In what seems to be a surreal exercise, waiting to see what’s going to happen next, Newmont (NEM), is posting Fibonacci counts in its nascent reversal (thus far).
The usual suspects are out on YouTube … touting the next bull move in gold and the miners.
However, the market itself is saying it’s not convinced.
This is another brief update to show Newmont has apparently reversed; posting Fibonacci counts on the initial downswing and what looks to be the upward test.
Newmont (NEM) Daily Chart With Fibonacci Count(s)
It’s up to the market itself to say today was the top of the reversal test … or something else is going on and we may indeed have the gold miners in the beginning stages of a bull move.
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 3-Day chart of GDX inverse fund DUST above, has the vertical range compressed to better show the support/resistance boundary.
The boundary is shown close-up in the version below:
Coming back to test a boundary as shown is normal market behavior … there’s nothing (yet) that would indicate the direction of ETF GDX is changing its main direction from down to up … with DUST moving correspondingly lower (not advice, not a recommendation).
However, we’re potentially at another danger point where price action can go either way.
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.
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.
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.
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 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:
The Set-Up
The ‘test’ or ‘gut-check’
The first ‘correction’
Continuation or Failure
Trend identification
Potential channel(s)
Exit process
Scale out
Full exit
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.
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.
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.
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 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.
The Danger Point® 