WHAT’S AHEAD FOR GOLD?

It’s very late in gold’s intermediate cycle (18 weeks) and it’s now due for an intermediate degree correction. As most know, I think gold is probably stuck in a difficult basing pattern this year. The big reversal on election night drove gold sharply back below the 200 DMA and that took the fire out of the metals sector. So instead of a continuation of the baby bull we are now left with a difficult basing pattern that could take the better part of the year to play out. It’s just going to take some time to turn that downward sloping 200 week moving average back up.

Some patience is called for right now. Gold is very deep into its smaller daily cycle (27 days). It needs to complete a short term correction. That means it needs to drop far enough to break the cycle uptrend line, drop below the 10 day moving average, and it should spend enough time below the 10 to turn it down. So there’s no hurry to buy the dip right now. As of Friday short term sentiment was at 83% bulls in GLD. That’s just way too bullish. We should see sentiment drop back below 15% bulls before the daily cycle low is complete.

The bounce out of the next daily cycle low is the dangerous one as that is the cycle that should be left translated and complete the move down into a final intermediate degree bottom. Many traders fall victim to the final daily cycle, and buy too soon, only to get caught when the cycle left translates and moves down into its final ICL.

Gold will need to break its larger intermediate trend line before we start looking for a more lasting bottom. As you can see in the next chart the junior miners have already broken that trend line suggesting they are leading the metals down into the ICL.

You will know when it’s time to buy. I will be the only one looking for a turn higher, everyone will be bearish, the technical traders will be calling for lower prices, and everyone will think I’m crazy for wanting to buy metals and miners. (The same thing that happened at the December low).

I think the real opportunity will be in the mining stocks as I think the banks are setting the miners up to run the December lows, and trigger everyone’s stops. This same thing happened at the bear market bottom. Everyone was looking for another leg down. I was one of the few who saw the breakdown for what it was, a strategy to allow the banks to accumulate large positions ahead of the baby bull rally. I think we’re likely to see something similar this summer.

So be patient for the next month or two. Wait for that failed daily cycle to run its course, and watch for the banks to manufacture a stop run before you pull the trigger on the metals again. You will know it’s time to buy as I will be the only one bullish. When I’m bullish and everyone else is bearish, that almost always means gold is at, or very close to a major bottom.
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124 thoughts on “WHAT’S AHEAD FOR GOLD?

  1. Dday

    Difficult to say if miners reach December lows, RSI has dropped dramatically over the last four days reaching neutral. If it continues at the same rate it will reach RSI levels of December within a week and GDX potentially reach March lows. I’ll be interested if the RSI matches December lows around 30(RSI 14). I agree miners have further to fall, exactly how far I couldn’t say….

  2. Ralph Wiederzane

    My other newsletter guy has surprised me as well this morning, saying he is not only short miners, but that not is NOT the time to go long bc miners could be β€œMUCH lower at the end of the 4th daily cycle low”.

    Wow, seems to me there aren’t so many bulls as some here suggest. if I were a short term trading monkey pecking at the keyboard and short the miners, I would cover around the 22.50 level on GDX. Lets see if the shorts cash out the profits quickly or instead convinced lower prices are guaranteed and stay in the shorts?

    This is setting up perfectly, in my opinion. Besides the people on the sides that want to put money to work like me, we have several advisors not only short, but looking for much lower prices possibly. All these people have to buy, and some double positions if they intend to get long as much as they were short. Sweet!

    1. Ralph Wiederzane

      Perhaps miners are repeating 2008, where they broke down hard long before the stock market did, then after stocks weakened miners held in and went sharply higher? I don’t think this is the case, but its more than unpossible.

      Who would have thought the metals bulls would be advising going short, after the GDX has risen 27% from the 44% pullback in the Baby Bull? That is how you trade bear markets, shorting into the rallies. My newsletter guys say this is a bull, but their actions are more important. Sounds to me like the bull did a good job shaking everybody off, even getting them to bet the other direction. With all the shorts I’m seeing out there, I would e taking profits quick if I were betting that direction!

      1. Gary Post author

        Even in bull markets gold will have intermediate corrections.

        I think the banks are trying to set up the miners for a stop run at the next ICL. That’s the only reason I’m willing to take a short position. Usually I just sit on the sidelines during ICL’s.

          1. Pedestrian

            About time. All the money is being made trading direction and momentum. Buy and hold has been dead for years. There is little gained by marrying trades or taking emotional positions based on some arcane philosophy about the true meaning of money (eg: gold is money and cash is trash). Gary may be late to the party but lets congratulate him for finally joining the real world. His subs will be thanking him for the change..

          1. Christian

            Ah Yes. Occasionally, I like to compare my notes with the guy from Gold Predict. John Doody is also pretty good when analyzing and picking apart precious metal companies.. which I don’t trade as much as use to. And I made awesome money trading GORO back in 2016, recommended by the folks over at Stansberry Research.

  3. zkotpen

    Gary,

    Great post. Lots of good technical charts to consider — thanks!

    I appreciate your backing off your former extreme bullishness from years past.

    With that in mind, I’d like to point out that you use charts all the time. And technicals, too. What I believe you mean to say is, one shouldn’t overwhelm one’s charts with TOO many indicators — something I wholeheartedly agree with. Rather than downplaying technicals overall, I recommend encouraging the use of a limited quantity of technical indicators that one is able to use successfully.

    To be sure:

    The miners were rejected from the 200-day moving average
    TECHNICAL

    nugt signaled a massive volume up day which often indicates a top in the mining stocks.
    TECHNICAL

    And second that huge volume up day on DUST was a major warning bell ringing that a top could be forming.
    TECHNICAL.

    I think the banks are trying to set up the miners for a stop run at the next ICL.
    NOT TECHNICAL

    ERgo: Some technical observations, a non-technical conclusion.

    1. Gary Post author

      I start with cycles and sentiment and then look to the technicals to confirm what my two main tools are telling me.

      Right now it’s very late in the daily and intermediate cycle. Sentiment is excessively bullish, especially in silver and GLD. So I’m looking for signs that a top may be forming.

  4. Christian

    Gary — I asked if you were concerned about the first round of french elections on Sunday, which could momentarily throw a wrench in our DUST trade, but never got a reply. I’m feeling un-loved all of sudden, hold me πŸ™‚

    1. Gary Post author

      Making money on the short side is hard. The counter trend rallies are convincing.

      I would say just hold until gold meets the conditions for a DCL.

    1. Pedestrian

      Based on this mornings price, in 8 trading days JNUG will be trading at 24 dollars given there is a 1 for 4 split coming. So keep in mind you won’t be able to buy as many shares as you are used too after the split. Not that it will affect your percentage returns but holding 2,500 shares never feels quite the same as buying 10,000.

      1. dboz

        Combine the share diminution with the stoppage of new units and you have an explosive potential for high demand and no supply. That could be a big move on the horizon? I still like my thousands of shares though.

  5. JJHarmen

    No one here seems much interested in the stock market. Like yesterday, we had a gap up at the opening but it doesn’t seem to be going anywhere. It sold off yesterday so I am thinking it will again today. Why not?

  6. MattyMan

    Ped,
    You officially 20 for 20 yet? πŸ™‚
    I’m still holding JDST. Missed the opportunity yesterday to get out and then maybe back in this morning…
    (It broke below my channel this morning, but might close back inside if it holds up here…2hr chart)

    1. Pedestrian

      When I sell it will indeed be a win for 20 but so far I’m just holding and watching to see if the chart builds its channel in a constructive way. Looks good right now and I expect price to pull back some before moving to the next level. But it did violate the lower channel and that’s a no-no in my books so I will take what I can get today and then get the hell out.

      I was up 7% over yesterday just a while back and on any other day I would accept that graciously as an excellent outcome. But my sense is this trade has some meat and potato’s in it yet and I am unwilling to exit before the cooking’s all done.

      I could be wrong of course. That is a risk in every trade.

      The best I can do is find entries that make the risk as low as possible and offer the best outcome. As I mentioned before, when you are trading channels and have done your homework there are often ample opportunities to escape even in the event you have made a mistake (which does happen and let me tell you I have really blown up accounts badly in the bad old days!).

      All I can add to that is that I would probably never have learned to trade with any confidence without having first had the experience of making some terrible blunders. So all that money from the past is just water over the damn. Call it the price of an education. It baffles me why anyone would be upset I am having a good run now though.

      Sheesh…..I paid the price to get here and they can do the same if they choose. They sure as hell don’t teach this stuff in school. Years ago I used to follow everyone and anyone with a name that other people seemed to admire as good traders. Until I found out most of them didn’t have a clue half the time.

      I was being whipsawed in every direction come Sunday and the big names were rarely ever on the same page as each other. Shit, they missed all the big calls because their ego’s were far bigger than their advertised skills as traders. It was endlessly confusing.

      I am sure everyone here knows exactly what I am talking about.

      Finally I just had enough and got deep into technicals. The math and geometry of it all and eventually I found I could out-trade just about every single person I knew and better than almost every single one of those big names to boot. That’s not bragging. It’s a fact. I would not even bother mentioning it to tell the truth but a few people here seemed impressed I kept hitting the trades and they were initially keeping track, not me.

      Maybe best I stop mentioning it since it obviously gets on peoples nerves.

      These days I do my best to just stay positive, follow a handful of rules I created myself, do my homework before buying and not kick myself in the groan if I do screw up. It has been so much more relaxing. And a lot more profitable as well.

      So yeah, I expect to bag #20 today but I will keep it to myself from now on. It just bugged me that Gary and a few other guys on this site kept insisting that NOBODY can have that kind of success rate and anyone who tries is destined to lose it all. I made a point of proving they were wrong. It is indeed possible to succeed with high win averages if you just take a sober approach and work hard at the trade.

      I am hardly the only one to discover that.

      The doubters can kiss my ass.

  7. GodoftheMachine

    Thanks Gary. You said last week that gold was topping and due for a sell off this week. Which is exactly what has happened in otherwise quiet trading really.

    The miners seem like dead money lately- even my beloved PVG.

    Does it take about a month to complete an ICL? Is June looking ok?

  8. JJHarmen

    I have covered all my stock shorts. The world’s a mess, the Americans have a con artist for a president and war appears to be just around the corner and the stock loves it all and goes up. I am sick of this shit.

  9. primetime

    Notice how the board is silent today? Everyone waiting to see what happens and then they can say “Told you so”. How they made the perfect trades and caught the big runners at the very top and bottom. Amazing! Very few are honest JJ.

    1. Christian

      Yes, I like to bullshit once in a while and I’m not one to shy away from a bit of friendly banter but I’m as honest at they come.

      My playbook hasn’t changed. Miners should continue to drop, so I don’t really need to “see what happens” nor do I need to tell anyone “I told you so” and as it stands, I sold half my shares yesterday towards close to lock in some profits and picked up some more DUST @27.25 just this morning.

  10. Bigdaddy

    JJharmen, sometimes it is better to cut one’s losses before it becomes and even bigger loss. I don’t think anyone knows why the stock market does what it does. Maybe too many people were short, like you, so the market had to up because the majority must lose. you can always try again when the market gets above it’s all time highs again.

  11. JJHarmen

    Thanks for your advice BD. I’m just really discouraged right now. I just can’t win in the markets. Everything I have bought has been a loser or is going no where. I bought 200 thousand shares of PGC on Don’s recommendation and it isn’t doing a thing, just sitting at 1.5 cents. He doesn’t seem like a huckster but I am beginning to wonder if Ped has been right about Don. I am afraid I may have been conned.

    1. Pedestrian

      Yes, you got conned. He sold you his shares at the offer in an instrument with zero liquidity and just about no hope of going anywhere fast. Oldest trick in the book. Penny people are notoriously liars, thieves and charlatans and will do anything to unload shares on the unsuspecting. Notice he always asks others for their email but never offers his own? As far as you now he is one of the insiders in that company trying to keep prices propped and drive a little interest. The lure is that 5000 bucks for each half penny move and three of you guys have fallen for it so far.

      I don’t know why Gary allows him on the site. But then again, Gary lets in a lot of strays and misfits.

      1. Christian

        Including you sweetheart πŸ™‚ And no one put a gun to JJ’s head and forced him to buy 200,000 freaking shares of anything!!

        JJ — No offence intended here but next time do your homework or buy less shares to start with. Everyone is always looking to make a quick buck which I totally understand, but nothing beats due diligence. You are responsible for you.

        1. Christian

          Thank you big daddy 😊 And you can kiss my beautiful behind as you continue to ask for others to spoon feed you every Day Trade β€” Dafuq is that you platypus?!

          1. Christian

            Sorry BD. Was reading using my phone and thought you were coming at me swinging — my apologies. But you’re still a platypus Lol! Jk.

  12. Bigdaddy

    JJ, now you are sounding like a big cry baby. If I recall, you said that you has looked into that company and the insiders were buying . True? Anyway, if it’s trading at the price you paid for it, why not just sell it and forget about the little bit of commission?

  13. dsims3

    Ped, looks like preciousmetalsforecast.com agrees with you. He closed his positions in DUST and JDST today and started positions in GDX and GDXJ. He has had a run of successful trades lately.

    1. Pedestrian

      Ditto. Almost back to where I originally bought it. Gold is forming a bowl on the hourly chart. Things should look better by tomorrow but today is pretty dead. I can hardly keep my eyes open. Would sleep except for the gold retards on the site who keep shooting arrows at me.

      1. Robert

        Do you follow cycles? I still dont understand why ur bullish unless your just looking a quick 1-2 day bounce. Based on the cycles intermediate decline should be starting soon in gold

          1. Pedestrian

            Good answer Boss. And because miners were sold off too hard so became oversold fast and thus a buy. The CCI crashed to its bottom. All that is happening today is sentiment is being reset. You may have noticed I picked off the bottom of the channel by just four ticks (cents) and price has been above there ever since. That’s an example of how to make a low risk trade and honestly its not that hard if you concentrate a little. JNUG has made little progress since then but I think we are still in a basing process so will hold another day. No sweat. Even if it goes South odds are excellent at some point in the day price will backtest and let me off the hook. I hope this is helpful to some people since this method works and keeps you out of trouble most of the time. I have a contrary mind set. When people are selling hard like yesterday I am typically looking for the obvious entry to buy the inevitable bounce. So its not a trend following strategy really. More an opportunistic strategy since it capitalizes on human nature and sentiment turns. It does not always work though just so you know. Like in a real bull market for example…….

        1. Ralph Wiederzane

          Robert, if cycles are always right, how come SMT is sitting on a string of losing trades? Not to bash Gary because he does very well at times, but the fact is most winning trading systems are right 60% at most. Why is it so hard for you to grasp this could be the other 40-45% of the time, especially as the cycles guys I follow have been on a cold streak lately, both of them.

          1. Ralph Wiederzane

            LOL. it’s as if you just can’t believe anybody could see something differently. If that is the case, then you might want to check your positions because they should flying in your direction, and if not, maybe you are missing something?

          2. Robert

            You might be right Ralph. Cycles dont work alot of times but the only thing got me still doubting miners is that gold has not even pulled back one bit. Its down $10 bucks from the high!! You really thinks thats all the pullback we get after like a $150 buck move? I just will have to be stubborn because no way in hell could that have been it. Unless your feeling one more spike up in gold to 1300s and then the real drop?

        1. Pedestrian

          Looks supportive of my new view that miners are going to turn bullish. That could be an overshoot on the chart. Wait for the back-test of the line and see what happens next. It if takes off higher we have our answer.

  14. victor

    sometimes it such a fun to read comments here… , still didn’t get it how it possible to submit a comment under Pedestrian name in previous post, what a dirty trick… , no explanations from Gary …

        1. Pedestrian

          Yup. My old password was “Doggy” since I can’t be bothered to remember difficult words.

          Now I have changed it Doggy_style_with_goldbugs

          Nobody will ever crack that!

  15. Don

    bigd: I was away all day with appointments. The SM is kicking my ass today. Good luck with the sliver long. I am out of the metals , for now. I did add a couple hundred more shares of ZJG but that’s it for today.

  16. Don

    JJ: I can assure you that I am not running a ‘con’ operation. Anyway, I thought you had a little thicker skin than what you displayed today. If you think you were led astray, sell your penny shares immediately. BTW, I never suggested that you should buy 200 000 shares, did I? That’s was a bit excessive. I am hanging on to my 800 thousand. (I know, sounds like a lot but all were bought at one half to one cent.)

    1. Pedestrian

      See what I mean JJ?

      Don has 800,000 shares now but he had a million before you took 200,000 off his hands. And he is laughing his ass off at you since he thinks you are gullible. Whole books have been written on the penny stock racket. The old VSE in Vancouver was destroyed by how corrupt everyone had become. It was literally a criminal empire of white collar gangsters pumping stock to fill their own pockets and then leaving the holders holding the bag.

      Google on it if you doubt me. This kind of thing is old as the hills. Its what I warned you about.

  17. Robert

    Gold pulledback only like $12 bucks from the high! I guess everyone feels now 1 more spike to 1300s before the real downturn? That is the only scenario I will agree on but other wise I think gold should have at least a 25-30 buck drop. So maybe 1265 – 1270

  18. JJHarmen

    Ok, Ped, stop already. I was having a bad morning and was lashing out and running off at the mouth. I really don’t believe I was conned into buying anything. truthfully, Don was very clear in his email that Plato Gold was a long shot and that they had nothing of value. He said that if gold were to really take off, any penny stock with the word ‘gold’ might do the same as they did back in 2011. He suspected the heavy volumes on some days were the pump and dump crowd getting in on the ground floor but made it clear that they could just be speculators who would lose if the stock were de-listed. He didn’t say anything about how many I should buy. Buying 200 thousand was my decision.

    After cooling down, I have decided to keep them and if they disappear, that’s life. It was only a few thousand bucks anyway. Hell, I have put five times that on a single ETF so I need to put it all in perspective.

    Don, I am very sorry for having suggested you might be a con man. Please accept my sincere apologies for being such a dork and saying what I did. I truly do believe you are a stand up guy who knows his shit.

    1. Pedestrian

      OK JJ, if you say so I will believe it. I guess it was someone else who bought the 200K shares he no longer owns. Not you at all. Pure coincidence. Whats a few thousand dollars between anonymous people on the internet. It’s not tike we go to the same BBQ’s or know each others kids or anything.

      1. Pedestrian

        And a PS to JJHarmen for doing an excellent job of getting that name Plato out there so you two have another crack at bringing a few more rubes in on this stock pump. Very clever post you left with all those details that nobody knew until now. If I didn’t know better I would say you are both probably one and the same person.

        Maybe Gary can look into the IP’s.

        1. Don

          Ped, god you can be such an ass. I told you specifically, months ago, about Plato as being a long shot so cut the crap with pretending you have never heard the name before. Do you honestly think JJ and I are working together to sell a stock worth 1.5 cents? Quit being so bloody stupid.

    2. Don

      No problem JJ. But think about it, if I was trying to get you, or anyone else, to buy my shares, it sure in hell wouldn’t be for 1.5 cents. I saw what happened in 2011 to the penny gold stocks with some getting to ridiculous valuations of dollars and I think it will happen again. I just don’t know when.

    1. Pedestrian

      Yes Arcticfox, I would agree with that. The HUI chart in the Chan series carries a lot of weight with me because of the size of that index and the length of time involved before the breakout happened. That alone is enough to turn me bullish and suggests that the next decline is one that should be bought, not sold.

      Call it a shot across the bow heads-up for gold bugs everywhere.

      Where the bearish sentiment remains is that too many indicators are calling for a decline near-term but I don’t see that as a problem at all. It is an opportunity if that breakout is valid on the back-test. A lot of others meanwhile are waiting for confirmation in the gold chart to tell them we have the all-clear to buy miners.

      On the daily chart you can readily see that we have not reached the upper channel yet and so can not have broken out technically. But I have some good news for the bulls. On the weekly chart, gold has indeed turned bullish over a similar period. Its just that the information is not obvious unless you are looking at weekly closing prices.

      So have a look at this link and see if it adds a level of confidence to your outlook.
      http://finviz.com/futures_charts.ashx?t=GC&p=w1

      Do keep in my that charting can be somewhat subjective at times like this and how you draw your support and resistance lines can make a difference (or create a few arguments!). By my way of charting though we do have a breakout on gold at this time which was achieved when we hit 1298 however it is by such a tiny amount over the line that many people will probably want to disregard it.

      A move over 1300 however will leave no doubt in my mind and certainly anything in the 1305 range will seal the deal. More importantly, a close today at 1300 or above would turn me very bullish and such a move is more than possible as that price lies a mere 15 dollars above yesterdays high). I suppose this is why charting is partly art and partly science though. We are always forced to confront which level of chart we will accept as being the most valid.

      For me though, any one of the charts at the daily, weekly or monthly levels that shows a breakout is enough information to at least turn on my Spidey senses and start looking for the clues that might prove I am not just hallucinating or in some kind of gold bug fantasy.

      I look at it this way….we have a clear breakout on the HUI index and we do have a minor (but significant) break above resistance on the weekly gold chart. Lets follow it along and see what comes next. I have added to my long positions although this is still just a short term trade since a pullback looks inevitable.

      But the next important bottom is one I want to take much more seriously for a change.

      1. Pedestrian

        As a follow up, it might be worth noting that we also have a break-out on GLD on the weekly chart.

        To identify that breakout you need to first establish the lower channel which in this case connects the low points of May and December 2017. After that locate the perfect parallel for the upper rail using the topmost peaks on the chart of April and September 2017.

        The break out is obvious at this weekly level of closing numbers and throws the bear case into doubt.
        http://finviz.com/quote.ashx?t=GLD&ty=c&ta=0&p=w

        1. Pedestrian

          This is also visible on the monthly chart (examining upper rail only in this case). I draw resistance lines by ONLY using the first of two peaks. So in this case the resistance line is identified by drawing from the green candle peak of 2011. Try it yourself. There is a tiny but significant breakout in my opinion. Its been my experience that better results are gained by ignoring the second of two candle peaks at tops as these can lead to faulty results.
          http://finviz.com/quote.ashx?t=GLD&ty=c&ta=0&p=m

  19. Alexandru Popovici

    USX looks like it set it’s DCL today on day 17, ahead of French elections and FOMC – good time for gold/ miners/ Treasuries to fall to their DCLs as USX has its dead cat bounce.
    Opportunity to buy gold cheaper before it’s last leg up lies a few days away from now.

  20. Robert

    Theres some other blog claiming all sorts of bad things about Gary. Looks like that DUCK guy is responsible. Haha. I like the analysis here but man it seems that some people hate Gary guts. lol

  21. Christian

    After such a steep decline in the Miners yesterday, a bounce up and a consolidation of some sort was to be expected, however.. We currently have a “triangular consolidation” in play which you can clearly see on a 15 min chart of GDX, provided below for your viewing pleasure.

    This type of pattern normally breaks in the direction of the trend.. Nothing is ever written in stone of course but for those of you hoping to make a dollar with JNUG over the next couple of days just beware. Momentum is not on your side!

    https://www.tradingview.com/x/6Sq9oqz5/

    1. Robert

      However I see alot of bullish sentiment today. Look on the gold 30 minute chart. The moving averages are now starting to curl up, maybe one more spike higher in gold tomorrow?

      1. Pedestrian

        I agree Robert. That resistance level on the daily chart is magnetic at this time. It seems almost improbable we would come so close but not see price at least kiss the 1305 level. I am looking for some of the indicators to double-top.

        **Do you ever chart strictly by the patterns on the indicators such as Stoch’s and MACD and that sort of thing? They can often be revealing about what is really happening under the hood. What I mean by that is you ignore the chart itself and try to determine what is happening just by looking at the moves on the indicators. So a double top forming on the Stochastics becomes more than just a little interesting and keeps you from selling too soon at times.

        1. Ralph Wiederzane

          No, I haver been neutral on gold and looking to get heavily long, but on the short term it looks largely sideways to me, or possibly could go lower for a week, but that is hardly a directional call. If they go lower I will buy heavy, if the go up from here I am lightly long at around 28% invested, so I don’t have a strong opinion either way unti we get a impulse move one direction or the other.

          I prefer that move is lower, as in a day or two high volume puke out which then reverses. That is how the miners usually trade, more violent moves, but that was also 2016 and before, and we could very well be moving into a different environment that just creeps higher and leaves most people waiting. If you look back to December and see where we are now, that is what has happened so far, perhaps it continues? I have no idea or bet placed on where we go tomorrow or next week, only a plan for action either way it turns out. If we go lower I buy heavy, if we go up I sit tight and wait for next DCL to add to positions.

          1. Ralph Wiederzane

            I’ve been waiting for that pukeout of miners for a few weeks now and it just hasn’t happened, that is what has me thinking their trading pattern has changed and got me to look back at the action since December. Miners seem to have calmed down, as has the stock market, but even a quiet SnP never kept the miners from ripping one direction or the other.

            Maybe since the sharp drop can’t get going, the miners are just going sideways until they start a gentle stair step higher again, gaining another 10-15% before they go sideways again, rinse and repeat. It would leave the most people missing the bull, and would give shorts hope to hang onto positions as they lose slowly and keep calling turns, while bulls like me don’t get the easy buy setup into a puke!

            Hope that ain’t the case, but seems like neither side is getting much satisfaction, except may the longer term bulls who did some buying into December weakness and are still holding. I have to say I am pretty convinced we are not going to take out December lows, except if the stock market crashes, even then miners would still be a screaming buy in my opinion. That is not because I am a raging bull, or I would be heavy long here, I just feel too many people are looking to buy and that is also the same reason the downside can’t get traction even as cycles suggest it’s due.

  22. zkotpen

    Christian,

    That’s exactly the triangle I watched all day. I was also watching for the other possibility, that of an A – triangle B – C sort of affair. The math says the former is more likely. Also, as I redraw the triangle (see below for technical notes), I note the apex appears very near point E — something I hadn’t noticed in the afternoon.

    https://www.tradingview.com/x/BO81qz0A/

    Technical note: You’ve drawn the upper trend line incorrectly. Technically, it should go from 23.80 to 23.68. Thus, that would leave that final point E as breaking above the upper trendline — which is quite common.

    More importantly, if you extend the upper trendline, as I’ve suggested, and the lowerd trendline, as you’ve drawn it, back to the TIME ORIGIN of the triangle, 23.28 from Wednesday, the difference is a rough estimate of triangle thrust — works better for gold than GDX, but it can help give you a break down target. In that instance, the downward target would be lower than the one implied from your drawing. If you look at my drawing, the triangle thrust is about 65 cents — with a final target of exactly 23.00 — which would drive the uber-bearish types crazy if they’ve got the weekly 23 put options!!

    1. Christian

      Thank you but a couple of things I should point out:

      You’ve drawn the upper trend line incorrectly — No I haven’t πŸ™‚

      Technically, it should go from 23.80 to 23.68 — That’s right and I did draw my trendline from 23.80 to 23.65, candle peak to peak, for April 20th/intraday, so not sure what you mean.

      Keep in mind.. the Angularity of the triangle would look different had it been drawn on a day chart or a weekly chart.

      And since we’re on the subject of technicalities.. look at your bottom trendline.. You can’t draw and cut through the body of a candle; you can only cut through the wicks, not the body. That’s a ‘No No’.

  23. zkotpen

    Gary,

    Thanks! To be clear, once again, you have made me pay attention to yet another technical indicator I had hitherto ignored: Volume in general, and volume of the leveraged miners, in particular. You didn’t invent that tech indicator, and you’re not the first one I’ve heard mention it, but you’re the one who got me to pay attention to it. Thanks for that!

    Both sentiment and most certainly cycles are technical tools. Check the definition & short video at Investopedia:

    http://www.investopedia.com/terms/t/technicalanalysis.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186

    Why bash tech traders, especially when you are a tech trader yourself? It’s distracting.

    Investors can buy and hold a stock in fundamentals, I believe, long term. I did a little of that successfully in my Navy days. Remember when you talked about turning off the computer for an extended period of time? How about something like taking advance pay for an SSBN patrol (less house, car, and all other fixed monthly payments), and buying what I deemed fundamentally sound mutual funds with the rest of the money & going below the sea for 3 months, then coming home to find an extra month’s pay in my account. All based on fundamentals of medium/near term growth potential. People did similarly well with Coca Cola during the decade of the 1980s (when I was a teenager). Etc.

    My own guru was a massively successful fundamental investor: My grandma’s aunt was a hair dresser who socked away cash into the bluest of blue chip growth stocks during the biggest bull market of the 20th century. Then, just before the multi-decade correction, she shifted all her growth stocks (mostly Exxon, Mobil, and other oil stocks) into dividend paying utilities — as in, many of the electric companies of the United States. She had those things set up so that she’d get at least one dividend check every 15 days. That’s fundamental investing for you. She showed me her books in 1980, when I was 12 years old. 1980 — 14 years deep into the bear market — she wasn’t complaining one bit!

    But to trade for consistent profits, especially in securities that don’t produce some product or service of social value, you must use technical indicators. Seems like there’s a different technical mix for every analyst and trader out there — zillions of combinations and permutations, if I’m not mistaken. Somehow, each of us is trying to figure out the mix that works best for each of us.

    So again, thanks Gary for the technicals… and, of course, to my Great Great Aunt, for showing me the charts & the strategy & the discipline!

    1. Ralph Wiederzane

      Cool story, reminds me of my great aunt too. She spanked the markets, making only a couple changes a year, until she died at 100 years old just a few years ago. She showed me her portfolio on several occasions and I was amazed at how she could be in some many different industries and seem to understand them all, but like your aunt, she was almost always in the biggest names. It’s funny but she never bought etfs, now that I think about it.

      Now I’m wondering why I focus on the individual juniors, instead of the big caps that are most likely to see the institutional money? lol

  24. zkotpen

    Christian,

    For my sources, feel free to check R.N. Elliott’s techniques for drawing a triangle: You draw an A-C trendline that connects points A and C; and a B-D trendline that connect points B and D. You can then extend those two lines westward to the time of origin of the triangle, thru which you draw a parallel, to measure expected thrust.

    That’s the technique I use, and will continue to use, until shown convincingly that some superior technique for drawing triangles exists. I am open to the possibility of such techniques, but certainly not going to abandon Elliott’s techniques just because somebody says they’re wrong, especially in the context of defending their own position.

    But if you cite your sources for drawing triangles, I will probably have a look at them over the weekend. Again, though I have my preferred technique, I’m open to learning new stuff, open to the possibility that my beliefs are not the absolute truth.

    I have only two infallible beliefs:

    1. The fallibility of my own beliefs; and

    2. That I will die, and the moment of death is uncertain.

    You can find Jody Samuels’s Basic Elliott Wave videos on youtube, and maybe get the old 1987 Prechter videos on other sites for those techniques if you’re interested. If you’re not interested, that’s fine as well — to be sure, I’ve drawn the triangle EXACTLY as I learned from those two sources, and exactly as it was taught.

    There’s my sources for you to independently verify — or not. I’ll keep right on enjoying the cup of coffee in front of me either way πŸ™‚

    I happen to be developing my own triangle studies — the studies that lead me to believe the current triangle is more likely to break down than break out, though fully aware that it could go either way.

  25. zkotpen

    Correction to the above post:

    “You can then extend those two lines westward to the time of origin of the triangle, thru which you draw a parallel, to measure expected thrust.”

    Should read:

    “You can then extend those two lines westward to the time of origin of the triangle, thru which you draw a VERTICAL LINE, to measure expected thrust.”

    1. Gary Post author

      I think the manipulation of the gold futures market is over. They got busted. Getting busted a second time would probably include jail time.

  26. Don

    Ped, god you can be such an ass. I told you specifically, months ago, concerning Plato being a long shot so cut the crap by pretending you have never heard the name before. Do you honestly think JJ and I are working together to sell a stock worth 1.5 cents? Quit being so bloody stupid.

    1. Pedestrian

      Stop using comments directed at me to keep promoting that piece of junk penny stock. I have honestly heard enough from you to last a lifetime and decided as a human being you are not worth snot. So piss off.

  27. Don

    I find it interesting that Gary and others are not giving any consideration for the possibility of an out break of war and how that event could upset their coveted cycle and technical work. I would expect gold to move up rather quickly. I would also estimate the probability of the US attacking Korea within the next 60 days to being too high to ignore. Russia and China are both amassing troops on their respective borders with NK. Obviously. they are taking Trump’s threats seriously. What if NK responds with nukes on South Korea, as their leader has promised to do? The world’s economy could be in for some nasty shocks.

    1. Dday

      I would say the weakness in PM’s ,particularly silver and strength in SM show doubt about the severity of the situation.But Agreed could change at any time…

  28. Alexandru Popovici

    Swing low for USX (on the leading foot steps of USDJPY) and swing high for EURUSD –>
    while EUR and JPY head down for their DCLs, USX has timidly begun its dead-cat bounce in what is likely to be the last daily cycle of its YC.

    The last leg up of gold is to start soon!

    PS: got quickly stopped out of my short-cotton trade; confidently holding onto the short-crude position.

    1. Alexandru Popovici

      USX likely to find its YCL around May23 (after EU GDP reports but before US’) — hence a top of gold/miners should be expected around mid May.
      I reiterate my estimation for GDX to reach $28.5 before it tops.

  29. Pedestrian

    The gold wedge (or triangle or whatever you like to call it) has broken to the upside (hourly chart) as expected so the miner indexes should be in the green today and JNUG & NUGT holders feeling a little better after yesterdays paint drying dull day. One caveat though. If price gets trapped at 1289 and change (below 1290 in other words) we may have a bear flag on our hands that won’t resolve until next week.

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