Category Archives: DUST

Make It Stop

November 21, 2020 By in DUST, GDX, GLD, The Speck

The gold bulls are trapped and the market is eroding away. 

The weekly chart of GLD (farther down), shows this past week was the opportunity for GLD to move higher.

It didn’t happen. 

Some of the YouTube sites that are monitored, have caught on something’s very wrong with the bullish picture. 

However, there are literally millions positioned (or at least thinking) on one side of the trade. Without neural plasticity to switch gears and re-position, at low risk no less, the pain is likely to be severe.

The same goes for the overall market. 

Steven Van Metre, in his Friday update stated, ‘retail investors are all-in at the highest level in market history’.

Yet he says, the market did not move significantly higher.  That’s the clue.  It’s likely we’ve seen the highs.

There’s more middle class destruction on the way with shutdowns and restrictions; all under the guise of the speck.   

If the speck is so bad, where are the bodies?

Take a trip to your local graveyard … you’ll probably find the caretaker asleep on his back-hoe … waiting like the Maytag repairman.

There are no bodies except for the odd duffer that died while on a ventilator … ah yes, the ventilator, that topic is for another time. 

Those flexible enough, the entrepreneurs, picked up on this scenario long ago and have responded accordingly. 

The only way out is self-employment; separate from the crowd.  Even that’s no guarantee but at least it provides some time and flexibility.

Getting back to the markets, we see the S&P and Dow at their highs (possibly topping-out) while gold and the miners have already rolled over. 

Senior miner index GDX, has now posted an outside down (key reversal) on the monthly chart. 

We have one more trading week to go (plus one day), but it’s likely the key reversal will stick.

As always, even with the lower action just passed, upward movement next week (if any) could happen but it’s likely to be halting and laborious.

If the overall markets head lower, the uneducated public once again and by their own actions, have set the stage for their financial destruction. 

Only this time, it’s over.  There will be no recovery.

As the downturn sets in and jobs continue to disappear, the calls to ‘make it stop’ will become ever so shrill. 

The masses will be desperate enough to line up for government assistance and allow (even beg for) the catch … be injected first; No matter who is in office.

There’s a reason, professional, seasoned hard as nails (even profane) market traders are quoting Biblical scripture.

Stay Tuned

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.

GDX: At Down-Trend

November 20, 2020 By in DUST, GDX, Gold & Silver

There’s a lot going on in the senior mining index, GDX.  Price action penetrated support yesterday and set up a spring (reversal) condition.

Today’s action is gap-up open with a test of the support level happening now (10:44 a.m. EST).

The chart shows the down-trend line and contact points. 

The magenta, dashed arrow is the location of the initial short position (not advice, not a recommendation) via the inverse fund DUST.

As price action was rising into the morning session (with DUST declining), the short position was increased by about 14%.  That area is shown as the orange dashed arrow.

We are looking for the spring action to fail and downtrend to resume.

If GDX closes lower for the day, we’ll move the DUST stop (not advice, not a recommendation) up to its session low; currently at 20.44.

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.

One Way Pockets

November 19, 2020 By in DUST, GDX, One Way Pockets

One hundred-three years ago, a brief 64-page text was published where a broker at a trading firm analyzed client accounts.

The year was 1915, and the market was at all-time highs.  The purpose of the analysis was to see how the active clients fared after a record breaking run-up.

“Like a great majority of our customers, these traders had been bullish on the munition [World War I] and standard industrial stocks during the great speculative boom of that year, and now, with the stocks in which they had been operating up from 15 to 100 points each, their profits were relatively small and their commitments [i.e. margin] larger than at any preceding stage of the movement.”

Basically, these customers were the herd.  Profits, if any, were slim and they are all-in at the high … and on margin.

Just five years later, that same market had lost nearly two-thirds of its value and is down over -61%.  The book is called One Way Pockets. 

Fast forward over one hundred years. We have The Money GPS with this report; Fund inflows at the highest in 20-years and nobody going short.  Well, almost nobody.

A huge amount of the population is out of work and most likely relying on the markets to make up the difference.  Remember back in the day, when it was bad if there were 350,000 jobless claims?

The middle class is in the midst of destruction and will (when it’s all over) basically be eliminated.  It will usher in, ‘neo feudalism’. 

It’s not a new idea as Prechter predicted as much nearly twenty years ago. 

This backdrop or macro if you will, has produced the sentiment driving the analysis on this site as well as more in-depth technical data on the host firm’s website.

Taking all into account, under the conditions of today, this moment, we’re short the Senior Miners (GDX) using DUST as the trading vehicle (not a recommendation, not advice).  The stop has been moved up to DUST 19.58.

Quotes used with permission.

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

November 18, 2020 By in DUST, GDX, GLD

That’s what hyperinflation gold bulls must be feeling; dazed and confused.

Certainly, we all know from a long-term macro perspective, all fiat currencies go to zero. 

It took the Roman Empire somewhere around 300 years to debase their currency to zero.

So, it’s what happens in-between; that’s the important part.

The old trading books like Reminiscences of A Stock Operator and Studies in Tape Reading are replete with speculators being on the wrong side of the trade.

Some of them realize the error, get themselves righted and back on the direction of trend.  Others, like in one Livermore example (the cotton trade) go bankrupt.

Just to see how big the hyperinflation crowd is, we’ve added up the total number of subscribers to bullish YouTube channels listed in this update. 

That list for sure, is a small fraction of bullish ‘content’ available.  At a total of 674,000 subscribers, it’s already a huge number.  The actual size of all such content is most likely in the millions.

Note the word “content”, is amorphous.  It just means ‘there’s something in there’.  It does not mean that ‘something’ is of any use. 

When reading through the old trading stories, we see the great speculators operated alone. At times, they employed a support staff of ‘board boys’, writing quotes down on the chalk boards but not much else.

If you’re alone, direction changes happen instantly. Changing direction that fast for millions … not a chance.

At this time in the pre-market (9:03, a.m. EST), gold (GLD) is set to open lower with GDX indicating lower as well.

Looking at the chart of GDX, we’ve got a possible trend line. 

Such lines make things a bit easier.  If there is confirmation on the way down, we maintain the DUST trade (not advice, not a recommendation); until the trend is broken.

Current stop (not advice, not a recommendation) is set at DUST 18.92

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.

Get Right … Sit Tight

November 17, 2020 By in BTU, Coal, DUST, GDX, Livermore

That was Livermore’s adage nearly a century ago.  Find conditions for a sustainable move and get in.  Then wait and wait some more.

Going on, he states that is was not the thinking that made him money … it was the ‘sitting’.

The short entry on GDX was initiated with DUST (2X Inverse, GDX) at DUST 18.86.

Initial stop (not advice, not a recommendation) was very tight at the session low, DUST 18.45. 

Price action the next session (yesterday) pulled away from entry levels and the stop was moved to 18.56.

Today’s pre-market session (8:54 a.m. EST) shows continued downside for GDX, with DUST up correspondingly. 

If there’s a higher close in DUST, we’ll move the stop again.

With the overall markets, S&P 500, Dow, NASDAQ, at or near all-time highs, the precious metals sector seems to be leading the way lower.

If the rest of the market reverses, downside action in the mining sector could be dramatic indeed.

In other markets, it appears that Peabody Energy (BTU) may have finally found its low; from top to bottom, a -98.33% decline. 

Analysis of BTU to be forthcoming before the end of the week.

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 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.

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.

Before The Open

November 3, 2020 By in Bonds, DUST, GDX, GDXJ, GLD, JDST, Natural Gas, UNG, UUP, Wyckoff 1 Comment

As expected from the November 1st, update, gold pre-market shows a gap-higher open.   Trading is around 178.80 – 179.00 which is a little above the resistance area shown in the original chart.

After the first hour of trading, the plan is to provide an update to see if there’s still a possibility of a reversal at this juncture (not advice, not a recommendation).

Correspondingly, the mining sectors, GDX, GDXJ are up in pre-market with inverse DUST and JDST, down. 

However, the big hitter, NEM is right at a 50% retrace off the lows of October 28th.  This is a possible area to stall and potentially resume a downward (or sideways) trend.

Other market actions that may have significant impact on silver/gold, are the four-standard deviation in the bonds to the short side.

As Steven Van Metre indicates, none of us reading this (in our lifetimes) are likely to ever see a set-up like this again.  It’s an historic extreme.

Bonds are down in pre-market along with the dollar … using UUP as the proxy.

The dollar has bottomed and is now in position to rally; completely opposite the established consensus.

At least twice now, Van Metre has mentioned Wyckoff in his updates.  He appears to be well aware of the significance.

In other markets, a position was opened in nat-gas, UNG at the last session.  That position was closed in the pre-market session with a slight ding of -1.2% to the managed account.

Even with record cold hitting large portions of the country, nat-gas can’t seem to get going to the upside.  Now, with its current action there may be a probability of lower prices (or stagnant action) going into winter.

We are leaving nat-gas alone for now and focusing on the historic bond set up and the potential effects when it all unravels.

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.