Gold Rocket Launches, SALT in the Soup
Struthers Report V29 # 10.7
Wow, what a 'V' shape recovery in gold. If it closes at current levels or better, it will be above my first resistance level. Happy Friday the 13th!, but as I pointed out, it is no surprise this middle east uncertainty is moving gold. The important level is $1980 because a close above that would be a higher high which would be a very strong signal that the correction since May is definitely over and we are in a new bull move. Strong $50 or so up days like this are rare and when you see strong moves like this, it is usually a part of a bull trend. The last strong move was about +$47 on March 17th and that was part of a $400 up move in gold (Nov 2022 – May 2023).
Another important observation is the Managed Money position on the COT report. It is produced end of day Friday based on Tuesday's trade positions, so it is about a week old. A couple weeks ago or so I commented that Managed Money had been liquidating positions and they would likely end up short. With this reported period, they are short -7,561 contracts. I always follow this Managed Money because they are always wrong. When you see them short, you can be sure a bottom is nearby. I would bet they were further short Tuesday and part of this strong up move is their short covering.
What I did not like about the 'V' shape move in gold, it stopped us out of 6 of our gold stocks and they recovered quickly. Here is the list of the 5 remaining gold stocks we were not stopped out of and the Sprott precious metal fund CEF that I don't use a stop/loss on. For a reminder and for new subscribers, I use a mental stop loss to avoid setting stops for market makers to see. They often will move a stock just to trigger these stops and create trades. If the stock closes below my mental stop loss, I sell it the next day, unless it bounces back up in morning trading. This happens often, because like I say they often move the stock just to trigger the stop losses.
Atlas Salt - - - - - TSXV:SALT - - - - - - - - Recent Price - $0.88
Entry Price - $0.80 - - - - - - - Opinion – stopped out at $1.20, and hold
This week, SALT filed a technical report on SEDAR presenting the results of a feasibility study of the Great Atlantic salt project on the west coast of Newfoundland in accordance with National Instrument 43-101 (Standards of Disclosure for Mineral Projects).
The report is entitled "Technical Report on the Great Atlantic Salt Project, Newfoundland and Labrador, Canada, Report for NI 43-101". The report was prepared by SLR Consulting (Canada) Ltd. and has an effective date of July 31, 2023. A link to the report is also available on the Company's website at www.AtlasSalt.com.
Pre-Tax payback is 4.2 years and an IRR of 23%. Net Present Value calculated at 8% discounting is just over Cdn$1 billion. In this recent market about everything has got whacked and SALT was no exception.
It is a good thing we took part profits around $3.10. If you did not use the stop/loss, I would hold as most likely the stock has bottomed. This will get bought out at much higher levels.
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