GDX Reversing, As We Speak

If GDX price action continues lower, it may have completed its test forecasted three-days ago.

The gold market is a very crowded trade. At this point, one to be avoided (not advice, not a recommendation).

If GDX posts a new daily low (below 35.40), it would give extra weight, the test is complete.

At the minimum, price action has recognized the bear flag by coming back up to test and then pulling away.

That alone, should give the gold bulls some pause.

In other markets, real estate IYR, did exactly as forecast. It opened below yesterday’s close and retreated from there.

The upward test, also discussed in this morning’s update may have already happened; there’s a 38% retrace present on 30-minute or shorter time-frames.

Correspondingly, the DRV position has been increased (not advice, not a recommendation). At this point we have an absolute hard stop: Yesterday’s DRV low, @ 9.67.

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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.

GDX Upward Test Possible

Last week, Senior Miners GDX, broke out of a bear flag to the downside.

There could be a little more momentum lower before reaching support in the area of 33 – 34.

After that, expect a test to the underside of the flag. This is typical market behavior.

If that happens, we’ll have familiar gold bull hysteria ‘this is it!’ All the while, GDX and gold (GLD) grinding lower.

Recall gold (and related), is a very crowded trade. Eventually, there will be a sustained bull market … probably after all have grown weary hearing the rumor of it.

Anecdotally, remembering entries from a diary during the 1932 lows (the actual source has been lost), were to the effect:

‘Everybody knew that major stocks were a once-in-a- lifetime deal, but nobody had any money‘.

That lifetime deal, or deals may come. The objective is to survive, prosper and be ready when it gets here.

With that, there’re probably much better opportunities for a directional move to the downside.

Real estate, Oil & Gas Exploration sectors come to mind.

On the real estate side, it’s unfortunate, sad, but entirely possible a significant number of those to lose their homes through foreclosure, are somehow going to be housed in now-empty, or near empty commercial (mall) areas or office buildings.

If so, that relocation process will take a significant amount of time. The value of IYR’s components (SPG, EQR, etc.) may reach some type of bottom before it’s all straightened out.

We’re already past the beginning stages of a massive life-long depression.

Getting focused on it, is difficult but best if one is to come out the other side intact; or better yet, well positioned to re-build.

Next scheduled analysis: Real Estate, IYR

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.

Gold Down. Why?

We have the usual suspects rolled out; providing expert analysis on why gold went down.

The answer is quite simple. It tested a trend break, then reversed.

If we look at the (close) chart of GLD, it broke an uptrend during the week of November 20th, last year; went lower and then back to test.

That test was rejected dramatically with Gold (GLD), heading significantly lower; getting whacked down over 5%, in just two days.

This is not bull market behavior.

Steven Van Metre’s assessment (at this juncture) that we’re in a deflation event is being shown correct. The lagging factor in the scenario is the overall market … still near all-time highs.

It’s true bonds broke lower (rates up) this week but that’s another event answered by technicals; the wedge formation, discussed here.

Both bonds and the dollar have set the stage for a swift reversal.

Just how that’ll affect an extended, obscenely overvalued, stretched, call options wild market with everybody all-in, is not known.

Getting back to Van Metre; he’s reported, during this past week, small traders/speculators added to short (bond) futures positions.

If there’s a signal bonds are stretched, ready to reverse, it’s the little-guy just now getting in (going short) …. right at the bottom; as usual.

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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 (GLD) Pivot Point Lower?

For the hyperinflation crowd, yesterday’s weak action in gold must have been a surprise.

That action may signal a change in character.  The GLD chart shows the long supposed bull flag that’s been going on now for nearly five-months. 

If the dollar’s in free-fall destruction, then you would expect precious metals to be on a tear.

Not happening.

Going way back to a real bull market like the launch of the S&P in 1995; we can see strong bull markets are unexpected, violent, and do not allow anyone to get aboard comfortably.

That market lift-off lasted a full eighteen months before a meaningful pull-back.

Gold on the other hand appears punch-drunk.

The chart shows two trading channels.  The one we know and the one that may be happening now.

In today’s action, gold could attempt to close the gap. 

How price action behaves as it (or if it) moves upward will give clues to whether or not it’s now counter-trend to test (before reversing), or impulsive, gathering steam for a breakout higher.

The dollar is at trading range lows.  Bonds appear to be completing their test of the Wyckoff spring set-up discussed here.

There are still massive short positions on both.  Probabilities favor counter-trend action in gold with the real downward push yet to come.

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.

It’s a Squeeze

As of 10:26 a.m. EST, price action in the miners, GDX is exhibiting the characteristics of a short squeeze.

A gap-up open that’s quickly eroding.

Trading was in a narrow range for thirty minutes between 35.50 – 35.70, before breaking lower.

As long as the high of 35.83, for GDX is not challenged, the squeeze may be over … that fast.

If so, and GDX closes lower than yesterday, it would indicate a high probability for a swift, decisive move to much lower levels..

The firm’s own position in DUST had a stop at 21.19.  In a discretionary move, based on price action itself, the short position (not advice, not a recommendation) is being maintained

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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 Bulls in Denial

Now that everyone’s in shock over gold (and miners) going lower, they’re telling us ‘the bull market’s still intact’.

If you completely missed the bull trap, why should your analysis be viable now?

Anything can happen that’s for sure.  The futures markets open in a few hours and gold could go into a rally.  It could … but will it?

When a trap like GLD is over three-months in the making, those in charge, the bears, will attempt to use it to its fullest extent. 

Those on the wrong end, are the ones providing downside fuel.

The bears set the trap and give it a push.  Now the bulls are selling their positions driving the market lower.

Effective traps typically go farther and last longer than anyone expects.  The most likely target for the current move is shown as the blue oval.

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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.

Seabridge Gold

During the coming ‘insolvency event’, could Seabridge Gold (SA) get back down below the $6.00 level?

If there’s any take-away from 2020, it’s that anything can happen.

Recent SA price action shows a wide trading range with high volume. 

Typical market behavior is to come back and test.

Looking at SA from a relative strength perspective, we have the top three majors (GDX) listed in terms of the highs in August, to most recent lows:

The three majors are ‘officially’ in bear markets while SA is hanging just above the – 20% level.

On a relative scale, looking at price action, SA is reluctant to head lower. It’s exhibiting relative strength.

If and when the markets (S&P, Dow, NASDAQ) reverse in earnest, there’s likely to be wide spread panic. Just like last time and probably worse.

It’s the person (or entity) that keeps their head under such conditions that has potential to establish long-term, low risk positions.

As a side note: If and when we get there (panic selling), and if SA pushes below well established support (6-area), the initial plan is to open a major long position … but with a significant caveat.

That caveat is:  We’ll take possession of the actual physical shares (not advice, not a recommendation).  The broker could put up a fuss and charge a fee.  So be it.

The world economic forum has already stated, the next “planned” event will be cyber attack

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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.