Author Archives: thedangerpoint

Gold Projections: Lower

November 16, 2020 By in DUST, GLD, Gold & Silver 1 Comment

In the overnight and early morning, gold futures GCZ20, posted a new daily high and a new daily low:  Outside down. 

Gold continues its move lower.

Before we can begin to get downside targets for gold, we have to go way back to the original start of the gold rally

Back to January 20th, 2001.

Gold reached a low near 254/oz – 255/oz. 

Using that knowledge, we can create a Fibonacci projection tool for the chart of GLD.

The GLD data on the chart does not go back that far.  So, we have to improvise.

Taking the Fib projection tool down to the 24 – 25 area of the chart and then identifying a major top of the move during the financial crisis of 2007 – 2008, gives us the chart shown below.

Expandable version of both charts, here

Note the multiple price action contact points on the 61.8 projection.  This area is an axis line.  The market oscillated around this area for nearly 10-years, before heading on to new all-time highs.

The axis lines and reversal points on the chart provide confirmation we have selected the price action waves correctly.

Using the same 25-area on GLD, we’re gong to remove the projection tool and use the retrace tool and then zoom in using the weekly chart.

That chart is below:

There is a lot going on with this chart.  Note the wide, high-volume bar.  Volume for that week was about double from the week prior.

Markets tend to go back to these areas for a test.

That area also represents a Fibonacci 38.2% retrace of the entire move off the February 2001, lows.

On top of that, a retrace to GLD 130, is a near exact -33% from the highs. 

If that weren’t enough, price action getting to that level would automatically set-up a Wyckoff spring (reversal) condition by penetrating the support area shown.

Will this all happen?  Obviously it’s unknown at this point. However, it does give us context.

As always, price action is the final arbiter.  We’re short on the GDX, the Major Miners via DUST (not advice, not a recommendation).  Our original stop was probably too tight at just 0.41 points from entry.

We’ll see how it works out.  Certainly, we are at another danger point.

Stay Tuned

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.

Impulse Power

November 15, 2020 By in DUST, GLD, Gold & Silver

Deflationary impulse is a term that is used to describe the potential decline in gold and silver prices.

If that’s what’s coming, it looks like it’s already started.

The weekly chart of GLD below, shows the long-term action in the sector. 

We have a trading range that formed during 2013 – 2019.  That range gave a projected ‘measured move’, to the 185-area for GLD.

The target has been met.  The bullish trade is over and now something else is being created.

That something from the circled area shown, expanded at the bottom of the chart, appears to be a reversal (Wyckoff up-thrust) condition.

The up-thrust was tested early in the reversal (first arrow) and this past week looks like a secondary test.  Secondary tests do happen.  Not too often but its acceptable market behavior.

In the updates here and here, the overnight futures price action was used to determine this past Friday, 13th, was a 38% retrace of the most recent down move; indicating weakness.

Anything can happen. GLD could open higher on Monday and somehow power its way through the down-trend line shown in Friday’s update.

However, probabilities based on the combined analysis point to continued downside action.

If we get a decline, how far would it go?

Price action permitting, we’ll cover downside targets in the Monday pre-market update.

Charts by StockCharts

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.

Testing: 1, 2, 3

November 14, 2020 By in Bonds, GLD, TLT, UUP 1 Comment

The dollar has reversed and is now testing the lows. 

Conversely, when we look at the price action of gold (GLD) its collapse exactly mimics the dollar’s reversal.

Taking into account the futures market activity in gold, it made new daily highs last week during the overnight session, Sunday-to-Monday. 

Using that knowledge on GLD, (adding it to price action) it retraced to 38%, of the recent down move this past Friday.

If we’re in a real bona fide reversal of the dollar and gold (posting more confirmation on gold tomorrow), then expectations are for continued gold downside during the coming week.

The dollar, bonds and gold, at this juncture are moving in tandem:  Dollar and bonds up, gold (and silver) down.

Charts by StockCharts

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.

Gold Rally Failing

November 13, 2020 By in DUST, DXD, GDX, GLD 2 Comments

At this juncture (2:40 p.m. EST), price action in GLD has verified the down trend and is pulling away; confirming that last week’s action was a major trap for the bulls.

Although not required by this site as there are no recommendations or advice, as a courtesy housekeeping notes are provided:

The DXD trade was exited at about break-even. Price action is moving too low (DIA higher) for continued maintenance on this trade.

A short position in the mining index GDX (Major Miners), was opened at DUST 18.86, when it bacame obvious that GLD was pulling away from the trend as shown.

Hard stop DUST, 18.45 (not a recommendation, not advice)

Charts by StockCharts

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.

Revelation 6:6

November 13, 2020 By in Corn, The Speck, Wyckoff 2 Comments

When a stock market trader starts quoting Revelation, you know it’s bad or about to get that way.

That’s what we have here (time stamp 14:20) where David Dubyne and Bob Kudla discuss a variety of events but mainly, the world’s food supply.

“And I heard a voice in the midst of the four beasts say, A measure of wheat for a penny, and three measures of barley for a penny; and see thou hurt not the oil and the wine.” Revelation 6:6

This site has presented in past updates sufficient data to show the nation’s food supply is being systematically dismantled via at least two avenues.

First:

Naturally occurring disasters are intensified (or outright created) by weather manipulation. 

Second:

The planting and harvesting infrastructure is being intentionally disrupted or dismantled by what this site has termed ‘the speck’.

By now, anyone accessing these posts should know what the (imaginary) speck is and it’s even discussed in the above links. The press (financial and mainstream) talk about the speck incessantly.

Put the lie out there long enough and eventually it will become belief.

Back to the markets and more specifically, CORN

CORN was a trade that was entered by the firm but then decided the look was not right and exited at essentially break-even.  That trade was entered right around the area that’s now labeled as a 38% retrace level.

The trade would have been modestly profitable but it’s not what we’re looking for. What we’re looking for may be yet to come.

The 38%, retrace level is now well established support and if penetrated by subsequent price action would generate a reversal condition known as a Wyckoff spring.

Shown on the chart as well, is the wide high-volume price bar that’s right in the middle of the 50%, retrace level.

This is where it gets interesting.  Markets behave in such a way as to come back to high volume areas for a test.

If somehow, CORN retraces to this level for a test of the wide bar, it will automatically set-up a spring (reversal) condition by penetrating price action at the 38% level.

Our edge in this situation, are the bullet items discussed above.  The entire world’s food supply is in jeopardy.  That’s a known fact.

Crops are failing world-wide.  Weather patterns are erratic and manipulated. 

Knowing this provides a fundamental backdrop that should CORN retrace to test the wide bar, it’s not likely to stay there long.

In addition, if CORN reaches the 50% area, it may never come back to those levels.

Charts by StockCharts

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.

Bond Reversal

November 12, 2020 By in Bonds, DIA, Dow 30, DXD, TLT

In the past three days, bonds (TLT) penetrated support and stopped dead.

Anytime a market penetrates support or resistance and halts, it’s an indication that something’s up.

Either the market‘s absorbing transactions at that level to continue on, or it’s a reversal about to happen.

With all that’s known on the short position by the speculators as well as another Van Metre report, bank lending standards, probabilities point toward bond reversal.

The dollar is already reversing higher.  Gold has been viciously slammed lower and the overall market’s hovering at all time highs.

The Dow edged lower at the last session. This session in the pre-market (9:01 a.m., EST) it’s lower again at -1.94 points or -0.66%.

If the Dow (DIA) gets below the 290- area, it’s below resistance and another move higher may be difficult indeed.

We’re short the sector via DXD (not advice, not a recommendation). A new daily low for DIA will allow our position’s stop to be moved to DXD 13.49.

Charts by StockCharts

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.

Mind The Gap

November 11, 2020 By in DIA, Dow 30, DXD

For the past past five years, the Dow 30 has filled every gap … except two.

The ‘election’ gap of 2016 and the ‘election’ gap of 2020.

Looking at the technical condition of the Dow, it’s at an extreme. 

Testing the underside of a trend break while at the same time in a reversal (Wyckoff up-thrust) condition.

A ‘reversal condition’ does not guarantee the market heads immediately lower.

It points out the probabilities that some type retrace may happen before a move higher.

In the current situation, a significant retrace would put the Dow well below resistance; adding to the bearish assessment.

Pulling out to the larger time-frame, the weekly chart puts the current pre-market moves (as of 8:51 a.m. EST), DIA up 0.51%, in perspective. 

The market may oscillate attempting to move higher.

At least three conditions are working against such a move: 

Underside trend line test

Up-thrust (reversal) condition

Lower gap area yet to be filled.

We’re short the Dow via DXD (not advice, not a recommendation) with hard stop, currently set at DXD: 13.13

Charts by StockCharts

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.

Miners (GDXJ): What’s Next?

November 10, 2020 By in DIA, DXD, GDXJ, JDST

It’s possible during the last session gold (GLD) received a final mortal wound to the hyperinflation argument.

Price action in the December contract (GCZ20) dropped over 100 points in a matter of hours.

A retrace is expected … it’s just part of market behavior. 

However, even as gold edges higher, the Junior Miner’s, don’t seem too eager to follow suit. 

Price action in GDXJ has risen just slightly with JDST down 0.50% in pre-market.

The dollar (UUP) has reversed as expected.  It’s got a long way to go higher for any kind of test on wide, high volume action.  Dollar higher, gold typically, lower.

The short position in the Dow (DXD) has retraced somewhat in the early hours. 

As it stands now, the retrace is about 1/3rd of the overall gain thus far; perfectly acceptable.

The focus for the firm’s trading at this point is on the Dow and related markets.  If the position is increased at these levels (and the analysis proves to be incorrect), it could be stopped out the same day.

So we’ll wait to add … for now.

Separately, it should be noted that every single market assessment in the previous update was correct:

GDXJ in up-thrust reversal condition … check

GDXJ finished at high on Friday, Monday’s typically down … check

Gold retraced to 50%, lower price action expected … check

Dollar in its own reversal set-up … check

Dollar up, gold down … check

All that list means, is at this juncture the markets are being correctly interpreted. 

Those interpretations are being done intuitively and without indicators.

Intuition can be skewed by events unrelated to the markets.  For now, it’s operating correctly and we’re going to focus on the Dow.

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.

Market Top?

November 10, 2020 By in Dow 30, DXD, GDXJ, GLD, JDST

Was that it?.  Did we see the all time high in the markets, Monday?

The short answer of course, it’s not known. 

The longer answer is, to go short the market at this point (Monday’s session) was a low risk entry; not advice, not a recommendation.

The inverse chart of the Dow, DXD (above) shows our initial entry.  We’re green at the end of the day and have hard stop, GTC, at 13.32.

Tomorrow’s open could be a gap-lower for the Dow, that spends the rest of the session attempting to retrace higher.  If so and depending on the behavior of that price action, it may provide an opportunity to add to the position.

Separately, the gold and related GDXJ, JDST had such sharp moves during Monday’s session that JDST was exited completely and yielded a gain of about 12%.

Gold is likely to retrace higher and possibly offer another low risk (short) position in the miners via JDST.

The trading actions are being directed by the market. It would be nice to have a slower more well behaved situation. However, that’s not the case and the trading response matches the market (price action) dictates.

Charts by StockCharts

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.

Hyperinflation: Hit Hard

November 9, 2020 By in GDXJ, GLD, JDST

The regular session is still thirty minutes away and already gold’s had it’s largest down-swing since August 11th.

Bulls must be stunned.  It’s not supposed to be this way.

Of course, the financial press has to come up with some kind of ‘reason’, so there’re off plying their trade. 

At this juncture, before the open, December gold is down about 4%. 

The dollar is slightly higher as forecast but bonds … TLT, down a whopping 2% in pre-market. 

How can bonds be down (rates up) with the dollar higher and gold lower?

The question itself, is an error.

It’s not ‘why’ that’s important, it’s ‘what’.  Asking why keeps one searching for the wrong answer.  It’s exactly what the media and those manipulating the markets want.

The trail of why goes on forever and leads nowhere.  The why is constantly changing second by second, minute by minute. 

Asking ‘what’ is a different story; what is the gold market doing?  Now, that’s a question.

The gold market is down hard; Very hard.  Shocked bulls, married to their ‘hyperinflation’ narrative, will have to see it as a buying opportunity.

Expect gold to retrace somewhat during this session.  However, the damage has been done. Gold (GLD) is below well established support levels … now resistance areas.

In related markets, the Junior Mining Index, GDXJ is down -5.75% in the pre-market session.  Correspondingly, the inverse fund JDST, is up a stiff 11.5%.

As stated in this update (not advice, not a recommendation), the position in JDST was re-established during Friday’s session. 

Obviously, we’re keeping that position for now and will monitor price action to determine a new stop location.

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.