For the current down-leg starting April 14th, the lowest risk point to go short the miners (via JDST) was at this post (not advice, not a recommendation).
Did I do that?
No, but I did the next best thing.
That was, aggressively position short at this post (not advice, not a recommendation).
An initial position was opened via JDST on May 15th with a hard stop at the session low; that position was doubled in size the next day when it was obvious, we’re in a reversal.
Too Late?
What happens now?
We’re about fifteen minutes before the regular session and GDXJ, looks to open slightly higher.
The Daily Chart of GDXJ below shows a penetration of the wedge with the market in position to test that break.
Junior Miners GDXJ, Daily Candle
The zoom moves in closer to show the detail.
Note: The last push below the wedge trendline resulted in a reversal higher. Will that happen this time?
If we use the ‘rule of alternation’, that what happened last time is not likely to happen this time, probabilities favor a test and continuation to the downside (not advice, not a recommendation).
Is this an entry opportunity? Maybe.
Is it as low risk as the prior two pivot points? Probably not.
Then again, the bulls may be stunned at this point and usure what to do. Therefore, huge short positions may not (yet) be in play that don’t need to be squeezed out.
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.
Dutch government puts the death knell on their economy … others will likely follow.
While the i-phone crowd is so easily distracted with AI and NVDA being their savior, back at the ranch, economies are being systematically destroyed.
Besides copper, one of the best indicators of robust economic activity is silver (SLV).
Since January, this site has highlighted the potential for a significant, sustained reversal in the precious metals; specifically, gold and silver.
Now, both the charts of GLD, and SLV, have weekly bearish MACD divergences (not shown); having just crossed the zero line with one more trading day to go.
Using a recent weekly bearish divergence as an example, natural gas (UNG), shows us the possibility; UNG is now down – 82%, (at the lows) in just 37-weeks.
Junior Miners GDXJ, Weekly
If gold and silver decline relentlessly from here, the sector most likely to take the biggest hit, is/are the ‘Juniors’, GDXJ.
Once the public figures out en masse, they’ve been fooled into ‘stacking’ instead of securing their food supply, precious metals are likely to accelerate to the downside (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.
You would think with all the handwringing, mental machinations, ‘debt ceiling’, we’re all going bankrupt, YouTube gold grifters et al, gold (GLD) would be in a monstrous rally.
Instead, we have what appears to be exhaustion and non-confirmation.
Gold (GCM23), is the only monetary metal (gold, palladium, platinum, silver) anywhere near its all-time highs.
Old-timers would call it a huge non-confirmation. The other metals are not on board with the ‘inflation’ narrative.
Time and again, we’re back to actually reading price action and having it tell us what’s real, not the mainstream.
So, trading ‘kabuki’ seems to be straightforward; just read the chart. Here’s one explanation from an unlikely source on why that simple task is so difficult: absolute, total, unrelenting focus.
Gold (GLD), Daily
When we look at gold (as of 12:05 p.m. EST), from a technical standpoint, it’s in Wyckoff spring position; a set-up to move higher.
The difference in this set-up as opposed to the one on November 3rd, of 2022 (not shown), price action’s ‘hugging the lows’ as David Weis used to call it.
We’re not springing higher.
The miners on the other hand (GDX, GDXJ) have already made their decision, moving decisively lower during this session (not advice, not a recommendation).
Junior Miners GDXJ, Daily
The chart below has two locations identified.
The first is this post identifying GDXJ, as a potential short opportunity.
The second is this post identifying the ‘test, reverse’ of the up-thrust with high probability of more downside (not advice, not a recommendation).
We can see the result.
Even though gold (GLD) had declined modestly with silver (SLV) more-so, the mining sector appears to be responding dramatically to the downside.
This ‘elevated metals, miners collapsing’ potential has been discussed previously.
Now, it appears that strategy is coming into play (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.
If this is the ‘big one’ that everyone’s talking about, the miners have a long way to go to the downside (not advice, not a recommendation).
When there’s a viable, bearish (or bullish) divergence, then price action has the potential to go much farther and the move last much longer than anyone would expect.
Junior Miners GDXJ (as well as GDX), have posted a bearish MACD divergence on the weekly time frame … very significant.
That divergence is shown below:
Junior Miners GDXJ, Weekly Candle
Price action goes one way (i.e., up) while MACD goes the other … down.
Other posts have already covered details of the current set-up, now reversal, links here and here.
Not covered yet, is the apparent repeating trendline and potential trading channel.
That is shown on the daily close chart of GDXJ, below:
Junior Miners GDXJ, Daily Close
At the minimum, on the right side of the chart we have a down trendline. An upside break of this line would negate any short positions … (not advice, not a recommendation).
The compressed chart of GDXJ (below), shows the potential.
As of this post (12:57 p.m., EST) GDXJ, continues to move decisively lower. Gold (GLD) and silver (SLV) have reversed to the downside.
Gold’s reversal potential has been discussed previously here, and here.
No one expects a significant reversal in gold …. no one.
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 update on the Junior Gold Miners GDXJ, said they were hanging by a thread.
That update even included a forecast which turned out to be wrong and right at the same time (not advice, not a recommendation).
The miners have reversed … it just did not happen the next day as shown on the forecast chart.
The decisive rejection of the resistance (and test) level happened four days later.
Today, continued a slight retrace of that down-move as shown on the daily close chart below.
Junior Miners GDXJ, Daily Close
The attempt to push above known resistance (blue line) has failed. Price action had a false breakout (Wyckoff Up-Thrust), then a test and subsequent failure of that test.
The zoom of the reversal area shows more detail.
Last Friday’s session closed higher as did today … however today’s volume (i.e., commitment) was down – 49.4% when compared to the prior session.
The buyers are pulling back … price action is drifting higher.
On a weekly basis, we still have a bearish MACD divergence (not shown). Probabilities at this point indicate lower prices ahead (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.
Something’s not right in the precious metals sector.
Gold’s just off -8%, from its highs while other monetary metals (Palladium, Platinum, Silver) are far below their highs; silver’s off a whopping -51.75%, from its 2011, highs.
In addition, as we’ll see below, silver (SLV) is just now contacting the right side of a trend line and potential downward channel structure that goes all the way back to the lows of 2015.
The ‘Squeeze’ of 2021
Below on the weekly chart of SLV, is a point labeled “1”.
That’s the location of what turned out to be a right-side trend line contact. Back then, an update on the ‘squeeze’ was posted, linked here.
Taken from that update was the following (emphasis added):
Those attempting garner forces (the little guy) to move the markets, such as silver, will find out soon enough who’s in control … and it’s not them.
It’s unlikely silver is going higher any time soon. There could be some upward spasms as the crowded trade exhausts itself; it’s likely we’ve seen the SLV highs for quite some time.
So, here we are nearly two years later; SLV never posted higher than the February 2nd, squeeze of 2021.
So, what’s next? Is there something else going on?
We’ll look at that question after the charts.
Silver SLV, Weekly
First, is the un-marked chart.
Next, we see a pattern that’s not so clear without mark-up.
For SLV, to break out, there needs to be an absence of motivated sellers (prices drift higher) or sufficient buying demand to overcome the downward trend.
Inflection Point
For an idea of what’s likely to happen next, we’re going to go to an unlikely source; Daniela Cambone and Gregory Mannarino.
It’s not about ‘controlling’ inflation and it never was, going all the way back to 1913. It’s about the ‘end game’, as discussed by Mannarino.
“Eliminate The Middle Class” (time stamp 11:40)
The sticky wicket is the ‘debt bubble’ and the ‘elephant’.
The Elephant Grows
The chart of silver (and other precious metals) and its non-confirmation with gold, could be an indicator of debt collapse and demand collapse first, before hyperinflation.
Multiple times a day now we have reports like the following flooding into the marketplace:
COVID Vaccines Are “Obviously Dangerous” And Should Be Halted Immediately, Say Senior Swedish Doctors
Multiple Young Athletes And Former Athletes Died Suddenly This Past Month
Doctor Calls For Withdrawal Of Pfizer, Moderna COVID-19 Vaccines Following New Research
The above list is just since yesterday and it’s only 2:00 p.m., Central Time, today!!!
Monetary & Manufacturing
Silver is unique more so than gold, in that it’s an industrial metal as well as monetary.
The collapse in manufacturing demand could be the reason silver’s not confirming gold’s move.
It may also be telling us, as the effects of the elephant take hold, a huge liquidation of all assets could be coming; paradoxically as the need for fiat cash (not precious metals) to pay off debt, increases.
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.
Since the lows last November, to the close this past Friday, gold (GLD) has moved higher by a decent but modest 15.4%.
Naturally, the opportunists are out telling us ‘We’ve been warned’, ‘this is it’, ‘it’s going to the moon’ … yet again.
With that backdrop, we’re going to look at the precious metals facts, not the hype.
‘Precious metals’ because there are only four that have ‘currency code’ classifications, i.e., are classified as an asset with ‘currency like’ monetary characteristics.
Way back over a century ago, Wyckoff discovered the key to understanding the next likely move of the markets was the study the market itself (not fundamentals).
Wyckoff essentially ‘locked himself in a room with just a stock ticker and phone line’.
That’s not saying ‘money printing’ has no effect. There are a lot of moving parts. Intentional destruction of the food supply is just one of those parts.
Old School Analysis
Hypothetically, if you dropped an ‘old-timer’ into the markets at this juncture (without him knowing the ‘hype’), and showed him all four charts of gold, silver, palladium, platinum, and asked ‘what’s happening?’
What’s his response?
After a brief look at the charts, he would likely say:
‘Gold’s move higher is not being confirmed by the other precious metals’.
Note that all four metals peaked together during the inflation spike of 1980.
Ergo: At this juncture, something’s wrong.
Either the other metals are going to ‘catch up’ to meet gold or gold is going to come down to meet the others.
That is of course, unless this time is different … somehow.
With that, we’ll look at the chart of gold to see what it’s saying about itself.
Gold GLD, Weekly
We’re starting with the unmarked chart.
Note: Elder’s Force Index scale is expanded to show the nuances of GLD, price action.
Next, we see we’re at a test of the trendline in place for 16-months before the downside breakout of July, last year.
Moving in closer, we have a wedge formation prior to the up-move last week.
Is this a breakout to the upside or a throw-over?
At this point, it’s unknown.
We can see that Force Index is below where price action entered the wedge during the week of November 11th.
Less force up into resistance (trendline), paints a slightly more bearish than bullish picture.
The ‘Why’ Comes Out
As if on cue and in classic Wyckoff style, we have a ‘why‘ for the move off the lows of last November.
Classic Wyckoff, because he said the ‘why’ of a move comes out after the fact.
There you have it; China buying gold last November and December.
During this move from the recent lows, it was certainly a trading opportunity for the bulls … but from a strategic standpoint, what happens next?
The Non-Confirmation
Non-confirmations can last a long time.
For example, the Oil & Gas sector XOP, declined for eight months, from April 2019 to January 2020, before the price of oil (USO) finally broke lower.
With the ZeroHedge article just released a few hours ago, we can expect at least a blip higher at the next GLD, open.
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.
Not to be outdone, we have this ‘me too’ melt-up article as well.
Let’s not forget, all the ‘Fed must do something’ rumors and feigned concern by its members.
If anyone really wants to know the big picture, the overall plan (a wide majority do not), this interview may be the best explanation to-date.
With all of that, we certainly could get some kind of rally in the coming week. We’ll let the price action speak for itself.
As a reminder, Wyckoff analysis does not concern itself with press releases, rumors or ‘fundamentals’; Wyckoff himself, determined based on price action alone, they have no material effect on market movement.
In his words, ‘other forces are at work’, and it’s those forces that interest us.
Gold & Silver
As said in this update, gold (GLD) was just ‘ticks’ away from posting a new monthly low. In fact, it got just 0.24-pts, from a new low before rebounding.
Of course, each time we get any kind of rally in the metals, there’s the usual hysteria. Even though for the past seven months and counting, those rallies occur at lower and lower levels … i.e., a bear market.
Shown below, it’s in a trading channel with price action at the right-side channel line.
Gold (GLD) Weekly
The chart below gets closer-in.
From left-most contact point on the channel to the initial contact on the right side is a Fibonacci 13-weeks.
Also note, the weekly high posted at the center line is a Fibonacci 5-weeks from the left-most contact.
Highly emotional markets tend to adhere to Fibonacci until either the emotion wears off or ‘everybody’ recognizes the structure.
Obviously, to keep the channel intact, a lower open (and lower action) at the next session is needed.
Looking at the daily chart of TLT below, Friday’s level of (down) volume has occurred only three times in the past three years.
Each time, there was a near immediate rebound or in the case of March 2021, the rebound came several weeks later.
Bonds (TLT) Daily
Moving in closer, we see the possibility of an ‘island-gap’ at the next open.
What could drive capital into the bond market?
Well, how about a ‘shock’ or continued market melt-down (not advice, not a recommendation).
A quick check of the local newsfeed (as of 12:45 p.m., EST) shows nothing on the horizon other than usual nuclear attack threats, power outages, child mutilation protests, marauding bears and the disarmament of Canadians.
Nothing to see here …
Real Estate
There is no mistake, events in real estate are happening at the fastest pace in recorded history.
As Scott Walters put it, over 10-million people bought into the ‘work from home’ hype and got themselves instantly (nearly) upside down in their transaction.
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 update, posted late in the session, said with the upward bias provided by the sizable Op-Ex event, we can look for the weakest (or one of the weakest) sectors.
The chart below summarizes yesterday’s action:
Friday 10/21/22, Single Day Gains
Gold miners GDX, is the outlier at the top and real estate IYR, the outlier at the bottom.
Before anybody gets excited about ‘hyperinflation’, just a reminder; silver SLV’s, action has retraced to a weak 38.2% (chart not shown), as it was forecasted to do from last week’s update:
“Silver (SLV) is currently at support levels; therefore, some upward action (staying below SLV: 18.5) is normal behavior.”
Price action is the final arbiter; we’ll see what happens next.
Back to real estate.
Professional Wisdom: ‘The Crash’
We’re going to use the experience and insight provided by Scott Walters concerning the potential for real estate; that is, we’re in a world-wide event the scale of which, no one alive (and possibly, ever) has seen before.
The Economic Ninja has just seconded that opinion (time stamp 3:45) with his quote:
“Right now, we are in the greatest collapse since The Great Depression; and I believe it will be as severe, if not worse, sharper, faster, than what people experienced in 1929”.
So, what would that ‘collapse’ look like on a chart of real estate, IYR?
Ah, yes. That’s the hard part.
To take useful wisdom like that above, and somehow map it into potential market behavior.
For that, we’re going to use the Quarterly chart of IYR.
Real Estate IYR, Quarterly
There are still two months and one week left to go in the 4th, Quarter.
We’re at a confluence of price action as we’ll cover in the Hourly chart farther down; first, what’s the potential?
Here is one artist’s rendition (not advice, not a recommendation).
That puts it into perspective.
We may know at the very next open, if we’re pivoting higher or continuing the decline.
Butterfly In The Amazon
Of course, the market’s not going to tell anyone its next move. We have to decipher that (read the tape) ourselves.
Sometimes, as Wyckoff said a century ago … ‘It’s as if the weight of a feather is all that’s needed, to push the market further or to reverse.’
So, let’s look at that feather (the butterfly) on the hourly chart.
Since we’re positioned short (DRV-22-05), the chart’s inverted to mimic leveraged inverse fund DRV.
Real Estate IYR, Hourly (Inverted)
The important part is we see a repeating pattern of trendlines.
Moving in closer, we have this. The blue arrow is ‘expected’ action based on the analysis up to this point (not advice, not a recommendation).
Moving even closer, the zoom shows IYR, finished the day in Wyckoff spring position; having pushed past minor support (resistance on non-inverted).
Summary
If IYR opens lower or gap-lower, we’ll have to wait and see if it posts a new daily low (below IYR ,77.24).
If that happens, we have some confirmation lower prices are ahead and can then set a definitive stop for DRV-22-05.
Obviously, a higher open (pushing past IYR 78.91), negates the trade.
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.
We’re going to use the chart from yesterday’s post to set the stage for getting closer-in.
This past Friday’s early morning ‘spike’ is barely visible; the 30-minute (inverted) chart below, has more detail.
SPBIO, 30-minute (Inverted)
Price action rejected the lower levels (higher on SPBIO) and pulled away throughout the session. That ‘pulling away’ continued on, all the way into the close.
That’s a clue there may be follow-through at the next session.
If the early session opens ‘gap-higher’ (SPBIO, lower), into the resistance area (four magenta arrows, hourly chart), it would be the fourth time pressuring at this area; markets rarely hold a fourth attempt.
Summary
Of course, other markets are being watched like real estate (IYR), Tesla (TSLA), and even Basic Materials (DJUSBM), a potential sleeper for significant downside.
Updates are planned if/when low risk shows up.
Positions: Current Stance (courtesy only, not advice).
The following is the positioning of my firm’s main (largest) account.
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® 