Gold Update: Calm Before Storm?

Last month I spotted the reversal Head & Shoulders pattern on the daily gold chart and shared it with you. Let’s see how it played out.

I entered the replay mode on the chart below and deleted the bars that appeared after the previous post to show you what I was expecting from the Head & Shoulders pattern. I would like to add more educational annotations for you in this post.

Head & Shoulders pattern
Chart courtesy of tradingview.com

The previous annotations were switched to gray except the target level for the Head & Shoulders pattern. So, what I was expecting to appear on the chart? First of all, there should be a breakdown below the Neckline, which would confirm the pattern (short red down arrow). Usually, after the breakdown, the price retests broken Neckline (blue up arrow). Only then, the market continues its move in the direction of a target (long red down arrow). Continue reading "Gold Update: Calm Before Storm?"

Gold Update: Reversal Pattern Emerges

Last time I updated the gold chart at the beginning of the year I focused on the long-term consolidation, which has started at the end of 2015 and has a tricky structure as all corrective stages do. I shared with you the three most feasible options of structure development.

The first one implies the straight move up beyond the former top of $1375 (blue labels), it took only 22% of your likes. The second option, which you liked the most (48%), offers triangular consolidation (green labels). The third alternative (red labels) gained 30% of your support, and it could bring gold back down to retest $1122 area before it goes up.

I am proud to have such smart readers of my posts as most of the time you accurately predict the market behavior as last time you did it with a Santa Claus rally of precious metals. These days I spotted one notorious pattern, which could terminate the first option, which collected the least support from your voting, that amazes me again and again.

Gold Daily Chart: Possible Head And Shoulders Pattern

LLLL
Chart courtesy of tradingview.com
Continue reading "Gold Update: Reversal Pattern Emerges"

Gold Sentiment Lesson

[edit] an article critical of (anonymous) others is an appropriate venue to once again note publicly the biggest mistake of my own, which was an ill-conceived target of 888 on HUI last decade. I learned from that. It’s okay to admit mistakes boys. We all make ’em. But as with humility, that appears to be all too rare in the market writer world as well. It’s okay to once in a while simply state “I was wrong”.

The number in the title is in honor of the boldest forecast burped up by the gold community in February as the metal (and the miners) jerked upward and jerked the holdout would-be enthusiasts into the market. It was included in the anonymous (but real) quotes from a cautionary post last week on the Gold Bull Horns.

We also used these quotes in an NFTRH update in order to try to make a point, despite what were very short-term contrarian bullish readings that day (per Sentimentrader’s data) for junior and senior gold miners.

From the update (2.28.19)… Continue reading "Gold Sentiment Lesson"

Gold Bullhorns Quieted For A Day, At Least

Over in the gold patch, things went from disinterested and downright antagonistic (A Notable Lack of Interest in Gold) to sleepy (Gold “Community” Crickets) to ferociously over bullish.

Any long-time and right-minded gold bug will tell you that the latter condition is usually a signal to prepare for some turbulence. Wednesday and Thursday brought the turbulence in the form of a reversal and pullback for gold, silver and the miners.

Since we became constructive on the gold sector in Q4 2018 (per the links above and especially NFTRH reports/updates) the groundswell of gold boosting (pom poms and all) has steadily risen since it became obvious that something bullish was going on in January. And it appears that last week’s breakout from various daily chart bull flags in gold, silver and the miners finally jerked ’em all in. Enter the Thursday pullback.

In the very few days immediately before that $20/oz. pullback the gold “community” threw itself a gathering of the bullish clans. On just a quick look around the gold websites, some quotes popped out from 2 days before the pullback and one day before Wednesday’s reversal. It’s crickets no more… Continue reading "Gold Bullhorns Quieted For A Day, At Least"

A Precious Metals Update

I reserve most of the work on precious metals for NFTRH weekly reports and in-week updates because it is done on a consistent basis, with the work done previously key to the narrative making sense in real time and going forward. In other words, in order to not be out there stabbing in the dark, you need to have an ongoing, adjustable plan that makes sense at all times with the macro markets around it.

So that said, let’s take a snapshot of where things stand currently with the understanding that this work will need future updates, which will probably not be made publicly. It is up to the reader to do the work required to put context to the picture. Meanwhile, this will free up more space in next week’s NFTRH 538 to focus on some quality miner charts, which sometimes take a back seat to the macro/sector stuff.

Precious Metals Update

First off, Commitments of Traders data are only available through 12.31.18 as a result of the government shutdown. So we are flying somewhat blind from that perspective. At the end of December, the CoT for gold and silver were well on their way to a bearish alignment. Have they maxed their trends and reversed in the meantime? It is quite possible, especially since the metals have taken pullbacks (within their intermediate uptrends) recently.

We have been following an analog to 2001, which saw SPX break down below its 50 & 200 day moving averages as HUI began its bull market. What’s more, SPX then tested its breakdown in Q1 2001… Continue reading "A Precious Metals Update"