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.
A massive four-year top, along with the latest ‘road-map‘, has this one going down; most likely, for good.
While other chip makers, have gone to near stratospheric levels such as Nvidia, with its 23,960% gain from 2009, lows, Intel has languished.
The rest of the markets, S&P, Dow, QQQs, have pushed on higher while INTC, has spent the last four years, in a trading range.
A sideways market is a bear market.
Intel never recovered its luster after the Dot-Com mania of the 2000s. Price action spent eight years heading sideways-to-down before bottoming out in early 2009.
After that, it’s been a long struggle to current levels.
Now, the markets have reversed and the economy’s collapsing. We’ve likely seen market highs that won’t be repeated in the lifetimes of anyone reading.
Friday’s announcement may be the kick-off for sustained price action to the downside.
INTC, Chart Analysis
The daily chart shows at least one breakaway gap and possibly two.
The next chart is on the weekly timeframe and identifies the long, multi-year, topping pattern.
When looking at these patterns, be reminded about the scale of what’s happening.
This wedge is massive … at least four years in the making.
Note: Price action finished the day right at the lower support. There could be a rebound on Tuesday (market’s closed Monday) or we could just keep going lower.
The SOXX Connection
Intel’s fifth in market cap of the SOXX, with Taiwan Semiconductor (TSM) at the top of the list.
Even the leader TSM, may not be immune to trouble.
Here are Fab locations for Taiwan Semi, located just off the coast of mainland China … nothing bad going to happen there, right?
In the case of the ‘wave’ analysis, if it proves correct, we’re possibly in for a sustained ride lower.
The daily chart of SOXX, shows each analysis point where a reversal lower was projected.
It’s clear from the chart and documented links, both methods nailed it … to the day.
Elliott was earliest and caught the exact point of inflection.
Wyckoff caught the test of the up-thrust.
Here’s the important part:
Wyckoff is a practical, bread and butter method. It looks at what the market’s saying about itself … is price action showing pressure to the upside or down?
Elliott Wave looks at where the market could be or is going.
If we’re really in an Elliott Wave Three down, it’s likely to be a decline like no other.
There are other indicators not market related, giving us hints, a massive collapse is ahead.
A Decline of ‘Biblical’ Proportions
Warning:
The following contains scriptural references.
Those who are in ‘it’s all a myth and fairy tales’ crowd, feel free to scroll to the ‘Summary‘.
For the rest of us, the secular world calls it ‘systems collapse’. The spiritual world calls it ‘judgement’.
Stated many times on this site, ‘the church’ is corrupt. Here’s just the latest salvo proving that point.
Along with the corruption, we now have the strong delusions prophesied over 2,000 years ago.
In reference to a Stew Peters broadcast, linked here, on the numerous media lies, is this comment (emphasis added):
“The only people to blame for this Stew are the ones who put on the mask, who distanced, who took the shot, who harassed other people and who advocated for my freedoms being taken away. Without doing five minutes of research.”
It’s not too much of a stretch to say, those who voluntarily injected themselves were (or are) in a place of delusion.
“And for this cause God shall send them strong delusion, that they should believe a lie:”
However, the injections are no lie … but the reasons for those injections are false.
Can this (spiritual assessment) really connect with what’s happening in the markets? How does it relate to actual price action?
Obviously, it can’t and shouldn’t be said that any specific price movement has been prophesied.
However, we can use the scriptural references to point us to the probability of events; the big picture, the situation at hand, the signs of the times.
The probability that we’re at some kind of major inflection point of Biblical proportions, seems exceedingly high.
Summary
Both Elliott Wave and Wyckoff Analysis, support the probability of lower prices ahead for the SOXX.
Because Intel (INTC) has been a laggard in the sector for years, suggests it may be one of the downside leaders.
As if to confirm the assessment we’re past the pivot, that generational highs have been reached, we have this just out, on ZeroHedge.
At the very bottom of the article, is a quote.
No, they’re not quoting from the King James Bible of 1611; they’re quoting from Shakespeare’s Richard III, of 1594.
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.
It’s been long enough; most have forgotten the ‘Flash Crash‘ of 2010.
That crash happened in May of that year.
May of this year, would make it 12-years and interestingly, a Fibonacci 144, months.
Normalcy Bias:
As Nissam Taleb said in his book, ‘The Black Swan’, every day is like every other day on the farm, for Mr. Turkey … that is, until Thanksgiving Day.
Let’s take a look at the historical chart of Semiconductor ETF SOXX, and see the effect of a Flash Crash.
Easy to spot … prices did recover by the end of the day.
What about the next time?
This report just out on ZeroHedge, shows liquidity is drying up in the bond market. Actually, liquidity has been drying up ever since Dodd-Frank of 2010.
All of this is working (to increase risk) in the background.
Let’s take a look at another unprecedented event … the downthrust and apparent recovery in the semiconductor index, SOXX.
SOXX, ETF, Daily Chart
First up, is the unmarked chart of the index.
Next, we’ll show the recovery higher is on diminishing volume.
There’s no real commitment to the higher prices …. they are just drifting upward.
We’ve already shown the Elliott Wave assessment of the current structure. Now, let’s look at it from a Wyckoff standpoint; Up-Thrust and Test.
Price action posted an Up-Thrust, declined and now has come back for an apparent test.
Confirmation Bias
At this juncture, both Elliott Wave and Wyckoff Analysis present a price action structure that’s set for downside reversal.
In a way, we’re at the danger point for both methods.
Summary
From a personal and corporate standpoint, going long in this market and all markets for that matter, was abandoned long ago (not advice, not a recommendation).
To borrow a phrase from Dan at i-Allegedly, he repeats over and over in his videos, ‘We’ve had warning, after warning’.
So, we have.
The SOXX, is telling us, it’s ready to resume action to the downside. After-hours, already has the index trading lower.
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
p.s. The insight of 2010 Flash Crash, anniversary of Fibonacci 144 months in May of this year, is exclusive to this site.
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 site does not use Elliott Wave as a primary analysis tool.
However, to be aware of the technique, will at times provide an additional edge … like now.
Number Two:
Once again, gold and the mining sector have become unbearable to watch.
The amount of hysteria, hype and bloviation serves to make this market all about ego. Ego is a four-letter word for the professional speculator/trader.
We’re leaving it alone for now and moving on to the market at hand: Semiconductors (SOXX).
Semiconductors, SOXX
On a Monthly basis, the chart below is the entire trading history for the sector:
The next chart zooms into the area(s) of interest.
This market, the semis, had its most powerful thrust lower in January, for the entire history of the sector.
The following chart is where it gets interesting.
Elliott Wave labeling as shown. If correct, Wave 3, down has just started (not advice, not a recommendation).
Warning:
My former mentor, the late David Weis, who once worked for Prechter, said the approach is a “cookie cutter” (his words) attempt to force the markets into a pre-defined construct.
With that caveat in hand and the understanding the ‘wave’ could fall apart at any time, let’s see what it would project if price action followed the current labeling and structure.
The daily chart shows a Fibonacci projection based on the Elliott Wave labels:
The projections are in percentiles of the first wave distance.
Elliott Wave rules are that ‘Wave 3’ can’t be the shortest wave. If the structure holds, that means Wave 3 (if that’s what we’re in) would go below the 100%, level and potentially to 161.8%, level.
To Trade, or Not To Trade:
This structure was spotted late yesterday … after abandoning the gold sector. There had already been the pre-requisite hype about CPI numbers and such giving the ‘excuse’ for markets to rise.
That meant risk of a short position (yesterday, early today) was low: not advice not a recommendation.
The chart below of leveraged inverse fund SOXS, shows entry points for what is now: SOXS-22-01
Summary:
Taking a cue from the late Dr. Martin Zweig, on his words during this broadcast, he was very hesitant to use the word ‘crash’.
So, this update is hesitant as well.
However, if the forecasted move of SOXX, to the Fibonacci projected 161.8% level (or more) is realized, it’s a decline over – 37%, from current levels.
It would be significant … crash or not.
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.
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.
The magenta arrow and bar show pre-market action in Junior Miners GDXJ, about 25-minutes before the open.
Fibonacci retrace levels as noted.
The zoom chart shows a gap that action may be trying to fill and then? Is there something more?
Sated earlier, a 23.6%, retrace is rare and 38.2%, more common.
Summary:
The market looks to open higher.
If so, typical behavior is to come down for a test and then continue upward if that’s the overriding direction.
If the expected test fails, action may continue lower.
Once again, we’re at the danger point. The action itself defines the trading response.
Friday saw a partial exit of the short JDST-22-01, position in anticipation of higher prices (not advice not a recommendation)
Today may see the rest of the exit if the pivot higher is confirmed (typically within the first hour).
The fact pre-market trading is subdued with just (so far) a half-point or about 1.0% gain, still suggests weakness.
We can see price action penetrated support (bottom blue line) on the chart and so GDXJ, is in ‘spring position’. However, thus far that spring appears to be weak.
There’s a lot going on at this juncture.
JDST-22-01, Position Table to be updated and posted later.
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.
The Danger Point® 