Gold … $1,300/oz, Or Lower ?

From Stacking, To Panicking

It may go down as the biggest strategic ‘stacking’ blunder ever:

The consumer’s maxed-out, food supply chain’s being systematically destroyed and now, gold’s set to down-draft nearly 20% … just for starters.

For those still thinking it’s all about inflation, how about this personal anecdote (skip to Analysis, Gold (GLD), if not interested).

Anecdote:

A recent trip to the local Ford dealer to obtain an engine part, specifically, a “Camshaft Synchronizer”, i.e., what used to be called a ‘distributor’, a very common part, resulted in this conversation.

Ford: ‘Ok, part number F8DZ-12A362-AA.

Don’t have it. It’s on back-order. We’ve got an order for 347 units, with no ETA‘.

This part’s used on V-6 production engines going back decades. It happens to be a weak point in the design. When it goes out, the engine quits.

With literally millions of these engines on the road, how can there be no repair parts available?

None of the retail dealers in town had one either; not AutoZone, not O’Reilly’s, nobody.

Another Ford dealer located 50-miles away, had one unit and so the order was able to be filled.

If your car/truck is dead-in-the-water, how much would you be willing to pay to get it back on the road?

Imagine if there’s some gearhead Bubba out there who’s stockpiled a thousand of these things … how much could he charge for them?

Now, that’s what I call ‘Stacking’. 🙂

Controlled demolition of the supply chain: Not inflation.

Which brings us back to gold (GLD).

Analysis, Gold (GLD)

Weekly chart of GLD below and then inverted.

Inverted with projection.

Old Time Projection Method: The P&F Chart

Since it was Wyckoff analysis that helped us plan and spot the gold reversal, we’ll use a method equally as old to project where GLD could go (not advice, not a recommendation).

The P&F Chart.

Using the two methods above, we’ve got a combined projection in the range from GLD: 119 – 140; a decline in the vicinity of: -16.50%, to -28.96%

Is anyone even remotely prepared for this?

Important Caveat

There’s been no wedge breakout … yet. So, the projection’s a little ahead of itself.

What we do have, is a miner’s market that doesn’t look like it’s waiting around for gold.

For the miners, other factors could be coming into play; not the least of which is massive corporate stupidity.

Remember this post?

If your management’s focused on solving problems that aren’t even real … how can they ever hope to run a complicated and dangerous mining business?

Gold Steady, Miners Down

Yet another scenario, is that gold could remain steady or even rise and yet the miner’s collapse.

How can that be?

Let’s remember where a good chunk of gold is being produced: Australia and Canada.

We’re not going to get into what’s going on in these two countries except to say, they’re not exactly outfitting themselves for continued sucess: quite the opposite.

How long will it be before we hear about mines being shut down as a result of staffing shortages.

Stay Tuned

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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®, trade mark: No. 6,505,279

Trade Anatomy

Leg Bone Connected To The Knee Bone …

If you can’t draw your trade system on one side of a paper napkin, it’s too complicated.

Just to be clear, ‘simple’, does not mean ‘easy’.

What’s presented on this site and essentially in real time, is a particular method of approaching and trading the market (not advice, not a recommendation) using a culmination of research and education (i.e. losses) that span the course of over thirty years …’thirty-five’, to be exact. 🙂

That culmination has resulted in the following ‘system’.

Being from the engineering field, it’s probably no accident that system takes the form of a ‘checklist’.

However, make no mistake. The checklist is about as far as engineering can go. The rest (reading price action) is mostly art and intuition.

The System:

  1. The Set-Up 
  2. The ‘test’ or ‘gut-check’
  3. The first ‘correction’
  4. Continuation or Failure
    1. Trend identification
    2. Potential channel(s)
  5. Exit process
    1. Scale out
    2. Full exit
  6. Post trade evaluation

Let’s take a look at how that system’s applied to the current (open) trade: DUST-21-01.

Since we’re short the Senior Miners GDX (not advice, not a recommendation), we’re going to use the daily chart but invert it (to approximate DUST) as shown below:

Marking up the chart with the above ‘checklist’ reveals the following:

As this post is being created, GDX is collapsing through support levels while DUST screams higher.

In the past two days, unless price action was monitored minute by minute, there was no time to get aboard comfortably (i.e., with low risk).

This plays directly into “Turkey’s” admonition a century ago about ‘not losing your position’.

The First Correction: Complete

With that under our belts, it’s time to get to work identifying trendlines, channels or potential traps for either the bulls or bears.

As a starting point, the daily chart of GDX is compressed and marked up with past trendlines and a potential line (magenta).

Looking closer

This series of trendlines is rising (using inverse fund DUST) at approximately +725%, annualized.

We can also see from the zoom area; price action can go sideways for some time before contacting the trend to either verify or negate.

Using DUST as the proxy, that sideways action can be as long as fifteen trading days. Just long enough to discourage the late comers; bulls and bears alike.

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.

The Danger Point®, trade mark: No. 6,505,279

Dominoes … Begin To Fall

Juggernaut Set In Motion


This just out from Activist Post, shows we’re in yet another ‘never before seen’ event.

One of the references in the article can be found at this link.

Many times on this site, the ‘reduction in size’ has been discussed.

Now, the official numbers are starting to show-up. The bottom line? Retail demand is going to evaporate.

As a side note, it’s interesting that YouTube now has videos on how to spot Myocarditis …. something we’ve (in the serfdom) have never heard of … until now.

While everyone seems to be focused on the overall markets, S&P, Dow, and QQQ, underneath the radar, gold and the miners continue to rachet themselves lower.

Senior Miners, GDX & Inverse DUST

The 2-Hour chart of inverse fund DUST shows we’re still at the danger point discussed yesterday.

The zoom chart (below) has an interesting distinction.

The distance between the blue-line trading range and the magenta-line trading range, is the same. The black-dashed arrow is equal length.

This implies that yesterday’s move, along with today’s may be an ‘a-b-c’ correction. A counter-trend move.

If so, the main direction has changed from down to up (for DUST).

Summary:

Still at the danger point, we remain short this sector (not advice, not a recommendation).

The good part, if price action reverses in DUST and begins to pressure the most recent lows, it’s an indication something else is afoot and the trade is failing.

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.

The Danger Point®, trade mark: No. 6,505,279

Gold’s ‘Last Chance Saloon’

If This Move Fails, It’s Over

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.’

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.

The Danger Point®, trade mark: No. 6,505,279

Gold Bulls … What Happened ?

Last Week, It All Looked So Good

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.

Just yesterday was this:

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.

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.

The Danger Point®, trade mark: No. 6,505,279

Fibonacci Fingerprint

Senior Miners GDX

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 this update) 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.

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.

The Danger Point®, trade mark: No. 6,505,279


Time Tunnel … GDX

Rendezvous With The Future?

Are gold and the miners destined to collapse?

Are the miners on some choreographed mission to take out themselves, the gold bulls, and ‘stackers’ in one fell swoop?

At the bottom (if there is a bottom) will Newmont, be the sole-survivor or will some other mining entity emerge as the next leader?

Year 2022: When It All Hits

As Bjorn Bull-Hansen has suggested in this post, we’re potentially just months (maybe weeks) away from a mass-awakening.

That is, there’s no, or very little food.

What food there is, seems to get mysteriously wiped-out by some never-before-seen weather event.

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.

Can you pick out the ‘Derecho of 2020?

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.

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.

The Danger Point®, trade mark: No. 6,505,279

The Chart Speaks …

Massive Trading Channel In GDX

The past week has been a frustrating one being short the gold market.

Is the current trade, DUST-21-01, in a correction or an outright reversal?

It’s in the green (not advice, not a recommendation) but seems like it’s taking forever to get moving.

Paraphrasing Dr. Elder; He says ‘when in doubt, pull out (or farther out).’

So, we’re going to do just that.

Senior Miners, GDX

The un-marked daily chart is below. The second one is the same but inverted (to approximate inverse fund DUST).

Inverted

From the blank charts, it’s not immediately obvious.

However, the chart below shows GDX in a massive trading channel.

On top of that, today (Friday) may have been contact and verification of the right-side channel line. We won’t know for sure, until next week.

There’re about nine-months of trading action which also includes the two months to create the up-thrust set-up.

Sitting Back

If you sit back and take it all in, one begins to realize the enormity of what’s going on.

The up-thrust set-up was formed in two months. The channel itself, the bigger picture is nearly a year of price action.

From the inverted chart, the spike (downward) December 15th to now, is when the market thinned-out.

That’s when based on the data, funds flowed out of the senior miners and (some of it) into the last man standing; Newmont (NEM).

The stage is set.

Summary

Trades can fail. Anything can happen. That’s a given in the markets.

However, it looks like GDX is at another critical juncture.

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.

The Danger Point®, trade mark: No. 6,505,279

And Then, There Was One …

Newmont Pushes To Extreme

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.

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.

The Danger Point®, trade mark: No. 6,505,279

Gold Bulls … Whacked Again !

Hit During The Early Hours

It was a nasty mess for the gold bulls during the futures, pre-market session.

As price action pushed upward past the (GCG22) 1,820 area, volume increased significantly.

Good or bad, it means something’s about to happen.

Happen, it did.

Price action was only above 1,820 for about fifteen-minutes; then eroded back into the range.

In total, GCG22, dropped 12-points in just 25-minutes, going well below the established trading range.

If we look at the un-marked daily chart of gold (GLD), it does not look like much is happening.

Gold (GLD), Daily

Marking it up, gives a better perspective.

Now, it does not look so good for the bulls.

The chart below, zooms-in

While all this is going on in the gold market, the GDX miners (below) are posting their own (potential) reversal.

It’s potential at this point as we’re about mid-session.

Trade Model Review

Trade: DUST-21-01

  1. The Set-Up: Complete
  2. The ‘test’ or ‘gut-check’: Complete
  3. The first ‘correction’: Complete**
  4. Continuation or Failure
    1. Trend identification
    2. Potential channel(s)
  5. Exit process
    1. Scale out
    2. Full exit
  6. Post trade evaluation

** 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.

The bears may be ready to ‘slice and dice’. 🙂

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.

The Danger Point®, trade mark: No. 6,505,279