Dollar Divergence

9:51 a.m., EST

Everyone loves to hate the dollar.

That sentiment extreme is a set-up … for the bulls.

If the UUP dollar index ETF, manages to push below the 24.00 – level, it presents the opportunity for a significant bullish divergence.

As Van Metre has stated many times over the past few months, the market’s not expecting, and not in position for a dollar rally.

How can it be … with the rabid gold bulls thrashing about with each upward blip in GLD, GDX and GDXJ.

From this site’s perspective, we’re staying away from that (gold) market and have focused on biotech … where things are really getting underway; but now, back to the dollar.

The weekly chart of UUP, shows the potential set-up.

If somehow we get a (narrow range) push below the 24-level, it would set up a clear bullish divergence on the MACD.

At this point, anything can happen.

Saying that gold will crash if the dollar launches upward is certainly possible. However, in today’s world, the opposite could happen as well.

Just one more reason to say away and focus on shorting an index that’s decisively moving lower: Biotech (not advice, not a recommendation).

Side Note:

The whole ‘divorce’ thing, you know what I’m talking about, could be a signal in disguise.

The ‘higher ups’ may have decided our cardigan wearing benefactor has reached the end of usefulness.

If so, how many biotech rats are now going to jump ship (before the paddy wagon arrives) knowing the jig is up?

Could that be why SPBIO, posted new lows in five time-frames; Daily, Weekly, Monthly, Quarterly and Yearly, last week?

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.

Inflation Reaches Peak Narrative

11:32 a.m., EST:

Just like ‘peak oil’ back in the summer of 2008, now it looks like we’ve reached ‘peak narrative’ for inflation.

‘Narrative’, because the markets are a game of manipulation.

If you don’t know who’s being manipulated, then that person is you (slightly changing a Buffett quote).

Bolstering the assessment, is this report from ZeroHedge.

Looks like everybody’s on board and reporting higher prices. Just like they were on board last year with: “We’re all in this together”.

The exact same tag-line for every major U.S. corporation … with ready made (like they knew ahead of time) banners to boot.

The problem is, the markets are not following along.

Reported two days ago, senior gold miners are testing their reversal.

Yesterday, was an upward push that wound up being an ‘out-side-down’ bar (GLD, GDXJ, SLV) … a reversal in itself.

That’s not in the script. Or, is it?

At this point, the public’s literally redirected, manipulated, at will. It’s a sick game being played by all who control the media.

From a personal standpoint, I’d rather make some popcorn, take my red wagon full of fiat, go camp down around $800/oz., and wait.

The gold ice cream man may never show up. If he does, great.

If not, there’re other opportunities; at least I’ll not be one of the manipulated masses screaming inflation hyperbole if/as/when gold ratchets all the way down.

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.

Bitcoin to Replace Gold?

That’s according to this episode from the Keiser Report.

Before we address that ‘report’, first this:

The video at this link (until it gets removed) is only 3:37 minutes long … but it explains everything.

It’s a well orchestrated script. 

How else would every single major corporation have exactly the same advertisements? 

Exactly the same; Literally, word-for-word.

So, bitcoin to replace gold? … it’s not even necessary to waste time with an answer. The deeper question is, what’s really going on with gold?

Gold is part of the script as well:

Gold is subdividing lower at this juncture. 

One target level from this update puts it around the $1,300-area.  By that time and if it gets there, the objective is met. 

There will be few-to-none of the original bulls left to buy in … their money gone; used to pay bills, buy food or worse … bitcoin … right in time for a major solar flare to knock out the entire electronic grid.

Listen to the “Report” and how the big names are bandied about.  They have the big bucks … you don’t.  So, listen to them.  They are the elite.

No, they are part of (and always have been) the coordinated effort to subjugate the masses.

It’s just now, there are enough ‘asleep’ with huge numbers of the population flu-shotted, vaccinated, fluoridated, medicated into complete stupidity; or just too afraid of the truth. 

It’s not necessary to hide the message. What are you going to do … “elect” someone to change it? Got that one covered.

If you have read this far … yours is a different story.  Welcome to reality.

One part of that reality is the markets are a wealth-transfer process which is now in overdrive. 

Looking at the daily newsfeeds, it’s obvious (or should be) to the old-timers, the lies and miss-direction have gone to a whole new level.

Wyckoff’s admonition about listening to the news is more true now than a century ago.

Ignoring those news-feeds and focusing on price action, the initial analysis of gold and the miners from late October, was spot on. 

The beginning trade in this series was a short position (via JDST) entered on Friday November 6th, when gold was at intermediate highs.

That short was held over a tense weekend.

Going against hundreds of thousands if not millions (on the other side of the trade) is difficult indeed.

Robert Prechter in his writings has detailed how hard it is to override the limbic (herd) system of the brain and operate separate from the crowd; nearly impossible.

By late Sunday – early Monday, gold futures (GCZ20) had collapsed.

The trade was closed out on November 9th, with a solid 13.22% gain.

Recognizing that JDST had more downward bias error than DUST, the next short position was initiated on the senior index (not advice, not a recommendation).

The GDX chart below (expandable version here) shows it’s following Fibonacci projections lower. 

It would be nice from a profit stand-point for GDX to reach all the way to the 16-area (blue oval).

Even Steven Van Metre has indicated several times in his reports, this area is his target as well.

After all, who is going to listen to some guy whose wife made his “Like” and “Subscribe” flash-cards from cardboard and sticks?

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.

Miners (GDXJ): What’s Next?

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?

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.

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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.

Hyperinflation: Hit Hard

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.

Dollar Collapse, Now?

If the dollar is going to collapse, this is the place.

Both weekly and daily price action (UUP) closed at new lows.  Gold and silver have moved up in counter action.

However, if the dollar’s going to rally, this is the place as well.

The current uncertainty in the U.S. is all part of the equation.  The emotions of the populace are being tossed about at will. 

The plan is to (always, no exceptions) get the herd pointed in one direction so that a small fraction of speculators can establish their positions cheaply and with low risk.

When it comes to gold and silver it’s obvious where the herd is positioned.  They are ‘all-in’, waiting for the precious metals rally to continue.

The dollar, UUP is at the danger point. A small move in either direction may be the deciding factor.

Looking back at the historical literature available, it was Livermore that coined the term ‘danger point’. It was Wyckoff that published the interview with Livermore where he used the term.

The take-away is, markets do not change.  The same (similar) price action can be observed on charts that are a century old as compared to charts today.

Considering the UUP weekly trading range shown, it’s at the extreme low. 

There’s been no significant upward testing of the wide range.  Markets like to test.  That’s what they do.

Based on empirical and technical factors in prior updates, we’re anticipating a dollar rally and in turn, are short the Junior Miner’s, via JDST (not advice, not a recommendation).

Futures markets open in a few hours.  We’ll see if the current position will need to be exited at tomorrow’s open or if we’ve analyzed probabilities correctly.

As Livermore said, ‘you don’t know until you bet’.

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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.

Inflation Fairy Tale

Truth comes only to those who actively seek it. 

This site works to present truth as background or ‘macro’ as it were and then look for price action set-ups correlating with truth.

It turns out (as some may have suspected) the ‘inflation’ narrative is a myth.  It’s just another lie that’s being perpetrated by the powers that be (TPTB). 

According to Jeff Snider and Steven Van Metre, at time stamp 21:30, there’s no way TPTB are going to correct the public’s perception that hyperinflation is right around the corner. 

It serves their purpose to have the masses in complete delusion … always setting up on the wrong side of the trade.

Using price action itself, problems with the hyperinflation narrative were presented in this update

Gold is near all time highs.  However, Junior Mining Index, GDXJ, and Senior Mining Index, GDX are far below their previous highs.  The junior’s are the weakest and so that’s been the focus.

In a bear market, focus on the weak sectors.

No doubt, there are a lot of well respected traders, analysts, YouTuber’s that are on the bullish side of the market.  Here are just some examples, here, here, and here.

So, at this juncture, this firm is taking the opposite side of the trade with its re-established position in JDST.

Hard stop in the market GTC, is at 8.82 (not advice, not a recommendation).

If stopped out, we’ll reassess and determine if another entry is warranted.

Even if the trade proves to be wrong, it’s a low probability that price action will break out of the GLD trading channel shown (below) in just one attempt. 

Typically, price action needs to retrace (lower) to gain enough fuel for a breakout.

If the retrace occurs, it will put the JDST position in profit with the miners down accordingly.  Doing so gives the ability to analyze the situation with objectivity.

We’re looking for a swing lower to the bottom of the trading range (at a minimum) for GDXJ.  Just a few of the empirical and technical conditions that favor such a move are listed:

Price action (GDXJ) finished at the high of its recent trading range and resistance. It thus created a Wyckoff up-thrust, reversal condition.

The GDXJ move over the past week generated a wide, high volume price bar.  Such areas tend to be tested (retraced) by the market.

GDXJ finished at a high on a Friday.  Monday’s are typically down or a retrace day.

Gold retraced up to its own 50% level and has contacted the right side of a down-trend line.  Lower price action in the coming week is expected.

The dollar has its own reversal set-up in progress. 

Dollar, UUP price action penetrated minor support (Wyckoff spring, reversal condition) and is close to a major support level.

Dollar up, gold down.

In summary are two charts of GLD and one of GDXJ, below:

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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.

Gold & Silver, Retrace Levels

If GLD and SLV maintain their pre-market, 181.40 for GLD and 23.15 for SLV, they will both open at 38% retrace levels.

They each have attempted to reach these areas two times in October and were rejected.

The last update stated that Junior Mining Index, GDXJ has its own Fibonacci level (38% retrace), in the vicinity of 56.80.

Pre-market activity for GDXJ is around 56.38 … very close.

In Wyckoff terms, yesterday’s trading activity for GDXJ was a Sign of Supply.  The index opened lower then tested (higher) and subsequently moved lower throughout the day into the close.

This firm’s trading action (not a recommendation, not advice) will be to monitor the first two hours of trading (GDXJ) to see if we tap the 38% retrace level and subsequently get hourly reversal bars … or some other indication of reversal.

We’re already short with a combined price of 10.93, in JDST. 

Currently, JDST is pre-market trading at 10.40, which equates to just over a 5% loss on the open position. 

Certainly that’s not desirable but then again, if this is all the market can hit us with, we’re willing to wait it out … although not for too long.

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 Watch

The overnight session was active for gold.  The GCZ20, December futures contract traded between a high of 1,917.90, and a low of 1881.80, a 36-point range, nearly 2%.

Gold is now off the lows and testing its overnight highs.

From a regular session standpoint, we’ll be watching the 179.43, GLD level covered in the last update.

If that high is penetrated it does not mean that gold will continue on higher immediately. 

It would mean that probability is now about even to greater, higher prices are ahead.

From the Junior Mining index, the GDXJ standpoint, there’s a Fibonacci level located at approximately 56.80.

Looking at the big picture, the short squeeze in bonds looks like it’s getting underway in earnest.    

There was just one more downward thrust that was not able to penetrate the TLT, 156.75 lows from the week of October 19th

The overnight move higher in bonds was a serious hit to the shorts. It’s now time to see if this move feeds on itself … higher.

These dynamics, the dollar, gold, interest rates, the four-standard-deviation-short in bonds are all operating simultaneously.

We’re sitting in the background and quietly observing everything. 

The choice at this point (not advice, not a recommendation) is to sneak into a significant short position on the Junior Miner index, GDXJ (via JDST).

We’ll see how it works out.  Obviously GLD and the 179.43 high, is being watched closely.

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.