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.
For all of us serfs in the banana republic proletariat, it’s near if not impossible, to keep up with the lies.
The latest ‘employment‘ report is just one example.
This video from Jerimiah Babe, posted a few days ago has a different story. Check out the intro and then farther on at time stamp: 9:00.
For a second opinion, we can go to Dan, at i-Allegedly.
On his latest post, fast-forward to time stamp 7:00, where he walks through an outdoor restaurant area that’s completely vacant.
The ’employment’ report is vapor. Judging from the comments (at ZeroHedge) most everyone seems to be aware of the fakery.
Naturally, with all of this uncertainty and rampant inflation, the logical place to go would be the gold market.
Junior Miners, GDXJ
As this post is being created (mid-session), the Junior Miners are at the danger point. Price action’s at a location where it’s decision time.
So far, it’s an ‘inside day’. We don’t have a new daily high or low from the previous session.
The Fib retrace of 23.6%, discussed previously is holding for now. That weights action to the downside.
Posting a new daily high would begin to erode the set-up; potentially indicating GDXJ, is going to attempt a retrace to the Fib 38%, level.
If that higher retrace becomes a more favorable probability, the JDST-22-01, trade will likely be closed out (not advice not a recommendation).
The chart below shows the inside action thus far.
The table below has the current positioning JDST-22-01, via inverse fund JDST (not advice, not a recommendation).
As always, the sell finger is on the trigger. Description of color coding and table layout is in this post.
Summary:
Trade decisions posted on this site are defined by the price action itself (not advice, not a recommendation). Wyckoff analysis does not concern itself with what’s obviously fake.
Wyckoff focuses strictly on what the market is saying about itself.
At this juncture, price action’s saying that both bulls and bears, are at the danger point.
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.
For the evening/overnight session, both gold and the S&P futures have opened lower.
The S&P is down 50-pts, nearly 1.10% (at about 8:15 p.m. Eastern) and already penetrating the last session’s low.
The number of technical factors concerning gold, the miners and especially the Junior Miners GDXJ, is significant.
We’ll cover just a few in this update.
Junior Miners, GDXJ: Daily
The un-marked daily chart shows GDXJ oscillating but in a general downward trend:
The next chart shows price action posted a reversal bar right at Fibonacci 23.6%, for the entire move; from the breakout highs in mid-November ’21, to the lows on January 28th, this year.
A ‘Fib’ retrace of 23.6%, is rare and if it holds, indicates significant weakness.
The next two charts present a case for why this shallow retrace may indeed hold and thus, indicate the start of the next leg lower.
On a print basis, it’s been a Fibonacci 55 (+1) days from the GDXJ print high on November 12th, 2021, to the high posted today (2/2/22).
The next chart shows that November 12th, 2021 was also the closing high of the breakout set-up.
The Important Part:
Yesterday, was the closing high of GDXJ (so far) and that makes it a perfect Fibonacci 55-Days, from peak-to-peak.
The last update on the miners showed significant down-pressure at support levels, unlike previous visits to the area.
Looks like we’ve had the rally that was forecast; that rally may now be fading.
“It’s reasonable to expect an attempt to rally in the coming week … but with this much down force, a successful rally is not the high-probability outcome.”
Gold Could Hold
Already discussed, is the idea, the actual price of gold may hold steady or even go higher and yet the mining sector collapses.
As Dan from i-Allegedly posts in this report, Italian wine makers are having a hard time getting corks for their bottles. That’s right, corks !!!
Does anyone really think a massive mining outfit is going to be able to source all they need to continue operations without interruption?
Let’s not even get started with the ‘sustainability’ corporate failure already baked into the cake 🙂
“For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.”
Sorry for those who think it’s all a ‘myth‘. I’m with Good Patriot on this one (time stamp 17:09); that we’re in a battle surpassing all that’s come, since 33 AD.
Gold & Silver
Hard assets: Good to have for sure (ammunition, seeds and egg-laying hens may be better) … but if we’re really in a similar event to Genesis 41, that means the corn and grain come first, then gold and silver.
Summary:
This post started with the S&P down about -0.80% and it’s now down -1.10%, posting a new daily low.
Gold is down slightly, holding steady but that’s already been discussed above.
Remaining short the sector via JDST-22-01 (not advice not a recommendation).
Position size on JDST-22-01, has been increased. More on that in the next report.
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 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.
More detail on the Carter grain embargo at this link … scroll down to No. 12
Of course, if that happens, corn is likely to crash (like it did last time) if only temporarily.
More Is Less
A corn embargo means more corn for us, right?
Probably, wrong.
Remember, fertilizer prices are sky-high.
Elevated corn prices (like now) might just cover the cost for the farmers … maybe.
A corn crash in the commodities would likely mean even less corn gets planted … maybe none at all.
Enter, The ‘Bought And Paid For’
It may be that easy (as above), or get complicated because a major consumer of U.S. exported corn, is China.
Exports to China over the last year have literally gone off the scale. Add to that, China is the number two holder of U.S. Debt.
So, one can already see where this may be going.
After the initial fake panic where the politicians realize there’s a crisis (that part being real), which they themselves created, they’ll likely pontificate about halting exports for just long enough, to have farmers throw in the towel with no spring planting.
After all of that, and let’s not forget special investigative news coverage about ‘how all this happened’; blame it on climate change and then keep everything the same.
Exports continue (to China) as much as possible and the U.S. citizens starve … literally.
By the way, go to time stamp 24:04, at this link and look at the clouds in the upper right. For those awake, it’s clear; right angle, cross-hatch pattern.
Right angles are not a natural phenomenon. Whatever climate change there is, is the one being created.
When Corn Takes The Dive
If or when corn takes a hit, price action itself will define the correct trade action.
So, let’s be ready and not surprised, if we see corn in chaos.
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.
Hearings on Capitol Hill on what we call ‘The Speck’ (to avoid censorship) and “corruption at the highest levels”.
Those of us who are awake, already know about the corruption … it’s just nice to see it hitting the mainstream.
No. 2
Cowards, To Brave ? … Probably Not
Max Igan in this video seems to think those who have been brainwashed into murdering their own children, will all of a sudden become brave and wake-up.
No, an alternate (more likely) view is, those who have been duped, fooled, the cowards, or just plain stupid, will likely turn their anger, not to the perpetrators … but to those who are even now, being referred to as ‘purebloods’.
In his own video, at time stamp 10:30, he shows the type of behavior that may go to a whole new level.
Does anyone think these people are going to become more sane, when they find out the truth of the injections?
No. 3
Greedy Implosion ?
Another Stew Peters broadcast where the guest, Karen Kingston has sifted through legal contracts, patent application and patent abstract documents.
She may have found a chink in the armor.
Looks like in the haste for profits, one manufacturer of ‘Speck’ protection may have done so outside the umbrella of lawsuit ‘immunity’.
Indeed. We can see how tough (and profitable) they are from Livermore’s attempt to short the market during The Panic of 1907.
As stated in Reminiscences, the story goes that he recognized a huge market break coming but started shorting too early … in 1906, as the market continued to rally.
Eventually, those rallies completely depleted his capital. He went broke.
The book goes on to say he began trading again later on but does not say how he got another capital stake; just that his credit was good at the brokerage office of ‘Ed Harding’.
We have to go to Wyckoff’s text from 1910, to find out that Livermore hocked his car for $5,000 and may have used that to re-establish his trading account.
After that, his trading errors corrected, he eventually covered his short positions at the bottom of the panic, October 24th of 1907, with over one million in profits (around 30 million in today’s dollars).
No. 6
T-Mobile: Set To Implode By April
Is dumb going to get smart? Like in No. 2, above, the answer is probably not.
Data and artifacts are piling up to dam-break levels.
There’s a virtual army of citizen journalism working to discover and sift through databases and documents.
No. 9
The Parting Shot:
What does any of this have to do with the markets?
Well …
Get your popcorn ready, ’cause Kansas is going bye, bye ….
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® 