61 thoughts on “CHART OF THE DAY

  1. Alexandru Popovici

    Let’s see ECB’s decision or lack of it later today, Gary.
    If no decision, then indeed these chart predictions will occur.
    Otherwise…shorting gold will make my day.

    1. Alexandru Popovici

      Hello, hello, Z! The announcement is scheduled at 7:45 EST but, if there is an extra QE, it is more likely to be announced by Draghi himself during the subsequent press conference.

      There may also be a 3rd outcome, a mix (actually this seems the most likely since the ECB board is fleeced with hawks): effectively the ECB not to do anything but Draghi to assert a very dovish statement.
      The effect of this outcome would be that, at least short-term, the correlation between USX and stocks would turn negative, so that we can see USX falling (hence gold rallying) while stocks up into a new intermediary cycle with ICL yesterday.

      So, if I were to make a non-tradable bet on the ECB outcome and aftermath in the markets, this would be, in which case I would not go long stocks but gold.

  2. Dan

    Covered my shorts and sold TLT yesterday. Bought 1 165 march UVXY call. Got my ticket for the collapse, only a few hundred bucks. So many calling bottoms lol

  3. Alexandru Popovici

    We are effectively in my 2nd scenario given the promise made by Draghi to take action in March.
    markets have reacted as expected under this scenario:
    – USX and stocks up aggressively (especially European banks)
    – gold and commodities down.

    Draghi’s promise:
    “It will therefore be necessary to review and possibly reconsider our monetary policy stance at our next meeting in early March […]”

  4. bc

    If gold do not break down $1090, I believe gold will go $1120-1140, that is an intermediate top, and than down to $1000. look like $1090 can be hold. $USD will go 100 again, not down right now.

  5. Chris

    If only Alex reads his initial plan carefully before making rash decisions based on market post ecb moves. This could save him some troubles.

    1. Alexandru Popovici

      I don’t know, Paul. I do not trade miners only use them for gold trades guidance.
      But I can only suspect that miners will continue their intermediate cycle decline for one more daily cycle.
      Very short term, on the other hand, GDX should produce a bounce at some point (temporarily diverging from gold’s downward spiraling to triple-digit level) in order to commence a new DC since it is very late in the current DC.

  6. Alexandru Popovici

    – stocks left an ICL
    – gold produced its DCH –> its daily cycle to fail soon

  7. Gary Post author

    I’m going to say that stocks have one more drop next week or the first week of February before the final ICL.

    Those almost always occur along with an ICL in the dollar or a top in the intermediate dollar cycle. I’m guessing we get a top in the dollar next week along with a final ICL in stocks.

    1. Gary Post author

      I also think that commodities will bottom along with stocks, although gold may be leading and may have made its bottom in Dec.

    1. Alexandru Popovici

      I don’t know, Paul. It is best to go past the bounce, not to get fooled by it (or even worse: to see it as a leading indicator for a gold bounce out of its intermediary cycle decline) and wait the first sign of weakness to re-short miners.

  8. Alexandru Popovici

    Swing low in stocks !!!

    Gary, I would have to disagree both with stocks and with gold:
    – stocks up in a bear market rally (in search for its ICH)
    – gold to see new lows, below 1000

    1. Tushar

      Thanks Alex for timely comments and insights! I am playing measured move target in $XAU near to 32. GDX will likely be near 10. Brent near 25 when it’s all done. For stocks, I agree with you completely for a rally starting now for a few months. Please keep it coming!

  9. Lil' Ricky

    If oil can catch a bid here, even for just a few days, then I think the stock market rally may have some legs. If it does its usual — flops like a dead fish and we’re at new lows in couple of days — then that would likely cap whatever rally is under way in stocks. Would love to see it crawl back above $32 in short order.

  10. ChrisG

    USD CAD, this pair has marked an important high in USD. When CAD rallies, commodities likely too. Hence Gary is right. Alex wrong

  11. Mark

    This is an interesting interview with Michael Maloney and Michael Oliver.
    The most interesting is M.Oliver’s. (from the 45 minute)
    He is a very smart technical analyst who is suggesting that there is a mega switch in progress from the stock market to commodites .
    It’s a slow process that is brewing under the surface of prices,he uses momentum and sentiment analysis to anticipate the price movement.
    He also thinks that gold could have already bottomed in december as Gary is suggesting a few comments above.

  12. Alexandru Popovici

    One word of caution: commodities’ segments have arranged correctly: commodities complex are led by gold and gold by miners, this is the usual relationship and here’s how it has unfolded:
    – GDX started their intermediary cycle decline first, as I had anticipated 2 weeks ago
    – gold is not about to produce a swing high and then start its own IC decline
    – crude produced an ICL yesterday and the whole CRB complex has started today a new IC
    – GDX will bottom first arround FEB 20
    – then gold will bottom in its 900s
    – then CRB complex will finish to lower the IC it just started today.

    PS: USDCAD is a commodity pair shadowing moves in CRB, it is led by CRB complex.
    Attention should be focused on the IC decline of miners and not fight price action

  13. Chris

    Poor Alex, you are recently delusional. U got it very wrong with stocks, now you shall be again with gold and commodities. Gary is the right one.

  14. Chris

    ALex, there goes your USX rally. LIke i said, your original thought was, draghi talk only, no action, means scenario 3. You forgot. USD just fooled the masses. Watch out. Fake out. With false moves, comes fast moves over the next few days.

  15. Bill in Tokyo

    Short term-wise, using 2 and 1 hr charts, everything is looking heavy to me – I think everything goes down the next few days. GLD too. GLD hasn’t gone higher than the Jan 7th peak, and looks to be running out of gas. I won’t short anything, but I think it’s too early to go long yet. GDX, SPY, XLE are all going down further.

    1. Bill in Tokyo

      … and TLT will make one more gasp higher.

      But all this is neither here nor there – I’m just following price, and noticing extremes or changes of behavior in price.

  16. Anthonyo

    When do we LONG oil?
    Miners are making 12-year lows as physical gold rallied? Feels like another leg down in gold is coming before it’s over.

    Jan 26/27 Fed statement: Cause for stocks and oil to go UP?

  17. Gary Post author

    I’m pretty sure the move down in miners was a fakeout to get traders to puke up their shares cheap before the next leg up begins.

    Remember this is the most heavily manipulated sector in the world. You have to take everything with a grain of salt and never trust that any move is dirven by supply and demand. Most of the time they are driven by the bullion banks to set up their next trade. So very often short term moves are bait to sucker in technical traders.

  18. KLO

    Thank you very much for the analysis Gary. The lack of urgency in the gold/silver complex does not mean that something isn’t brewing under the surface. Miners and hui bumped back up to recent support that had held on multiple occasions over the last year and gold and silver showing a little resilience . I’m reading a lot of complacency and most seem to already have the next leg down for gold and silver as a sure thing. I agree with Gary’s earlier post that the bloodshed on Tuesday could be a fakeout move getting positioned for the rally in the metals and the miners. The chats and commentary all over the web seem quite full of genius traders that have made a killing riding gold and silver down. Similar to the opposite sentiment 5 years ago on the long side of gold.

    As for the general market why can’t this be a very long term top like a 2000? In fact feels like 2000 all over again…the S&P and Dow can only go up from here (after a correction) and gold will never go anywhere. Yep, feels like 2000 again. Only Greenspan, Bernanke, Yellen have used up a lot of ammo…

  19. Bill J.

    Yesterday’s rally in miners was done out of a very weak volume…be very careful of another malicious push down today to prevent HUI in closing up with a weekly hammer.

    Fully cash for now.

  20. Bill J.

    But, then, again, USD just put in a “shooting star” right below 100 & looking to reverse down…that’s why Gold didn’t weaken at all in the past few days!!!

    So, the chances of miners rebounding are right on the card too!!!

  21. Bill J.

    The 120mins chart on GDX looks bullish as it had a breakout on its vertical resistance since the peak of Jan 8th…looking to rebound here today!

  22. Frank

    Wednesday’s stock bottom was temporary, I think. It was wave 1 down from the top. We are in the wave 2 correction before we dive down in wave 3, a more powerful wave. As usual I missed profiting from the wave 1 bottom because I was falling off my seat thinking we were en route to hell. I stay with a big picture approach.

  23. Alexandru Popovici

    Good morning!
    I see USX produced a strong shakout last evening; now it is getting back to pivot 99.65 where the bulls-bears fight will ensue in its earnest.
    USX’ shakeout to rid of weak bulls dragged stocks lower and gold higher into yesterday’s closing.

    yes, stocks cascaded way more below than I had believed BUT my risk management rules saved me from a loss larger than -1.8% of my equity.
    Now I am double short gold via etf DZZ with 17.5% of equity, capital at risk 0.9%; planning to increase my stake to 25% on follow through.

  24. Chris

    Poor Alex, his short gold is going to hand him his head on a platter. Go look at $TSX. Its weekly going to form a dragonfly. Tis bounce is going to have more legs for commodities. When TSX forms a big low and rally off it, gold follows.

    1. Alexandru Popovici

      Chris, according to my last comment yesterday evening, 3rd bullet/line, I see oil and commodities having entered yesterday a new intermediary cycle.
      Thus, I do not contradict the idea of commodities rallying up big in the following couple of weeks, but quite the contrary, I agree with you on commodities current bear market bull !

      I am trading gold, not the other lagging commodities.

  25. ChrisG

    Alex, if commodities is going to bounce, gold will likely bounce to 1145. Then it’s a short there. Tis is unlikely the level. And Gary is likely right about silver. When tsx rallies, silver if heading to $15-$15.50.

    1. Alexandru Popovici

      I don’t know anything about silver, Chris, except that it has been highly manipulated throughout history and, on top of that, also very volatile, thus an asset for me to avoid.
      So I’ll not comment on that.

  26. ChrisG

    Doesn’t matter Alex. Bottom line, gold doesn’t seem like a good spot to be short. I am long crude, gold, silver, copper.

    1. Alexandru Popovici

      long crude and copper seem good plays as they move with CRB index and particularly the latter correlates with Chinese stock market which is set for a dead cat bounce into a new ICH piggy-backing US stocks.

  27. Alexandru Popovici

    oil can easily reach 38 and set its ICH around there (before diving to new lows) while diverging from gold.
    As I commented to Paul yesterday, GDX will soon diverge [again] from gold in a short dead-cat bounce as it will search for its new DCH

  28. Dan

    Central planner criminals open their yaps to rescue the market. So pathetic. Give it a few days for the bounce to play out then re-short. Market should go no bid on the next leg down. Days of delaying reality are over.

  29. zkotpen

    Good morning Alex!

    Your shorting gold so soon is a surprise — seems a bit out of character for you.

    As of about 6-8 hours ago, I’m looking at gold moving sideways, perhaps all the way into the FOMC zone. So far, there’s been 3 waves up (zig zag) from 1071 to 1109. Then almost spot-on 61.8% retracement yesterday.

    So far, both my intraday charts (2hr and 30min) are pointing up. Yesterday’s bounce gave a small 5 waves up, followed by a corrective move (small bear trap) — maybe one more move to 1103-05 area.
    On my daily chart, gold is getting squeezed between my slowly falling resistance curve, currently about $25 below the 200 day SMA, and the rising lower trendline support from 1047. A move down, say Tuesday to around 1080, or Wednesday to around 1083, as a reasonable projection, before turning up, either 3 waves up (another zig zag), or 5 waves up as the final wave up to the next high. Maybe in conjunction with FOMC meeting, or FOMC + employment report the following week. That could be a likely scenario for a zig zag — 5 waves up on FOMC, then retrace/consolidate (bear trap), followed by 5 waves up on jobs.

    At any rate, I don’t think that lower trendline will break before a new high is made above 1113. I also do not think that the current daily cycle in gold will break the 200 day SMA, currently at 1133 and falling about 50 cents per day. So I’m looking for 1120-1130 later next week or the first week of February — my targets are moving.

    Happy trading!

    1. Alexandru Popovici

      Hello, Z!
      For me it is perfectly me calling for thumbs-up for USX and for a short-gold trade 🙂

      I have been claiming USX to ride its bull to new highs into March since …. late October and even after DEC3 when it fell into IC decline I saw that IC correction as a natural shakeout of weak bulls and since proven me by each week that USX indeed has got the stamina to go to new highs despite many classical signs of weakness.

      On miners & gold: 2 weeks ago, on JAN8 I had warned about the swing high in GDX and predicted that, besides miners sliding into IC decline, gold would follow it too but not immediately: FIRST GOLD WOULD CHART A LOWER DCH.
      And indeed : 2 days ago, on JAN20, gold printed its DCH at 1110 vs 1113 on JAN8.

      I might be wrong and lose the -0.9% capital at risk on this trade or I may be right ….BUT THINGS SO FAR HAVE GONE WITH USD, WITH MINERS AND WITH GOLD AS I HAVE BEEN SEEING THEM.
      So why not trade it the way I see it ?!! 🙂
      It makes perfect sense to me, in context with my calls since late October, and with Lady Market’s consent so far.

      In short, it’s perfectly me 🙂

  30. Alexandru Popovici

    Both USX and gold are charting intraday cups-with-handle now, except that gold’s is ..belly up 😛

    Crude oil is set for a correction before moving higher –> that’s a scalper’s trade.
    Crude’s inverted triangle is a menace

  31. Chris

    Alex is delusional and this is why. Index can rally some due to 1. Banks led, 2. Commodities led. This rally the banks hardly participated. This rally is commodities led. Hence, it is wrong to short gold. Gold will likely participate upwards.

    In banks led rally, you will see gold selling off.

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