November 24th – A Diamond in the Rough?
Today is just a shortened day of trading in the U.S., so I want to do a little something different with this report. I just have a couple of thoughts to cover on this 1/2 day of trading in the U.S., and in the weekend report I am going to cover all sectors including my thoughts on Bitcoin (or Crypto, since many of the crypto currencies are progressing). I have mentioned that the set ups in MARA, RIOT, etc that were ‘lagging’ seriously are now bullish bases and these are progressing, so some buy & hold positions may be advantageous, if you can handle the volatility that can come with this sector. I think that 2024 is going to be awesome in this sector, so buying in the bases could pay off over time.
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In this report I want to
1. briefly cover the General Markets set up and then
2. I want to discuss the possible ‘Diamonds in The Rough’ – Junior and Explorer Mining companies. I want to share a couple of Junior or Explorer stage Precious Metals Companies that one of our readers emailed to me (Thank you B.H. !) Some of these charts really are beautiful, but as always, I feel the need to at least warn of the risks & rewards that come with smaller Pink Sheet Miners. 🙂 Can they do a public offering and drop? Yes. Can they get bought out and spike higher? Yes. One of these was already the real ‘Diamond in the rough’, as you’ll see!
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To start with the General Markets: I want to repeat that I never said to sell your positions in the General Markets, even though I said that the markets could dip. I mentioned in Wednesdays report that The General Markets paused, but we were only on day 18 out of an ICL, right? Since the markets can easily run from dcl to dcl in a period of 40 plus days, day 18 may only be 1/2 of the first daily cycle. Yes, there is a gap below, but it does not have to fill right now. We know that these bullish markets can ‘dip lower’ or simply ‘pause’ or even just pause for a day or 2 and then continue higher. So with that understanding, let me mention something again:
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If you are a day trader, I am sure that you can decide how to day trade it, but I am just saying we could get a dip so that everyone understands that markets breath in and out, and a dip for a couple of days in normal – nothing to worry about. No action is really necessary if we are on day 18 out of an ICL, except maybe beef up positions at the next dcl. With a strong move out of an ICL, we should have a 2nd and maybe even a 3rd daily cycle that continues higher. If you want to trade it(?), then that is fine. I would encourage buying the dip or adding at the dcl when it comes, with such a strong move out of an ICL, since this is still the first daily cycle. So…
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THIS WAS IN WEDNESDAYS REPORT: This is the SPX on day 17 and it paused on Tuesday. It can dip, pause, or continue higher 🙂 NVDA released great earnings again, so that may cause the markets to push higher.
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The SPX on day 18 did push a bit higher with some positive earnings reports, like NVDA.
Since I am saying that on day the markets can dip or they may continue higher from day 18, let me show you 2 charts that highlight how each of those possibilities could play out. (I drew these up as of Tuesday actually, when discussing with another reader about ‘stops’, but I thought that they may also be helpful here).
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The SPX could do a small dip to the 10sma, continue higher as a breakout to new highs, and then drop into a dcl as a back test all in the first daily cycle. This would be an extremely bullish first daily cycle, but we do see that happening so far in this first daily cycle. This is why I probably wouldn’t recommend selling positions and trying to buy back on a dip. You can see that the dip here would be higher than current price.
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The SPX: Of course the markets could chop to the highs and start to pull back before breaking out. That could mean that the dcl comes with a deeper dip, and yes, this is possible. A dip to the 50sma would still be a nice higher low for the next dcl. Whether you ride these 2 ideas out, or trade them is up to you.
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Next I just briefly wanted to discuss some of the smaller Miners or explorers in the Precious Metals sector. They could be diamonds in the rough…
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We had our deepest ICL (lows) last October 2022 as the shake out ICL for Gold. I said at that time that the shake out there marks the lows and the bull run with a possible break out to all-time highs should start there, based on my view of the USD and its 3 yr cycle. Some Miners rallied from there, others seem to be finding buyers now with this recent Oct 2023 ICL, so let’s take a look at a few smaller buy & hold lottery ticket companies.
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So let’s take a look at a few smaller buy & hold type lottery ticket companies, as many call them. These can be volatile and hard to hold, rising and dropping 20%, so you may need to just buy a small starter position on them when they dip and try to ignore them within reason. I wanted to mention that one of our readers is not allowed to comment in the live area due to his employment, so he emailed me and sent me a list of his favorite beaten down juniors/explorers. I looked at the charts and even though I had a few from his list, he did have some that look excellent that I did not have on my list, so thank you again B.H. Also, B.H. does own a basket of these smaller ones, and has owned them for a while. Some are doing quite well, and one is doing ridiculously well since the recent Oct lows- so let’s take a look…
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AAGFF (AAG.V) – Most of you know that I rode this out of the 2020 sell off and it ran from pennies to over $1.30. I said that I bought it again as a buy and hold and have had it in the reports. I LIKE THE BASE IN THE BIGGER PICTURE.
AAGFF has been doing great, and after a breakout and back test of the 50sma, it ran higher again. Since the October ICL it ran from 11 cents to 18 cents, but it looks like it may have completed a measured move ( A-B=C-D) and dropped sharply 10% on Wednesday. THIS is why I say that they may be hard to hold, but over time I would expect this to be much higher.
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I also mentioned that I owned OCGSF in my basket, and this was a chart from October 30 that I put in the report. It is a nice base and bounced off of the 50sma. Did it break out from this magenta short term trendline?
No it did not, it was rejected and dropped back to the 50sma at our last dcl. I like bases, so I decided to add a little more to my position there on that drop. It has overhead resistance at the 200sma, but a break and run to April highs would be a 100% move, so I am still hoping that over time this works out.
SNWGF ( SGD.V) – This is a beautiful chart! Snowline Gold did run from the last October 2022 ICL and notice the move from Feb to Aug, when Gold wasn’t doing all that much. Big gains, but ti then dropped into our October ICL and it even made a lower low at this dcl. That, however, brought it back to the 200 sma and that is normal price action. It is now chopping under the 50sma, but a breakout could lead to a nice run higher. Let’s look at the weekly…
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SNWGF WEEKLY ( SGD.V) – The weekly chart shows me that for some reason on that last blast higher, volumes really lightened up and that often does cause a technical back test. We didn’t fully reach the green 50 week ma line, but I’d say that it doesn’t have to. It is oversold again and this company obviously could be a buy out candidate. I did some reading about them, they explore and develop in the Yukon and reported a loss recently, but the chart is a nice one. My only fear is a dreaded public offering, but that risk comes with all of these.
Take a look at IEGCF (IGO.V) – You can see a big change in the volumes right after Golds ICL in Oct 2022. It ran from 3 cents to 14 cents in a few months and then became very choppy in a sideways consolidation. That was a tough hold, right? It then surged again when Gold put in an ICL in October 2023 and out of the recent dcl. It is reacting with Gold nicely. It is now pulling back, lets zoom in…
IEGCF – So again, it got overextended with a rally out of the Oct ICL from 9 cents to 23 cents. That is a BIG move. It looks to have completed a strong A-B=D-C move, bouncing off of the 34 sma. It may fall there again, that would possibly make a nice entry ( $0.14ish.
On the Weekly IEGCF Chart, I also get a 14 cent possible buy area, IF it keeps dipping lower. So far we have a weekly Doji. Again, you can see how hard this is to buy and hold. It just dropped from 23 cents to 18 cents this week, so these can be hard to buy and hold, they need to be put into a basket and ignored to a reasonable extent. NOTICE THAT THIS BROKE FROM A CHOPPY BASE. I SHOW YOU THAT BECAUSE…
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NOTICE THAT IEGCF BROKE FROM A CHOPPY BASE. I SHOW YOU THAT BECAUSE…
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NKGFF WEEKLY IS A BASE: It is not reacting to Gold, but it is in a choppy weekly base. This is actually roughly bouncing between 20 cents to 40 cents ( that can be frustrating, but if and when it breaks out, you can get a strong run). Next we’ll visit an absolute monster that broke from a base…
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Try not to cry when we visit this absolute monster that broke from a base,
THIS WAS THE DIAMOND IN THE ROUGH!…
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BADEF (Hercules Silver) – I thought Silver stocks were lagging?? 🙂 I actually tried to buy this twice at around 50 cents and it just wouldn’t allow me in, so I waited for a pullback that just does not come. You get a 1 or 2 day dip to the 10sma and off it goes again and again. I can’t recommend buying this here, unless you buy a dip to the 10sma and use a stop? This can keep running, but it is super extended, so it can also easily dip down to 50 cents at the 50sma. Notice that it started breakout and run at the Sept lows, or after the Oct 2023 ICL. It ran from 12 cents to $1.12!! Or…
BADEF WEEKLY – It was pulling back and chopping along at the 50 week ma and has blasted off straight up! Will the others above do this? We don’t know , and that is why we call them lottery tickets. Some do a dreaded public offering, some act like rocket ships. THIS IS AN AMAZING 2 MONTH MOVE OUT OF A BASE.
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Enjoy your 1/2 day trading if you are around, and enjoy your weekend too! I will probably have the weekend report out on Sunday, because my weekend is already a fairly busy one with family.
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~ALEX
