Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
There’s something very wrong with the “hyperinflation” narrative.
The gold miners GDX can’t even get to a full 38% retrace level without collapsing.
Price action has negated the targets from the prior update.
It should be clear at this point, a monstrous 5,600 page, so-called stimulus package is not inflationary.
For an irreverent look at what’s in that bill, reference “Salty Cracker”.
By the way, just how long does it take to write 5,600 pages? A couple of years, maybe?
Probably as much time as it took to write the original CARES Act … which was submitted (put in committee) to Congress during January 2019 … a full nine months before anyone even heard of the “speck” in Wuhan.
The inference is, both of these bills were planned long ago and have been in the works for years.
Which brings us to gold and the miners.
The hourly chart of GDX shows two wide bars in today’s session. The 35.00 – 35.50, area is support that may stop the down move for now.
Wide price bars usually get tested. Today’s action (as of 1:34 p.m. EST) shows GDX is moving quickly.
Expectation now, is for GDX price action to test the wide bars. That could take hours or days … or not at all.
If there is a test, the most likely stopping point is yesterday’s low at GDX, 36.18
In other markets, the short position in XOP (via DUG) is being maintained. Stop has been moved to DUG, 26.63; not advice, not a recommendation.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
If GDX continues in counter-trend action, an equal distance wave ‘c’ is the area GDX, 37.80.
Fibonacci Day 21 from the lows in late November, puts the counter-trend top on or about, December 23rd.
With the stimulus bill essentially a sure thing and gold going nowhere, something else behind the scenes is happening.
We’ll stick with the Van Metre assessment that stimulus is deflationary; Until proven otherwise.
From ‘uneducated economist’, linked here, he proposes there’s slight of hand going on yet again. The inference is, that somehow holding the actual physical cash note may (not advice, not a recommendation) become very important.
Following up on his comment is this: There’s a limited amount of actual physical currency in circulation as detailed here.
So worthless paper fiat currency, in an ironic twist, might become valuable for a short period of time … yet to come.
The job of this firm is not to figure out the nuances and details of the Fed.
The job is to identify probability and opportunity; then take advantage. Interpreting price action takes decades to master … it’s a full time job in itself.
With that in mind, we’re currently short (not advice, not a recommendation) Oil & Gas via DUG.
The senior miners are on track to test the 37.50 – 38.00 area. GDX will be monitored if/when it rises into that level. If so, it could be another low risk short opportunity.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
After the last post on GLD, price action pushed lower for one day before starting its anticipated move upward.
That lower push has altered the end point for counter trend action.
Adjusting forecasts and possible termination points is never-ending.
Each bit of price action gives a new data point; confirming, negating, altering the perceived scenario.
A 38.2% retrace of GLD, on a closing basis from the November 30th low, gets to around the 177.00 area
This area also corresponds with a one-to-61.8%, “a-b-c” move from that November low.
Time wise, if GLD continues higher, we’re still on track for around December 29th, having already passed the December 16th, forecasted turn.
Note: The December 16th date was off at this point, by one day. GLD may have reached its counter trend high on the 17th.
If there’s a trade set-up (to go short) during the last week of the year, the objective is to initiate a position in the Senior Mining Index (GDX) via inverse fund DUST; not advice, not a recommendation.
Because of the current ambiguity, no positions are planned … yet.
At this point, we’re using the deflationary model, or macro as outlined by Steven Van Metre. Price action thus far, is confirming that thesis.
Also worthy of investigation (more later) is how banks will get out of their massive long-bond positions. A potential scenario of Negative 6%, is discussed by J. Bravo and Jeff Booth.
We’ll see if further investigation of ‘Negative Six’ as we’ll call it, includes IRA confiscation.
Years ago, Prechter wrote just how simple that would be.
Summarizing his words:
We’d have a complete market melt-down. IRA withdrawal penalties made prohibitive; for your ‘safety’ only treasuries can be in the portfolio. Voila! We’re done!
What needs to be kept in the forefront of everyone’s mind accessing these updates is the overall objective remains the complete destruction of the middle class.
Even in the Bravo post liked above, at Time Stamp 19:50, he presents that destruction as the Neo Feudalism already discussed here, two-weeks ago.
Price action is the key. If GLD continues higher and past the 50% retrace, it indicates something else is afoot.
If that happens, the bearish look then turns bullish.
A downward reversal from this point would suggest the December 16th date was off by one day and the corrective move higher is complete.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
That’s part of the title from the Energy Sector report, linked here.
Those exact words were used just hours prior, in the pre-market update.
“Downward pressure is increasing.”
The short position in the sector is being maintained via DUG (not advice, not a recommendation).
The stop is set to be moved after today, based on price action.
Using USO as the proxy, oil is pushing a little higher as of this report (12:41 p.m., EST) probably because the dollar’s probing new lows.
Even though the dollar’s at lows, action thus far is reversal. A UUP close above 24.38, may signal trouble for those that are short.
The markets continue to be stretched to extremes. Based on data thus far, Energy Sector appears to be reversing (again) first.
Since that sector’s in a long term down-trend, XOP reaching its highs way back in June of 2014, we’ll remain focused on DUG.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Like GLD, in this report, GDX looks like it’s correcting in a-b-c, type fashion.
The GDX chart shows the Fibonacci projection with target indicated (blue line and arrow).
If the dollar (UUP, proxy) reverses and heads towards resistance 24.75 – 24.80, while gold counter-trends higher, we’ll have a tenuous situation.
Something will break; gold or dollar and probably both. The dollar higher, gold along with the rest of the market, lower.
With so many short on dollar and bonds, if UUP gets to underside resistance, a reversal (to test back to 24.50 lows) could be very short lived.
Keep in mind, when it all comes apart at the seams, it’s likely to be quick.
In other markets, XOP in the pre-market shows a slightly higher open with DUG showing lower.
After the session is over and if there’s a new daily high in DUG, the stop will be moved up (not advice, not a recommendation).
Separately, and as public service, here’s a link to an old article written by Robert Prechter Jr., way back in 1986; what it takes to be successful in the markets.
It’s a good read … probably the most important part is the last bullet item, No. 5 “The Mental Fortitude To Accept Huge Gains”
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point® 