Inflation, Off The Chart ?

Or … Massive Supply Restriction

Use the miss-information and propaganda to your advantage.

The following items are just a partial list of recent inflation, so-called ‘news’.

$3,000 Gold Imminent

Gold & Dollar Soar, CPI Surge

Consumer Prices Soaring …

Gold & Crypto Surge

Transitory” Debate Is Over

That last one … is that like “The science is settled”?

To be fair, there is some truth in the articles. Prices are indeed rising. All types of costs are going up like food, gasoline and on.

Supply Restriction:

Here’s a strange bit of information from an unlikely source.

It turns out that copper (mining) supplies are being restricted in Minnesota. Go to time stamp 2:52, at this link and listen to the next 30-seconds.

Sure, it’s a data point of one but then again, what about all the talk of shutting down sources of oil production?

On it goes. This is supply restriction, not inflation.

It depends on what the definition of ‘inflation’ is.

Here we have one of the usual suspects parroting the now-accepted (but likely incorrect) definition of inflation. Go to time stamp 1:23.

I’m sticking with Robert Prechter Jr.’s definition of inflation and that is: Expansion of credit that causes increased spending that in turn causes demand to rise and then prices rise in turn.

Do we have expansion of credit now … or the destruction (or, soon to be) of credit? That’s called deflation.

Dollar … Still Not Dead

The dollar of course, is the wild-card.

Everybody’s expecting a collapse but darned if that’s just not happening. Actually, the opposite is taking place.

Now, all of a sudden it’s a “Contrarian Trade”. You can’t make this stuff up.

We’re coming up on the one-year anniversary of this post.

It postulated there was potential for a significant, medium-to-long term reversal in the dollar.

Getting The Picture

In a way, the dollar post and subsequent ZeroHedge one-year-later recognition of the obvious, define what this site’s all about.

As stated in the ‘About’ section, not every analysis works out. To borrow a quote from David Weis, ‘Sometimes I’m 100% wrong’.

Presented here are analysis, actions, course changes, attempting to maneuver through the largest economic and population collapse in world history.

The main focus is not to increase followership … although that is happening.

As the follower numbers increase, it’s a good sign that more are becoming aware of how manipulated and controlled is the entire narrative.

One way to separate from the effect of the falsehoods, is to become proficient at reading price action. As David Weis used to say, ‘What’s the market saying about itself?’

Which brings us to the current juncture. Gold

Gold, At A Crossroads ?

The current assessment of gold (i.e. bearish or reversal potential) is similar to the dollar from a year ago.

Different from the dollar, are the momentum (MACD, etc.) indicators … which are currently pointing higher.

In the dollar, there was a bullish weekly MACD divergence helping us along.

Not so with gold (GLD).

What we do have, and what the linked list above provides, is a look into a type of mass hysteria.

The ‘pegging the meter‘ article that came out late Friday caused only a blip higher in GLD and GDX.

If we’re at max persistent inflation already, is there any more upside left?

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.

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

Gold, In Mid-Air

We’ve Been Here Before

CME

As we’ll see in the charts below, gold (GLD) has pushed above resistance three times in the past.

Each time, GLD reversed.

Two of those had GLD print new post, 8/6/20, lows.

The average decline was -11.3%.

During that time, miners GDX, GDXJ, took the brunt of the action.

The last GLD draw-down (6/1/21 – 8/10/21), was about -10.2%, while GDX got whacked top-to-bottom with -28.2%.

At this juncture, miner’s downside price action looks to be leveraged by about 3:1, when compared with gold.

Gold (GLD) Analysis:

The un-marked chart:

The marked chart has the past three up-thrusts above resistance (magenta arrows) and our current potential; the orange arrow.

Note the typical distance price action traveled above the blue line resistance levels.

If GLD does not move any higher from this point, its current distance above resistance is typical when using the past three moves for reference.

Danger Point:

In the markets, anything can happen.

Price action in GLD and miners, GDX, GDXJ are each at their own danger points.

Counter-intuitively, this is where the risk of being wrong is least (not advice, not a recommendation).

Senior Miners, GDX:

Taking the hourly chart of GDX and inverting it, gives us a chart similar to inverse fund DUST but without the tracking (bias) errors.

The inverted hourly chart:

Net downward price action is narrowing; less and less downward progress with each thrust.

This is an indicator we may be nearing the end of the move.

Helping that assessment along, is the next chart. The circled area shows Force Index is also dissipating.

Today’s session thus far, has essentially no more thrust energy when compared to the last two sessions.

Summary:

Price action in DUST, has gone a little farther (lower) than desired.

However, the analysis above tells us there’s nothing, yet, that would indicate an exit of the short position (not advice, not a recommendation).

One has to remember who’s on the other side of this trade; that is, the bull side.

The general public has been led to believe inflation is rampant. The media and various YouTube personalities have whipped them into an inflation frenzy.

Its become some kind of psychosis

Costs are going higher. That part is true.

The reason they’re higher, or at least a different perspective, is available to everyone via Uneducated Economist and Steven Van Metre just to name two.

As Van Metre said about a year ago concerning the actions by the Fed (paraphrasing),

‘Do you think the Fed is going to educate the public and tell them Quantitative Easing is actually deflationary?

No, they will allow the public to have the false belief their (Fed) actions have the opposite effect.

Just a reminder of what the guys above are really all about; Some additional info is here.

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

Gold … Bulls & Bears, Fight It Out

… And, In This Corner …

The fight is on.

Pre-market action in miners GDX, shows a slightly higher open with inverse fund DUST below yesterday’s low.

Is the short set-up busted?

In the markets, anything can happen but we don’t know who’s really in control … yet.

Even as the dollar powers higher, gold bulls could overpower deflationary conditions pushing gold and the mining sector up as well.

To do that, they’re going to need to overcome some significant resistance obstacles.

Let’s take a look at just a couple.

Senior Miners GDX

The un-marked chart:

The mark-up:

The mark-up shows the first two layers of resistance. The blue line is the Up-thrust (potential short) condition.

The dashed black line is not so easily discernable. It was formed way back in late July and early August.

The next two charts zoom into those areas of interest; providing evidence, getting above these levels may require a sustained effort by the bulls:

Summary:

The ‘inflation’ news is already out.

Price action in today’s session may let us know if we’re in a drawn out fight lasting day to weeks; or will the bulls reach exhaustion during the session.

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

Gold … The Show Begins

Popcorn Ready … Asylum Freaks Out

You would think everybody’s escaped.

We have this link and this one and probably many more.

Those who’ve been monitoring this site already know, today has been in the planning stages for months.

This post was the first one to discuss the target area for a reversal in gold (GLD).

So, here we are.

So-called inflation is running rampant and it looks as if everybody’s in agreement.

Well, almost.

Turns out there’s a guy in the Pacific Northwest, a ‘boots on the ground’ type that sells lumber for a living.

Uneducated Economist never waivered on the fact, prices are rising as a result of supply constraints and not inflation.

There was one more as well.

Steven Van Metre has given his take on current monetary policies; they’re deflationary.

It’s a minority view.

Either way, we’re about to find out the truth.

Gold (GLD) Analysis

The fact GLD, has reached a target identified two months ago, gives credence to a potential reversal.

We’ll start first, with the un-marked weekly chart of GLD:

Now, the mark up:

It looks like we have a test of the original Up-Thrust (reversal).

In addition, today’s action (above black dashed- line) is another Up-Thrust.

Is this a reversal, within a reversal ?

The chart below zooms in on that area:

Everyone has their own investment/trading time-frame and method.

There’s no doubt, gold (GLD) is at the danger point. Price action can go either way.

Positioning:

The ‘inflation’ links above highlight current psychology and sentiment. The bull trap may be set.

As of this morning, we’re already positioned short this sector via DUST (not advice, not a recommendation).

Note:

A push below today’s DUST low of 17.27, does not necessarily negate the trade but it does (or will) bring it under scrutiny for potential exit (not advice, not a recommendation).

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

Gold Sellers Exhausted ?

According To The Latest Propaganda

It has to be this way.

As counter-intuitive as it sounds, for there to be a significant downside reversal in gold (GLD), the vast majority if not nearly all traders, speculators, and investors need to be on the wrong side of the trade.

Getting that crowd positioned without them realizing it, or being plain hypnotized like our asylum escapees, the gold bulls, helps get articles like this accepted by the masses.

The daily chart of gold proxy GLD, shows the potential target area for reversal.

This area has been a reversal target for months … since mid-September.

Working the markets in this way, that is, identifying a potential future condition for trend change, allows one to think about how it’s all going to go down.

Of course, consistent, incessant, propaganda along with bullish (asylum) hysteria is a must. 🙂

Just to be fair, sometimes and on a rare occasion, the crowd is right.

With that in mind, we’ll have to see how GLD price action behaves if/when it breaks through resistance.

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

Dollar … Before The Open

What To Watch

Spring (Reversal) Position

Not every bullish set-up works.

However with the dollar, continuing sentiment is so negative along with bonds, the dollar has potential to do the unexpected; that is, go higher.

Yesterday, UUP pushed below support (and 23.6% retrace) levels.

In so doing, price action’s now in ‘spring’ (reversal) position.

Pre-market action shows UUP, trading higher; right at support that may now be resistance … maybe.

That’s where to watch.

‘No one expects the Spanish Inquisition’ … right?

The currently held belief is dollar collapse and gold to $3,000/oz.

Dollar (UUP) Analysis:

The daily chart of UUP may be painting a different scenario:

The dollar’s already in an up-trend. It just established support at the 23.6%, Fibonacci level. There was a bounce higher and then yesterday, penetration below support.

Now, in the pre-market, UUP is currently trading at 25.14 – 25.16, which is at or even above the support level.

A dollar reversal higher at this point, being a very shallow 23.6% retrace thus far, would potentially spell big trouble for gold and the miners.

Of course, no one ‘expects’ this to happen.

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

Gold: Thanksgiving Treat

On Track For Breakout, Then Reversal ?

If gold (GLD) maintains its current trend, it’s on track for breakout (up-thrust) during or before Thanksgiving week.

Holiday weeks are where market reversals tend to occur; when nobody’s looking.

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 … Stage Is Set

Dollar’s Absent From The Show

To get the gold bulls in a hypnotic trance, thinking $3,000/oz. is just around the corner, the appropriate press releases need to be created.

As if on cue, reported by Jerimiah Babe, big names are coming out to say ‘hyperinflation’s’ a sure thing.

If it’s not happening now (as we speak) it’s bound to happen very soon.

In fact, just look at the prices (time stamp 1:30). Those price increases are proof.

Never mind the hundred or so ships off CA, or even the containers just happening to ‘slide off’ into the sea.

But wait, what about the fire?

No manufactured (um, sorry ‘supply chain’) crisis would be complete without a fire.

However, there’s a problem with all this hypnotizing the masses to hyperinflation.

That problem is … the dollar’s not playing along.

Dollar, UUP Analysis:

In fact, the dollar is showing significant strength.

It’s right at Fibonacci 23.6%, retrace (very shallow) and appears ready to move higher.

The weekly chart of UUP, is below and includes the Fibonacci levels.

The next chart expands the last few weeks to show contact with the 23.6%, line and what looks like a nascent move up:

If UUP manages to make a new weekly high above last week’s 25.24, level, we have confirmation it’s attempting to continue the reversal and up-trend.

That reversal started way back at the beginning of this year.

This is what was said back then when the dollar looked poised for imminent collapse.

If gold and the dollar are still inversely correlated, the dollar appears ready for an upside breakout; obviously, a breakout higher would then put down pressure on gold.

Gold (GLD) Reversal:

Five weeks ago, the potential for a significant gold (GLD) reversal was discussed at this link.

That idea was updated last Friday at this link.

Then, over the weekend we’ve discovered one other analyst coming up with their own version.

At this juncture, GLD continues to ratchet higher to the 171 – 175 target area.

That move’s happening along with the requisite press generated hysteria … helping lead the bulls to a potential last stand.

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.

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

Gold … Coup D’état, Draws Nigh

Leading Gold Bulls To The Last Stand

It’s your host’s engineering background that causes him to go looking for supporting data (or lack of) when presenting a contrary opinion or analysis.

Usually, that means sifting through randomly selected research or YouTube links on the subject; just to make sure the idea’s not being discussed by someone else.

This round’s sample of links is provided for reference below.

The Alpha FX

Capital-com

Kitco NEWS

None of them even hint of a potential ‘gold bull trap’.

Of the three, Kitco NEWS, receives the day’s honorable mention.

It contained the most amount of useless information; All of it, jam packed into a 21-minute period.

Particularly egregious was (time stamp 18:35), “Sentiment always follows price”.

Sorry Charlie. Star-Kist wants only the best.

The proper sequence is: Sentiment, Volume, then Price. 🙂

The Potential Gold (GLD) Set-Up:

We’re calling the ‘coup d’état’, for lack of a better description.

The bullish hype is so bad and the me-too-ism on YouTube is so disgusting; being devoid of original thought (i.e., it’s a set-up), one has to be prepared for the opposite.

If GLD, manages to move higher to the 172 -175, area, it could be the final thrust before a wrenching sharp, or sustained decline.

The last time gold was discussed in detail was this post.

Gold (GLD) Analysis:

Daily chart (mid-session) of GLD, with the set-up target is below:

The first time the up-thrust target (above) was presented, was this post in September.

These charts are an example of what strategy is all about.

Price action after that post, seemed to negate the possibility and so the idea was tabled.

Now, with the GLD reversal off the lows in late September, we’re back on.

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.

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

Gold Gets Whacked !

Mid Session

… But, That’s Not The Real Story

First, this morning’s action in gold (GLD) tells us, it’s not a bull market.

The asylum escapees (gold bulls) from yesterday, might paint today’s action as a buying opportunity.

Well, it could be a buying opportunity for short term trades (not advice, not a recommendation) but that’s not what this site is about.

Bull markets do not let you get aboard comfortably.

Case in point:

For those old enough to remember, harken back to the bull market launch of 1995.

Remember that?

It seemed like every day was up into new highs with nary a retracement until a year and a half later.

No, there’s something else going on with gold.

It may indeed continue to move lower from here. However, there’s a price action feel that’s not right.

GLD:

Potential Coup D’état Set-Up ?

Those who own the gold market(s) know full well, there’s a bunch of rabid ‘collapse’ types who believe the metal’s their salvation ticket out of events to come.

Those in control, need to get as many as possible on the wrong side of the trade before there can be a sustained long-term (or fast and sharp) down move.

Such a move, if it goes low enough and fast enough, would likely take out the majority of the ‘stacking’ community.

Looking at the un-marked chart of gold (GLD), just where would that location be … where everyone, except the few, are positioned incorrectly?

As discussed previously, the area shown below would be a good location for an up-thrust (reversal) condition.

In addition, that location’s between the 38% and 50%, retrace level(s) from August 2020, to March 2021.

One can speculate on just what would cause or enable a last-gasp push higher above the GLD 171, level.

Well, for starters, how about a massive volcanic eruption that results in long-term destruction on both sides of the Atlantic.

As Dan (I Allegedly) says with his post just out, ‘the economy is in a perfect storm’.

Anything can happen.

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