RETESTING THE 200 DAY MOVING AVERAGE

$XAU – Retesting the 200 Day Moving Average
Mining stocks have broken their daily cycle trend line and are likely to retest their 200 day moving average over the next week or so. This would potentially allow the daily RSI(5) to push down to an oversold reading near/below 30, give the rising 50 day moving average more time to catch up to price, and trigger the stops of traders who bought the breakout above the 200 day moving average within the past month. This is a normal corrective move that is unlikely to last much more than a week.

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129 thoughts on “RETESTING THE 200 DAY MOVING AVERAGE

  1. Pedestrian

    Please Gary, just try to listen to me for a second even if you think you will disagree. The XAU is almost precisely at the peak of its falling channel right now today. We are going down and the recovery period is more distant than you might imagine.

    Just run a couple simple channel lines on that XAU chart. I would encourage you to not box yourself into the idea that miners are only due for a modest pullback followed by a big run higher. Rather, it could be a considerable setback and the decline could last as long as the next three months.

    If you can see what I see then get short instead. Its 100% OK to change your mind when presented with an alternate but likely scenario. The gold bugs hate me but I have a very good record in this regard. And my charting says the entire metals sector has topped out and due for a fall.

      1. MegaMind

        Ped, I drew the channel you mention about… i would say there is potential for a 15% drop minimum…good eye…

        1. Pedestrian

          I established the lower rail using the points at October 11th and December 16th. The lower channel projects to the middle 60 dollars or lower depending on how far out you imagine it can run. I am not saying it must go there of course. But if XAU does not turn around quickly and break above its upper channel I will assume its next destination is the lower rail.

          1. MegaMind

            I saw that lower rail but I was being conservative… lot of this is going to be dependent on currency action and other events… you are right 60ish is possible only if it takes out the 77level…

    1. vin

      Thank you Pedestrian for your insight. Your posts are quite helpful. Please continue posting. Though I am of the opinion that gold is headed up because those in power WILL do their best to stop 10years yield from increasing substantially. Yet, I take your comments into consideration whenever I trade.

      Having said tha Gary IMO Gary is right that gold is headed higher (though for different reasons) and that Gary is a genius, I have to admit that I have made more money using Gary’s posts as a contrarian signal. I came to this site about 5 months ago. Since than I have made a bit of money following Gary but as a whole I have lost money following him.

      On the other hand, whenever he is extremely sure of gold going up I sell gold/golds for a short period. And, whenever he becomes iffy I go and buy gold/golds. This strategy has done extremely well for me so far.

  2. Gary Post author

    I don’t trade based on chart patterns. I don’t think I’ve ever seen anyone make any consistent money trading chart patterns.

    I trade based on cycles and sentiment levels. Sentiment levels indicate this rally still has lots of upside potential before we need to start looking for a longer term top.

    You’ve been trying to call a top in this rally for weeks and in the process you’ve missed an incredibly powerful run. In the meantime we’ve taken the metal portfolio from +50% to +167% during this period.

    Way back on Jan 24th you were looking for gold to slide back down into the low 1100’s. Instead it rallied to almost $1250.

    On the 31st you were buying JDST. That trade is now down 30%.

    I just don’t think one can get any kind of edge from just chart patterns. If that were possible every Tom, Dick, and Harry with some charting software would be rich.

    1. ras

      Likely, the next stop for xau could be 102, Sept high. Folks who bought at September high and got trapped would bail out at that point, being happy to recover their capital. That is the meaning of resistance, a remembrance level. After a bit of pull back/consolidation , xau to head higher to August high? We will cross that bridge when we get there.

      If Gary’s view is correct, we should be seeing a basing pattern with an upward bias in xau during the next 4 days of the holiday shortened week. Time will tell.

  3. Hamish

    Ped, you are all over this blog. It might be time to take a little break. Meet a girl… go to a movie. You can come back and rightfully say I told you so if we do indeed get the big drop you have been talking about for so long.

  4. Gary Post author

    Some people are good at making money on the short side of the market and some are good at the long side. Few are good at both.

    Ped has shown he is good at the short side (with some help from market manipulation during the bear market). But I think that manipulation is over.

    I’m very good at making money on the long side. I suck at the short side so I don’t even try to do it.

    When the market is going up you should pay attention to me. When it’s going down Ped is your man.

    1. ras

      Indeed, the skill sets are different for making money on the short side vis a vis the long side. Technical indicators also behave differently during DT versus UT. For example, during UT, rsi 5 seldom dips too far below 20 level, and the recovery tends to be quick. In a DT, rsi 5 tends to get stuck below 20 level for relatively longer periods.

  5. Pedestrian

    LOL!!!!

    I want to remember this thread and repost the words a little down the road. You are all so sure of yourselves but don’t offer a shred of technical reasoning for why. Unless pork chops are the new technicals.

    Jesus Murphy. I really have heard it all now.

    1. Hamish

      Good idea. So let’s mark the current prices:
      JDST: 13.13
      JNUG: 11.14
      Gold spot: 1234.60

      Let’s check back this time next month 19th March.

    2. zbigkid

      Ped, “Jesus Murphy” to yourself. You are the one who sounds so cocksure of himself, and this isn’t even your board. You act like you own the place, which is tragic and mind boggling at the same time. Your arrogance is simply off the charts.

      Seriously dude. Take a chill pill. Do as others here say, and go find a girl friend or go to some movies.

  6. Strike

    THIS IS NOT A JOKE…
    After reading and rereading recent posts, I think there is a good chance Ped IS Martin Armstrong. Yes I said IS. I have read a lot of Armstrong and Ped is equivalently well written in a very similar style. There is a generational equivalence, and I suspect (no proof) a geographic similarity. The pi thing set off my suspicious side. That’s a way out hokus pokus relationship for an ultra-grounded guy like Ped to believe.

    How’s that for a wild suspicion.

  7. Alexandru Popovici

    The safest trade on the Street w massive upside potential = long USDBRL w stop at 3.038
    Good luck!

  8. Goild

    Pedestrian has a bright mind and works virtually all day in this trading stuff.
    We should capitalize on his strengths so that we can make more money and also have fun here.
    We all have problems in trading, don’t we?
    Pedestrian is an asset to this site.
    I appreciate his hard work and his comments.

      1. Goild

        There had been a couple of times when his views have coincided with my views and that has helped me to be more confident in pulling the trigger.
        His knowledge of the market has helped to broader my horizonts.

      1. Goild

        Indeed I am seriously thinking of dropping the 2k shares of NUGT. As the market is closed tomorrow while gold will be running we will have a better assessment for the week tomorrow evening.
        I think Gary is also expecting a bad week.

        1. vin

          Goild, be careful. I am planning to take new positions in jnug and gdxj, though only for a short period. Currency markets shrugging off Federal Reserve Chair Janet Yellen’s fairly hawkish remarks, is worth considering before one takes a position.

    1. Strike

      Goild
      I agree with everything you just said, and I have always championed Ped’s status here. Always. I just also think he’s Martin Armstrong.

  9. Jrasta2386

    I do not see a lengthy correction period simply because we came out of a 4+ month deep correction less than 2 months ago that completely reset sentiment and made the vast majority of people bearish on the sector. Even gold bug sites were very bearish. Gold COT’s, GLD money inflows, Miners improving balance sheets, and etc. all point to a upward trending Gold sector.

  10. Goild

    The story that we are in a bull gold market is true but we really do not know how many zigzags and how deep they can be. The facts up to date are that this time we do NOT have the same type of ride as last year. For the next year there are two distinct possibilities either we indeed break through $1300 and up, or we continue channeling around $1200.
    Any analysis should also consider were has been before 2016. As of January 2016 the miners have done very, very well and they may not need to go further up. So Pedestrian’s view at this point is as likely as the view of going further up. In any case one should be very carefull. Unfortunately as Gary points out the easy money is gone. I am expecting the manipulators would play severe extreme punishment before letting the miners riches to be taken that easily.

    1. Jrasta2386

      I agree completely that the easy money has been made. Also though, you have to look at the fact that gold miners were down for 2011, 2012, 2013,2014, and 2015. 2016 was a great year with a 64% return, but it would be highly unlikely for 2017 not to be a good year as well for the miners based on market history. But what do I know? I am only 30 lol.

    2. bginvestor

      gold bull market should be confirmed after it breaks the long term downward trend line. Has not done that yet.. Ped is right in that price is approaching a peak of the down trend resistance line..

      However, at some point, price will break, and it looks really good so far..

  11. Goild

    The 2013-2017 is the established channel coinciding with low rates.

    Currently and for a few months there is no expectation of higher rates. So the channel theory has a foundation. Unless the SM crashes to fuel gold.

    There is no age to be a great trader. But second guessing the market and being stuborn is recepie for disaster.

    1. Jrasta2386

      If “the 2013-2017 is the established channel coinciding with low interest rates”, how does that explain the 2008-2012 period that also had low interest rates with the gold sector performing well? Did you mean inflation expectations (or positive real rates in 2013-2017) were lower in 2013-2017 hence the bad performance of the gold sector?

        1. Jrasta2386

          Good call. It’s hard to argue with that. I believe real interest rates are one of the main drivers for Gold.

      1. Goild

        Jrasra,
        I am on my IPhone and cannot answer at the moment. I will try to address your query once I return from this trip.

        1. Jrasta2386

          Thanks. I am trying to figure out the best way to play this once this bottom I see forming soon. Most of my investments are tied into rental properties so I am a little more conservative than a lot of you who have no issue with 3x levered mining funds. I have done pretty well in the gold space so far, but nothing compared to Gary’s +165%.

  12. WallStreetJesus

    Gary – what’s your take on oil right now?

    The commercials are the shortest they have ever been.

    Oil futures are in backwardation which is rare.

    1. Gary Post author

      I’m waiting for the weekly stochastic to move back down to oversold before I’ll be interested in oil again.

        1. montecore73

          Fwiw Gary, notice this (maybe in some way atypical) move for gold each time we finally got a small FED rate increase in Dec 2015 and recently around same time in 2016, drop before and each time followed by a rather strong bounce next in the price of PM.
          Looks quite promising for what’s coming our way this year. Goldprice uptrend towards 1300-1350 imho by early 2018. Federal Reserve predicts at least some 3 US rate hikes in 2017, even 1 or 2 would be very welcome ๐Ÿ˜‰ Regards from Belgium, Ed

          https://www.bloomberg.com/news/articles/2017-02-20/gold-isn-t-doing-in-practice-what-it-should-in-theory-yet-again

  13. zbigkid

    Here is the only thing potentially worth shorting right now….

    http://www.cnbc.com/2017/02/19/is-the-dollars-run-done-why-some-traders-say-yes.html

    “When the Fed chief says, pretty much unabashedly, that she’s going to go to three rate hikes (which is maniacally stupid unless she knows the dollar won’t be falling), and she sort of talks up the economy, and yet the market remains skeptical, that’s telling me something,” Schlossberg added.

    Major political uncertainty surrounding the new Trump administration is weighing on the dollar, Schlossberg said. He noted that such uncertainty regarding policy is also weighing on the fixed income market.

    “That tells me that both markets remain skeptical about the continuity of this potential growth as we go forward,” he said, adding that these issues are lending themselves to being long the dollar right now would be “very, very dangerous” due to such uncertainty.

    He would mark the dollar a sell so long as the yen fails to reach the 115 mark against the greenback. He points to the dollar-yen relationship as an important gauge of dollar strength, as weaker equity markets and yields are said to be associated with a stronger Japanese yen.”

    (Raising rates in this environment is complete economic suicide for our country, and US corporations. Earnings topped long ago, and have been decreasing ever since early last year. Further, earnings are now at the level of 2010. While stock prices have gone way way above the levels of 2010. The fake news from MSM and our government about the economy is so far off base it isn’t funny. In fact, it won’t be long before the FED starts re-enacting QE4, to try to re-flate for the umpteenth time a completely dead economy. The economy is so bad, that putting out 4 times the level of debt, versus increase in anemic economic outputs of barely 1% of GDP growth, versus what growth was like with far less levels of debt issuance in the ’90’s, tells you how bad things truly are. People don’t realize that their jobs are hinging on extraordinary levels of debt acceleration. Its a very very very sick and demented game being played by all central banks right now, including mostly our own. )

  14. Alexandru Popovici

    Hi, WSJ !

    I’ve been protesting against the Romanian government alongside other hundred of thousands of Romanians in the streets + family + countryside small farm development + bronchitis, enough to keep me busy.

    I got stopped out of my third short-SM attempt some 2w ago on SPX’ b/o to the upside.
    This week I’ve entered long gold + USDBRL, the latter on Friday on daily swing low at 3.091 –> WATCH OUT COMMERCIALS’ COT NET SHORT AT A STAGGERING 75% OF ALL OPEN INTEREST IN BRL! Amazing!

    PS: i rarely get onto the blog now. Cheers!

  15. bigglaze

    Well I’m speechless. I never thought I’d see the day that you Alexandru would be long on gold. ๐Ÿ™‚

    1. Alexandru Popovici

      I was long gold in June [successfully] and then in November [unsuccessfully].
      JPY’s and USX COT reports and gold’s reaction have had me rejoin the hunt but only after gold’s DCL and after I saw exotic currencies (such as BRL) getting exhausted vs the greenback –> usually a precursor of massive risk-off assets’ advance

  16. bigglaze

    Question Gary… If the USD is expected to roll over now (as it’s broken downward), why will (gold and silver) miners also come down to reach oversold? Shouldn’t the price of the metals increase and push them up this week?

  17. Adrian

    I will try shorting or selling USA 500 CFD 1X294 several times this week, and maybe next, meantime and due ECRI’s WLI turning down, with Stochastics in overbought with high volume, an McClellan in overbough too.
    Now I’ve an open trade since thursday with a stop loss of 0.35%, if it fails, i will open another trade on the short side. Done with les tan 3% of my principal on that account

  18. dboz

    SINGAPORE (Reuters) – The U.S. economy is on “sound footing,” a hawkish Federal Reserve official said on Monday in a speech that cautioned against asking the central bank to solve problems beyond its control such as low productivity growth.

    Cleveland Fed President Loretta Mester, at a forum in Singapore, did not comment specifically on interest rates. However she has dissented in the past in favor of quicker rate hikes and on Monday urged the Fed to focus on returning to a more normal policy footing, including trimming its $4.5-trillion bond portfolio.

    The Fed has raised rates twice in two years and expects to pick up the pace of tightening this year as unemployment, at 4.8 percent, has fallen to near an equilibrium level and as the Republican-controlled White House and Congress are expected to provide fiscal stimulus.

    The U.S. economy is “now on sound footing,” Mester, who does not vote on monetary policy until next year, said in prepared remarks to The Global Interdependence Center.

    However, she said, “am very doubtful that monetary policy could be targeted to spur a strong pickup in the types of investment in human capital and physical capital that would raise productivity growth.”

    Years of disappointing productivity growth has stymied the Fed’s expectations that the U.S. economy would grow sustainably quicker than its roughly 2-percent rate.

    Turning to the balance sheet, which the Fed quadrupled in the wake of the financial crisis to spur investment and hiring, Mester reiterated the central bank expected to shed its mortgage-backed bonds and return to an all-Treasuries portfolio.

    “The return to primarily Treasuries will take some time, but it will be welcome because … it may help guard against future calls for the Federal Reserve to enter into the realm of fiscal policy,” she said.

  19. macman1519

    Excuse me, i see the leader of the free world has miraculously alleviated all the angst he has created in every corner of the world?? Oh he hasnt, he has created even more over the weekend! And some of you think gold will witness a significant melt down???? Keep checking those charts. Trump is in control of gold, every minor dip will be bought within two days max. Sell and try to catch these minor corrections at ur own peril. Even Republicans are openly questioning the sanity of the leader of the free world. This is not fake news, this is news that moves gold!!

    1. Dday

      Go on macman1519 write one intelligible comment about golds current technical position regarding technical , cycles, is it over bought/sold? Where do expect gold to top/bottom. Rather than your continuous bias political rants…..I dare you….

      1. macman1519

        The charts dont matter when u have sentiment in control, it seems a group of Americans are so stuck in their world of bliissful ignorance as to ignore the worlds obvious concern with the direction the leader of the free world has taken, in a pre Trump era gold would have majorly corrected already. It hasnt, hmmmm. Ped uses these euphanisms like, ” I dont understand what is going on, gold should have corrected by now, something different is going on, be careful”””” bla, blah, blah, youy charts are toast, zTrump is the flavor of the next while. Senior repubicans are coming out against his ” the media is the enemy of the people”. Gee last time I heard that from a leader of the free world was……. never. Mattis, his secretary of defence came out to publicly state he disagrees with the president over the press. Isnt that a fireable declaration? Mattis should now be fired, and the merry go round goes on, no one knows what this president will say or do next, no one. THEREFOR KNUCKLEHEADS, GOLD IS GOING UP WITH ONLY SLIGHT DIPS UNTIL TRUMP IS NO LONGER THE DRIVING FORCE. ALRIGHT BACK TO UR CHARTS THAT GARY HAS TOLD U THEY DONT ALWAYS WORK, RIGHT NOW, POLITICAL RISK AND SENTIMENT RULE ALL. CAN I EXPLAIN IT ANY CLEARER TO U.

  20. zkotpen

    I believe gold is nearing the end of a leading contracting diagonal which might complete the current sideways consolidation, then poke its way up to about 2% above the 200 day SMA to complete an intermediate top. 1260-80 area… This week & next…

  21. LiesandDamnLies

    Ped

    I just read your silver price prediction of $10 posted yesterday, based on the mirror system of charting applied to the long term silver chart going back to before 2004.

    Astounding call. Which I have taken a copy off to maybe remind you of in the future.

    I found a really unusual technique based on supply of silver and demand for silver. Alright its a way out theory. Check out page 10 of this pfd. Its covers world silver supply and its sources. Also covers worlds demand for silver and its sources. Please note that the supply of silver from all sources has declined from 2010 while demand for silver has increased.

    Still the mirror technique to charts must have a good foundation otherwise it wouldn’t have been suggested.

    The moon is silvery maybe you could have backed up the mirror technique prediction with an astrologer insight of the moon going down into Taurus.

    1. dboz

      Yep, this prices would defy any fundamentals and paper would seperate from physical. 10 dilver would shut down mines and demand would go up at the same time. No one is going to sell their silver at a loss. The market would break.

  22. Alexandru Popovici

    ZKOT: yeap, I share your last view – for now I keep my stop at 1217 to give the trade a breathe.

    The scent of FOMC on MAR15 should allow USX to meet its DCL next week and gold its DCH.
    Thus, gold and GDX should extend and expand their bearish divergences against their oscillators through mid next week or so.

    Then, the buy-the-rumors-sell-the-news clichรฉ should do its bit post FOMC –> driving gold >1300

  23. WallStreetJesus

    I remember not so long ago when the metals would get hammered during the night, particularly with a holiday involved.

    Geez I get up today and no decline in the metals.

  24. zkotpen

    Alex,

    Nice to see you!

    I’ve got gold above 1300 next ICH…

    Hey, have you got any English subtitles for “Two Lottery Tickets” lying around?

    The 2016 remake — I’ve got the video but no subtitles!!

  25. zkotpen

    Pedestrian,

    Saw your comment about 31 years for a gold peak… yeah, makes sense… the big new highs in gold in the 2030’s to ’42.

    1. Pedestrian

      Haha! It means I have 25 more years to traumatize gold bugs and the children and grand children of gold bugs. Of course I will have to live that long to have the pleasure. I should be pretty famous by then if I start now. Might even be the worlds preeminent gold bear, anonymous octogenarian (or whatever) Mr Pedestrian handing out curt one liners about metals like a really grumpy old man.

      (In best old man voice while waving a cane)…..”It’s going down!!!!”….”you are all doomed!!!”….

  26. Hamish

    This is the post that Gary was referring to I think.

    Pedestrian
    January 24, 2017 at 4:05 pm

    I would agree the cycle is longer. It looks to me that gold will bottom into this current half cycle decline on the 17th or 20th of February just prior to gold options expiry. Just enough time to make sure all the longs are worthless come the 23rd. We should get a strong, brief bounce at that time off a what will be a double bottom near 1125 from a good support region. That is my outlook right now. How it affects GDX or other ETFโ€™s is not as easy to determine so weโ€™ll just play it by ear.

    1. Hamish

      and Gary’s reply was spooky accurate.

      Gary Post author
      January 24, 2017 at 4:28 pm

      If we are going to get a HCL it should begin immediately and only last 3-4 days. Just long enough to push the 3 day RSI down to oversold levels. Then gold should finish the move into its daily cycle top, maybe around 1250.

  27. cazabrujas

    All this talk about technicals and cycles is interesting, but I think the price of gold will be headline driven for a good while and most of the headlines will be favorable to gold. The Russia scandal is not only not going away, but it’s going to keep growing. Additionally, Trump is making a fool of himself at least twice a week, and that is eroding confidence in his government, the you have the upcoming brexit and the elections in France and Germany . On the other side of the trade you have Trump’s tax plan, which might bring the price gold down if it is within the high expectations of Wall Street. So, on balance, I think gold will keep climbing.

      1. cazabrujas

        Also, forgot to mention the South China Sea situation, which is not getting a lot of attention yet, but it will sometime this year.

  28. macman1519

    Stand with Sweden, after all didnt they stand with us after the massacre at Bowling Green!,, Buy gold, only direction in up.

    1. roadrunner

      hey macman..how is your dad doing? Its been a long time since I saw him. last time was in 1981 and he was ranting and raving like a banshee about Ronald Reagan nuking the planet. So i guess he passed his hysterical delusions on to you….well don’t worry after a couple of years you will feel better.

      1. macman1519

        Hes doing fine, says to tell yo moma that the boys miss her. Its all the evil media destabilizing the world, not Donnie. Right, put ur tin hat back on.

        1. roadrunner

          I guess your dad forget to tell you I am gay. He always enjoyed himself with me.
          The world has been destabilized for a long time. But for entertainment purposes the fact Trump sends you Dem clowns off the deep end is worth the price of his presidency. He won ‘t be any worse than the last 4 inhabitants of the whitehouse.

          1. macman1519

            It already is after a month and you moron, ignorant repubs cant see it, or are too busy counting the thirty pieces of silver you got for selling your soul for trump.

  29. WallStreetJesus

    Here is an article pointing out that the COT’s for silver are extremely bearish, however this time it will end differently.

    http://seekingalpha.com/article/4047526-rally-silver-prices-may-historic

    Maybe this guy is right?? The commercials were on the wrong side of the copper trade and got their clocks cleaned. It looks like copper has started another up move today after consolidating for a few days. Its rare but the commercials do some times get caught on the wrong side of the trade.

    1. Dday

      “Here is an article pointing out that the COTโ€™s for silver are extremely bearish, however this time it will end differently”

      More likely american sm closed today ,markets (pms) will tank tomorrow.

        1. macman1519

          Theres never been a donald with the intellect of a gnat, and the moral compass of a 10 cent hooker. As the leader of the free world

        2. Gary Post author

          It’s always different at the start of major multi year trend changes.

          This is why the bearish COTS levels had no effect on gold or silver for many months during the baby bull.

          When others were freaking out expecting the metals to turn back down last February I said not to pay any attention to the COTS. They wouldn’t work during a baby bull.

      1. WallStreetJesus

        Haha I do hope they tank and stay that way for more than 5 minutes before buyers rush in. It would be a nice change from the slow grind higher.

  30. Option Trader

    Ya all make this so difficult.
    I’m very much looking to the awesome gains I’ll be making in my SLV and BAC May option calls over the next few weeks or so.
    All you need to do is follow my masterful charting entries which I have generously disclosed on this blog.

  31. Pedestrian

    Its not much, but there does appear to be a topping process in the works on the Dow and S&P futures today that could imply tomorrow sees the start of a very modest correction. I mentioned this last week and said I felt the declines would not exceed 2.5% so its not a lot to write home about but is nonetheless a change of behavior should it come to pass. We will see tomorrow naturally. Market corrections are the most difficult calls to make but if correct it will have a bearing on precious metals and I am looking forward to seeing how the correlation plays out.

  32. WallStreetJesus

    The casino (futures) is open. How about everyone get together and lets see if we can get 1 good down day in the metals. One of those days that goes out on the low. Nice big red candle.

    We don’t want some 2 minute spike down with buyers coming back like we have had recently.

    How about it everyone…………………..big red candle.

    That being said.

    We will probably be limit up tomorrow.

  33. WallStreetJesus

    45 minutes into the session and not a seller in sight in the metals.

    Come on guys lets hit the button and dump about 30,000 contracts to get the ball rolling to the downside.

    If we have any hope of a big down day it has to start in the futures market. These guys are leveraged and if you get the price down they will sell. The banks have been cleaning up using this method going back many years. I can’t believe getting caught manipulating the market and a few fines (chump change) will change your behavior. Based on the COT’s the large spec’s are extremely long silver so this is the opportune time for a big decline. Just hit the sell “woosh” button….

    1. Gary Post author

      The COT isn’t really that negative in silver. The Blees rating hasn’t even hit 0 yet.

      That being said I’m pretty sure the next week is going to play out just like I said it would. The market will be propped up into the SOTU address and that will stretch the stock cycle and probably prop up the dollar as well.

      Once past that event then there will be a window for stocks to drop before the PPT rescues it again ahead of the March FOMC meeting.

      This will give the miners the opportunity to complete their DCL.

  34. VMA

    My take is the US equity market is in melt up mode with foreign buyers leading the charge (mainly EURO fleeing uncertainty of increasing disruption this spring-summer). Bonds will be bid to retest the recent lows in yield and PM’s will grind higher through May before a serious buyable reaction as the dollar spikes due to European turmoil. Come fall, PM’s begin a steady sustained climb for several years while equities react to rising interest rates and strong dollar. Dollar will be above 109.75 headed for 112-120 initially before a 21-24 month topping process begins. Gold and the $ will trade higher with gold leading. The strong dollar will cause foreign $ debt holders a lot of pain and a currency event worse than 98 will occur. Just a guess…

  35. Goild

    Following on last week the situation still looks grim.
    Gold is down this evening -0.37%.
    TIP has been in a channel and currently it is at the top.
    Gold appears to be forming a double top.
    Yes, the situation is not great.
    We gold bugs are going to be tested.
    The scenario may substantially change if gold breaks through $1220.
    Beware of a deep spike to scare the bulls.
    Currently the easy money is in day trading.

  36. Goild

    The monthly candles for GLD, TIP, FXY, UUP tell at least a 50/50 chance between gold breaking $1300 and the channel theory around ~$1200.

    Next level of support for NUGT is about $10.00.

  37. Pedestrian

    It’s overdue that gold had a fall down the stairs and bloodied its nose.

    But its just not happening. Bullishness is too low and there are not enough bugs to scalp since they have mostly been burned so much they won’t buy into a rise anymore as they suspect its a trap. So yesterday they trotted out Alan Greenspan to talk up gold and its merits as a currency.

    And also to tell us why gold is the last refuge from the coming economic storm in Europe. His timing is wonderful. Just about perfect to get the last few buyers in the door and create the energy needed to take metals down. Bugs love Alan as a Central Banker because he says all the right things. But for the rest of us….

    When Greenspan says “buy” that’s really a code word that means “sell”.

    So yeah, gold is going down this morning. Not much yet. But its a start .

  38. zkotpen

    Pedestrian,

    Just saw your comment at the top of this post. I have been suspicious of a forming intermediate peak in metals — question is, whether it has formed yet, or not.

    Either way — another push above the 200 day SMA or not — the next move down should be of intermediate degree, much to the chagrin of so many…

    I am also looking for a move down shorter term…. a test of the 20 day SMA.

    Then the consolidation ends with a move up to 1261-76 area (200 day SMA).

    And that’s the ICH ๐Ÿ˜‰

    Followed by the intermediate move down you’re looking for.

    I’m just not seeing the intermediate cycle in gold as having topped yet.

  39. Alexandru Popovici

    Hello, Zkot!
    I’ve searched even the illegal data bases but have found no EN subtitle ๐Ÿ™
    Sorry, mate!

    It’s funny though – it shows the poor but very relaxed and honest (God-fearing people) side of Romanian countryside – it’s sort of Romanian rural “Seinfeld” with Romanian humor replacing the Jewish humor, but the framework is similar to Seinfeld: 3 friends w/ no real profession/skill having an amiable relaxed life occasionally getting stung/stirred by an event.

    1. Alexandru Popovici

      …I long for a bar, or better said, a drinking place like the one in the movie!
      Such a stingy, unassuming drinking place is called “bodega” in Romanian.
      Bodegas can now be found only in the countryside – I would love to be able to get out w/ my friends over a drink in a bodega on a regular basis! Now Bucharest has got all kind of fancy places – people kill the amiability of simplicity and relaxation. Search for comfort is a killer.

  40. Dday

    Again the dollar not acting as it should be….. A close above 101.77, then next resistance at 102.5…Althogh the 4h chart showing overbought again. With Europe in disarray, regarding economics(look at Greece again), and political and social breakdown. The question you have to ask will that lead to stronger or weaker dollar?

  41. VMA

    Alway’s sell lightly into obvious resistance, and buy at or preferably just below obvious support. When pice is in-between (like now) just sit tight and let the market show it’s hand…

  42. WallStreetJesus

    Is this really the best the bears can do. Absolutely pathetic…

    This isn’t a decline, barely a rounding error.

    Lets get some real selling going. $100 down day in gold and a couple bucks in sliver.

  43. Don

    I doubt gold will dip much below the $1200 mark. I will wait until it does before adding any new positions. Pedestrian has got it wrong, there will be no serious decline, in my opinion. Watch natural gas, there should be weak bounce followed by a drop to the 2.50-2.60 area before reversing upward some time closer to the end of Feb. Right now the fundamentals are not good for NG and that accounts for the weakness.

  44. Goild

    Thanks guys for commenting.
    I will hold the 2K NUGT shares.
    No big deal. All it means is that the profit I made day trading last week may be
    gone for a while.
    I am pessimistic, this does not look good.
    We shall see.

    1. VMA

      The other option is to sell out of the money covered calls (above strong resistance), and buy to cover at strong support. The obvious risk is a strong breakout with continuation (usually around the 200 dma if price approaches from below-for now not a factor as price is at the 200 ). Right now GDX has strong resistance in the 25.75-27 area with strong support at 22.75. This is going to be a grinding PM market with lot’s of overhead resistance to chew through.

  45. bigglaze

    If you look at kitco, the reason for gold dropping isn’t active selling. People are actually BUYING. It’s been like this for the past couple of months. The reason is the US dollar today. I think it’s going to be a ‘buy the rumor, sell the news’ wrt the FOMC meeting minutes. The fed will disappoint tomorrow (or at least be luke-warm) and the dollar will resume it’s decline.

  46. Goild

    Dday,

    Thank you for the 4h TA.
    Does that mean you like to use them foe entering and exiting?
    If so, how successful have you been?
    I take it pretty good?

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