Gold vs. Silver Weekly

The following chart has the ability to determine a top and a bottom in GBN.V shares, by comparing the correlation with the Gold/Silver ratio.

Once correlation is almost -1 and reverses, then you can be sure that the stock price has either seen a top or a bottom.

We are definitely working on some kind of bottom and anticipating a gold price recovery, which is pending. The stock price can always reverse in the meanwhile, which is possible after two years of declines.

I placed red arrows where those conditions occur, where the inverse correlation of GBN.V share prices with the gold/silver ratio were at an extreme. I also placed a grey arrow where I think the stock should have technically seen a stupendous rally.

What intervened were losses attributable to a drastic curtailment of production, amortization of loans and the deal with Waterton prohibiting distributions.

The last red arrow shows where the inverse correlation wound up, but can actually decline to the extreme again, without the share price moving should the gold price recover spectacularily.

We'll see what happens in the next few days.

The important thing to remember is that this chart gives you the tops and bottoms for the GBN.V share price.

supersize:

http://www.flickr.com/photos/11747277@N07/8363554567/sizes/l/in/photostream/

http://scharts.co/13gzfJo

GBN.V Weekly

Given that we have certain price points developed out of the Gold/Silver ratio and its inverse correlation with GBN.V share prices, we have something to go on when analyzing the stock price and its movement finally.

We take those price points where GBN.V topped and bottomed and connect the dots on the weekly log-scale chart.

Two articles from investopedia.org will assist you in recognizing the technical formation, which is almost impossible to spot, and stretches over years:

http://www.investopedia.com/terms/b/broadeningformation.asp#axzz2HKuC7dio

http://www.investopedia.com/articles/trading/07/broadening_pattern.asp#axzz2HKuC7dio

http://www.thepatternsite.com/abw.html

If GBN.V share prices are meant to recover, then we should see a short covering rally on heavy volume to confirm. I kept all of the old technical analysis in place with only small corrections to get an idea of how large this formation is.

GBN.V must have dealt with Waterton because they both see the gold price as crashing, and thus desperate measures are called for. Sprott's lending facility was only too aggressively based on huge moves in the gold price which did not materialize.

GBN.V can make up for the serious mistakes in grossly mis-judging the market with dividends, should full production resume, which is prohibited by the Waterton agreement.

The control of the outcome rests entirely with the shareholders at this point, since there are no dividends to look forward to, this gold company is at best just a land flip to a bigger player.

Management really check-mated themselves here.

supersize:

http://www.flickr.com/photos/11747277@N07/8363618521/sizes/l/in/photostream/

http://scharts.co/WysBqz

-F6