Gold: Intermediate Bottom Close
This video discusses the completion of gold’s intermediate cycle and looks ahead to future price performance in both gold and miners.
I thought I would add this chart. When you think about it it’s weird but when price is most oversold that is when people are the most bearish. Yet all one has to do is look at a long term chart and see that this is when one should be the most bullish. Our emotions prevent us from thinking logically.
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Gary, after the chart i posted yesterday: http://prntscr.com/cqii36
You replied that gold has to have a bubble phase.
Well what i did is look at gold decades back on a logarithmic scale
You’ll be suprised with what you find.
The black climbing line is the logarithmic support the rest is pritty obvious.
As you can see in previous area’s gold didnt had a bubble phase either in fact gold had a very similar patern in the past with the market of the last couple of years:
https://www.tradingview.com/x/6Ux8ORQx/
Atm i am disagreeing with you on the bubble phase, i am inclined to say we reached the top area of this bear market and are correcting next few years until the next leg up begins.
800-1000 is indeed also my goal atm.
this chart (that i saw yesterday) proves you right about the bubble phase.
But it would also mean we first need a heavy correction before the bubble phase can start.
As I explained in my previous video this D-wave did what all other D-waves did. It dropped far enough to test the previous C-wave top. Now it’s time for the next leg up in this bull.
Trust me it will be obvious when we get into the bubble phase. Price will stretch 100-200% above the 200 DMA and every Tom Dick and Harry will be buying gold.
personally i am in doubt i am holding cash in the gold market till we either break down decent (following my scenario) or we break above the declinging bear trend to the upside.
This area is just not convincing me to go either bull or bear.
I rather risk missing the first leg up/down of a new move then stepping in wrong.
Soon we’ll know the answer.
Gary,
I am not sure you even know where the bottom truly is. You still have JNUG at 23$, do you think it will go back to even $21 or when? I will subscribe to your service if you get this one correctly.
Thanks.
lt
JNUG is going many many points above 23. Get serious. This is a bull market. Before this is over JNUG will be above 500 (split adjusted) and maybe above 1000.
So this intermediate cycle would be left translated which means the long term trend has changed?
You got another $60 bucks to go Gary till a sustainable bottom in Gold. Longer term Sentiment is still too rich.
No this intermediate cycle was extremely right translated It topped on week 31.
Gary, With all due respect, I am not sure what Gold chart are you looking at?
Gold’s first ICL was on May 31 at 6 months from the Dec 2015 Low. The May Low had everything you need in an ICL (Failed Daily Cycle, IC trend line break and a Fib 32% retrace) so why would you not recognize it as one?
Out of the May 31 ICL this second intermediate Cycle topped after just week 5 and has been heading into its Yearly Cycle Low ever since. Duck has a valid point and question here, IMO.
Your analysis on the USD’s ICL pattern would also appear to be flawed as well.
The other point to be made from a Cycles standpoint is Time.
The first ICL into may took 6 months into the May 31st low. From a Time perspective, it has now been only 4 months since that ICL so it is still possible that this next Low will only be a DCL followed by a bounce and then drop into the Final ICL which would be in late Oct to mid Nov timeframe.
Not saying this is certain but YCL’s can be very nasty affairs. Are you going to hold NUGT and JNUG into a late Oct/Nov ICL if this is the case?
Duck, this is a very good observation you’ve made. I personally think it is normal to be that way because the last YCL was on DEC 03 last year, so that….we are nearing the timing band of the next YCL 😉
Obviously, the YCL to come should be lower than the ICL now in the brewing.
…this expected YCL of gold is consistent with the IC cycle development of USX.
USX is late in its IC so that it should START TRENDING DOWN AGGRESSIVELY after tomorrow’s jobs report to chart its ICL (while gold will rise in its new IC to prove shortened and also left-translated).
Once, USX’ ICL is charted, its rise in a new IC will provoke gold’s decent to its YCL in the winter.
USX rise in the winter (in a new IC) will be catalyzed by Brexit discussions which will take over all markets’ attention –> THEY WILL TAKE STOCKS DOWN INTO THEIR YCL TOO
Starting to see momentum divergences on the intraday gold charts. The bottom is close.
Based on the size of the consolidation box (roughly 70 points). I’m guessing gold tags the 1240ish level after the employment numbers are released tomorrow.
Odds are good that will be the bottom in gold, and the top in the dollar.
I will add a few words to Alex’s assessment:
Big triangle;
triangles within triangles;
watch for them!
As I said a few weeks ago, old turkey becomes very cold turkey in this cycle degree bull market rally.
Gary, the last ICL in gold was on May 31, so that the current IC toped in week 5, producing a left-translated IC, as Duck noted.
…the assessment above, that a deeper correction comes in the winter, as also heeded by Zkot, is underscored by the technical damage just inflicted in miners: the strong breakaway gap-up on JUN 3 has just been filled.
So, next phases for gold/miners are:
– ICL in the brewing (today or tomorrow – it is up to USX to make the game),
– strong surge as USX dives in its IC decline post-jobs report tomorrow,
– YC declines in the winter.
Alex,
You have uncovered Gary’s point of subjectivity.
March 21, 2013 was also supposed to make a higher high, for a right translated daily cycle.
But that’s not what happened.
One can’t get too attached to one’s own forecast 🙂
Well, Zkot, I’ve gone through a mountain of pain before I got to learn the lesson you are mentioning.
This lesson lies at the heart of taking small losses, which is part of the Holy Grail of playing any probabilistic game (professional poker/blackjack do the same: lots of small losses and several large gains).
I’ve seen trader after trader destroy their portfolio trying to time perfect entries and stopping out over and over when they fail to do it. This is how one loses money in a bull market.
I’ll say it again, and maybe some will learn the lesson, trust me it took me a long time to learn it myself because I bought into the same nonsense that others are spouting for a long long time.
In a bull market you don’t have to time perfect entries. Any long entry will be a winner. Trying to time bull markets and stopping out over and over every time you fail to make a good entry will cause you to wreck your portfolio in a bull market when all you really had to do was buy and hang on.
How many billionaires do you know that trade in an out making 20, 100 or 1000 trades a year. I’m going to bet none.
How many billionaires do you know that take a position in a bull market and hang on?
Virtually all of them.
If you want to be mediocre in life then just do the same thing as everyone else. You will be assure of staying with the herd.
If you want to be exceptional in life then you have to do the opposite of the herd.
Gary, this is pearls of wisdom; but some here have no ears(or between ears) to listen to it, let alone understand it.
The USD index has NOTHING to do with Gold.
USD/JPY does.
That has broken out with sentiment extremely bullish JPY…negative USD.
Until that tops, or shortly before it tops, Gold is going down.
Yes, and I have been shorting the YEN with YCS since late September when I made this post.
https://goldtadise.com/?p=382241
Gold stocks down 25% from the top.
In the last 4 weeks intermediate oil stocks are up 15-20% while gold stocks are down the same amount.
A good 40% out performance for the sector you should be trading.
And the Gold oil ratio is STILL ridiculously expensive.
You may get a nominal bottom in Gold stocks at some point, but in relation to oil stocks, their drubbing is just getting started.
ZKOT, I think USX will top in Asian trading tomorrow at my expected target of 96.8, as I stated the day before yesterday (while gold will meet its ICL, of course).
It will be easy for you to go bottom-fish gold since you live there 🙂 lucky you! (I am too lazy and prefer losing an opportunity than spoiling my beauty sleep 🙂 )
Miners on the other hand should bottom today since they will trade again 1h after jobs report tomorrow.
I’ll buy a portion of NEM at the close today while keeping the rest for tomorrow at the open.
I checking out from my computer – there is nothing to see till the end of the session.
Have a great bottom fishing, man! 😉
I added a chart to the post. It gives a classic example of how traders are always wrong at turning points.
yeah but you missed a lot of this downside action as well.
The way I see it you gonna lose 2 Burritos.
USD/JPY…I am kicking your butt on that call. 110 before your 90.
And GDX is not gonna cross $32 for another 10 months…don’t look so improbable now does it?
GDX will cross 32 by January and probably by mid November.
Gary could be right. There could be still some unfinished business on the downside. Cycles and sentiments are helpful but may not be reliable. Price is king. As gdxj gets close to 34-36 area, it could get interesting. Predictions do not always pan out. au/ag stock universe is small, less than 200. Worth watching them all closely. We will know when we get there. A few leaders tend to ring the bell. Interesting times ahead.
gdx hit 50 wma is likely.. 5o% retracement
maybe it’s a mistake but I’m going short till 42 minimum in Oil ..
Hi there. One question: Why do You guys not buy options on the metals themselves or into a gold-trust or silver-trust of Sprott for example? You are buying the individual companies and so You will always have some individual company risk, don’t You?
See You tomorrow and good luck! 🙂
Gary,
A turning point may be nigh, but you seem to be ignoring two key points:
1. Gold’s left translated intermediate cycle; and
2. The yearly cycle low — are the metals going to simply skip the YCL this year? The YCL would be the ultimate buying opportunity.
What are the implications of the above, according to your analysis?
Need I remind you that your success in metals this year has NOT been old turkey — you’ve successfully traded daily and/or intermediate cycles, which has been the correct strategy.
Longer term picture, gold is still overvalued vis a vis the CPI. The market needs to correct this.
Lol CPI as if any onf that out of date stripped down to the core measurement is tied to REAL inflation lol come on now. Is that you Yellen?
Well this will be the YCL but of course price was much lower early in the year. Just not at a cycle low.
Will tomorrow’s employment report be a trigger for more of the same or a sharp short squeeze? Multiple oversolds. Let us wait and see.
Kudos to oil.
Woe to gold.
Gary,
When will we add to existing longs?
Anyone who has bought into the gold sector in the past week is suffering nasty drawdowns (myself included). Strangely, many of my penny gold miners are holding their advance since Feb with some actually going up while gold crashes. Seems to me that is a good indication that the bull market will resume after this scarey washout.
Agreed.
How much longer can crude go up against a rapidly rising US dollar?
The question is more: are the bank taking oil higher than the previous high, so they can unload their positions at the “break out” to retail traders. So watch out for that. Everybody will be bullish as hell if oil is above $51.67.
During 2005-2008, USD/JPY and Crude oil went up in Tandem….so I am gonna say at least 4 years.
http://image.exct.net/lib/ff021270746501/m/9/Oct+2016+Bill+Gross+Investment+Outlook_October+2016.pdf
Just bought NUGT (my first Gold trade ever).
I except gold bottoms between today and the Payroll Report if the Payroll Report is negative, but I except a last phase of the blooth bath if the Payroll Report is positive, and then bottom either way and easily recover any futher losses.
This is small gamble of course 😉
Gary, I bought NEM for 34.03.
You tell me tomorrow at this hour if I have done well or wrong waiting for it until now.
Victor, shorting oil should work for few trading sessions but mind that oil should cool merely to a HCL as it will be drawn by CRB index in its DC decline to start tomorrow.
But as soon as CRB completes its DCL, oil should spring out of its HCL.
Therefore its scope for contraction is limited, it won’t reach 42, maybe 46…maybe
Thank you Alex, I will follow you.
Good post, Gary. I bought some GDX calls today so I agree the bottom is near. Quite the coincidence the metals crash the week that China is closed for holidays eh?
Would be funny if China devalues next week, now that the Yuan is in the IMF basket anyway.
Here is another ratio that shows how overvalued that useless metal Gold is.
Platinum has historically traded at a 20% premium to Gold.
It has traded at a discount to Gold for less than 3% of the time in the last 50 years.
It has never traded at such a large % discount for so long.
Best part, the breakeven for Platinum miners is about $450 higher than the current price.
I think a big mean reversion is coming there too.
I covered a little more today on my shorts and now have 20% left with a trailing stop. Might cover premarket tomorrow. Won’t go long till $GDX hits $20.
Holy Cow!!!!!!!!!!!
British Pound down 600 pips (4%) in 3 minutes. What the heck happened?
I think that should be the final low in the British Pound.
Reeks to manipulation in thin Asia-trading (while China isn’t even open). Should be the bottom.