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Metals and miners – How to shop the huge future upside



For well over two years, we have been stable in our downside projections in gold, silver, HUI Goldbugs Index and VanEck Vectors Gold Miners ETF (GDX). This sector is causing huge upside, but if it fails properly, it can damage your long-term capital. Saying the mood that surrounds this sector is extremely easy to set up, and while the individual stocks in the mining sector offer huge upside pages, it is important to understand that they can fluctuate with such an enormous amplitude that investors approaching Say it wrong, can use it much of their emotional currency trying to take the move – before it starts – that they end up missing it when it finally takes place.

In this article, I will discuss our expectations of the upcoming price movements within metals and miners and describe our approach to how to position in this sector for major upside without taking huge risks for your hard earned capital. Because we all know how we accumulated our capital, let's not figure out how to reduce it.

Let me first discuss where we are in the greater number in Gold and GDX. It is our claim that gold is in a (NYSE: A) (NYSE: B) (NYSE: C) down to 1.109. Our expectation of the first (A) wave of gold to conclude in the 1.251 – 1.232 region, and then followed by the (B) wave, goes back to the $ 1,300 region before going to the lower levels in one (C) wave. But we will always consider the alternative potential if we are mistaken in our analysis, because for us the use of Elliott Wave is not an academic approach that results in the provision of more opportunities, that is how we distribute hard earned capital to real positions. So with this in mind there is a possibility that the current movement down from the February height is a retracement compared to the whole movement that originated from August 2018 low. Here is the interesting part. Whether this shift is a retracement of the movement up from September, or is a beginning (A) wave of the larger movement down in both cases, after this current drop is completed, we expect a minimal move to the 1,300 region or higher. So in both cases, there is a share of the total price sharing they share jointly, which is the move from 1,251 – 1,232 zone back to 1,300 – 1,314 zone. Therefore, it allows us to allocate capital to gold with the expectation of the much higher targets to be followed, while we can go out of pause, although lower levels are what is in the store and re-enter from lower. It's called having your cake and eating it too. Explained differently, we expect a minimal occurrence from 1,251 – 1,232, and if we are mistaken, gold may be throwing forward, we take the height and lead to our long-term higher goals.

Gold Chart

  Gold Chart

While gold and GDX are in somewhat different minor timeframes, essentially a similar approach can be taken with GDX and with many of the individual mining stocks. In GDX, we look at the formation of a downside impulse, where the next low or two smaller precipitation in the $ 19.08 region represents the whole wave 1 down, and so when gold completes a (B) wave back to $ 1,300 region, GDX would transform into a wave 2. Now, if we are wrong in GDX and it is bottoming in an upward wave 2, then it would be bottom in the green support box and instead of forming a wave 2 would [19659007] GDX Daily Chart

  GDX Daily Chart

Over the years, we have carried out a very rigid basic analysis of all candidate quality graduates in the sector, resulting in the building of our strategic mining portfolio. While many analysts have taken positions on each draw back with little regard for the terrible downturn risk they expose to their supporters, we have so far not taken a single long position in the stocks that are part of our mine's portfolio. But we are currently ready to start buying shares in some individual mining companies. We prefer to analyze each mining operation on its own advantages. This allows us to identify low-risk inputs with relatively tight output levels in each miner, and build a portfolio over time, resulting in minimal withdrawal risk. Like GDX and Gold, we now see many miners who minimally establish a big leap before they go down to lower levels while GDX and Gold follow through. As such, we will place ourselves in these shares as they each hit their respective downside goals. If we make a mistake about the bigger downside, we will be placed for huge upside. If we are right about further downward, many of these individual miners will still increase 20-30% or more in the b-wave study, allowing us not only to put into break-even stop-out levels, but If upward follows through errors, we can finish a lot and take profits and thus seek to get back from much lower.

To illustrate what I mean, look at the Barrick Gold Corp (GOLD) chart below. The GOLD is in a very similar pattern as GDX, where the movement down from the April height represents an initial impulse. Once this is completed, a step back to the $ 13.50 – $ 13.90 region will be reasonable before heading lower. By going far GOLD you can enter a break-even stop and let the upward direction prove itself and do so with very little downside risk.

Barrick Gold Corp Chart (GOLD)

  Barrick Gold Corp Chart

Back in January Seeking Alpha published an article I wrote about McEwen Mining, Inc. (MUX) when it was in the $ 1.70 region. While the article was focused in the longer term upward for MUX, I pointed out that we were waiting for lower levels. The result of these projections resulted in a fairly criticism from the long MUXs at that time, but the follow-up in MUX has been a perfect picture. We still expect lower in MUX, now in $ 1.05 or lower region before we go long. For those who have held the course with MUX, they have successfully given 25% of their hard earned capital and for absolutely no reason.

McEwen Mining, Inc. (MUX) Chart

<img src = "https://static.seekingalpha.com/uploads/2019/5/24/43898886-15587176668363006.png" alt = "McEwan Mining, Inc. Chart [19659016] The Miner Sector Offers extreme upside As I have discussed many times, we expect at least a 5-fold increase in many of the mining stocks, but it is simply not an acceptable strategy to take huge downturns to achieve this type of return. Being very challenging, and over time, we have grown to believe that this consolidation from 2016 is a very big B wave, which means that when the next big move occurs, we will probably see lower levels below 2015-low, however, whether this basic task is correct or not, it is totally unimportant, since the entrance and the strategy of positioning this sector for either a large movement up into a C-wave or an astronomical movement into a wave 3, is exactly it

In summary, both precious metals and miners are very close to the purchase zone of either a (B) gold wave, which would represent a wave ii in GDX or would require a much larger motion up in the form of a 3 . rd wave up from September 2018 low. Building a position in this sector must always be done with great caution, and with the basic premise is NOT to experience large capital downturns. Risk management should always be the primary mode of operation when allocating hard earned capital to this sector. We expect that a large upcoming jump in the sector will require a much larger total sale at the end of the summer of 2019, whether we are right or wrong, the next position investors should take must be on the long side because both count suggests higher.

Investing in this sector should only be about targeting the higher price movement expectations, but should be about making money even when your bigger picture is wrong.

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Disclaimer: I / we have no posts in the mentioned stocks and no plans to start jobs within the next 72 hours. I wrote this article myself and express my own opinions. I do not receive compensation for it (except from Seeking Alpha).

Further information: We are monitoring various individual mining stocks now to take long entrances in the near future.


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