Tag Archives: Mining

HONG KONG (Reuters) – Two Chinese bitcoin mining equipment makers plan to raise up to $ 1 billion each from Hong Kong listings this year, riding on strong global interest in cryptocurrencies, IFR reported on Tuesday, citing people familiar with the plans.

Canaan Creative filed a listing application to the Stock Exchange of Hong Kong on Monday, IFR, a Thomson Reuters publication, reported.

Zhejiang Ebang Communication has also started working with advisers on a proposed Hong Kong float of up to $ 1 billon, reported IFR.

Ebang listed on China’s National Equities Exchange and Quotations, also known as the New Third Board, in 2015 and was

delisted from the over-the-counter market in March after announcing in January that it would seek a Hong Kong listing.

Chinese bitcoin mining equipment makers are hungry for capital to fund their growth as the heightened interest in cryptocurrencies has led to a surge in demand for their machines.

Canaan, which sells “Avalon” mining machines with customised super-fast ASIC chips, made revenue of more than 1 billion yuan in 2017. Although cryptocurrencies can be mined using regular computer equipment, specialised processing devices dedicated to mining are more effective and can generate more income.

The company’s co-chairman Jianping Kong told Reuters in April that he expected China’s push to promote the domestic chip industry to help drive growth for the company.

Credit Suisse, CMB International, Deutsche Bank and Morgan Stanley are joint sponsors for Canaan’s float, according to IFR.

Canaan Creative declined to comment. Ebang could not be immediately reached for comment. All the banks didn’t immediately respond to a request for comment.

Canaan’s IPO valuation has yet to be set as there is no listed comparable and the prices of cryptocurrencies have

fluctuated a lot, reported IFR. It was valued at $ 500 million in mid-2017, IFR said, attributing it to one of the people.

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For those that follow me regularly, you will know that I have been tracking a set up for the VanEck Vectors Gold Miners ETF (NYSEARCA:GDX), which I analyze as a proxy for the metals mining market. I believe that the GDX can outperform the general equity market once we confirm a long term break out has begun, and I still think we can see it in occur in 2018. But, after last week’s break down below the December 2017 low, the set up will have to be resurrected first in the coming months.

I am not sure what more there is to say. We have had several break-out set ups break down in the GDX over the last year. Yet, all the market has done is consolidate sideways for an entire year. Clearly, this is not something I would have or could have expected. Moreover, we still have a 5-wave structure off the 2015 lows, which still keeps us in a longer term bullish perspective.

Since the GDX is a composition of a whole host of mining stocks, I think I have to resolve myself to understanding that the weaker stocks have certainly been a strong drag on the overall fund. So, until the weaker stocks prove they have a bottom in place, it seems quite clear that the GDX will continue to frustrate us.

With that being said, the miners we are holding in our EWT Miners Portfolio are presenting as exceptionally strong, especially relative to the GDX as a whole. Many of them seem as ready to break out similarly to the manner in which GLD seems poised to break out. Yet, when I go back to look at stocks like ABX, it seems quite clear why the GDX has been underperforming.

As you can see from the attached ABX chart, it has followed through down to lower lows in this current pullback. When I highlighted this chart a few months ago to our members of my The Market Pinball Service, I noted this lower low potential, and the ABX is now fulfilling that potential. But, as I also noted in those updates, the long-term potential being presented by this chart is quite strong. As you can see, the positive divergences evident on this chart as the market has dropped down to just below its .618 retracement of its 2016 rally is quite stark. This is often a precursor to a strong reversal which will likely kick off the larger degree 3^rd wave which has failed to take hold over the last year.

Within the micro count of ABX, it would seem we are completing the wave v of (C) of y of ii. But, within wave v, we may still see another 4-5 structure before this completes its downside. That means that the 14 region is going to be the resistance over which it will have to rally in impulsive fashion to begin to signal that this wave ii has finally completed. Should that occur, we may see the ABX catch up quite quickly to the rest of the complex behind which it has been lagging.

So, in order to align the GDX chart with the ABX chart, I have to consider any bounce below the 22-22.66 region as being a 4^th wave bounce, similar to the potential we see in the ABX. It will take an impulsive rally through the 22.66 region to suggest that the lows have been struck in the GDX, assuming the ABX is also impulsively rallying through its 14 region. Again, we will have to start seeing the laggards in this complex catch up and potentially even outperform to signal that a true low has been struck.

But, in conclusion, even though the GDX technically broke its recent (1)(2) structure, the metals charts still give me reason to remain bullish in the larger degree. As I noted to my subscribers, the short-term indications in my 144-minute silver chart suggest it is trying to bottom out, while the longer-term structure in ABX suggests it should also catch up to the rest of the market, which would allow the GDX to finally break out when the ABX is finally able to complete its longer-term pullback. Until such time, it seems the market is trying to teach us a lesson in patience, such as that exhibited by the biblical figure Job.

Housekeeping Matters

Lastly, it seems that Seeking Alpha has changed the way they tag articles. So, while my articles used to be sent out as an email to those that follow the metals complex, they are now only being sent out to those that have chosen to “follow” me. So, if you would like notification as to when my articles are published, please hit the button at the top to “follow” me. Thank you.

The Market Pinball Wizard

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Within The Market Pinball Wizard service, I provide several formal updates a week on the metals complex, as well as a directional bias on the S&P 500 every day and weekly USD and USO analysis. We also host one live webinar a week to go deeper into the charts. I also provide updates throughout the day in our chat room within the service, as well as answer questions.

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Disclosure: I am/we are long PHYSICAL METALS AND VARIOUS MINING STOCKS.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I significantly reduced my hedges, and only hold an appropriate amount for portfolio insurance at this time.

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