It all lined up for gold in the form of international tensions, military on the move, then outright invasion.
The ‘safe haven’ metal of course, launched higher.
It’s what happened next that’s the important part.
Steadfast on this site, is the premise, It’s not inflation … at least not the kind in the form of credit creation with persistent rising wages and prices.
The charts themselves show the retrace from the lows of March 8th, 2021, to now (today), is a counter trend move.
Unless today’s reversal bar is penetrated to the up-side, the main trend is either sideways or down.
Gold (GLD) Weekly:
Re-stating again, Elliott Wave is not used as the main analysis tool.
However, it can’t be denied that GLD, looks as if it just completed an ‘a-b-c’ correction with both ‘a’ and ‘c’ waves of equal length (vertical blue lines are equal).
It’s a near textbook example.
Adding to the potential reversal case is the up-thrust position as shown.
For the bearish assessment to change to bullish … this resistance area will need to be penetrated and successfully tested.
Anything can happen … so we’ll see what happens next.
Enter, The Famine
Here is a link that only requires the first 50-seconds of one’s time. The presenter is an offensive character to say the least.
However, this site searches out as many sources as possible; sifting through the trash to find kernels of truth is a necessary requirement.
With that said, restricting the food supply results in a compliant population.
That’s most likely the next area(s) of focus for our benevolent controlling oligarchs.
Summary:
This is gold’s chance for a continued breakout to the upside if it’s really a bull market.
If it fails and reverses, we know the main trend is down and potentially leading to some kind of deflationary impulse.
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) has pushed past prior resistance and is now hovering at the 177.00 – 177.50 level.
International tensions are the usual excuse for the metal’s move but has it really done anything out of its recent norm?
This is a good time to see what the gold market is saying about itself.
Gold (GLD) Daily Chart
We’re going to use a somewhat compressed version of GLD. The reason for that will become apparent.
Starting with the un-marked daily chart below:
First is the obvious Wyckoff up-thrust (potential reversal) condition.
Price action has pushed past resistance and is now hovering at the 177.50, area … as if unsure what to do next.
GLD can come back and test on its way higher; it can come back, test and fail into a downside reversal.
The next chart is where it gets depressing for the bulls.
Price action in GLD, shows the current rally’s distance, is no different than it’s been for at least the past year.
We’ve highlighted the most recent move in blue and then moved that same line back to prior moves of nearly the exact same distance (magenta lines).
So, gold’s not doing anything out of the norm (so far) that it hasn’t done already.
Note how the entire twelve months shows price action as choppy and over-lapping.
This type of deep retracement action is characteristic of a countertrend move … that is, gold moving higher in choppy action is actually counter to its main trend … down.
Summary
With the dollar moving higher and the continued possibility of gold/dollar inverse correlation, somebody’s likely to reverse … soon.
The dollar’s been in a year-plus long upside reversal. The weight’s on the gold bulls to prove the dollar/gold inverse correlation is disconnecting.
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 usual suspects, ‘geopolitical tensions‘, are being trotted out as the reason for gold’s latest breakout move.
Junior Miners GDXJ, have pushed past the trendline highlighted in the last report, negating the ‘short-squeeze’ analysis … for now.
So, gold’s up, markets are down, and bonds are up … all in an apparent ‘flight to safety’.
To the casual observer, it might look like pandemonium.
Let’s step back and let the price action speak for itself. However, we’re going to approach it differently this time.
The charts below of GLD, show a trend-line study that’s unbiased … the lines are there. We’ll let them tell us what’s the next likely outcome.
Gold (GLD) Weekly Chart:
First, clean and un-marked
The objective is to look at this price action and see if there are relationships not immediately discernable.
How about this one:
Looks like there’s some type of ‘axis’ trend line.
Price action’s been oscillating around this line for about two years.
What about this one:
Let’s take that last trend line and see if there’s a trading channel of some type:
Ruh, Roh Scooby … looks like there might be trouble ahead for the rabid bulls; at least temporarily.
How about putting the first axis line back in and see what we have:
Zoom in on the ‘confluence’ area below.
Valid Or Not
The big question is, if these lines are ‘in effect’.
That is, we’ll have to watch subsequent price action to see if the market’s respecting these lines … enough to precipitate a reversal.
This week’s action in GLD, has pushed past established resistance from mid-November, last year.
Doing so, has put GLD in Up-Thrust (potential reversal) position.
Momentum indicators, MACD, monthly, weekly and daily, are pointing higher.
Summary:
We’re between resistance and momentum.
Opposing forces.
Let’s throw in, major indices had their all-time highs between November last year, and January, this year; excluding biotech IBB, which peaked way back in August.
Mining sectors GDX and GDXJ, are a whole other story … their all-time highs were long ago; back in 2010 – 2011.
At the close, GDX is near up-thrust and GDXJ, is already in up-thrust position. We’ll cover that in a subsequent update.
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 gold sector pundits bloviating, the ever-present challenge is to cut through the bilge and see what price action’s actually doing.
Stepping away for a few days, then taking another look at the charts, has yielded some potential insight into what’s really going on.
Junior Miners, GDXJ:
The first chart shows GDXJ, in the top panel with Force Index, in the lower.
Note the Force/Volume spikes … after the demand is satisfied, price collapses … at least on the first spike; we can’t say for sure the outcome of current action.
Price spikes and volume that subsequently collapse; the textbook definition of a short-squeeze.
There’s no real bullish demand or price would launch into a bull run.
The second chart highlights the areas in question.
The last chart gives one more clue that price may reverse from current levels.
Not only do we have a potential squeeze, but we’re also contacting an established trend line.
It looks like the squeeze is over. Volume has dropped significantly and price is up against established (trend) resistance.
Gold Higher, Miners Lower
Discussed many times, it (almost) doesn’t matter what gold is doing. It can go higher and yet the miners go lower.
We won’t know exactly why until it’s all over; one possible explanation’s that corporate collapse is already baked into the cake of the major equities …
Summary:
Remember their tagline, “We’re all in this together”.
So they are.
All major corporations implementing self-destruct (sustainability) policies … all of them doing it, ‘together’.
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.
Even though technical conditions show we’re at least in a correction, if not outright reversal or collapse, record inflows for 2022, vs. 2021, present the herd-driven behavior of the public (and funds), to go long.
According to the link above, flows have been out of bonds and lesser performing equities, into equities that have gone down less.
In addition, you can see some of that flow (not addressed in the article) going into gold and the mining sector.
Stepping Back
Pulling away from charts and indicators for a moment, figuratively closing one’s eyes to get a ‘feel’ for what’s happening, it looks like the following:
We’re in a (potential) massive juggernaut reversal that’s been decades in the making; possibly having origins going all the way back to the ’87, crash, the ’95, bull market and then, repeated bubbles of 2000, ’07, and now.
At this point, it looks like the ‘average investor’ is doing the only thing they know how to do … that is, go long.
Those with at least some market knowledge, just got decisively whacked with their ‘put buying‘ strategy as the market has rallied strongly off the lows.
Pavlovian Panic
We’re witnessing the knee-jerk reactions of a public that’s been conditioned for decades, not to ‘think’, but only ‘do’.
Expect this type of behavior to go parabolic if the markets really do turn lower on a sustained, long-term basis.
Prechter has written extensively about crowds or the herd; especially in his text The Wave Principle of Human Social Behavior.
We can see this visceral behavior real-time, in other seemingly unrelated markets. Two examples below:
First, we had oil futures going negative for the first time in history; then we have LNG tanker rates going negative first time as well.
The model seems to be:
“Everybody wants it, and then, they don’t”.
The crowd runs to and fro, effectively leaderless.
With that said, one can make a case we’re just beginning, or already in an economic collapse; now being followed by the early stages of a market collapse.
Meanwhile, The Elephant Gets Bigger
Let’s not forget the massive elephant that’s just now getting so large, it can’t be ignored (time stamp 2:40).
Recall the example at this link … disparate crowds have a tendency to come to the same decision and modify behavior, all-at-once.
You have to wonder, when that crowd is going to simultaneously press the Sell, button.
Hit, In The SOXX
Unprecedented events are everywhere. That includes the massive, ‘never before seen‘, thrust lower in the SOXX.
The uptrend shown in the weekly chart of SOXX, has been decisively broken and with enormous volume.
The week ending Friday January 28th, saw 16.7-million shares traded … the most ever for the index (ETF).
More detail on trend break
Then, There’s Elliott Wave
Before the ‘Elliotticians’ get miffed by the previous (cookie cutter) comments, here’s this:
When this method works … it’s great.
It provides good projection areas and the useful ‘Fourth Wave of Lesser Degree’, targeting.
Note: A quick internet search for this Fourth Wave method (authored by Prechter) turns up nothing.
Logging onto ‘Club EWI‘, putting in ‘Fourth Wave’ has no items found.
One can try contacting Elliott Wave International, to request a copy of this targeting method. It may still be available (for a price).
The data used by this author to target the 4th wave retrace (shown below), is from a hard copy, dated, 1/8/2003. That information was excerpted from The Elliott Wave Theorist, July 9th, 2002.
First, the 2-Hour chart from Thursday’s update is repeated below with the ‘lesser degree’, added in magenta font:
Getting closer-in on the 4th-wave area below:
It’s subtle and difficult to spot. The price action congestion area is the ‘4th wave of lesser degree’.
Summary:
The previous update showed entry points for what is now SOXS-22-01 (not advice, not a recommendation).
Friday’s price action put this position well in the green; getting it to +24%, based on the close.
The table below are the ETFs being tracked along with the leveraged inverse fund tickers.
The percentage gain/loss, is for this past Friday’s action and shown for the inverse funds.
Obviously, the semiconductors were hit the hardest on Friday and so, SOXS, had the largest gain.
A good stop level for SOXS would naturally be Friday’s low (not advice not a recommendation). If we really are in an Elliott Wave 3, down … price action’s expected to continue its decline with haste.
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 link to an article where lawmakers (using that term loosely) are attempting to limit the export of natural gas.
We’ve already discussed the likelihood of some type of corn or grain embargo as prices continue higher.
Now, we have a similar (limit export) event but in the energy sector.
Recall, the statement from that prior (corn) post:
“What we’re looking for here, is some kind of Jimmy Carter type stunt where corn exports are halted in the name of ‘national security’ or some such thing.”
And this, from the same post:
“Of course, if that happens, corn is likely to crash (like it did last time) if only temporarily.”
So, let’s take a look at what happened to natural gas (UNG), when our lawmaking geniuses proposed to limit exports.
Daily Chart Natural Gas, UNG:
So, when this type of announcement comes out, the market takes a major hit … just like it’s forecast to do if we get something similar in corn (not advice, not a recommendation).
Now, if the overall long-term objective, is to wipe-out the food supply, wouldn’t you want some kind of dry run to make sure markets are going to respond as expected?
So, let’s try natural gas first, shall we?
Remember that with corn, it will (if it happens) be different.
Because of the elevated fertilizer prices, a forced lowering of the corn market may be all that’s needed to make sure very little-to-no corn gets planted … and Voila!
For a reminder on just what exactly we’re dealing with here, please reference this link.
Moving on to other markets, we have some housekeeping in the gold mining sector.
Junior Miners, GDXJ:
As stated in the pre-market update yesterday, the finger was on the sell trigger.
After the first hour of trade, it was obvious higher prices were in the offing.
Not willing to wait through a correction to a higher retrace level, the short position was closed-out (not advice, not a recommendation).
The table below summarizes the entire round-trip. It should be somewhat self-explanatory.
A hypothetical $10,000 was used as the starting amount. Any additions to the position used margin.
The end result as shown, approximately, +21%, gain.
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.
What if the ‘imminent collapse’ of the dollar is overblown by about 50 – years?
According to this just out, on private gold-filled currency, the article states average life of a fiat currency, is four generations. It goes on to say there are exceptions like the British Pound, continuing on even after hundreds of years.
The Black Swan
In Taleb’s book ‘The Black Swan’, he says it’s an event that nobody expects. It has long lasting repercussions and permanent change.
However, what most if not nearly everybody ignores or leaves out, is his alternate definition. That is:
A Black Swan can also be a future event that’s widely accepted as fact, that does not happen !!!
Is that where we are with the U.S. Dollar?
Even though the dollar has not collapsed and in fact, has rallied as we’ll see below, the ‘collapse’ talk continues unabated.
It’s easy to talk about dollar collapse.
It’s what gets the clicks. No matter that an actual collapse may be years if not decades away.
As of this post, how many ‘monopoly money’ YouTube videos can be found? Seems like it’s the same number or more than, ‘gold to skyrocket higher’.
Well, so far, gold has not skyrocketed higher.
On top of that, this site’s even provided an exclusive correlation that gold’s moving inversely to corn.
See ‘Insight Note‘ at the end of this post.
Ever since the ‘Derecho‘, it’s never been the same.
Back to the dollar.
No doubt, the dollar was whacked over the past trading week. Let’s take a look at what the UUP, price action is saying about itself.
Dollar, UUP, Weekly Chart
The unmarked chart shows the dollar oscillating, testing support for six-months at the beginning of 2021.
Then, in mid-June ’21, UUP pivoted decisively higher (gold, GLD, pushed lower) and never came back to those levels.
Of course, this past week The Usual Suspects were out talking about the dollar and ‘monopoly money’.
The chart below shows last week’s bloodbath has served to bring UUP, down to an established trend-line.
It’s important to note, with all that (down) volume, the most since early 2020, UUP was not able (thus far) to break through the trend (blue line).
That leaves the dollar at or near, the danger point.
Continued, sustained selling, risks breaking the uptrend.
If the opposite takes place and UUP starts to rally, last week may have been an inflection point (to the upside).
Gold (GLD) and the dollar appear to still be inversely correlated.
Summary:
Ever since removal of the link to gold in 1971, the dollar has the potential to collapse at any moment.
However, in this case, we at least have some historical precedent that on average, fiat currencies tend to last four generations before becoming worthless.
Wyckoff sates in his writings over and again, ‘somebody always knows something’.
If there’s a collapse afoot, he tells us to look at what the market is saying about itself (not advice, not a recommendation).
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
Insight Note:
It’s been a strange coincidence over the past year or so, ideas presented on this site make their way to certain YouTube sites either in the titles, or within their content.
The timing of this phenomenon, that within a day or two, ‘post it first here, see it on YouTube there’, has occurred more times than one would consider as just ‘coincidence’.
Admittedly, the insights (making their way to certain YouTubers) have not been exclusive … that is, until now.
Recognition of the Gold/Corn inverse correlation, first posted here, is unique to this site.
As far as is known, this correlation has not been presented on any other financial site or YouTube channel or any other medium.
It may be an important data-point and map into this site’s long-time premise; it’s the corn and the grain first, then gold and silver (not advice, not a recommendation).
For more detail, search for Genesis 41.
When ideas from others are incorporated into the analysis presented on this site, full acknowledgement of the source is cited.
As Dr. Elder said in his book ‘Come Into My Trading Room’:
“I have zero respect for thieves”
He’s talking about the theft of his book title: “Trading For A Living”. He goes on to say, (paraphrasing)
‘Do you really want to use market analysis or input from someone that can’t think for themselves?’
Authorization:
Therefore, this footnote is authorizing the further use of the Gold/Corn inverse correlation by others in the industry if they so choose with the following caveat:
If one of the sites monitored (or some other media) uses this exclusive insight, and does so without referencing the source, it puts this author in the unenviable (but not unfamiliar) position of calling out the thief by name … not unlike what Stew Peters is doing (to the hoax/genocide perpetrators) on his broadcasts.
This market environment’s providing a fantastic public service:
It’s separating out the hucksters, the shysters and the otherwise incompetent from those who are, or who are striving to provide a service or useful insight.
The general investing public may find out soon enough, they’re on their own. Maybe unbeknownst to them, they’ve always been on their own.
For all of us serfs in the banana republic proletariat, it’s near if not impossible, to keep up with the lies.
The latest ‘employment‘ report is just one example.
This video from Jerimiah Babe, posted a few days ago has a different story. Check out the intro and then farther on at time stamp: 9:00.
For a second opinion, we can go to Dan, at i-Allegedly.
On his latest post, fast-forward to time stamp 7:00, where he walks through an outdoor restaurant area that’s completely vacant.
The ’employment’ report is vapor. Judging from the comments (at ZeroHedge) most everyone seems to be aware of the fakery.
Naturally, with all of this uncertainty and rampant inflation, the logical place to go would be the gold market.
Junior Miners, GDXJ
As this post is being created (mid-session), the Junior Miners are at the danger point. Price action’s at a location where it’s decision time.
So far, it’s an ‘inside day’. We don’t have a new daily high or low from the previous session.
The Fib retrace of 23.6%, discussed previously is holding for now. That weights action to the downside.
Posting a new daily high would begin to erode the set-up; potentially indicating GDXJ, is going to attempt a retrace to the Fib 38%, level.
If that higher retrace becomes a more favorable probability, the JDST-22-01, trade will likely be closed out (not advice not a recommendation).
The chart below shows the inside action thus far.
The table below has the current positioning JDST-22-01, via inverse fund JDST (not advice, not a recommendation).
As always, the sell finger is on the trigger. Description of color coding and table layout is in this post.
Summary:
Trade decisions posted on this site are defined by the price action itself (not advice, not a recommendation). Wyckoff analysis does not concern itself with what’s obviously fake.
Wyckoff focuses strictly on what the market is saying about itself.
At this juncture, price action’s saying that both bulls and bears, are at the danger point.
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.
For the evening/overnight session, both gold and the S&P futures have opened lower.
The S&P is down 50-pts, nearly 1.10% (at about 8:15 p.m. Eastern) and already penetrating the last session’s low.
The number of technical factors concerning gold, the miners and especially the Junior Miners GDXJ, is significant.
We’ll cover just a few in this update.
Junior Miners, GDXJ: Daily
The un-marked daily chart shows GDXJ oscillating but in a general downward trend:
The next chart shows price action posted a reversal bar right at Fibonacci 23.6%, for the entire move; from the breakout highs in mid-November ’21, to the lows on January 28th, this year.
A ‘Fib’ retrace of 23.6%, is rare and if it holds, indicates significant weakness.
The next two charts present a case for why this shallow retrace may indeed hold and thus, indicate the start of the next leg lower.
On a print basis, it’s been a Fibonacci 55 (+1) days from the GDXJ print high on November 12th, 2021, to the high posted today (2/2/22).
The next chart shows that November 12th, 2021 was also the closing high of the breakout set-up.
The Important Part:
Yesterday, was the closing high of GDXJ (so far) and that makes it a perfect Fibonacci 55-Days, from peak-to-peak.
The last update on the miners showed significant down-pressure at support levels, unlike previous visits to the area.
Looks like we’ve had the rally that was forecast; that rally may now be fading.
“It’s reasonable to expect an attempt to rally in the coming week … but with this much down force, a successful rally is not the high-probability outcome.”
Gold Could Hold
Already discussed, is the idea, the actual price of gold may hold steady or even go higher and yet the mining sector collapses.
As Dan from i-Allegedly posts in this report, Italian wine makers are having a hard time getting corks for their bottles. That’s right, corks !!!
Does anyone really think a massive mining outfit is going to be able to source all they need to continue operations without interruption?
Let’s not even get started with the ‘sustainability’ corporate failure already baked into the cake 🙂
“For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.”
Sorry for those who think it’s all a ‘myth‘. I’m with Good Patriot on this one (time stamp 17:09); that we’re in a battle surpassing all that’s come, since 33 AD.
Gold & Silver
Hard assets: Good to have for sure (ammunition, seeds and egg-laying hens may be better) … but if we’re really in a similar event to Genesis 41, that means the corn and grain come first, then gold and silver.
Summary:
This post started with the S&P down about -0.80% and it’s now down -1.10%, posting a new daily low.
Gold is down slightly, holding steady but that’s already been discussed above.
Remaining short the sector via JDST-22-01 (not advice not a recommendation).
Position size on JDST-22-01, has been increased. More on that in the next report.
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 last time weekly down-thrust energy (Force-Index) was this deep, GDXJ price action ratcheted lower for 16-weeks before a significant reversal.
That reversal took place at support where GDXJ, is now. However, back then (week of October 1st), contact with support was on weakening Force-Index; this time, it’s increasing.
It’s reasonable to expect an attempt to rally in the coming week … but with this much down force, a successful rally is not the high-probability outcome.
Summary:
One possible clue for exit of short position, JDST-22-01, is to look for continued downside action but with divergent (lessening) thrust energy; not advice, not a recommendation.
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® 