It’s The Poo … Turning Into Gold

Wait, What ? … We Really Do Need Cows ?

Unprecedented times, yields unprecedented events.

It looks like cow dung (i.e., fertilizer) is literally turning into gold.

From the October 12th, 2021, update:

“What happens when the public realizes all-at-once, it’s the food supply that’s not ever (in quantity) coming back?”

Of course, in our upside-down world, if dung is turning into gold, well then gold must be turning into, um, something akin to dung; and so, it is.

For those who have been monitoring this site and others like ice age farmer, this news is nothing new.

The assessment that gold (GLD) was in a reversal (up-thrust) test, published hours before the Fed announcement, appears to be correct.

From the mining sector, the Junior Miners (GDXJ) have been hit the hardest being down about – 10.7%, for the week (early session).

Junior Miners, GDXJ:

We’re going to use the weekly close chart of GDXJ, as presented in the January 24th, update; more specifically, this statement:

“If GDXJ really has pivoted more aggressively to the downside, price action will ‘get itself into the channel’ by accelerating sharply lower.”

So, let’s take a look.

GDXJ, Then:

GDXJ Now (early session):

It’s still a long way to go before the close. However, action seems to be accelerating lower into the new more aggressive down-channel.

More detail in the zoom chart below.

Positioning

As a courtesy, although not obligated in any way, the following is from the company’s trade spreadsheet (not advice, not a recommendation).

The ‘share size’ has been changed to indicate percentage of the position.

Frist, we had DUST-21-01, closed out (details discussed here) and then JDST-22-01, opened. We’ll call that initial open as 100%.

Then, additions were made and one reduction before adding again. Those changes are shown as percentages of the original size.

Example: If the original entry on 1/19, was 10,000 shares of JDST, then on 1/20, that amount was increased by 348, shares and so on.

The table below provides the dates and entry/exit prices (not advice, not a recommendation).

Summary:

There may still be opportunity to increase position size.

However, it’s obvious at this point, the market’s in decline and volatility likely to increase all the more.

It’s literally been four months or longer, to plan this trade. As of this post, the combined position is up a nice +31%

The next order of business is to monitor action and locate potential exit targets and stop levels.

Meanwhile, the cow dung becomes ever more valuable. 🙂

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

Fighting The Last War

Because, Last Time Will Work This Time

Gold fund GLD, saw record inflows for the past year.

So, that’s the place to be, right?

In a rare (media) event, the answer may be included in the above link.

The analyst in the article is quoted as being “surprised” the actual metal, gold, has not moved appreciably higher as a result of massive ETF inflows.

Since before 1980 when gold reached an all time high (back then) of $850/oz., its’ been ‘inflation, inflation, inflation’.

That Was Then:

It’s been forty-plus years (some would argue more) of non-stop inflation.

At some point, the music stops; we seem to be very close.

Everybody stampeding into gold and related markets (i,e., the miners) appears to be fighting the last war: Inflation.

Where We Are Now:

In Steven Van Metre’s latest update, he presents just how precarious and fragile is, the current market environment.

It’s a short video, just under 13-minutes; it’s worth the time.

The internet’s been the great equalizer and so everyone has access to the same information.

After watching his video (time stamp 6:07), it raises the question as to why anyone, or any financial manager, would want to be long in the equity market (not advice, not a recommendation).

To Be, Or Not To Be, ‘Certified’

Let’s just throw in that ‘certified’ management actually underperforms non-certified peers. At least in the case of the CFA (Chartered Financial Analyst).

In the article above, it even states that ‘experience’ is a deciding factor. Imagine that. 🙂

One has to be smart to pass the certification tests. No doubt. However, ‘smart’ does not equal ‘savvy’.

Taking all of this into account, it’s reasonable to think we’re possibly just one ‘fat-finger’ away …

Gold Finished Testing ?

We’re a few hours from the Fed announcement but the market looks like it’s already made a decision.

The daily chart of gold (GLD) shows all that’s happened since the potential for up-thrust breakout was first presented.

The zoom chart shows price action right at the support/trendline of the terminating wedge.

More importantly, we see that action is below the established resistance line; possibility indicating the test is complete.

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 Miners: Now, It’s Obvious

It Was Never A Bull Market

The bottom’s falling out of the equity markets and the miners are going right along with them.

For long-time users of this site, this lack of a sustainable bull market in the mining indices was identified long ago.

Fifteen months ago, we had the following post. Let’s review and give it an update:

‘What’s wrong with this picture?’

The Charts:

First off, we’ll re-post the weekly close chart of Junior Miners, GDXJ as it was then (October 25th, 2020):

The following quotes were also part of that report:

“One way to look at it is, the junior sector does not believe gold (and silver) prices can be sustained at current levels.”

“Or, if they are sustained, there must be something else at work that would prevent them form obtaining a substantial profit.”

Now we know, nearly a year and a half later, that “something else at work”, is what we call The Speck and the Speck-Effect.

Not only that, energy (and money) that’s being diverted to solve non-problems (covered in the last post) may be having an effect as well.

Let’s not forget supply chain problems with no end in sight.

If there ever was a case for Wyckoff analysis, this is it.

Reading price action, making calculated (intuitive) decisions will keep one away from what by now, has become useless prattle from the mainstream sources.

Remember ‘blue skies ahead’?. Seems like it was almost yesterday … oh, wait. 🙂

This garbage-in, garbage-out, is not exclusive to just the financial media.

As Dr. Vernon Colman points out in his video (linked here), it seems to be pervasive in all types of media world-wide.

Junior Miners GDXJ, At Present:

Here’s how the weekly close of the Junior Miners looks today (approximately, mid-session):

Downside Trading Channel(s)

We’ll stay with the weekly GDXJ but zoom in and mark it up:

GDXJ, has been in a well-established down-channel, beginning around late November of 2020.

As shown with the grey dashed-line, there’s a possibility of a new more aggressive channel.

The chart below shows the potential right-side trend line is currently being ‘straddled’ by price action; this can happen when the equity or index is unsure there’s been a change.

If GDXJ really has pivoted more aggressively to the downside, price action will ‘get itself into the channel’ by accelerating sharply lower.

Where’s It Headed?

For this update, we’re going to use the P&F projections for GDXJ. Fibonacci projections (which have a similar target) may be covered in tomorrow’s update … price action depending:

Downside projection is for a drop of approximately – 35% to -50%, from current levels (not advice, not a recommendation).

Summary:

As always, anything can happen. The markets could be rescued yet one more time.

However, at this juncture we’re at least in the established down channel shown above. Price action will let us know if there’s been a decisive acceleration to the downside (grey dashed-line).

Remaining short GDXJ via JDST; labeled as JDST-22-01 (not advice, not a recommendation).

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

Straight Talk On Gold

The Air’s Going Out

It’s time for the truth on gold and the miners.

Before we get to the charts, we’re going to start with an unlikely source:

Dr. Vernon Coleman

His latest video post is here; it’s important to watch in its entirety.

At time stamp 13:30, in the link, he says that restrictions are backing off, not because of any real change of conditions; no, they’re backing off to clear room for the next scam.

Useful Idiots

For obvious lies to have any effect, one has to have a whole pack of idiots to believe them.

The last post showed with the anecdotal ‘Target’ update, of that, there is no shortage.

So how does one think a dirty, dangerous mining operation is going to be functional with an ever declining or impaired workforce coupled with a potential ‘climate lockdown’?

Let’s not forget, these operations are also working to solve problems that don’t exist (i.e. ‘sustainability’ and ‘net zero’).

Was it like this in 1929 ?

The latest post from Economic Ninja, talks about the market becoming more “narrow” … which is just an alternate term for “thinning-out”.

All of this brings us to the market at hand: Gold and the miners.

Newmont Mining (NEM):

We’ll go straight to the inverted daily chart of NEM:

This prior post did an excellent job showing the potential bearish reversal conditions for NEM.

However, there’s at least one more bearish condition and that is, ‘up-thrust’.

Remember, that if it’s ‘up-thrust’ on the regular chart, it becomes ‘spring’ on the inverted.

The zoom chart below shows price action has come back to test support quickly; an indication the downside thrust cleared out the weak hands and allowed strong hands to take positions.

We’re talking ‘inverted’ here.

So, what’s likely happened in the real (non-inverted) world:

The herd has bought into the inflation narrative.

They think Newmont, the miners and the gold market, are breaking out to the upside. Meanwhile, back at the ranch, the professionals have likely used the opportunity to sell or sell-short.

Back In The Day

Way back in the day, when Steven Van Metre, still had his 1970s wood-paneled office, he used to talk about how the Fed knows its actions are deflationary.

Also, how the Fed was in no way going to educate the public; so, they let that public believe that it’s all about inflation and dollar destruction.

The herd is nearly always on the wrong side of the trade. Here’s a blast from the past to help make that case.

Data Dump & Asset Transfer

With so many bits of data swirling around like Cryptos, Digital Dollar, UBI, Supply Chain Destruction, Depopulation, Neo Feudalism, and on, who of us in the proletariat, really know how it’s all going to play out?

However, there’s one thing of which, we can be sure:

It’s an asset transfer of Biblical proportion.

Next On The Schedule

This post is already long and we’ve not discussed the mining indices and downside projections.

Depending on price action or news, we’ll cover that in tomorrow’s update.

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

Volatility Event: Newmont Mining

Alignment Of The Bears

“Volatility Is Good”

Volatility cauterizes the emotions. It reveals the market extremes and shows each player’s hand; bulls and bears.

With the market just opened we’re going to look at gold’s last man standing: Newmont Mining.

‘Last man standing’ because, except for two equities far down in Senior Miner’s GDX, no one is anywhere near their mid-November highs.

The take on this: The gold market’s thinning out and ready to reverse.

A really big move

It’s easy to get lost and hypnotized with the day-to-day action. However, by pulling back, one sees the potential for a massive short (the market) opportunity (not advice, not a recommendation).

Implosion Effects: Broker Platforms Go Inoperative

Over and again, nearly each time there’s a big down move in the markets, where the Dow may lose 1,000 points or more, brokerage platforms seize up.

It happens so often; it’s probably best to incorporate it into one’s trading approach.

That’s one of the reasons, if not the main reason to work the short side (not advice, not a recommendation).

Newmont’s Short Clues

The volatility has exposed everybody’s hand on both side of the trade. That’s the good part.

We’ll touch on each technical event separately, starting with the unmarked daily chart:

First off, markets that have wide, high-volume bars, tend to come back and test that bar. We see it below:

Next, price action’s got itself into a terminating wedge; a potential bearish reversal pattern:

Then, we have today as Fibonacci Day 34, from the December 2nd, reversal low.

As this post is being created, NEM just made a new daily high; potentially culminating its wedge terminating move.

Big Fish, Little Hook

As Dr. Elder has said concerning stop placement, ‘You can’t catch a big fish with a little hook’.

So, we have GLD, GDX and GDXJ, in a November bull trap (up-thrust), with what looks like two-months of price action to come back and test.

If that assessment’s correct and it took two months just for a test, whatever happens next, may be on the order of years to resolve itself.

From a trade standpoint, it looks like today’s low in JDST, current open position, JDST-22-01, may be a good place for a stop (not advice, not a recommendation).

Newmont, Reversing

After Newmont posted a new daily high, it’s currently trading below yesterday’s close.

Deflation Pivot-Point

We have the usual hysteria in the gold market but this time, deflationary forces may be overtaking the manic gold bulls.

Case in point:

Existing home sales look like they’re rolling over. All kinds of excuses being made about lack of inventory and the imaginary ‘Speck’ with its new variant.

The one thing not imaginary about The Speck, is this report about what’s really going on.

Massive ‘depopulation’, is deflationary.

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 Test ?

Updating Now; Not Waiting For Tomorrow

If this is a test of the mid-November up-thrust, things may happen quickly from here on out; with that in mind, it’s important to get it all (technical data) out in the open.

The gold (GLD) chart is similar to the GDX that was discussed in the prior update.

It could be a test of the bull trap from last November.

If that’s indeed the case, and price action reverses lower from here, the downdraft could be more than significant.

Position Change

Instead of lightening-up on the DUST-21-01 position as stated, that position was modified.

The DUST-21-01 was closed out. Then, a position in JDST opened immediately; currently labeled as JDST-22-01, with nearly the same position size.

The gold market appears to be thinning out.

We want to pick the weakest part of the sector for downside potential (not advice, not a recommendation).

The Junior Miners. GDXJ, have been lagging the Seniors GDX, for some time.

Today appeared to be a good opportunity, with everything at extremes, to make the change (not advice, not a recommendation).

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

Miners … End of the Thinning ?

There are violent moves today in gold; both gold (GLD) and the miners, GDX.

One could think, maybe rightly so, the whole market, the miners, gold and silver, are kicking off a massive bull run.

On the surface, it looks that way.

Looking deeper, maybe not.

It could be a test of the November ’21, reversal.

Looking at charts of both Newmont and Senior Miners, GDX (we’ll cover gold tomorrow), the prior assessment, the market’s thinning-out applies even more.

Everything possible is being thrown into the last man standing: Newmont.

The violence of these moves is obvious.

Newmont (NEM) and GDX: Daily Charts

We’re going to put the unmarked chart of Newmont (NEM) and GDX directly below. The key takeaway is how far above NEM, is from its mid-November highs.

Then, look at GDX and note, it’s close but well below its mid-November highs.

This market (Senior Miners) continues to thin out … and it’s doing it violently.

Newmont (NEM):

Senior Miners, GDX:

Looking at the marked-up chart of GDX, it’s possible all of the action over the past two months, was to get into position to test the upthrust:

If an up-thrust “test” is the correct way to view this action, with gold (GLD) in a similar position, and if price action can’t hold these levels, the ensuing downside stands to be even more violent.

Run Fast, Or Not At All

Before the end of this session, DUST-21-01, will be reduced to be in compliance with margin requirements.

At mid-session, that reduction would be in the area of 12% of position size (not advice, not a recommendation).

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 Miners … The Short Side

The Second, ‘First Lesson’: Go Short

‘Don’t lose money’.

That’s the first lesson in trading.

The other ‘first lesson’; the short side can be (and usually is) more profitable and faster than, the long side.

Anybody’s whose paying attention at this point, knows that ‘something in the market’s going to pop’.

We, in the serfdom, don’t know what or where it is; just that there’s a sense of an event just off the horizon.

From a personal standpoint, to be holding (or maintaining) long during a market upset is the last place one wants to be (not advice, not a recommendation).

Which brings us to shorting the gold market and more specifically, the Senior Miners, GDX.

Senior Miners, GDX

The weekly chart of GDX shows where we are; the market just opened for the day.

It might not look like much is going on … that is, until we show the trading channel.

The right-side trend-line has been purposely shown as ‘dashed-line’ so that when we zoom-in below, we can clearly see GDX, is at the danger point.

This is the exact location where risk is least (not advice, not a recommendation). We’re right at the trendline.

At this point, price action’s still posting below last week’s GDX high of 32.03

GDX Leveraged Inverse, DUST

Looking at the inverse chart DUST, we’ve just posted a new daily low (new daily high for GDX) while at the same time being at Fibonacci Day 21, from the top of the December 15th reversal/correction.

We’ve already had the ‘first correction’ as shown the trade model below.

The ongoing test of that correction was unexpected but not out of the norm for price action behavior.

If the gold miners, GDX are to reverse and continue lower in their channel, today is a high probability day for that reversal (not advice, not a recommendation).

Let’s review the trade model (checklist) thus far:

The System:

  1. The Set-Up 
  2. The ‘test’ or ‘gut-check’
  3. The first ‘correction’
  4. Continuation or Failure
    1. Trend identification
    2. Potential channel(s)
  5. Exit process
    1. Scale out
    2. Full exit
  6. Post trade evaluation

At this juncture, we’re right at No. 4, ‘Continuation or Failure.

A new daily low for GDX and corresponding new high for DUST, shifts probabilities to trade ‘continuation’.

If that happens, we’ll start looking for trendlines, if any.

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

Pivot – Point: ‘Inflation’

Major Direction Change Ahead ?

Was the inflation report ‘brutal’ or not?

The gold market, the supposed ‘inflation’ safe haven, has already decided for itself.

That is, GLD ‘blips’ higher just 0.26%. Hardly a screaming bull market.

If the worst inflation in 39-years can’t drive the gold market higher, then we’re taking the contrary view.

We may have just seen the peak of whatever’s being termed inflation.

Demand on many if not all fronts (except, maybe food) looks ready to collapse. The consumer’s tapped out; about to be taxed out as well.

Taxed out of whatever is left of their property … even if it’s stolen property.

Buried in this mainstream article may actually be some truth. ‘Supply chain pressures are easing … shipping rates coming down’.

Of course, they won’t tell why it’s happening.

It’s a double whammy of the consumer being maxed-out and literally dropping out as well.

We’re calling the video in the link, The ‘Speck-Effect’.

Let’s move on and take a look at what the gold market has to say about inflation.

Gold (GLD) Daily Chart

Price action is nowhere near a bull move and remains below significant resistance.

In the expanded chart below, we can see GLD literally banging about below the resistance level.

First, a test. Then a secondary test and now, what looks like a third attempt.

Note, that each subsequent test is at a lower high (thus far).

Senior Miners (GDX)

Price action in the miners, GDX is similar to GLD.

GDX remains below significant resistance.

Each upward attempt appears to be terminating at lower and lower levels.

Newmont (NEM) and DUST-21-01

Price action in Newmont (NEM) continues to look as if the entire market is thinning-out.

If there are this many price-action attempts to throw off market participants whether bulls or bears, one gets the sense the ensuing move (if/when it comes), may be literally off the charts.

Maintaining short via DUST-21-01 (not advice, not a recommendation).

Summary

We’ve just had the worse ‘inflation’ news in 39 – 40 years, depending on the source. Yet, the precious metals markets go nowhere. Therefore:

The ‘inflation narrative’ is false.

Just another lie. Probably no surprise there.

If it was true, then all commodities, gold, silver, corn, grains, oil, coffee, every last one of them, would be in a screaming bull market.

Instead, we’ve got the grains moving higher while precious metals move lower.

It can be shown that gold is now inversely correlated to corn as seen, in this post (in case you missed it).

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

Newmont: Fibonacci Count

Reversal Posting Fibonacci Sequence

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.

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