Predictive Modeling Suggests A New Gold Rally

One of our readers’ favorite tools is the Adaptive Dynamic Learning (ADL) predictive modeling system. This tool maps out technical and price patterns into an array of similar setups using historical data, then applies that data to current and future price bars. Using the ADL predictive modeling tool, we can see into the future based on historical technical analysis that maps statistically relevant price activity and shows us the highest probability outcomes.

Monthly ADL Gold Predictions

In this research article, we’re going to focus on Gold and how current price action suggests a bottom is likely near the $1720 level. The YELLOW price channels on this Monthly Gold chart highlight exactly where we believe support is located for Gold. If this $1700 price level is breached to the downside, then the previous lows, near $1400, are the next support level for Gold.

Our ADL predictive modeling system suggests the $1720 support level will hold, prompting a new rally to levels above $2200 within 30 to 60+ days. The ADL system predicts an aggressive move in Gold near May or June 2021. The move higher may happen earlier than the ADL Monthly predictions indicate. There is a chance that a move back above $1850 starts the move higher before the end of March or April 2021 – propelling Gold toward the $2300+ peak. The actual peak level predicted by the ADL predictive modeling system is $2315.

predictive modeling

2-Week ADL Predicts Gold May Start To Rally Near Mid-March

This 2-Week Gold Chart highlights a similar ADL price prediction. What we find interesting about this ADL predictive modeling outcome is the similar price predictions originating from vastly different origination points. The Monthly ADL prediction originates from a date of August 1, 2020 – the peak price bar. This 2-Week ADL prediction originates from a date of November 23, 2020 – the intermediate low DOJI bar before the recent continue downward trend targeting the YELLOW price channel. Continue reading "Predictive Modeling Suggests A New Gold Rally"

Amazon Chart Presents Buying Opportunity

In April 2018, I published the post with the title “Disney Could Rally After A Long Pause”. I spotted an interesting long setup on the Disney (DIS) chart that time. Below is that monthly chart of Disney stock with the bullish setup.

Disney

The combination of higher tops and higher lows has shaped the famous Triangle (Symmetric) pattern highlighted in blue.

The neutral position of the relaxed RSI indicator and the double trendline support on the chart facilitated the bullish opportunity. The target was set at the equal distance of the widest part of the pattern added to the breakout point. It was located at $149 with a potential gain of 50% as the stock was traded around $100.

We can see how it played out in the next chart. Continue reading "Amazon Chart Presents Buying Opportunity"

Gold & Silver: The King Fights Back

The benchmark 10-year Treasury yield spiked to 1.61% last week for the first time in more than a year. The U.S. dollar, aka “King,” fought back to the upside on this growth of the yield. Investors ran out of other assets, including precious metals, and its price dropped.

Let us see the updated structure of the U.S. dollar index (DXY) in the chart below.

dollar

It looks like the DXY moves according to your favorite orange path to the upside that was published last week. However, the sharp drop below the earlier valley eliminated both scenarios. Continue reading "Gold & Silver: The King Fights Back"

Bonds And Stimulus Are Driving Big Sector Trends

Falling Bonds and rising yields are creating a condition in the global markets where capital is shifting away from Technology, Communication Services and Discretionary stocks have suddenly fallen out of favor, and Financials, Energy, Real Estate, and Metals/Miners are gaining strength. The rise in yields presents an opportunity for Banks and Lenders to profit from increased yield rates. In addition, historically low-interest rates have pushed the Real Estate sector, including commodities towards new highs.

We also note Miners and Metals have shown strong support recently as the US Dollar and Bonds continue to collapse. The way the markets are shifting right now is suggesting that we may be close to a technology peak, similar to the DOT COM peak, where capital rushes away from recently high-flying technology firms into other sectors (such as Banks, Financials, Real Estate, and Energy).

The deep dive in Bonds and the US Dollar aligns with the research we conducted near the end of 2020, which suggested a market peak may set up in late February. We also suggested the markets may continue to trade in a sideways (rounded top) type of structure until late March or early April 2021. Our tools and research help us to make these predictions nearly 4 to 5+ months before the markets attempt to make these moves.

If our research is correct, we may have started a “capital shift” process in mid-February where declining Bonds, rising yields, and the declining US Dollar push traders to re-evaluate continued profit potential in the hottest sectors over the past 6 to 12+ months. This would mean that Technology, Healthcare, Comm Services, and Discretionary sectors may suddenly find themselves on the “not so hot” list soon. Continue reading "Bonds And Stimulus Are Driving Big Sector Trends"

Watch Gold, Leave Silver Alone

It is time to update the charts as gold triggered the former valley of $1765 last Friday.

The U.S. dollar index (DXY) opens this post.

Dollar Index

Most of you agreed last month with the plan that the dollar index will extend its consolidation to the upside, making a zigzag first to the downside and then to the upside with the target area between 91.40 and 91.80 (blue box). The former was your favorite goal, and it was hit with a margin as the price reached 91.60 at the top of this month. Continue reading "Watch Gold, Leave Silver Alone"