Yea, I know I got you all excited. But, in truth, I am seeing strong potential for doubling your money in the metals mining stocks over the coming several years, states Avi Gilburt of ElliotWaveTrader.net.
For those of you that may not know who I am, I have been writing publicly on metals now for almost 13 years and have been providing analysis services to individuals and money managers for almost 12 years.
In fact, my first market call was made back in August of 2011. For those that may not remember, it was a time when gold was going parabolic. There were days it was seeing $50 gains. And, the only disagreements you were hearing in the complex and amongst the analyst community at the time was how far past $2,000 gold was heading.
Well, at the time, I did not see it the same way. So, I penned my first public market prognostication, wherein I called for a top to gold at $1,915 on August 22, 2011:
“Since we are most probably in the final stages of this parabolic fifth wave “blow-off-top,” I would seriously consider anything approaching the $1,915 level to be a potential target for a top at this time.”
When I was asked about my downside targets in the comments section, I noted that I could see it dropping as low as $700-1000. This was said even before gold topped, and as it was still going higher in parabolic fashion.
When I look back at that article now, I see it got one “like” (and that may even have been given to me after gold proved me right). I won’t bore you with the comments I received in that article and the next article or two I penned to follow it up. Needless to say, mine was not the popular opinion at the time. Yet, gold did top within $6 of my target and proceeded to drop down to the $1,050 region over the following four years.
Many at the time simply chalked my call up to “beginners’ luck.” Mind you, I had been analyzing and investing in the market for many years prior to writing this public article. But admittedly, this was my first public market call, so I guess I was a “beginner” in some way.
Then, in September of 2015, in seeing the potential for a major bottom being struck, I opened a mining stock service for our members of Elliottwavetrader. We began suggesting buys on stocks like Newmont Corporation (NEM) when it was in the $15/16 region, along with many other individual mining stocks. Moreover, in December of 2015, I penned the following to our subscribers, and then published it a few weeks later:
“As we move into 2016, I believe there is a greater than 80% probability that we finally see a long-term bottom formed in the metals and miners and the long-term bull market resumes. Those that followed our advice in 2011 and moved out of this market for the correction we expected, are now moving back into this market as we approach the long-term bottom. In 2011, before gold even topped, we set our ideal target for this correction in the $700-$1,000 region in gold. We are now reaching our ideal target region, and the pattern we have developed over the last four years is just about complete.... For those interested in my advice, I would highly suggest you start moving back into this market with your long-term money....”
And, as we now know, not only did the mining stocks bottom in the fall of 2015 when we were buying, but gold bottomed right after I posted that to our members, and we caught the exact low the night it struck the $1,050.
I guess I got lucky again. (smile)
Those of you that recognize Doug Eberhardt as another public author/analyst on metals may not know that he is also a gold dealer and runs buygoldandsilversafely.com. I bought gold that night from Doug. Later, he posted the following in support of our work:
“I can attest to your accuracy on actually buying both gold and silver from us as close to the bottom as one could. With gold you called it to the letter and your limit order which was placed well in advance executed perfectly. The silver limit orders were within a tight range of the lows as well.... Your timing on buying the dips is uncanny Avi! People should be aware of this.”
Moreover, when silver broke the 12 level back in March of 2020, I got on the phone again with Doug again, and bought more silver. I even posted to my members that I was getting on the phone with Doug and putting in an order to buy as we were approaching that 12 level, and many members followed my lead.
Doug later came into our chat room at Elliottwavetrader, and posted the following about our work as well:
“Avi has the magic touch. Listen to him.... And I want to explain to you all what Avi did for you. He got most of you to buy the metals before the premiums shot up and before everyone ran out of product. This is the 2nd time he has done this and kudos to him for doing that for you.”
I guess I got lucky yet again. (smile)
Now, I also want to tell you that I sold almost all my NEM stock (by far, my largest mining stock holding in my portfolios) as it was approaching 84 back in April of 2022. You see, as I suggest to all my subscribers, before you enter a trade or an investment, you should have three things laid out: 1—your buy point; 2—your stop out point (for risk management purposes); and 3—your target for taking profits. And, my sell in NEM was based upon my plan.
In our case, we layered into NEM back in the fall of 2015 in the $15/16 region, and had appropriate stops set at the time. As the structure developed off the low, I set my target for the 82-85 region a number of years ago. And, in April of 2022, as the market was spiking up into my long-term target, I announced to our subscribers that I was selling almost all of the NEM stock that had purchased back in 2015. And, for those counting, that was a bit more than a 5X investment within a seven-year period.
As we now know, NEM topped right at our target, and dropped more than 50% of its value since that time.
Boy, I am one lucky SOB. (smile)
A few months ago, I outlined a trade in a public article I posted on Seeking Alpha. And, I noted as long as the 22.50 region held as support, I was looking for a rally to begin. While the 22.50 region held as support (it did see a quick spike below it and then reversed), when we got to the 25 region, it did not look like we were preparing for the major break out was expecting. So, I told the members of ElliottWaveTrader.net to lighten up, as I saw another decline coming. And, yes, that did occur.
At this time, I still think there could be one more decline in a number of the mining stocks. While some have potentially bottomed already, there are a number that are still suggestive of one lower low to be seen in the coming weeks before the next major rally I am expecting begins. To put it in a more generic term, as long as GDX holds below 30.50, I can reasonably expect a lower low relative to what was struck in mid-August.
As far as the upside goes, well, there is a significant variance in our expectations for the next rally in mining stocks. There are a number of them that are set up for 4X runs over the coming 2-3 years. But I will note that I am not yet expecting NEM to more than double. While I think it can get back to the 80-90 region, it does look like it may underperform many of its brethren. Yet, when you consider there is a potential double to be seen in the weakest of the mining stocks I am seeing, it should give you some idea as to the opportunity that is setting up as we speak. But, ideally, after one lower low is struck.
So, watch that 30.50 resistance region in GDX for a clue as to whether the low may already be in place. If we should break out through that before we get that lower low and complete an Elliott Wave 5-wave structure north of 31.50, then the bottom is likely in place, and all pullbacks are buying opportunities as the next major rally has likely begun, suggesting that many mining stocks can potentially double or more.
Avi Gilburt is the founder of ElliottWaveTrader.net.