Market Summary

Dow, S&P, Russell … all outside down

Three markets with key reversals and the biotech sector (SPBIO) posting an inside day.

One other (less followed) market of note with outside down, was basic materials (DJUSBM).

Gold’s (GLD) upward thrust from Thursday the 29th, continues to erode.

One gets the sense that it’s slipping away for the bulls.

SPBIO price action shows the most probable direction is lower.

Expectation for the next session, is for some kind of downside follow-through along with lower market action overall.

Positions:

Current positioning remains unchanged (not advice, not a recommendation) being short the biotech sector via LABD.

Market updates for the week will be limited (as the result of travel) and will resume with technical discussions by the week-end.

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.

Gold, Dollar: In Tandem

Dollar Rally, Gold Rout

Markets Remain Inversely Correlated

First, let’s start with a review of the dollar reversal.

Back in early May, this report pointed at the possibility for a bullish set-up in the dollar.

That type of head’s up gives one time to investigate the correlations.

Correlations like, ‘is gold still inversely correlated to the dollar (and bonds)?’

Over the weeks as the set-up unfolds, confirmation or negation can be added by observing price action.

By the time we get the dollar penetrating support levels, we have gold at interim highs.

In fact on June 9th, the day the above ‘penetration’ report was posted, gold (GLD) had already reached its peak and was in a reversal.

Five days later (before the major down-move), this report was published on gold.

Therefore, at this juncture, we’re still inversely correlated.

So, what does that mean?

The updates on the dollar have proposed, since the bullish divergence (now turned rally) is on a longer, weekly time frame, the ensuing move could have the potential to carry the index UUP, to the top of the trading range shown here.

Then, what happens to gold?

If the negative correlation remains intact, gold gets whacked.

The weekly chart of GLD (above) has the index closing right at the Fibonacci 38.2%, projected level.

Wide bars tend to get tested. There could be some kind of rally in the coming week but it’s not required.

The Fibonacci projections highlighted as the orange bars, go all the way down to 161.8%. That’s equivalent to GLD at ~ 118.65, or the futures market somewhere around $1,300 – $1,350.

With the Dow 30, (DIA) penetrating and closing below the 336, support levels on Friday, we have a Dow Theory Sell Signal (not advice, not a recommendation).

The markets appear to be rolling over.

The last market reversal in February – March, of last year, had GLD dropping over – 14.5%, in two weeks.

Fast forward to now; GLD, is already down over – 15.2%, from its August 2020, highs.

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.

Gold Channel … Down

10:47 a.m., EST

Contact points confirm channel

Gold (GLD) heading lower

The two hits on the right side channel line provide confirmation of the trend.

An expanded version of the daily is below:

So far, we’ve had the blockage of the Suez Canal. Auto parts being sent to the bottom of the ocean off Japan. ‘Mysterious’ grain silo fires destroying harvested crops.

But wait, there’s more. This just in:

A fire has destroyed the largest grease plant in the U.S.

If transportation is shut down as a result of cyber attack, fuel pipelines off-line, no grease to lubricate the wheels or any number of other (planned … and don’t think there’re not) events, the last thing that’s going to help get anyone through, is a ‘stack’ of inedible metal.

It’s no secret this site’s been using the Biblical precedent of Genesis 41.

That is: Grain and Corn come first … then gold and silver.

The ‘stacking’ public has got this message reversed. Of course, this is not advice or a recommendation.

However, for those that can see, it’s so obvious the goal is ‘controlled demolition’ of the supply chain. All of it.

We’ll put everything back to ‘normal’ if you just get injected.

Meanwhile, biotech IBB, and SPBIO, have both posted a new daily low.

IBB is poised to penetrate the resistance area identified in this update, and come back to test the wide bar.

If that happens, we have a Wyckoff up-thrust in play. More analysis of biotech to follow.

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.

Dow Theory Sell & Gold

9:23 a.m., EST

Dow Theory; Sell signal nears

Gold, in Wyckoff ‘Up-Thrust’ reversal

Even though the current environment is anything but traditional, the report at this link shows how close the market is to a Dow Theory sell signal.

It could be. Even with valuations and markets at never before seen extremes, the traditional theory will still hold.

Wyckoff analysis, developed during the same time as Dow (published in 1910), does not concern itself with ‘valuations’.

That’s the key

Wyckoff discovered early on, that ‘markets have an energy of their own’.

This ‘energy’ has nothing to do with valuations.

Gold (GLD) has been discussed several times over the past few weeks; that it has stalled and in potential reversal.

The weekly chart shows the blue line resistance area. Price action has struggled at this location for weeks.

Now, with the market about to open, GLD is trading down a solid -2.5 points, or – 1.4%.

If that level is held to the open, it puts GLD below the June 3rd (weekly) low and below the resistance area.

With all the inflation, and hyperinflation talk, GLD has not made it to new highs.

Last week, the dollar reversal was confirmed with UUP posting a new weekly high. At the same time, weekly MACD confirmed its bullish divergence.

The stage appears to be set for some kind of surprise; in the markets, the dollar and gold.

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.

Gold & Dollar, Reversal Ready

When price action penetrates support or resistance and stalls, reversal may be imminent.

At this juncture, gold and dollar, are mirror images.

Each at their own pivot point.

Gold (GLD) is attempting to push through resistance.

At the same time, it’s at the 50% retrace from the August 6th, 2020 high, and the March 8th, 2021, low.

The dollar is a near mirror image:

The correlation is not exact but has been fairly close for the past three months. Gold at a retracement high; the dollar testing support lows.

This past Friday, the dollar (UUP as proxy), did not move appreciably higher.

That in turn, has set up the ‘spring’ condition (weekly close basis), discussed the day prior in this report.

We can see the set-up.

Both gold and dollar at opposite ends.

Note, the dollar’s bullish divergence is a weekly time-frame set-up; giving it more weight.

If there’s a rally, it could go much higher, last longer or be quicker than anyone would expect.

If the dollar/gold correlation remains intact, as/if the dollar rallies, gold, silver and the miners would retreat … possibly, right along with an overall market 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.

Gold at Pivot

8:49 a.m., EST

GLD, retraced 50%, now at edge of range.

Reversal is possible

Note: Both charts are inverted, turned upside down.

Above: GLD is currently at 50%, a common retrace level.

Next: We have GLD, in a possible trading channel.

With the Fed meeting minutes due out at 2:00 p.m., EST, that release could be used as the excuse for GLD, to complete its corrective action.

If GLD pivots lower, the dollar (UUP), could also make its move and reverse higher.

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.

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

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.

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.

Gold, The Big Picture

The bottom line for gold is: Retrace, lower

No-one in the inflation camp wants to hear that … it’s uncomfortable to face the potential of being so wrong.

Albeit wrong in the short term but probably right later … after it’s too late. More on that farther down.

Just like the lazy (and complicit, we might add) financial journalist publishing the standard (speck blaming) propaganda for the day, so too are the hyper-inflationists, jumping on the most popular bandwagon in town.

Not even considering the potential for a retrace; admittedly, which could be short and sharp but significant nonetheless.

This site has presented several times, we’re in a situation similar to that of Genesis 41. It’s the corn and grain first … then gold and silver.

Just to back that up a bit before getting to the charts, we have the following:

Crop failures world-wide

Systematic destruction of the food supply chain

Systematic elimination of farms and viable (for millennia) ranching practices.

Solar minima activity (decreased sun-spots) causing erratic weather patterns, shifting growing zones; even as far as sub Sahara, Sudan.

Those so focused on stacking metals will likely be using that stack to pry much needed food, food staples, seeds and fertilizer out of the hands of those not willing to sell … at any price.

Why are the oligarchs not worried about the ‘little guy’ stacking metals?

Because there’re going to make it irrelevant … at least for just long enough to completely bankrupt, starve or ‘inject’ the middle class.

Moving on to the charts:

The title header said ‘big picture’. Here we are with monthly gold charts going back to the 1950s, time-frame.

It’s been a long … long bull market. It appears to have made a top at ~1,972 and is retracing … if only just a bit.

The second chart is the one that gives us pause. Consider the potential for a more substantial pull-back.

Markets like to retrace and test. It’s what they do.

That second chart is scary. It’s plain, the 760 – 780 area is a long time (monthly) support level that goes all the way back to 1980.

Absolutely no-one expects, or is planning for gold to get back to $800/oz, or lower.

Think of the irony. The ‘stackers’ (and maybe the rest of us), having to exchange actual money, gold and silver, for worthless fiat just so they/we can buy food to stay alive.

After the middle class stackers have exhausted their metals hoard, that’s when gold and silver will launch into the next bull phase.

It has been done this way (keeping the peasants under control), literally for millennia. The method works … why change?

Summary:

The intent here, is to at least recognize the possibility for the above scenario. It’s clear and becoming more clear every day, food is the weapon of choice.

The objective is to have enough food ahead of time; be in position to take advantage of once-in-a-lifetime metals prices should that opportunity be presented.

Stay Tuned

Charts by Macrotrends

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 (GLD) Hits Target … 166

Bring out the usual suspects.

Last month, March 13th, had this forecast for GLD, to retrace at least to 166-area; a Fibonacci 23.6%, level.

So, here we are.

GLD closed last Friday, at 166.35 … close enough.

Before we get to the chart analysis, we have the following summary from the video link in the header line:

‘We were seeing some noticeable improvement in the economy … especially in the U.S. as the [speck protection] took hold.’

(time stamp 5:03).

‘Taking hold’, indeed.

We can see just how well that’s going, here, here and here … adding to a very long list.

Before we leave this topic, we have entire school districts being shut down from speck protection reactions.

Let’s extrapolate that into ‘entire grocery chains shut down’, or ‘entire air transport companies shut down’ and the picture is clear.

By now, anyone with two lipids rubbing together can see the false narrative has reached beyond absurd into a completely different realm.

We’ll just have to call it the ‘Twilight Zone‘ for lack of a better description.

All of this will affect the markets … gold included; probably in ways unknown at this point.

Analysis:

So, here we are at the 23.6% retrace. What’s next?

First off, 23.6% is very weak. It’s not typically seen as the final (upside) reversal point in general market behavior.

However, if GLD does reverse from here, posting new daily and weekly lows, it’s in serious trouble.

The next chart has GLD in a downward channel that’s been in-effect since last August.

Pulling out to a longer time frame … the monthly; using a Fibonacci projection from these levels we have some interesting price targets.

Frist, is the 1:1, or 100.0% – 100.0% on the Fibonacci tool that projects GLD down to about 130 (129.64). This just happens to be the area Steven Van Metre has been discussing (as a potential target) for months.

Moving on lower to the 69.25 area for GLD, are targets mentioned by Harry Dent … albeit, years ago (actually, it was below $400).

We should keep in mind, a Fibonacci retrace of 76.4%, from all time high to cycle low, 1999/2001, is the 64-area on GLD.

Getting below $400 at this juncture seems unlikely.

Summary:

A downside reversal off 23.6% retrace would signify substantial weakness.

GLD would have to push below last week’s low of 161.81, to increase probabilities of a sustained downside move.

Stated many times on this site, precious metals are a crowded trade.

Operating at the same time, adverse reactions (and death) being caused by speck protection. A massive number of the population is subject to being permanently debilitated.

That could feed into the availability of all items; gold included but more importantly, the food supply.

To wit, CORN has just pivoted to the up side in a new trend; rising at over 437%, annualized.

More on that, later.

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.