MARKET UPDATE – WHAT’S GOING ON WITH THE METALS

The metals have begun the second leg up in this intermediate degree rally. Miners are on week one of a new intermediate cycle and should still have 5-7 weeks before topping.

45 thoughts on “MARKET UPDATE – WHAT’S GOING ON WITH THE METALS”

  1. james moffett

    Gary — yes, metals seem to have some momentum. What is your take on stocks after today’s rebound from possible DCL (oil up & FOMC on tap)…dipping your toe into stocks?

    1. Gary Post author

      I will not be trading stocks from the long side until I think an ICL has formed, and right now both oil and stocks are too early in their daily cycles to have completed DCL’s.

      It’s possible the PPT forces an early DCL ahead of the Humphrey Hawkins address but that just means the true ICL will get pushed out another ful daily cycle. If not then there is a crash still ahead of us in the next 2-3 weeks.

      1. james moffett

        By one count, a DCL could have occurred last week but by another count, as you previously mentioned, it may not have occurred yet. After today’s rally, I’m getting a bit more convinced the DCL occurred last Wednesday….but no clarity yet.

    1. Gary Post author

      No idea. Right now I want to see how this intermediate cycle plays out and whether or not it generates 3 rising daily cycles.

  3. RayB

    Last week Gary said he expected Gold to start to rise this week … looks like he was right! Thanks Gary!

  6. Jacob 2

    Gary

    All set to sell my miners Monday but held off after seeing your post. Glad i did. I was convinced that we were just getting a backtest to the neckline before the final deflationary plunge. Undercut…. Never heard of that one before.

    A fools dream but holding on to the idea that we are in a new embryonic virtuous cycle for the miners For the next 4 or 5 years. The major instruction being don’t sell buy the dips. From a fundamental perspective the only way for this to happens is if we get some inflation, global growth and the recovery of commodity and emerging markets. Not todays commentary but commentary can change.

    Thanks again

  7. Gary Post author

    As I kept stressing, an intermediate degree rally must break the intermediate trend line to confirm a final ICL. And an intermediate cycle can’t top until after the trend line gets broken. This is why I knew that gold was not starting an intermedaite degree decline a couple of weeks ago. As you can see gold still has more to rally to complete the confirmation and break the trendline.

    And as I pointed out in the video the dollar must break its intermediate trend line to confirm an intermediate degree decline. When the dollar starts down in earnest to break the trend line and produce its next ICL it should deliver a nice tailwind for gold.

    1. Jorgy

      We need to start thinking about the USD’s drop into the 3-Yr Cycle Low. We might have gold confirming the 2nd DC of its IC and a weekly swing in the miners on week one, but the USD hasn’t broken its DC trend line nor its IC trend line as you so eloquently explain in your video. I’m locked, loaded and leveraged long, but if the FOMC does not trigger the drop into the DCL, breaking the DC trend line we could see the USD break higher! Time will tell where we are at, whether the FOMC delivers the 4 rate hikes in 2016 (as promised in December) setting off the plunge into the 7-Yr Cycle Low. I don’t want to get too giddy since I feel like a dog that’s been kicked repeatedly over the last 4 1/2 years, but this 2B Reversal in the miners is really good given the cycle setup in the USD. With a USD 3-Yr Cycle due and having see the USD fail at DXY level 100, the FOMC may guide toward 2 hikes in 2016 (not 4)? I see the FOMC Statement talking more about their second mandate (i.e. +2% Inflation Target) that they and the rest of the world CBers aren’t hitting and hinting at more QE4 or NIRP or “data” depends on it. All and all it’s a really good setup for those w/ a ball sack… All we need is a little luck and an upside surprise! ?

  9. zkotpen

    I see two trendlines for gold:

    1. The one Gary has drawn on his chart — I believe this one will be broken.

    2. Another trendline one degree higher, from the January, 2015, peak, to the October, 2015, peak, currently at 1145 for Jan 27 and declining.

    I believe the second trendline is the one that determine’s gold’s intermediate cycle in a more predictive manner. If the second trendline breaks, then it’s onward and upward, eventually into the 1300’s. If, on the other hand, it does not break, then it’s one more move to lower lows in gold. Basically, it’s a groundhog day type of scenario 🙂

    I think the second scenario has a higher probability, but I’m fully prepared to make my alternate scenario the preferred, and vice versa, if price action over time dictates.

  10. Jackie chan

    Eventually China decided to allow market to reset naturally but will watch it closely to prevent external intervantion

  11. zkotpen

    My preferred scenario:

    Gold reverses at 1132-33; GDX at 14.32-14.45

    Same as I posted last week: That gold would exceed 1113, but GDX would not exceed 15.01

    I’ve narrowed my target range.

  12. zkotpen

    If gold exceeds 1143, I will prefer the more bullish scenario.

    If GDX exceeds 14.68, I will begin to wax bullish; above 15.01, even more so.

  14. Bill J.

    Expect XAU to be bounded by $1,160, i.e its vertical resistance from the peak in Year 2011…also, it “could” be attempting a reversed h&S bottoming pattern in the interim where a rally stopping at $1,160 could make way to create its “right” shoulder on another sell-off attempt.

  15. Bill J.

    On similar account for GDX, it could be looking to test the vertical resistance from the peak in Year 2011 at circa $17 in coming days. Note that last night’s bounce was by no means a small volume at 76mil shares done.

  16. Walt

    I hope no one here has alot of apple shares. Its down ,like 4% in overnight futures. I wonder if that’s the thing that will get this final move down the next couple weeks in the market to get all this overhang out of the way so we can move forward .

  18. victor

    Maybe I’m going to be sorry, but Alex words of Tuesday gold top keeps me stay aside…, just some exposure in silver though…, will see

  19. ChrisG

    Victor is out of your mind. Alex has been miscounting recently. Lol. If you have heeded alternative views here and buy gold days ago, you are so stress free now because you would have moved up your stops to a risk free trade.

    You can initiate now with a low risk stop if you know what you are doing

  20. ChrisG

    The mining sectors are showing healthy rotation. I took profit on those that have rallied a lot, and placed into laggards. Those laggards rally while leaders holding at resistance. Very good sign and very good to trade.

  22. Anthonyo

    Lot of the word”If” here.

    To me, gold needs to close above 1187 decisively on a weekly basis or the bottom is yet to come.
    It just does not feel like the final low has been made yet.
    Too much deflation still in the commodity space. Needs time to clear out.
    Oil may be in process of being done though bottoming.

  24. ChrisG

    Euro is definitely going to clear 110. Run lots of stops maybe by this week. Maybe can rally to 112-113. Am going to take profit there

  25. Alexandru Popovici

    USX moving below 98.68 would produce a weekly swing high, an omen of IC decline, and be my signal that I have over-appreciated USX’ strength, consider DEC03 the low in gold, JAN20 the low in $CRB and start searching for a gold entry in the near future.
    Of course, until then gold can run to 1135-1140 and be ready for a short-term reversal, for a HCL, [or not] but I stick to my signals and to viewing gold strictly through the USX filter: this filter was prompt in anticipating some reversals so that it is only fair for it to lag sometimes, it may be the case now.

    Shortly put, I would never initiate a gold entry without USX’ all-clear first. That’s part of my system.

  26. Walt

    A guy on bloomberg radio who’s the chief at Raymond James said he’d buy gold here moments ago . Not sure if that’s bullish or bearish in the short term . Its everywhere now . ” buy gold” . I read hedge funds are net long now . I was looking for blood in the streets before buying . When it started moving up , not blood in the streets

  28. Bill J.

    Folks, heed the TA pattern. As I said over the weekend, miners put in a weekly hammer as of last week’s closing…

    Are profiting yet? ???

  29. Bill J.

    I think one of these will happen on Thursday: SPX will down BIG or its MACD will cross up successfully and close in GREEN.

    So, it’s either a big red or a small green for Thursday!

    ???

  30. KLO

    I bought miners last week so I have my bias. At this point its hang on for the ride of your life….

    I am impressed with Alex’s comments and open mindedness. A breakdown of the dollar here would add a tailwind but isn’t it possible that the dollar and gold could rally together? The miners are set up and acting well here. There WAS blood in the streets last week when hui peered over the precipice and was below 100 last Tuesday. But there was no follow through on the downside and there was a quick hop back up to nearby support. The miners are at 14 year lows and at levels last seen when gold was in the $300 range. Isn’t that bloody enough?

    Bill J., The bullish hammer on the weekly miners last week is getting confirmation this week with the move so far. Much greater risk of trading yourself out of this market now booking a tiny profit and then totally struggling to find a new entry point. Fundamentals and technicals are finally lining up and I think we are in the early days and weeks of a new bull market in gold and silver. No more sell the rally, now it’s buy the dip. There are a lot of folks saying one more leg down who may have been left at the station.

  32. Walt

    Blood in the streets is a 14 day rsi
    Between 20 and 25 . gdx didn’t touch 30
    Last week . Wasn’t that oversold .
    Good job to those that bought last week and are in the green .

  33. bc

    Gold, silver and miner are possible topping today, and start new decline to search final bottom. It is interesting that silver is not going up today, it is a negative signal for metal.

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