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Before the intermediate cycle can top gold needs to rally far enough to stop all the calls for $1000 & $800 gold. There are still way too many traders expecting lower prices. The job of an intermediate rally is to clear that sentiment. As long as we keep seeing multiple comments about this being a bull trap (it may be) and traders should short the bounce then the bounce will continue. That’s what counter trend rallies do. They rally far enough to knock all of the shorts out of the market. Once that is complete then the next leg down can start.
As you can see the move into the first daily cycle low got a lot of traders short again. Ie. there is a tremendous amount of fuel to push gold higher. All of those shorts need to be squeezed into covering before the cycle tops.
And if this is a final bear market bottom, then sentiment won’t stop at 40-50%. It will rise to 70-80% bulls before the cycle tops.
At one point earlier this year I remember you didn’t want anything to do with metals because of the overwhelmingly manipulation in them kinda like how you feel about shorting the US markets. Why the sudden interest now? Aren’t you worried at all that the higher powers that be will continue the slaughter in metals?
They already slaughtered them to get the HUI to 100. Now it’s time to take the other side of the trade.
If this is a bear market bottom we should have an extremely right translated intermediate cycle in gold. Given the fact that miners were manipulated into a lower low while gold made a higher high I would expect miners to explode out of the manipulation zone (i.e. punish the short sellers) for 4 straight weeks of gains. This type of price action will punish shorts AND sideline longs or anyone who booked short term profits expecting a lower entry early in the cycle.
Speaking for all of us poor folks who just do the best we can with what we have you’re contributions on this site are very much appreciated. You have many great gifts…thank you for sharing them with us.
Why not short the S & P if you really and truly believe we will see SPX 1700 or lower? (you could always cover at 1800 to be safe)
The Fed has a printing press. Nuff said!
Listen to Mr JPY this week, the pennant is breaking out either up or down…
I agree William market selloff will take down any mining and energy companies period.
I like your charting and website!
I believe your comments over the last few days about the intermediate rally in gold are correct. Here in Australia, thanks to a weak $A, the small better gold miners are making nice rallies. The better stocks have no debt, good cash flows (even with Gold at US$1100), low P/Es and pay dividends. It seems the only way at present is UP, until an attack by the manipulators to restore faith in the $. The technical charts for some of them confirm this. Eg. ASX: EVN, RRL and soon to follow SAR, NST.
Gary i see 4 scenarios now after 6 days straight up in miners. RSI 5 is at 80 and was 84 on Friday AM.
I wanted to get your opinion which one are you leaning towards. At this time i’m thinking miners are temporarily overbought but please take a look and let us know your thoughts short term and longer term.
Possible Flag – bullish
Head & Shoulders – bearish
Falling wedge – bullish
W bottom – bearish. Bear rally
The miners rallied almost 10% last week. The HUI is stretched above the 10 DMA. A little consolidation here to allow the moving average to catch up to price would be normal.
Although sometimes in a really strong second daily cycle price will just continue to ramp higher and pull even further away from the mean forcing anyone not on, or early profit takers to chase.
The TSI for GDX is only at 53. I’ve seen it go as high as 90 before correcting.
Gary this overbought condition would match nicely with your assessment of dollar rallying out of its 18 day cycle low to test the tend line and perhaps then failing it, or maybe break out of it. That would consolidate gold and miners a bit. Scenarios are if this may be bullish flag or maybe h&s. I dunno i’m looking at it. This coming week we will know.
All you haters had better read up on negative interest rates: https://www.stlouisfed.org/publications/regional-economist/january-2013/how-low-can-you-go-negative-interest-rates-and-investors-flight-to-safety
In a post Lehman world you have to accept the fact that lunatics are running the asylum and nothing and I mean nothing is sacrosanct, not even the currency. Like it or not TPTB are moving us one step closer to a one world government and one world digital currency. In order to facilitate the move toward a one world TPTB must create a crisis of massive proportion one that “know one saw coming” or could imagine. Eliminating fiat and moving everyone to digital currency (i.e. 1’s & 0’s) along the lines of Bitcoin. Blythe Masters is working with elite members of the banking cabal in creating an alternative to fiat, one that TPTB can use to replace the current system of fiat once everything goes BOOM since we are in the twilight hours of the current system. Gold and silver is the alternative wealth storage vehicle and an anti-venom to the poison negative interest rates will usher in the fullness of time or the next recession since the FED is trapped at the lower zero bound. Think they won’t sacrifice the world’s reserve currency? Think again. The lunatics that run this asylum will sacrifice anyone and anything to maintain control of the masses of the world. The ships going down and they’re going to take everyone and everything down with it! ?
Oh and don’t forget what comes with NIRP: http://www.telegraph.co.uk/finance/bank-of-england/11874061/Negative-interest-rates-could-be-necessary-to-protect-UK-economy-says-Bank-of-England-chief-economist.html
The Abolition of Fiat Currency! ???
Good luck abolishing ones physical gold and silver stack! ?
I can hear it now, “Only criminals and terrorists need cash, gold and silver.” ?
Not in your lifetime.
Miners red, stocks green, and all is well in the world of blatant central bank intervention.
Great analysis Gary!
I have found an entry technique I’m the gold market in the following site:
Nice symmetrical triangle shaping up in Gold 🙂
There is not more cheap inflation hedge than gold miners…but it seems nobody are allocating as little as 1% of their money into this industry. or maybe it is indifferent and the only players that move price are big banks…where are pension funds with their thousands of billions?. anyone, a Tom or an Anthonio, could became an important stakeholder if prices continue to going down: simply craziness. Norcini continue to looking at the mining sector like at waste. At this point gold bugs have been devastated, but it seems someone want mooooooooooooaaaaaaaaaaarrrrrrrrrr blood
Houston we’ve got a problem, this bear claw looks “constructively destructive”…