Chart of the Day – GDX
GDX has now completed a weekly swing barring a complete reversal the rest of the week. This deep into an intermediate decline a swing stacks the odds heavily in favor of the correction being over. The metals should now rally for the next 3-4 months.
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Agreed, Gold sold off much to clear sentiment and because of manipulative selling attacks and rate hike prospects, which are a total balony.
Yellen isn’t going to raise interest rates in December, period!
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/10/16/20161018_edcon1.jpg
Rate hike in December simply means Financial crash + US recession at this point. Worst timing ever because of political and policy uncertainty. First new president have to be installed and policies outlined in the first few months, then companies and consumers are going to invest and spend again. Only after that they can raise interest rates (albeit slowly).
Fed’s job is to promote economic and job growth, stable inflation and maintain financial stability. Not to crash to markets and economy at the worst timing ever! Fed credibility will hit rock bottom anyways, whether they raise interest rates or not.
Gary,
Due to the severity of the decline I doubt it will go straight up. I believe we might fill the gap and then retest or go lower than the 22’s level. So a double bottom likely first before your big rally?
I know that’s what most of the EW guys and technicians think but I suspect they will get left at the station like they usually do at these bottoms. We aren’t in a bear market anymore and the metals should act different now that a new bull market has begun.
I think a lot of folks who panicked and sold at the bottom are going to find out just how fast a bull market can erase an intermediate decline, and I will be saying I told you so before very long.
Remember in a bull market there are no losing trades on the long side.
Sorry but it’s not easy to think that at present the gold is destined to decline if key part of the analysis is the sentiment bullish: it seems that values above 70 are too high.
Unless I do not have the wrong data! I make reference to timingcharts.com
Of course, the same holds for silver
Consequently GDX and GDXj should go back far enough!
I do not know ,but I feel the same movement on the weekly chart in July 2013 by the miners
Some of the Goldtent crew are still bearish and have already missed this reversal….nothing has changed you are correct Gary…
Gold continues to show remarkable correlation with USD/JPY…again this morning.
As long as USD/JPY has not topped, Gold will NOT bottom.
watching metals following USD/JPY for a year now …, so do you think it’s topped? thanks
Seriously doubt it.
USD/JPY follows the inverse of TLT. Normally currencies follow interest rate differentials but with JAPAN’s 10 year fixed to zero, TLT pretty much runs the show
I think TLT has topped so USD/JPY has put a very long term bottom.
$WTIC:GOLD ratio forming a giant inverse head and shoulders pattern and testing the neckline now.
Breakout here….which I expect soon will target Oil Gold ratio about 60% higher over the next 2 years.
I think you are going to be disappointed. The yen has put in a long term bottom and is starting a new cyclical bull market. It looks like it has completed a corrective move allowing the 200 DMA some time to catch up to price and we’re going to get a breakout above resistance soon.
Nah..that was the cyclical bull market and it is finished.
We will see 110 in 6 months and 120 in 18 months.
I hope you’re right, Gary. I notice that you are pretty good at calling bottoms, so I decided to listen this time around and loaded the boat last week with silver miners. That trade is looking very..very… good already my friend.
Best
Ryan
Time to say thanks by buying a subscription.
You bet. Planned on it. I’m what Gary calls Old Turkey, but I’m terrible on knowing when to sell. Hoping Gary can help with that when the time comes.
Gary,
How important or is it important to see gold stocks outperform or lead the gold price back up?
Do you put any stock in that reasoning?
It often signals a bottom when the stocks start to lead.
None can argue with price. Price wants to go up. One needs to stay long for that duration. Nothing goes straight up. There will be pullbacks/consolidations along the way. Important to stay with the trend and ride it. It is just week no.1, still at the starting gate. Important for everyone to do their own due diligence and risk management.
are you really sure that we are in the presence of a bottom for the miners? Apart from the consideration of the levels of gold sentiment, it does not seem strange that FCX also lose today?
Why would you not expect another undercut low Gary? Wouldn’t that be a typical move to flush out the weak longs?
Is the market smelling future inflation, like inflate or die so Central Banks choose higher inflation.
For an undercut low, it would have to go below 1243.20.
Don,
An undercut was normal during the bear market, but we aren’t in a bear market anymore. I warned over and over that the analysts that got the bear market right would fail during the transition to the bull because they would continue to play by bear market rules.
That makes sense. Got it. I am long silver and gold equities so up is fine with me.
It sure doesn’t look like oil is getting “dragged down” anytime soon. I guess sometimes things go according to plan and other times, not so well.
Alex, are you still bullish on the treasuries? If so, for the short or longer term? I have been short for some time and have covered some, but not all positions. I am thinking that any strength would be an opportunity to short again.