There is little doubt that gold is now in a bull market. However, gold is stuck within a complex sideways triangular consolidation pattern which may continue for the rest of 2017.
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AGree. Gold not a favored destination. NO insider buying in miners and lots of selling. Renounced gold in mid Febuary. DOing quite well in emerging market small caps more recently oil and getting positioned for a comeback in biotech. BEst of luck.
Paul,
“I’ve been in the Market since 92/93…”
I was an Officer on a US Navy submarine in 92/93…
… I reckon the markets were humming right along back then?
😉
Zkot, I studied some charts and I can say GDX has a date with 21. Of course it might go lower but 21 is doable as first target. What say u?
Crazy money train with Bill Clinton… the summer rally’s… I made my money with early internet stocks… p
Gary,
Thanks for the triangle crystal ball.
A discussion about why the miners have been beaten down would be nice.
Anyone?
Goild based on what Gary and others are thinking, the manipulators (GSachs, HSBC, etc) seems to have moved from shorting gold futures to now shorting the miners. They got caught and fined naked shorting futures so I guess this is there new playground. Makes sense
Robert,
Thanks for commenting.
I wonder if there is any financial/economic explanation, or it is a sheer manipulation.
2017 is going to be a difficult year and it already started that way … what? Since the beginning of this year, Gold has doubled the return of the SM. Silver has tripled the return of the SM.
What’s been difficult about that? lol. Way more upside in Gold than the SM.
You are buying the market with maybe 5-10% upside if that before a big downdraft. I predict you will add on the dips and get stopped out at the bottom long before the bubble phase begins.
I think you are being way too short sighted. The Nasdaq has at the very least the potential for 100% or more over the next 12-18 months.
When the Dow breaks out of its bull market trend channel it will be game on and the bubble will start in earnest.
Worth noting the reversal/rise of XLE, USL (oil).
Would that reverse the miners?
USL, USO are in a clear channel, they just hit support and turned around.
It appears that it is a no brainer, classical trade to go long.
What else can one ask for?
So tomorrow I will get 5K shares of USL.
Please comment.
Gary,
I am monitoring for 4 possible triangle scenarios:
1. At cycle degree (one degree higher than you suggest), which I’ve had in mind since early 2016.
2. Yearly cycle (a.k.a. Primary degree), which is your suggestion. I hadn’t thought of this before, but I can see this potentially playing out as well & am monitoring for it with great attention, ever since you first brought it up several months ago.
3. Intermediate cycle. As in, a triangle consolidation of intermediate degree, now following the rally off last year’s lows.
4. Combinations of the above — up to and including all 3 of the above, and perhaps other triangle patterns at smaller degree, from time to time, following any big move in gold. Very likely, as I consider the triangle to be the most efficient way for any market to consolidate. If the gold market is 6000 years old, I reckon it has figured out efficiency by now.
At any rate, a little caveat regarding any of the first 3 possible triangles above vis à vis the one you’ve drawn in the video:
Neither of your trendlines is sacrosanct in any of those 3 scenarios, thus follow your own advice, which I have learned to keep in mind, to not buy the break out or break down of either per se.
The gold market isn’t 6000 years old Zkot. That’s mostly gold bug propaganda. In the West, gold coinage never really circulated among the public until Greek/Roman times so the history of precious metals outside the realms of royalty, Pharohs and the elites who traded is less than half what the bugs claim. The oldest coin in the world is just 2700 years and even it was only made for rare local use in trade, not daily commerce. It’s impossible to accurately verify the value of metals in earlier times without reference points such as what a days work was worth when nobody was paid in metals nor did they buy or sell homes and groceries with gold/silver coinage. Its even questionable whether there is any special fixed value to gold in inflation terms through all modern times. Gold seems to be worth whatever people wanted it to be worth at various times so the old saw that an ounce of gold in Nero’s day that bought a good Toga is equal to a quality man’s suit today verges on comedic because we can’t properly compare any of it given technology changes, industrialization or the value of labour. But it all makes for hilarious online arguments with the obsessed who fixate moronically on what they think are the intrinsic and timeless qualities of precious metals as though akin to star dust. But I can tell you one thing about gold that has never changed. There is no profit in holding it or burying it in a hole in the backyard. Like anything else, if you want to make the most of gold it is best employed as a means to transport wealth between two locations since there is virtually always a buyer on the other end who will convert it into the currency or goods you actually need to make your business life function.
https://www.fleur-de-coin.com/articles/oldest-coin
Well I can’t disagree at this point Gary. The triangle pattern certainly seems most plausible right now and it does line up with the seasonal strong period around year end/ January. Your idea will be even more likely once we drop back should gold bounce strongly off the lower channel of that triangle. That would definitely encourage me to start changing my mind. Otherwise, I am still planning around gold retracing back to its bear market lows at 1040 and possibly dropping even lower.
Until we get a break out though we are still in a bear market and that’s how I will trade it with a bias to the downside. Long or short does not really matter much though. Fact is, its really not relevant whether gold goes up or down big picture unless you are a gold bug.
The metal heads always dream of buying gold stocks as if its real estate. Set it and forget it trades that just keep winning year after year. Few of them ever acknowledge the true nature of this market though which is that there are relatively short periods of euphoria interspersed with long periods of stocks languishing in the muck. It is a true boom/bust arena not generally suitable for long term buy and hold idealism.
As traders, all we really need care about is there is enough volatility to keep playing both ends.
Gary — I remember you mentioning once that commodities [including precious metals] would go up alongside stocks during the euphoria phase.. if you take all of the bond market woes into account as well as all the political uncertainty here in the US and in Europe, that scenario certainly isn’t out of the realm of possibilities.
So far that is exactly what is happening. Since the bottom in 2015 (gold) and the bottom (stocks) in 2016 both have been generally going up together.
But I think gold is going to go up slowly as more and more people start to recognize that stocks are entering their final euphoria phase and that easy money is there to be made.
Once stocks end their bubble then all that liquidity will go looking for somewhere else to land and that’s when gold should really take off.
Notice that when the housing bubble popped and the stock market topped the liquidity flowed into the commodity markets in 2008 and created a bubble in oil.
I would agree with that Gary. As the market works its way higher the commodity stocks will begin to look ever more interesting as investors start gazing around for what upside opportunity is still available once everything else is obviously overbought and overpriced. It seems unlikely that resources will not participate in the stock frenzy that so many are predicting. Once this years gold declines are out of the way (maybe Novemeber/December?) I will be looking much more seriously at individual miners.
Robert,
Currently looking at early targets of 22.35 (20 day SMA), then 21.65, and 21.20 for GDX.
I believe it will go lower in the current daily cycle decline, but taking it one step at a time.
Hope this helps 🙂
@Gary and all the others here:
Life doesn’t follow your plan – more often it is a surprise …..
So is the gold market.
If everyone expects a triangle, there is a good chance for a big surprise.
Could be true. GDX may also be forming a current small triangle though. Have a look at this link below. This is one chart that gives me doubts about how low miners will fall in the next while as price narrows between 22 and 24 dollars. I don’t plan to overstay my welcome on JDST in any event. If its profitable today and tomorrow I will likely take the money off the table and leave the big ideas about price forecasts until next week when I can view the charts with fresh eyes again.
Here is that link
http://finviz.com/quote.ashx?t=gdx
And here is GDXJ. I will be over the moon if it breaks down below that lower channel line near 35 today or tomorrow. Happily for me the technicals imply the drop will be decisive and clean ending any speculation this particular triangle has real merit. You could say I am looking for a miners smash. Yipppeeee!
http://finviz.com/quote.ashx?t=gdxj&ty=c&ta=1&p=d
Ped, Emptyness,
I concur. I’m working on big picture outlooks, but taking action in the shorter term, based on what seems to be the higher probability outcome. I totally agree with Ped’s cautious approach to the short trade, as evidenced by my first set of targets posted above:
“Currently looking at early targets of 22.35 (20 day SMA), then 21.65, and 21.20 for GDX.”
And I go on to say I think it could go lower, but my short trade is based on the most CONSERVATIVE of these playing out this week: 22.35.
If GDX drops to 21.65, 21.20 or so much as one penny below 22.35, I’ll be ecstatic!
And then, as you say, I’ll reassess and reevaluate heading into next week ( = next month, also = FOMC minutes week).
Good thinking Zkot. Never get too greedy. It’s an account killer because with that philosophy you almost always end up holding too long for home-runs, trying to wait out draw-downs for that big payoff or losing all gains to the unexpected and never anticipated reversals. I have learned (the hard way) to just take any reasonable gain when it arrives and not try to out-think the rest of the market. It is a modest and effective approach that delivers consistent wins and keeps risk low. I avoid losses at all cost and have found that even when I did make a mistake that if I bought in a good region the price almost always comes back to me and gives me a chance to get out whole. Honestly, the market is pretty forgiving if you have done your homework and reviewed your technicals diligently. So you can trade with a lot less stress and much less worry by targeting support and resistance zones if the other buy signals are in place. It is a winning strategy. I honestly don’t know why it bothers Don so much other than the fact it obviously takes effort and careful planning to succeed as a trader. But I for one know it can be done.
FOMC minutes should set the end of the anticipated dead-cat bounces in USD, stocks and non-PM commodities.
These dead-cat bounces are small-spec driven –> on next week’s COT reports we should see commercials loading GBP, EUR and JPY, larger net long positions for the big guys.
I have the following tweak, though, GBP and gold are not to see lower lows – ICL in gold came early, on week 12, as Gary anticipated.
Short cotton, short!
…post-FOMC I’ll go long gold anew.
Ped,
I’ve got to ask: Are you a barrister? (or former barrister?)
(That’s “lawyer” in US English).
I appreciate your thought-out reply to my post about gold being “6000 years old”. The reason I ask about barrister is because your approach is more argumentative. As a scientist, I think more in terms of orders of magnitude, that’s why i refer to the gold market in terms of millennia — not centuries (one order of magnitude smaller), but also not in terms of 10’s of millennia (that takes us back to well into prehistory and the ice age and before).
So 6000 years, 2700 years — we’re thinking of the same order of magnitude of how far back in history. We’re on the same time scale:
-Overthrow of the matriarchy
-Invention of written language
-Invention of agriculture
I realize all of those things didn’t happen at once, but they did happen in the same order of magnitude of time in the past. And when I say “6000 years” — I’m just borrowing a page from Ussher’s playbook (17th century Irish Archbishop — not the singer 🙂 ) He says (masculine) God created the Universe (overthrow of the matriarchy, in my humble scientist’s interpretation) on October 23, 4004 B.C.
Those key events happened “in the same time frame” — 1000’s of years ago. Same time frame as the invention of currency.
I also agree with everything from “But I can tell you one thing about gold that has never changed.”
And I will provide you with some additional food for thought. Although you “can tell [me] one thing”, I want to point out another thing as well.
The one thing you state is the universality of gold, in that it can be universally exchanged between any two places in the world. Try traveling out of Laos with a pocket full of Kips into any neighboring country, or try to exchange some Lempiras or Quetzales and see how that goes!
The other thing: You do state, “…that has never changed” — the definition of timelessness.
From that sentence on, we are in complete agreement.
I’ve saved the link you posted for leisurely (weekend) reading — thanks! 🙂
No, not a lawyer. Sorry about that. I had no idea I was coming across so dry sounding. That 6000 year gold history thing is almost an anthem to the bugs though so its my pet peeve because it is a falsehood. They just keep repeating it mindlessly again and again though and eventually it might even become the truth since those guys over-run most sites and are so repetitive. Like a bunch of sheep.
Baaaaa, Baaaaaa, Baaaaaa!
What’s a krip? You lost me on that part.
JDST and GDX doing fine this morning (for the bears). Hope that cheers your day.
Hi, Zkot!
Out of boredom, I am a piquing prick arguing that agriculture preceded written language and that the bedrock, fundamental change was the mastery of fire – overthrow of matriarchy was a result of social stratification on the heels of the Fire Starter 🙂
The earliest forms of proto-writing were of religious intent and were not writing per se because they lacked grammar/structure, they were just symbols.
As a matter of fact the VERY FIRST SUCH FORMS OF PROTO-WRITIGN CAME FROM HERE, FROM THE PLACE WERE ROMANIA LIES (also part of current Serbia, a bit of Bulgaria and Ukarine) before Sumer, Egypt, China or Phoenician cities –> check out TARATRIA PLATES, VINCA CULTURE AND CUCUTENI CULTURE all part of the Neolithic, pre-indoeuropean settlements.
Well boys, I’m positive .86 cents a share on JDST this morning and its looking really good for the day. All you other shorters (all two of you) should also be pleased. Lets hope it holds and rewards as the hours pass. So far so good though and all the better if gold moves below 1250 and does not come back up for air by days end.
Ped,
Kip is the unit of currency in Laos — valueless the minute you step across any border.
I’ve only been to Vientiane & Luang Prabang — they are more than happy to accept payment in Euros, USD, and THB. Any modern business will print your bill in all 4 currencies.
I didn’t know about the 6000 year connection with the gold bugs — just thinking about the Ussher connection & figured it was “sometime round there”.
At any rate, a market that counts its age in millennia is likely to be structured and efficient.
Gold bugs use the age factor for nostalgic purposes. I see it in terms of market maturity.
Speaking of gold bugs — is that a reference to a scarab beetle?
Don’t know why, but an image of a golden scarab beetle just popped into my head today 🙂
Ped,
“All you other shorters (all two of you) should also be pleased.”
OK — that’s me and who’s the other one?
So far so good…
I’d like to see a swing high in spot gold (1244.83) & cross below the 10 day SMA (1243.74) for starters!
KHT
Hi Alex!
G’day m8!
Thanks for the ordering. It does make sense — I had sloppily lumped all those things together. If you can imagine some Alex and zkot 2000 years hence having a similar conversation and talking about electricity, computers, telephones, and the internet, in that order as they reflect upon some of the technologies of our age — yeah, it’s worth while to keep things in chronological order in our minds.
That, my friend, is syntax
But yeah, the Fire Starter sets the whole thing in motion.
Now, you’re talking about an old buddy of mine:
Prometheus 😉
Good morning,
Let us make money today.
Beware of falling knifes.
Or master the art of the short (talk to Ped).
Good trading to all.
Looking objectively, I would say silver holding above the 200mda shows strength in favour of the pm,s, and gold seems to be holding up relatively well against the strong dollar. Which indicates any potential falls in the pm’s will be capped….Just a thought….. the art of going short is the same as the art of going long, short when overbought long when oversold…..of course easier said than done….
Ped,
I am long JDST @ $14.39 from last week. Waiting for my final signal to add more for a longer trade. Looking for at least a test of the December lows in the miners… Might get that signal today/tomorrow by the looks of things…
(Haven’t had much time to post since my wife and I just had our first child almost 3 weeks ago!)
Nice work by the way on the nimble trading and selling in the high $15 area!!
Hey thanks Matty. And congratulations on the new child in your house.
Congrats to Ped, KHT and Z on the JDST short. I’m thinking if gold breaks 1243.50 then there’s definitely more downfall ahead and I may also get into JDST at that time. Monthly and weekly MA’s are not lined up on gold so it seems it’s hit its upper resistance of 1260 and should come back down?
Congrats to you Matty – just saw your post. Nice to get into a long trade and not have to touch it for a while to provide for more time with baby.
Thanks Ped & Blue!! 🙂
MM
Congratulations on the new first baby!!!
Thanks Goild!
Ped,
I wonder if you can say what percentage of your account you put into your current miners short?
From reading this blog, it is with certainty that the boat is loaded completely to one side. I will be maintaining my bullish long position. If everyone is bearish and short and waiting out for up to a year, hard to believe that is the direction we go. Time will tell. Many signs point to potential breakouts at any time. Again, we have no defined direction. Holding for now. Stops are in place should we collapse.
Did some charts on DUST and JDST with price targets. Let me know if you can see it.
https://twitter.com/robc70377927/status/847439477454757888/photo/1
Got 2K USO shares at $10.48.
Volume is low, not a lot of action like yesterday.
Though I just got $433 for breakfast.
Gold reminds me of oil last year. Bulls and bears calming victory alike as oil moved back and forth in a triangle pattern, then both swiftly being shafted as they held onto uwti/dwti (don’t exist now) expecting new highs/lows… The daily was pretty useful at picking reversal points….
Ped is full of bullpucky. He probably has a mirror right next to his computer screen so he can stare at himself all day.
Just like a sports match. The losers always hate the victors. 🙂
One hour of trading work = $555
That’s a good rate per hour.
I must go for breakfast and to errands.
Have a great day today and make lots of bucks.
Something fishy must be going on. The market is quite slow.
Actually, my trading platform somehow freezes and the candles do not move.
I will call Fidelity and ask them to fix the problem.
Final position added to JDST. Average cost is $14.65… Let’s see some new 2017 lows for the miners!
Matty – if you don’t mind sharing – what indicator prompted you to add your final position of jdst here?
Impatience, LOL!
My “add” indicator wasn’t actually tripped yet… Might not until close today or maybe even tomorrow (if at all)…
Seriously though, I just bought my second position based on 62% Fib retrace drawn from yesterday’s close to today’s high on the JDST 1-minute chart. Price broke just below it, but it was quickly invalidated IMO, so I bought at $14.90
I could be wrong on the timing, but I feel confident about the miners dropping going forward…
My indicator, however, is a summation of averages and oscillators from the 2-hr and 4-hr charts plus short term moving average crossovers from $BPGDM, GDXJ:GDX and GDX:GLD
I was watching the same thing. Fib came in @ 14.85 on the decline according to my elementary school math and its been hanging around there for awhile now waiting for the next leg up. Still looks good but I am not adding more. I’d like to see it above 16 dollars today though and would be more than happy with that.
Thanks for sharing Matty. Looking good so far with JDST at $15.30. I’m thinking it’ll at least hit $16.60’s before some pullback. Good luck!!
Here is my triangle.
https://www.tradingview.com/chart/SgNWm0XV/
Gary wrote:
“gold is stuck within a complex sideways triangular consolidation pattern which may continue for the rest of 2017”
I have to disagree with the last part. I see a great trade in Gold&Silver from midsummer to end of October/early November 2017. After that it’s time for the bond market to say hello or help is a better word.