Let’s now begin a new chapter to this Substack shall we? We want to catch some Elliott waves right?
Now that we have the “weather report” by analyzing various asset classes and sectors fully detailed in the 13 Part Upcoming 21st Century Stagflationary Depression (U21CSD) series, we now have clues which “beaches” will be closing soon for the season and which ones will let us catch a few good Elliott waves during what could be the largest storm of the century. The best waves seem to be at the Precious Metals, Energy, Commodities, and Emerging Markets beaches. We need surf reports for all of them and can look at a broader array of companies in each sector. Gold beach seems like a happening place doesn’t it? Let’s go check that beach out and those surrounding it.
We looked at GDX and NEM in the Part 10 of the U21CSD but lets look at some other major gold miners and compare Elliott wave structures and Fibonacci extensions for the next intermediate and primary waves higher. Here are the top miners in the GDX1 Exchange traded fund. Looks like a great place to start.
For each of these tickers we will compute current standard Fibonacci extensions for the wave structure that is in place in an effort to identify the highest upside potential on the current primary wave up (with the assumption that the low is in).
Standard Fibonacci wave extensions from a wave 1-2 structure are as follows:
Wave 3: 1.236 - 1.382
Wave 5: 1.618 - 1.786
Mind you this has no bearing on the timing of these targets. Nor do returns account for any dividend payouts along the way or potential overextensions that may occur. Some names may move first, others may come into favor by investors later on. This analysis could also help us identify which companies are over or undervalued at any given point given the longer term perspectives respective of their Fib extension targets.
We’ll continue doing this for additional companies in the precious metals sector looking at major holdings in highly traded exchange traded funds like SIL, SILJ, GDXJ and many junior miners which look interesting. Again none of this is financial advice. Elliott Wave is a subjective technical analysis technique based on highest probability outcomes. EW can be one of the best investment tools in your toolbox when paired with sentiment.
Time to paddle out. This should be interesting.
Newmont, NEM
Newmont may have put in a Primary wave 2 bottom in the heart of a major Cycle III. The 76.4% retrace level so far and does have 5 tiny waves up off that low. From the current price level as of Friday’s 12/16/22 close there is an additional 707% upside to the median Fib target level of $372.50 later this decade.
Barrick Gold, GOLD
Barrick Gold is also working on a Primary wave 3 after finding support at 50% level. here we have potentially 536% upside to standard Fib extensions between the 1.236 and 1.382. Could Primary 3 extend higher? Of course. We will need to adjust our targets based on the Intermediate (1)-(2) structure.
Franco Nevada, FNV
Franco Nevada found support just below the 23.6% support for Primary Wave 2 which I’m counting as a running flat. Like Newmont and Barrick, Franco Nevada is working on a long term Primary 3. It also had 5 waves up off the recent low and has 625% to fulfill standard Fibonacci extensions for Primary Wave 3. I’ve drawn two price trend channels which give us a potentially wide timing range for these targets. Only time will tell us which one will be correct.
Agnico Eagle Mines, AEM
Agnico Eagle Mines merged with Kirkland Lake Gold in 2022 to create one of the largest gold mining companies in the world. Since it completed waves (1) and (2) in the Intermediate degree I am using the the corresponding Intermediate Fib extensions instead of Primary degree. If using the Primary extension the result becomes a bit unreasonable given the current price channel. Standard Intermediate wave (3) extension will take it 374% higher and wave (5) 738% over the next decade.
Wheaton Precious Metals, WPM
Wheaton Precious Metals is one of the largest precious metals streaming companies in the world and is clearly in a long term uptrend. Primary 2 found support a the 50% level and price recently found a bottom at the 38.2% support for Intermediate (2) of Primary 3 which has the potential of moving up another 1126% from the current price to reach standard extension targets. This also has excellent confluence with the intermediate (3) and (5) extensions. What a beast.
Gold Fields, GFI
South Africa based Gold Fields has been in very long term downtrend lasting more than 4 decades. It nearly broke out of that downtrend in 2020 and has been rebasing for another attempt ever since. The next attempt will be what I’m currently counting as a Intermediate wave (5) of its first Primary bull wave which could take price 404% higher to median standard Fibonacci extensions.
Newcrest Mining, NCM.AX
Newcrest mining is Australia’s leading gold mining company with nearly 2 million ounces of gold production expected in 20222. Here we see yet another long term uptrend. Primary 3 takes the share price 1382% higher later this decade which in turn has excellent confluence with the Intermediate extensions. The over the counter ticker for my US based friends is NCMGY.
Northern Star Resources, NST.AX
The second Australian gold miner we’ll review and 10th largest weighting of the GDX is Northern Star Resources. Like many other gold miners we’ve looked at in this report, NST.AX is in the heart of a Primary Wave 3. It had a very long Intermediate wave (1) which saw a retracement of 50% where support was held. A standard Intermediate wave (3) extension will take it 533% higher and wave (5) a whopping 1166%. Again I am using the Intermediate extensions instead of Primary since they seem to correlate well with the anticipated price channel.
Summary
Here we will tabulate our above analysis to see what stands out. There are definitely some big waves found in the gold producer space when looking longer term. The Aussies Newcrest Mining and Northern Star appear to the best in the lineup as well as Wheaton Precious Metals. These structures will likely take several years to fill out so patience will be necessary. As the smaller degrees complete we can further refine extension targets as necessary.
First surf report is now complete. I hope you found this new format helpful and informative. I had no idea that Australian gold primary producers would be as interesting as they are. We have many many more reports to do so hang tight so we can hang ten. From time to time we’ll also check in on the closed beaches (bear markets) to find if there are any hints of them opening up again at some point or sneak into and find potential shorting opportunities.
Welcome to the endless Elliott Wave summer!!
Cheers and #EndTheFed
-Hypersonic78
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Coffee or KAG are greatly appreciated if you wish…
Coffee: Ko-fi.com/hypersonic78
Kinesis KAU/KAG: GAO2JIBCQFAEOPHJPGEIAKIANOJ5ZMBSGARLGLY5PRNJGKD64W3OZZNC
https://www.vaneck.com/us/en/investments/gold-miners-etf-gdx/
https://www.newcrest.com/2022-annual-report/overview
A great new chapter to your series. You've put a lot of work into this and it's greatly appreciated. I'm in and drip feeding as we go. In the early 70's my father bought me a Hang Ten T shirt, I didn't know what Hang Ten meant but I do now. Cheers!
Here is my count for FNC.
https://serving.photos.photobox.com/05288399d043b3e17edc9f1456b75f039cda0602f67fb0696ce2f4d2954cd8c088871adf.jpg
It's based on the minute wave 3 as you can clearly see on several indicators and volume. The only issue is March '20 correction which slighlty crossed into the wave 1. This might be understandable for a black swan event knowing that the day was not closed in the wave 1 territory.
However, in your count I see that you have 4-to-1 overlaps in all of your intermediate subwaves and in primary wave as well. So for this case it's not an exception but a rule and it clearly doesn't follow the Elliot Waves theory. The only good thing in broader picture is that it doesn't change the uptrend at all.
Anyways, these articles are a great reasource of valuable information. Thanks and cheers!