Thin zones vs formations vs macro

Paul brought up a very vital comment yesterday, saying that if we combine the charts with thin zones and formations, plus macro posts, it makes up a pretty good case.
That is actually the way I look at TA, I believe that one has to do that in order to grasp what is happening at an inflection point like this.

I could post many, many recently posted charts including ratio charts now here to try to show what I mean but have limited myself to the ones below. Look at the thin zones vs the formations.


When we move into the very short term thin zone in $GOLD, circa I would say that the second leg have started. We have BO from the inverse h&s at circa 1277 and the very short term thin zone starts right after that. This thin zone corresponds to GLD 122-125.

The massive, medium term thin one in $GOLD starts at circa 1370, and culminates between circa 1400-1575.

SPX Yearly Cycle update

SPX is being very stubborn but most SPX IC Lows tend to be rather rapid affairs that last 1-2 weeks. 2100 SPX would be the minimum level decline I would expect but YCLs tend to be a bit more severe than normal ICLs. Witness the Gold YCL that still may be underway.


Previous SPX post:

Trader Dan

“BOJ Governor Kuroda’s Comments”

Yen Yearly Cycle Low

Here is an update on the Yen, which has been moving into its Yearly Cycle Low. I have been shorting the Yen with YCS since late September now and it has been a sweet trade for those who may have followed me. 😉

screenshot-2016-10-27-17-19-31 screenshot-2016-10-27-17-26-14

Previous Yen and YCS Posts:

BTW, the Yen is an important currency with respect to Gold and that is one reason I watch it closely. It peaked back in 2011 along with Gold and started a furious uptrend in early 2016 along with Gold. My research on the “Yen Carry Trade” indicates that all the big banks, since 2011, have been massively borrowing the Yen at zero interest and using the funds to short the Gold and the rest of the PM Complex….

The Yen rising early in 2016, along with Gold, required the banks to unwind their Yen Carry Trades in a massive short squeeze. This unwind also limited the funds they had available to short Gold.

It would appear that the Yen Carry trade is now back in vogue until perhaps the Yen’s YCL is behind us.

DUST 2 Hour and GDX Daily/Weekly…

As I mentioned 2 days ago, I do not like to trade against the TRIX on the 1 or 2 hour charts…
The DUST 2 hour TRIX is on a BUY…
GDX daily DID NOT “jump the line” so as far as I am concerned, see no reason to be long at the moment…
Also, I have put an emphasis on the TRIX 1,2,3 and the trend line cross. Last time this occurred, not only did the TRIX have a trend line cross, but the MACD also breached zero with the histogram leading the way. Currently, the MACD histogram is rolling over; this is NOT what the bulls need to see.
Bear Flag breakout…
I am not trading DUST until the GDX weekly breaches the trend line at approximately $23.50
This is my proverbial “nail in the coffin” before I get active with DUST…

Correlation between CPI and Energy prices is impressive and instructive.

Here is my article on my own blog at

The CPI index for all items, year over year, has a remarkable correlation with energy prices over the past 16 months.

So much so, that one can take the year over year energy price changes as given by the BLS in their inflation reports and predict the All Items inflation rate to within about +/- 0.1%.

In the following chart, I have used the energy price % changes and scaled them by the weighting that the BLS gives them and then simply added a constant to this figure (e.g. 1.6%) and overlaid it on the CPI all items index graph.

Blue line is CPI All Items index year over year for each month reported.
Red line is modelled CPI based on energy price change times its given weight each month.
Green line is modelled CPI based on energy price times given its weight adjusted by factor of x1.2.
Purple line is modelled CPI based on energy price at weighting of 9%.

In any case, CPI inflation is about 1.6% + the energy price multiplied by its weighting.

I believe that this shows that inflation is critically dependent on energy price changes as the energy bear market might be starting to flatten out and turn up. This has big implications for interest rate policy and gold prices going forward:


The basic comparison between CPI and energy price changes:


GLD – looking at $GOLD’s massive thin zone


$USD / USDU – Daily

Gold & silver are holding firm, at least so far today – in the face of a big up-day for the USD.  It appears that gold & silver may suspect that the USD is in the latter stages of topping, having been on a relentless tear since the beginning of May this year.

As I posted earlier this week – having printed a lower-high double top, followed by a lower-low bottom in May, the USD remains in a bearish structure, and continues to trade within a bearish rising flag.  The top rail of the bearish flag is presently situated at about $99.75, which also corresponds to overhead horizontal resistance.


The USD topped earlier this week on Tues, at a high of $99.09.  So far today, the high reached $99.005.  Of course – there is no law that mandates every chart formation to be perfectly “symmetrical”, ordaining that the USD must touch the upper rail before potentially reversing course.

In the USDU daily chart below, we can observe that the USD complex is already bumping up against short term trendline resistance, with negative divergence developing.

Therefore, I suspect that if today is not the top for the USD, that the upside potential from here – before a reversal occurs – is limited.







UVXY has found a new floor. More to come looking at the STO. 2HM on daily crossed-UP. UVXY has potential.

VIX turning up?


Can somebody post a VIX-chart?




Possible CUP & Handle in DWTI-60 in progress.

Indicators needed to cool off. OBV positive. STO about to turn.


Possible Targets For Gold of $955 & $930

This is very leftfield but just thought I’d get it out there.  It’s based on $XJY falling back to either ~ 90 or ~87.50

and the $gold-$XJY ratio falling back to ~10.60:

xjy-w1 xjy-w gyr-m gyr-q

If gold were to fall back to these levels it would still be above the EMA 20 on gold’s yearly chart, which, IMO, would mean the bull market was still intact:


HUI 60 strong support at 204


GDX Channel

For Fully. HUI and XAU channels appear to be the same for now and nothing has broken down yet.

Price still chopping in a Bear Flag but Time is becoming a factor.


FAZ 120




Russell 2000- In case you missed this one.

I am using TZA for a short trade.


GDX daily


Could set your clock by these sharp drops




Bonds better not fall much further….bad outcomes all around for PM and SM

Looks like they are shaking the tree again. These sudden drops are take downs.

They happen about the same time of day. Nothing gradual about them. Gives the shakers cheap shares. Accumulation. But… maybe more to come before PMs turn around.


This is what we need to see … fear and despair


I’m done…

With anything gold. (This will be our 2nd divorce). It has been one hell of a run. Made me whole again. Gave me back my confidence and a nice (paid for) trading account. God bless you, Fully, for building this place. It kept me focused for sure.

I am no longer convinced that this is a new bull. Too old to lose it all again. Not saying it’s over…just over for me. Not interested in being a nut…..just a washer. 🙂

So now what? Need a new bull. Need one that leaves little doubt.

I’ve been looking at this for a few months and am now all in.

The only serious participants at this point barely make money but like Amazon will trade at insane multiples based on anticipated earnings. There are few issues to choose from. Demand will be difficult to fill. Right now they can only fill prescriptions.
Recreational use is the future prize.

The main catalysts going forward are the Nov release of the task force’s report on legalization and legalization itself slated for 2017.

Like always, it is imperative that you do your own DD.

Here are my 5 “rocks”. Payback to the board. Good luck.






Update – Silvercorp Metals (SVM.TO)

As the saying goes, a chart says more than a 1000 words:


Previous post on SVM:

And do not miss USA.TO, the most interesting junior/mid-tier silver producer as I see it:

One For the Bulls

Each Market and Time Frame seems to have its own unique Moving Average that best defines its bull and bear phases

The Gold Monthly Chart is Probably the most important timeframe but one we rarely analyse .

The 20 Month Exponential Moving Average has been incredibly consistent ….and here we are again


The one time this MA failed was during the Great Financial Crisis of 08…when Everything failed

The exception that Proved the Rule

Also Note on this chart the WHY Gold stopped where it did on this move

A simple long term chart with one simple moving Average and One simple down trend says a lot more than

hundreds of short term noisy chart

Unmitigated disaster in progress.

Don’t even go near this stock. Check out the CMF and OBV.


NatGas Intermediate Cycle

My cycle work shows that Natty Gas may have found a short term Trading or Daily Cycle low today on day 17. I also show, however, that the last Trading Cycle just failed (i.e. made a lower low than the last TC Low).

As this usually signals the longer 5 month Intermediate Cycle has topped with the final IC low perhaps still 3 months away. I plan to short the next bounce into the next TC high on or before day 9.


Buying on Weakness

Yesteday GDX was #1 on selling on strength  , today it is #1 on buying on weakness.

Money flows yesterday -$416 million, money flow today +$403 million. Almost the same.

I never paid attention to this data before, thanks Starr!  Let’s see if GDX gets a pop tomorrow like the drop it had today.

I was expecting a drop in gold today due to Comex option expiration. Maybe that is what the money flow from yesterday and today was about?





$GOLD – making sense of the last down draft

I did not expect $GOLD to drop one more time before leg 2 once it was above the neckline for the massive inverse h&s. A backtest with a dip below, yes, but not a very hard backtest like the one we have now. I now realize though that I should have payed more attention to that particular very long term trendline.


My PO is still 1615 for leg 2.

The thin zone is next very short term.

HUI – Daily

As long as we are posting scenarios, here’s another. What if the 400 EMA holds support. How about a double bottom, a W sort of thing. Maybe with a spike lower for a shake out. Presented as pure speculation for fun and entertainment.


Full disclosure. If I was any flatter the miners right now I’d have to change my handle to Silver Pancake. Geez.