60 thoughts on “CHART OF THE DAY – BULL FLAG?

  1. jacob2

    Failed flag? Drop dead debt ceiling date 9/29. Don’t often point to fundamental commentary but there you have it and almost September the worst sm month of the year.

  2. Goild

    QQQ has in the last two trading days a solid long red candle, followed by a small doji.
    The small doji means the SM is pausing to think, the solid red candle says there is large moment going down.
    The previous week also felt that but recovered. There is a test on that small doji.
    Is the QQQ getting in a channel to extend a bit the flag? or early this coming week will see another red long candle?
    Anything happen.

    The PPT team may decide to keep manipulating the market, or we can have any time a black Monday.

    Eventually QQQ should dive to at least the 131 level.

  3. victor

    Thanks Ped for pointing out on gap fill. Time is coming to enter metals and forget abt it for a several years. But, coming re-set or whatever “they” do will wipe out any paper profits. Time is coming to be suspicions of any excess euphoria feelings in profits. Money in the bank is not your money.

    1. Pedestrian

      You are welcome Victor. That chart was totally unexpected and came as a surprise to me when I saw that spike down on the silver monthly. Kind of a holy shit moment. If I come across any more like that I might just become a convert to the bull camp (I was heading there anyway. My plan was to short into the next decline and then with luck ride the miners up come late fall and spring of 2018).

  4. Goild

    How unthoughtful…

    Rather than leaving 3K JNUG shares on the table on Friday, the correct move for me should have been leaving 5K GDXJ shares. This is to not have the risk of JNUG natural depreciation.
    I would not pay margin on the GDXJ shares. A no brainer and safer improvement.

  5. TraderPete

    If the SM crashes, as some have suggested, that will also pull down PMs, because of the margin calls. I’m not saying you’r wrong, I’m just saying PMs will also crash, which suggests to me that we are headed into a depression or at least a recession. If that happens, you can expect the FED to restart QE on a massive scale. Therefore, I don’t think that will happen. I think the SM and PMs are still in a bull market. Be careful what you wish for.

    1. Pedestrian

      I don’t think so Pete. For that to happen the Nikkei/Yen correlation would have to break leading to a failure of gold to rally with the Yen as a safe haven. Keep in mind that the developed market stock indices are all traveling more or less together right now (all going up).

      When major market equities decline they all decline together.
      And when the Nikkei falls the Yen rises.
      When Yen/$ rises then gold rises.

      In other words, if US markets fell but mysteriously the Nikkei bucked the trend and kept going up then it would be possible for gold to fall with Yen and ride the decline down with US stock markets. All things being equal though the relationship of gold and US stocks is already well established so we should expect metals to fly if there is a market crash.

      What is less certain is which way gold stocks will go.

      I think in a major sell-off that gold miners will get hit however their recovery should be rapid if gold has moved up sharply as equities sold off. They will want to catch up in other words but it will be based on fundamentals which are that miners will simply be worth more in a higher gold price environment.

      If any of this does happen with gold stocks then BTFD!!!!

  6. Sassybabe

    I think Don said much the same thing a few days ago. So you guys think that gold will go up if the market falls but the mining stocks could go down in a falling stock market ? We should not buy the miners now but it’s okay to buy gold. Have I got that right? Thanks.

    1. Pedestrian

      I think the correct answer is that it all depends on where miners are in their long term cycle. The HUI peaked roughly 6 years ago in July 2011 and if we assume its on a 7 year cycle then its probably not ready for blast off just yet. When you look at a 10 year chart of the HUI you can see its just touched the middle line of its Bollinger bands and is very likely to reverse down one more time into the lower Bollinger. The two outer bands are rapidly narrowing so a big move lies ahead but exactly when it happens is harder to know for certain. If it came in January of 2018 that would be 6 years and 7 months into the cycle which seems too early to me (not everyone agrees on cycle length and they can and do vary). So with that in mind it suggests that mining stock, which is highly speculative at the best of times, will probably decline with markets if there was a significant correction this fall but that the move out of the bottom could be explosive once the correction is over. It would almost certainly return gold miners to a bull market for a number of years following. It’s my opinion that miners will sell off with stocks this fall and should be bought aggressively once they hit an exhaustion bottom.

      Were you talking to me?

        1. Pedestrian

          That’s going to be a tough one then Sassy. I go by quite a few different names around here and most of them are profane. Hopefully you will choose one of the more agreeable terms. I’m partial to “Handsome” but my wife already has a franchise on that one! πŸ™‚

  7. Goild

    The expectation that the money in the SM would go to or fuel gold has been commented by many around here.
    But who knows what can happen. Bitcoin is a competitor for some money.

    As to where to invest, gold or miners, it does depend on your unique circumstances.
    A conservative move would be in gold.
    A risky move would be with the miners who would feel pain shall the SM dives a good portion.
    Here and there, there are signs that show the SM and the miners going occasionally to bed together.

    1. Pedestrian

      Yup, like in 2008 when the HUI crashed 300 points as stock markets cratered. It’s the nasty declines that take down gold stock with general equities. On the other hand, during year 2000 when the S&P tanked by almost 50% gold had just arrived at a cyclical bottom and took off skyward which began its decade long bull market that ran until 2011.

  8. Pedestrian

    Copper is less than 10 cents away from a MAJOR reversal. Look out below! TECK looks like it has similarly peaked or is near to it now and set for a decline. Maybe too early to declare but the industrial metals are not quite ready to shine and enter a bull market just yet.

    That’s just what the charts say. Not my opinion.

    1. Pedestrian

      So I’m looking for copper to fall back to around 2.20 over the next six months. Very worrisome. If the chart and technicals are giving me accurate information it means we ARE going to see a stock market correction in very short order and right on its heels the start of recession. Probably means that the debt ceiling will expire without a resolution. But how in hell the charts would know that ahead of time I really have no idea.

      Buckle up people. This looks like the real deal to me.

      1. Pedestrian

        Btw, I would not have done an Elliot count that way but then I am not an Elliotician. I have a different way of looking at the charts. Just saw a link elsewhere showing that copper has an inverse head and shoulders pattern too. I had not even considered that pattern but the impression has not changed my outlook in the slightest. If I told you I was 98% certain that copper was on the verge of a decline that could see it lose 25 to 30% of its current value by middle 2018 would you make me eat those words if it didn’t come true?

        Well here we go, neck stretched out and ready to have head lopped off.

        I think copper has a big date with destiny in September. It has almost peaked already.

        And that is very bad news for stocks and crude oil too.

  9. Pedestrian

    Man, its dead in here today. The gold-bugs are totally despondent. Looks like they have given up hope and are prepared to be offered up as metals sacrifices to the Gods of technical patterns and the hungry jowls of the hibernating bears. I can hardly wait for next week. Another big, fat, gold smash awaits but be ready people because when it hits bottom some weeks in the future should be when the stock market finally takes its overdue face-plant into the pavement and gets its teeth knocked out. Whew! What a life.

    1. Christian

      “Man, its dead in here today. The gold bugs are totally despondent”

      Or —- people are just out (like, outside) enjoying their weekend with family, friends and loved ones πŸ™‚

      Maybe you need to do the same?

  10. Goild

    This trading business may have some subtle unpleasant sides.
    One might be related to ludomania, the addiction to gambling/trading, which can unexpectedly get into you as a horrible/terrible disease.
    I have not thought about it, I know trading is highly addictive, but one most be careful on this subtle side of the business.

    1. Christian

      It’s Saturday night πŸ™‚
      And GOILD has just brought out the Scotch, the one hiding in a drawer somewhere.

      He cannot be held accountable for what happens next…

  11. Goild

    To add more of the unpleasant side…

    You can easily loose your account(s)
    Your self esteem
    Your house
    Your retirement
    Your wife

    And if one does not lose money, it might be a lot of valuable time.

    Weird game, it is quite expensive…
    And uncle Sam takes first about 1/3 of the profit.

    Few survive the game.
    Why in the world a healthy person would get into the game?

    This game I guess is for a few stubborn/special characters.

    1. bginvestor

      For the beginners! (not u Goild)

      Knowing if your going to be successful or not is easy. Understand the coupling between a strategy, risk management, and money management..

      Trade for many months on PAPER.. Are you consistent? If yes, you will be successful. If no, you will lost money..

      Doesn’t matter if you bet $100 dollars or $100 K.

      See, that was easy, huh? LOL

        1. Pedestrian

          That’s what I said. Far as I can tell the contest is just a clever way for Gary to identify the best traders in the room and let them do the hard work of pointing out entry and exits points on decent trades. Hell, you guys are worker bees behind the Smart Money Tracker. If I could line up 50 traders of which just 10% were above average and then have them willingly send me their best trades each day I could set up a killer site too and go on dream holidays while they hustled to do all the heavy lifting for me each day.

          Then I would charge you suckers 500 a head too.

          Its that easy.

          1. Goild

            There is more.

            Gary, and of course, all of us, benefit, copy, use, etc., the original ideas and insights posters here post.

            In addition, I suspect, many so called professionals come to the SMT to fish for ideas to talk about elsewhere as their own.

          2. bginvestor

            I told Gary to take his spreadsheets of each trader AND just summarize all trades on one page..

            For example, each month, each trader with his percent gain/loss on the a monthly basis. Once setup , it automatically calculates.

            No so hard, and everyone can see and talk about it. Would take me one minute to cut and paste a picture and post to this site.

            PS Gary, just do this! here’s the format.

            Month of August:
            pedestrian X% gain/loss
            Goild X% gain/loss
            etc..
            etc..

  12. dboz

    You really don’t see the correlation between 2008 and now to say if the market declines it’s taking miner stocks down like it did then. Totally different scenario on that down draft. Banks were going belly up. The entire system was on the verge of collapse. No one could trust that anything was stable. Fear was immense. A market drop and a system collapse are two different things. I don’t see a system collapse in the cards. So I don’t see a miner down draft just because the market pulls back.

    1. Pedestrian

      Sure Boss, I see that. But I don’t give it much consideration because to me it was more a matter of the stock cycles and gold cycles lining up. Another thing that went down in 08 was crude oil which had a massive crash. But it also declined sharply in 2001 and 2014. That cycle is coming in 7 to 8 years apart as well which puts the next big oil bust down the road in 2022 perhaps. Anyway, I don’t see anything that severe coming in the next stock correction which could be this fall so maybe you are right. This is just speculative talk anyway since I don’t think any of us can know for certain until it arrives. If anyone has a crystal ball and can tell us with certainty maybe he will step forward since I would like to know that answer with an iron clad guarantee too!

  13. Goild

    bginvestor,

    Well,

    I am appreciative to talk to all of you. I adds value to the trading activity,
    and diversity to life.

    We live and sweat trading, we love it, don’t we?

    We perhaps got to be passionate about trading.

    At this point, I envision or aim at the fine art of trading whatever it means for my style.

    In this vacation I experienced looking at some highly skilled craftsmen. I also enjoyed dinner cooked by a master chef with prime raw ingredients. These people really were/are master’s of their crafts. It was a delight and inspiration.

    So we are here, and it is worth reflecting on where are going with trading.
    I really want to go through the next steps.
    I want to be a master trader.

    1. Bv

      When you say “fine” have you got any names? Might treat my brother to a bottle as he’s a tequila fan. I’ve only ever had the cheap stuff which you drink with salt lemon/lime to mask the taste. It’s a it of a laugh once in a while but that’s about it. I prefer brandy myself, but it doesn’t have to be an expensive one, a Spanish one will do. I add a drop of water if it’s a bit harsh.

        1. KHT

          Fortaleza Anejo. Expensive and difficult to find. They never even heard of it in the duty free shop in Mexico City. My wife and i have to order it through a liquor store in neighboring New Jersey then drive there to pick it up. $100/bottle. Very smooth and an excellent sipping drink for a night time camp fire in the Fall/Winter or to sit on the back deck at night in the summer and gaze out over the misty valley behind our home.

  14. zkotpen

    Christian, Pedestrian,

    Any thoughts on the YCL for gold?

    Gary stated he believe it was July, in the previous thread.

    I think that’s possible, but unlikely for now — but still monitoring for that possibility, if things begin to shape up that way. I just don’t think they will.

    Shorter term, I am considering the idea of an ending diagonal for gold & miners, to end the current move up.

    For GDX, that scenario is invalidated below 22.70 and seems like it’s pointing at that amusing figure I threw out there last month for an eventual target: 23.87 πŸ™‚
    For gold, that invalidation point would be 1276.

    1. Pedestrian

      Sure Zkot, I am in agreement with Gary on this one. We have seen the half cycle low so far but the YCL is dead ahead and provided there is no stock market upset in the next while my plan is still to get short metals and miners at the earliest signs of an all clear. I am holding back since the current top is elusive and keeps extending past my targets. Its just better to wait at such times and do nothing at all. The market will come to us when its good and ready.

    2. Gary Post author

      For gold to enter a new bull market and I think it has then the YCL has to migrate into the early part of the year. The YCL came in December in 2015 and again in December of 2016 with one very important change. The 2016 YCL held above the the 2015. So for the first time since the top in 2011 we have a change in behavior. We now have advancing yearly cycles. But for a true bull market to take off we need the YCL to move to early in the year. This year the YCL occurred in July. Price is not going to drop back below that level at any point during the rest of the year.

      The YCL for next year should occur in January or February and price will hold above the July lows. Then that low will hold for the rest of 2018.

      So the YCL should migrate to the spring of 2018 and confirm once and for all the secular bull market in gold has resumed.

  15. zkotpen

    I have looked at the longer term charts for gold and GDX this weekend.

    The move down from the 2016 peak is simply looking more and more incomplete.

    People seem to think this consolidation is on the brink of ending any day now… such an instant blast off or break down looks unlikely to me. Math & patterns are saying, “maybe, but probably not for a few more years.” No HG Wells story to the moon or to the center of the earth just yet.

    Gold put in its “8 year” and “3 year” cycle low in December, 2015. Next “3 year” cycle low would be due… right, that’s why the term “3 year” cycle low is inaccurate. It’s the intermediary cycle just below the “8 year” cycle, and intermediary cycles are tricky. They are useful (they inform the primary cycle above them), but they are not practical (not recommended for taking action).

    Regarding the “8 year” cycle — gold’s 100 month SMA is still rising for more than 10 years! GDX’s 100 month SMA is declining, but it’s way above price action. Like out of touch with the reality of the market. I have a hunch that the structure of the gold miners is undergoing fundamental change — real fundamentals, not armchair fundamentals. Real fundamentals like, the industry is changing from an antiquated relic to… ??? to something else, and it’s not clear what that something else is just yet.

    Such uncertainty in the industry means: Gold stocks continue to go down longer term, despite a consolidation rally that goes on for a few years in the middle of that decline.

    As for gold — Fundamentally, the CPI is up almost 25x since 1913, and gold is up much more than that. If gold is a store of value, it must accurately store value, not exaggerate it or understate it. The market knows this, price action reflects this.

    Regarding the “3 year” cycle, the move down in gold and miners from 2016 is likely still in progress, until when? December? March? So it could last 17-20 months all told. I reckon the subsequent bounce will take as long or longer to complete.

  16. zkotpen

    Pedestrian

    “I am in agreement with Gary on this one. We have seen the half cycle low so far but the YCL is dead ahead”

    Actually, Gary stated the YCL is in the rear view mirror, that it completed last month. You can check the previous thread (or the one just before that — I may be missing a thread in my accounting).

  17. Gary Post author

    How many bear markets have begun with everyone looking for it?

    We don’t even have an inverted yield curve yet people think we are going into recession.

    Every recession since the 40’s has been preceded by a spike in energy prices of 10% or more. The sudden shock to the economy causes consumer spending to collapse and the economy grinds to a halt. Energy is behaving.

    And finally no cyclical bear market has begun until retail investors become convinced that the bull is going to the moon. The ROBO ratio isn’t even bullish yet, much less the months and months of excessively bullish levels that indicate mom and pop are all in.

    I know the deflationist story is sexy but we simply aren’t there yet. Anyone who travels around the country and actually sees what is going on rather than listening to the perma bear nonsense can see that the country isn’t even vaguely close to going into a recession.

  18. Steffmeister

    I’ve been bullish Gold since summer solstice πŸ™‚ and for once Jordan and I agree about gold going forward.

    https://thedailygold.com/golds-sudden-newfound-relative-strength/

    Total Solar Eclipse will affect most markets I guess, I am new to this phenomena and how it affects markets. Common stocks sideways to down for a week, two or three? Then an explosive move to the upside. That would indicate a weaker dollar.

    1. Gary Post author

      Daily cycles in the stock market rarely last more than 40 days. Monday will be day 36.

      If we turn and go back up on Monday then the ICL has been pushed out to October.

      If we continue down and break the June low then the ICL should be finished sometime this week and we then rally for the rest of the year.

      I’m leaning towards a rally on Monday because I think the PPT will try to turn the market back up ahead of the Jackson Hole event. A test of 2500 by early Sept. and then a long slow grind down into a stretched ICL in mid October.

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