Surf Report 9.5-2: The "Endless Summer" in Precious Metals and Miners

Junior Silver Miners, SILJ Part 2

I’ve been taking time in this series to introduce everyone to some of the greatest surfers of all time but so far all of them have been men. Let’s not forget about the ladies! One of the best female surfers of all time is an Australian professional surfer named Stephanie Gilmore. She is an eight-time world champion on the Women's World Surf League World Tour. Over the span of her career, she has won 34 surfing competitions!

Here’s 10 minutes and 41 seconds of “The Queen of Style” Stephanie Gilmore who absolutely shreds every wave she rides with beauty, style, and grace…

What can we learn from one of greatest surfing champions whose won more victories than any other in the sport?

Winning is euphoric, but it lasts a short time. You've got to lap it up, then move on to the next thing. I think I've kept winning because I haven't attached myself to past successes.

-Stephanie Gilmore

I can say when you catch an good wave in the markets with your invested capital it will also feel euphoric. But it will only last so long. Just as fear takes hold at extreme lows, greed can overtake many as the top of the wave completes. “I’m certain it will continue even higher!” However sentiment, and in turn markets can change in a New York minute and those waves that brought you so many gains and feelings of euphoria can come crashing down into sometimes very violent corrections. Lap up your victories but be certain to have an exit plan in place. There are always better risk/reward setups and its serves investors to follow Stephanie’s advice not to get too attached to any single asset class, sector, or individual stock. Be ready to move onto the next wave!

Does that mean I think its over for precious metals? Not even close! These waves still have a lot of structure to complete. If we zoom out to large enough degrees, the “endless” summer in precious metals does indeed look endless in a century long uptrend. However we must remember that large degree corrective waves can take a long time to complete and run deeper than most expect so it serves one best to find other waves to surf when corrections inevitably take hold.

Now are silver junior miners ready to begin playing catchup to gold and silver? That’s what we’re here to find out. Let’s now continue our analysis with another update of the Amplify Junior Silver Miners ETF (SILJ) and its top holdings. For this report, we have three brand new charts that I haven’t ever presented in a prior Surf Report. The remaining will be updates from Surf Reports 4.1, 4.2, and previous Endless Summer reports.

SILJ Update

First let’s take a look at SILJ and do a quick update on the 144-min chart. As you can see, we saw an extended (b) wave following the late June lows. This was then followed by a deeper (c) wave which had a nice reaction just above the 61.8% Fib retracement level. This should complete Minor degree wave 2, but we still need a micro 5th wave up followed by another micro correction to be more certain that the lows of 2 are complete. This would give us a really nice 1-2, (i)-(ii) setup that will propel SILJ above $20 for Minor degree wave 3. You don’t want to miss that wave in junior silver miners!

Seabridge Gold (SA)

We last looked at Seabridge Gold in Surf Report 4.2 published in February 2023. At the time we were looking for confirmation of a Minor degree 2 bottom. For this chart, I have adjusted my count just a bit given the overlapping structure within the smaller degrees. I now think we have a larger ABC diagonal forming with the February 2024 low being the bottom of a Primary B wave. This also aligns better with potential Fib extensions would see in a Cycle wave III that would make many years to complete.

Artemis Gold (ARTG.V)

Artemis Gold is a gold development company which focuses on the identification, acquisition, and development of gold properties. The company holds equity ownership interest in Velocity Minerals Ltd. which in turn focuses on exploration and development of gold properties in Bulgaria. It also holds 100% interest in the Blackwater Gold Project located in central British Columbia. This is a brand new chart for me and it has limited price history. Regardless, the initial Intermediate degree structure is in a bullish trend with Minor wave 5 making very good progress. Price has clearly been in a wave (iii) of 5 since last October. The higher wave (iii) extends, the higher potential targets there could also be in (v) of 5 unless we see some truncation. ARTG.V will be on my watchlist as Intermediate (2) runs its course.

MAG Silver Corp (MAG)

We updated the larger degree view for MAG in Surf Report 9.3-2 so now let’s zoom into the 144-min chart to see what could be happening at smaller degrees. I still would like to see one more wave up in Minor degree 1. Wave (iv) of Minor 1 had a deep retracement earlier this month to just slightly below prior support. The low made in wave (iv) now becomes support and MAG needs one more micro wave higher followed up with a slight correction to signal the beginning of (v). Given the strength of wave (iii) we could see higher Fib extensions for (v). The alternative count is that we’ve seen all of Minor degree waves 1 and 2 already. We’ll be able to tell by the structure of the next rally if this is the beginning of Minor 3 which would need higher extensions to reach Intermediate wave targets. We’ll have to watch MAG closely.

First Majestic Silver (AG)

We also did a larger degree longer term view update of AG in Surf Report 9.3-1 so we’ll take time in this report to review the smaller degree structure. Prior support broke but then AG’s price found new support at the $4.43 level earlier this month. I'm almost certain this is now a ABC diagonal. So far there are 4 out of 5 micro waves completed off the wave B low so we need one more small wave up followed by a corrective pullback to confirm the wave B low. I noted in the premium subscriber section in Surf Report 9.5-1, that the waves in AG are ones that I’m personally “Elliott wave surfing”. If you see the 🏄️“Hypersonic Wave Surfing Trade Notes”🏄️ box on a chart, it indicates moves I’ve made in my personal portfolio. I currently have a longer term core position and have also recently added a much smaller speculative leveraged position with some longer dated Call options. Please do not follow my moves unless you understand how to trade options and their risk.

Skeena Resources (SKE.TO)

Skeena Resources is another new chart I have not ever analyzed before this report. Skeena Resources was formerly known as Prolific Resources Ltd. and changed its name in June 1990. The company explores and develops gold, silver, copper, and other precious metal deposits in British Columbia, Canada. As for the Elliott wave structure, I believe we are seeing a very large ending diagonal with a 5-wave Primary structure dub-divided into 3 wave ABC diagonals. The overall structure will take some time to completely fill out. Investors should be advised to watch out for those corrective B waves within Primary 5, although they would present opportunities to add to a long term core position.

Taseko Mines Ltd (TGB)

Our last new chart for this report is that for Taseko Mines. TGB is a mid-tier copper producer located in British Columbia, Canada. It operates Gibraltar Mine which is the second largest open-pit copper mine in Canada. They also are developing the Florence Copper site in Arizona and the Yellowhead project in BC, Canada. Taseko is also in the planning stages for several other mines including the Prosperity Mine, Harmony, and Aley. I must say this is a bullish chart and one which I may personally add a long term position in the near future. Here we can a see a massive multi-year Primary 1-2 structure which bottomed during the March 2020 market selloff, followed by a very impulsive Intermediate (1)-(2), followed then by a Minor degree 1-2. I’ve said repeatedly that wave 3s are where “the pocket” is for Elliot Wave surfers and TGB may be entering the heart of one. Notice the confluence in Primary and Intermediate Fib resistance between $2.66 and $6.91, along with the longer term downtrend line which initiated in the late 1990s. Once price breaks free of this zone, its off to the races. Seems to me, based on Copper producer charts such as TGB, low cost producing copper mines will also become precious in the future.

Gatos Silver (GATO)

We last reviewed GATO in Surf Report 4.2 which was published in February 2023. Then we were looking for a Minor degree 2 to complete from the high achieved in January 2023. That pullback ended up being a Minuette wave (iv) within a large Minor 1 with Minor degree wave 2 completing in June 2023. Given the smaller degree wave structures, I think we are now completing a much larger Minor degree wave 3 within a much larger Intermediate (1). I’m keeping a much larger Wave 3 wave extension target box open and based on on where wave 3 actually ends. We can then have a better idea where 5 of (1) may actually end up. GATO has a really nice structure overall here and is following the typical Fib extension and retracement levels very well along the way.

Fortuna Mining (FSM)

We last did a longer term update in for FSM in Surf Report 9.3-2 when we were looking for Wave 4 support to told to maintain an impulsive structure. That support broke but price did find new support at $3.87 with a sharp reversal thereafter. Does that invalidate the the entire minor degree structure? No it does not. However, the overlap turns this into a more uncertain diagonal. We still need to see a 5th micro degree wave 5 up and a small pullback which holds support in order to be certain that wave 5 has truly begun.

Summary

The Elliott wave structures we are seeing in these charts don’t lie. The bullish intent in the precious metals mining complex continues despite the consolidations we have seen across the sector and miners still have a bit of catching up to do. Let’s not lose sight of this by allowing price to control our emotions. Stephanie Gilmore also is quoted saying “Surfers are in tune with the weather because if there's a storm coming, there are waves coming. I love the rain.” I can say that good Elliott wave surfers are in tune with the larger degree underlying wave structures and trends because if there are corrective waves coming, there are opportunities take profits beforehand and/or add to positions when price pulls back. I love opportunities!

We’ve now completed our second go around of the top holdings of GDX, SIL, GDXJ, and SILJ. We are still not even close to being done with this series. SILJ currently has 54 total holdings which we’ve now only covered 16. We aren’t even halfway there! But before we circle back to GDX for what will be Surf Report 9.5-3, I would like to begin revisiting the Uranium sector once again. Be on the lookout for a new Surf Report 10.X series which will follow up on Surf Reports 7.1, 7.2, 7.3, and 7.4. I plan to interleave this series with our current “Endless Summer Series” so we can look at both of these sectors concurrently.

Until next time…

Cheers and #EndTheFed!

-Hypersonic78

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Disclaimer: None of this is financial advice! Please do your own diligence. The views expressed here and other Surf Reports are my own. Only risk what you can afford to lose in these crazy markets. Know your timeframes, parameters, and personal risk tolerance.

Position Disclosure: I remain long physical silver and gold (mostly silver) and am also long a handful of individual precious metals mining shares including AG and GATO which were reviewed in this report.

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