This is my first post in many a blue moon…so forgive me while I shake the cobwebs out from between my ears. A good friend down in Marco was asking for my thoughts on Newmont Mining as a play. Instead of bloviating on it – I will just share my reply here:
Okay… the daily chart has been eviscerated, so we need to zoom out to a weekly chart to see the bigger picture. Take a look at my footnotes below the chart:
1. Is the low price from the week of August 28th 2015. The last major bottom.
2. Is the most recent significant low from the week of May 27th 2016
3. This weeks action has blown up a very heavy support diatonic near $36
4. Curiously enough the $30.84 area (call it $31) is the midpoint of the 2015 bottom to the week of August 12th 2016 top. And this is the most important. At the midpoint of a major leg – there are 50% winners and 50% losers. This where the majority of the stop loss orders will be placed. Either the Bulls or the Bears will capitulate here on margin calls. “loot a burning house” theory…
5. Consider this too – look how extremely low the volume has been on this meltdown… that should tell you two things – a.) Institutions, and hedge funds, banks and strong hands are not the ones dumping. -and- b.) this is RETAIL selling or what I affectionately would refer to as a “Piker’s Panic”. I can’t see any reason to try to front run a long trade until it tests and holds the $31 +/- area