Gold bulls are doing everything they can to re-establish the up-trend.
This morning’s action was a deep upward test of miners GDX, and not as deep for gold itself (GLD).
The bulls were able to open higher in both GLD and GDX; then driving action upward into an early morning test.
At this juncture (mid-session) that test is wavering.
We’re going to inverse fund DUST, on the 2-Hour basis to show the fight that’s taking place.
GDX Leveraged Inverse DUST:
Un-marked 2-Hour chart
Adding the notes.
With Zoom.
As this update is being posted, it’s still unknown which direction DUST is headed; currently trading at DUST 19.35.
Summary:
We’re at the danger point where action can go either way.
If the gold bulls can’t hold and DUST makes a new daily high (GDX, new low), we have a decent confirmation, we’re at the end of ‘the first correction.’
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.
Dazed and confused has got to be the current state of the gold bulls.
Just when things look like they’re getting underway to the upside, there’s another whack lower.
This morning’s action was no exception.
Before anyone starts screaming “manipulation”, the potential for this reversal (i.e., ‘the first correction’) has been discussed on this site for weeks.
“However, the most likely outcome at this point, is the market pivots straightaway or hesitates for several days; just long enough for both sides (bulls/bears) to start scratching their heads.“
Well, “straightaway”, it is.
Yesterday’s update, also ended with this:
“Next up, scheduled for tomorrow and depending on price action, we’ll discuss how the upward retrace in GLD, may actually be a test of the mid-November up-thrust“.
And a test it is … bringing us to the chart at hand, GLD
Gold, (GLD) Daily Chart
The un-marked chart.
We’re going to keep the chart ‘as-is’ this time and not invert.
Mark-ups are added showing the extent of the set-up; that last Friday, including Sunday’s overnight futures, were a test of the up-thrust:
It’s A Big Move
We’re looking at price action that took over four months to create a set-up (mid-November up-thrust).
Then, price action posted for nearly two weeks within the set-up before collapsing on November 22nd, last year.
Remember there was absolutely insane gold bull hysteria during that time … a very important nuance.
Now, we’ve got what looks to be nearly six weeks of testing that culminated last Friday (and Sunday, overnight).
If that weren’t enough, over those six weeks, the Senior Miners, GDX, has thinned-out. Thinning-out typically occurs at the very last stages of a directional move.
Summary:
As stated yesterday, if we got a downside pivot in GDX (DUST moving higher), the market may allow an opportunity to re-establish the original position size … maybe more.
At this juncture (mid-session), it’s doing just that.
Early this session, the DUST position was increased by about 3.2% (not advice, not a recommendation).
Channels & Trendlines:
Scheduled for tomorrow, is a discussion on what to expect on a go forward basis.
Will action confirm a potential right-side trend or begin to move deeper into the trading channel identified in a previous post.
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.
With mixed signals, confusion in the economy and markets, one has to wonder if anybody’s noticed the Fibonacci sequence in Senior Miners, GDX?
As soon as such things get ‘figured out’, time correlations diffuse and evaporate; just long enough to throw off attention and re-emerge at some distant date.
However, as yesterday’s update inferred, along with a compelling trading channel, it begs the question; is this juggernaut so big that even if it’s ‘discovered’, it won’t make a difference?
Of course, the market itself is the final arbiter.
However, the coming week may prove to be interesting. If the time correlation remains intact, expectations (shown below) are for GDX to pivot lower early in the week.
Senior Miners: GDX
We’ll start with the un-market daily chart of GDX and then invert (to approximate DUST) for the subsequent analysis.
Now, inverted
The first Fibonacci sequence, ‘Day 1 – Day 34’, defines the channel width (shown in thisupdate) and the subsequent retrace to the December 15th, apex/reversal; Day 55.
The next chart shows that embedded within the sequence above, is another sequence; from the November 16th low, (inverted chart) to the same December 15th, top.
Putting both together, we have the following.
However, that’s not all.
The time to retrace from December 15th to Friday’s close is/was 12-days … just one day short of a Fibonacci 13.
Is the market going to ‘blip’ this Monday, print a new low (on the inverted) just to make it absolutely perfect or is the whole set-up going to fall apart?
Either one can happen.
However, the most likely outcome at this point, is the market pivots straightaway or hesitates for several days; just long enough for both sides (bulls/bears) to start scratching their heads.
Summary
We’re still short this sector, identified as trade number DUST-21-01, (not advice not a recommendation) but the actual position size has been reduced.
‘Reduced’ is not the same as ‘closed’.
The reduction in size, which was about 8.8%, of the total position, was entirely the result of maintaining margin requirements.
If the trade falls apart, obviously the correct action would be to close.
However, if GDX pivots to the downside (as expected), there may be a window of time allowing position size to be increased back to the original or more if the market allows (not advice, not a recommendation).
Gold (GLD): Testing The Up-Thrust
Next up, scheduled for tomorrow and depending on price action, we’ll discuss how the upward retrace in GLD, may actually be a test of the mid-November up-thrust.
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.
It turns out that precious metals and the grains, i.e., wheat, soybean, and corn are at this juncture, inversely correlated.
Gold & Grains: Inverse Correlation
What kind of nonsense is this?
I thought we were supposed to be in a hyper-inflation event. I mean, the financial press is aghast about it. The YouTuber’s have jumped on and provided their own non-thinking “me too” assessment.
How can it possibly be any different?
The official narrative has been sanctioned by the press and YouTuber’s alike. It’s a consensus!!!
Let’s put it this way, if your (or my) favorite YouTuber is not being harassed, shut down or otherwise ‘cancelled’, are they really offering any useful information?
So, what gives?
How can gold, precious metals and the miners be inversely correlated with grains and/or corn?
Well, ok. Let’s take a look.
Below is an un-marked daily chart of gold proxy, GLD.
Let’s put in a big arrow showing when that crop-destroying inland hurricane (just before harvest … how convenient) showed up:
Below is a daily chart of tracking fund CORN; showing the correlation.
The markets in corn and gold never looked back.
Now we have this report from ice age farmer, just out. Trucking shipments between U.S. and Canada could be reduced by 15% or more.
As a result, food shipments are likely to be impacted starting this month.
Sustainable, Self-Implosion
If the negative correlation between gold and the grains wasn’t enough, we also have the controlled demolition of ‘sustainability‘ being put in place as well.
Tony Heller was part of the YouTube purge a few years back. He wound up being one of the first major hitters moving to NewTube.
Sporting no fewer than five science degrees … one of them being Master of Electrical Engineering from Rice University, he has systematically dismantled the propaganda and cult of climate change.
As with our second link above (repeated here) the only climate change of note, is the one being sprayed in. 🙂
So, most if not all major corporations are implementing plans, that by definition (unless reversed) will ultimately result in their own collapse.
After all, if you’re implementing plans and actions to address something that’s not there, what are you doing about any real tangible problems in the company?
Back to the topic at hand.
Senior Miners, GDX.
As stated in the first paragraphs above, GDX seems to be on some kind of time-tunnel mission.
Yesterday, it was shown how GDX is in a huge trading channel … with Friday’s price action potentially confirming the right side.
Next up, scheduled for tomorrow are specific and repeating Fibonacci time correlations between GDX inflection points and channel widths.
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.
When a profitable position begins to erode, the questions begin.
Is it just a correction or a full-blown reversal; how do you know?
Of course, nothing is ever known for absolute sure.
However, in the case of the current trade DUST-21-01, which is a short position on GDX (not advice not a recommendation), the market’s exhibiting what looks like terminal (reversal) behavior.
Of all the thirty-one equities in the Senior Miners GDX, only one is above its mid-November highs: Newmont Mining.
Newmont, NEM
With Newmont getting all the attention, the view is the entire market is ‘thinning-out’.
In addition, price action in Newmont tends to suggest it’s exhibiting terminal behavior.
Daily chart below.
It looks like NEM has just ‘thrown-over’ its wedge pattern. Typically, the last gasp before reversal.
Zooming-in
Summary
With markets reaching new all-time highs yet again, the gold miners are showing they’re not invited to the party.
From a Wyckoff standpoint and for bear markets, the focus is on the laggards … not the ones at the top (not advice, not a recommendation).
Unless the dynamic of GDX changes, and others in the index push past their mid-November highs, this market continues to look ready for reversal.
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.
** To verify the completion, we’ll need a daily reversal (today) as well as a new daily GDX low in the following session(s); not advice, not a recommendation.
Summary:
From the trade model, the ‘first correction’ may be completing during this session.
If that’s the case and gold bulls are trapped yet again, this time around, price action’s not likely to be so tenuous.
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.
Having been on the wrong side of major moves numerous times, I have first-hand experience on what’s likely to happen next.
If the bulls are trapped for a second time, those in control, the bears, are going to put the screws to those on the wrong side (not advice, not a recommendation).
It could be a straightforward downward thrust or a slow capital draining grind.
We won’t know how bad it’s going to be (for them) until it’s over; Keeping in mind at all times, anything can happen.
“Price action permitting, we’ll discuss how this first correction may be a brief one as opposed to a drawn-out choppy affair.”
Price action in GDX, has posted a new daily low (below last Friday’s low); a potential indication we could be starting the next leg lower.
The basis of that assessment is from a technical discussion published by Robert Prechter, Jr., in the early 2000s (’02, ’03, if memory serves) as ‘the rule of alternation’.
Basically, what happened last time, won’t happen this time.
Senior Miners, GDX
The daily chart shows the eight-day up-thrust, along with current action.
The mark-up makes it clear
It was eight days above resistance battling it out between bulls and bears.
Now, we’ve had one day above resistance (level posted on, 12/7) followed by a new daily low.
Correction Complete ?
The following (DUST-21-01), is the trade sequence currently being used.
Based on the above analysis, we’re going to tentatively call ‘The first correction’ as complete (not advice, not a recommendation).
Next up in the trade sequence, is identification of a trend or trends … if any.
For now, we have the potential channel shown below.
Now comes the part most traders/speculators find difficult; That is, wait.
As Livermore said in Reminiscences, (paraphrasing): ‘It wasn’t the thinking that made me money … it was the waiting’ (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.
No fan, and no endorsement of Buffett but the quote is applicable.
If yesterday’s Newmont analysis holds, meaning, it’s the last stand before another leg-lower, gold bulls might start acting irrationally.
Is it even possible to be more irrational?
Remember their manic prediction of $3,000/oz, gold in months, not years?
Barring a major reversal, the tide’s going out.
From the comments section of this ZeroHedge article, some in the herd are figuring it out as well.
As one of them says … ‘another year to wait before the Great Pumpkin’ (i.e., gold moving higher).
As this post is created, comments continue to pour-in.
Gold bulls are frustrated, confused, pontificating, crypto loving/hating, central bank blaming, it’s all there.
Thus far, there’s not one comment on what price action is actually doing.
Public Service Announcement
This whole business with the financial media and its attendant hucksters (recent examples, here and here) is actually a fantastic public service.
For anyone who’s still able to think (an act of rebellion in itself), it’s clear, or should be, if you’re on TV, or the mainstream media, you’re a shill until proven otherwise.
The good part?
All of this media, podcast, carpetbagging and corruption, plays right into the hand of Wyckoff analysis.
Wyckoff focused on what is … not what should be.
Even back in the early 1930s, he was adamant about ignoring the financial press. ‘You’ll never be successful’, he said if you listen to the hype.
Mixed Messages
On cue to support that statement, is Dan, from i-Allegedly; he reports ‘we’re getting mixed messages‘ in the economy.
Proving the point.
The (Trade) Plan Forward
With the caveat, anything can happen; gold could rally in a couple hours when the futures open, the short via DUST (not advice, not a recommendation), is as follows:
Even if the trade fails at the next session, it would still provide valuable information.
With that in mind, no matter what happens it’s likely to be referenced in the future; so, it needs a name (or number).
Taking a cue from prior engineering work (creating numbering schemes), the current trade will be identified now, and in future posts, as: DUST-21-01.
Seems straightforward.
The ‘First’ Correction
No. 3, above is titled ‘The first correction’.
This labeling is borrowed from a trade discussed by William Doane, in Dr. Elder’s book: Entries & Exits.
Price action permitting, we’ll discuss how this first correction may be a brief one as opposed to a drawn-out choppy affair.
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.
The Danger Point® 