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?"

Precious Metals: Wash, Rinse...

Before the promotional corners of the gold community start with the conspiracies, excuse making and general placing of blame everywhere but where it belongs, let’s simply note that this correction was indicated (by sentiment) as far back as February 22nd. On that day I made a post quoting three anonymous sources within the community, firing up the troops to be hyper bullish… as in a gold price of $1400 promptly before a “parabolic slingshot” on the way to $3000 off of a “gargantuan pattern” (that had not even appeared yet and was but a figment of a fertile imagination).

The quotes and targets were compliments of different sources melded together for a mouthwatering smorgasbord of greed for gold bugs to sink their teeth into. It was a classic contrary indicator as the sector was touted far and wide while already overbought and obviously bullish. It was confirmation of the greediest hopes of the greediest and/or newest, most naive gold bugs (putting aside for a minute that gold itself is not a price play, but a value play within the leverage-rigged casino called the financial markets).

We are all wrong at times. My point here is that you can state your case humbly, be wrong and try to do better next time or you can state your case in an emotionally charged manner, suck in some newbies, be wrong and then do it the hell again!… and again… and again. That is what I have observed over nearly 20 years of closely watching the sector. The spin cycle repeats over and over because new marks are being minted in the markets all the time. Continue reading "Precious Metals: Wash, Rinse..."

Gold And Silver Still On The Road To A Low Risk Setup

From a post on gold and silver on Tuesday…

Very simply, if it’s an H&S it’s a minor one with a target to the SMA 200 or short-term lateral support. Gold has curled back up to test the underside of its SMA 50. A takeout of 1310 and then the March high could put yeller back in business. Otherwise, don’t personalize it. A test of the SMA 200 would be normal.

The H&S was not my thing. I tend not to get overly excited about short-term patterns and surely do not announce them far and wide to stir people up. It was a product of the gold community, some members of which have been flipping in head-spinning fashion between bullish and bearish views. I note it again because I don’t want that stink on me. The upside and downside parameters above were my stuff.

Per the NFTRH Trade Log, I shorted a chunk of GLD yesterday (while remaining long gold stocks and even more so, cyclical assets on balance) as gold poked the SMA 50 per the Futures chart below. Gold’s pullback today was not engineered by the Fed or da Boyz or da PPT, PtB, Trump, Mnuchin or some nefarious super algo. It’s normal. Okay, conspiracy mongers? N.O.R.M.A.L.

Click the chart for a clearer view of gold’s situation at the SMA 50. If it does not clear the March high the SMA 200 (at least) continues to yawn with its gaping maw. 1240 is also doable.

gold

Silver looks particularly lame, but ironically this is the metal I am expecting to bottom first with the question being the two noted (green) support areas. Don’t rule out 14.50. Continue reading "Gold And Silver Still On The Road To A Low Risk Setup"

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"