Just a few observations of the state of the PM stocks. Its been like watching paint dry wondering which way it will eventually break. As you all know I believe we entered phase III last October and we have been in a complext BT since then. I think once this all plays out it will make perfect sense, but the main crux is we are in a super slow motion QE-Keynsian train wreck which is in a slow motion spiral. Remember the word picture I used…it is like whirling around the top of the toilet bowl for a few years. Gravity eventually overcomes the centrifugal force instilled by QE and eventually it falls on its own weight and goes down the bowl.
That’s what we have been doing and we are about half way down the bowl now. The second half by the way gets alot more exciting. The gold stock bull market kicks off once the deflation grips all sectors in the economy. That’s not that far away, maybe in a year or even less.
Post WWII stocks have been in Nirvana when inflation stays between an inflation band of 1-4%. Whenever we transited outside that percentage band stocks did poorly. We are approaching the time where we are going to drop below the 1% band. You will want to be out of stocks at that time and in Govt bonds and eventually gold stocks then.
So once we get phase III behind us it will be all systems go.
State of the gold market: Rambus has pointed out that we should be watching the double hump for support. It has been marginally violated now, but not enough to provide downside confirmation. The clues to me are bearish, however not certain. Gold has refused to breakdown below its previous low despite the USD being strong and going to new highs. That’s a bullish statement for gold actually, so we don’t know yet. Over the next few days if we get a stronger USD and a successful test of the lows in gold I will cover my short, but for now I am staying short.
Here are some longer term concept charts that still argue for the bearish case. First the relation between gold and silver. In a bull market silver should outperform gold… simply stated no evidence of it doing it here, or likelihood.
And that concept that everyone is always stating that stocks lead the metal….well this points down
Now onto some of today’s action. First focus on the interplay between the price and the moving averages (50 & 200 DMA). I think that is today’s market clue. On many of these issues the price action just didn’t even care that the MA was there. It offered no support. That is the market talking to us. First the 4 royalties. These stocks are supposed to take out the operational risk and reflect more the state of the bullion. What are they telling us….again look at the moving averages:
Now onto the Majors…..again the moving averages!
And a few silvers. Sil looks ugly and look at CDE. This used to be the whipping boy saddled with the most stupidest management team out there, but everything has now changed. They are the turn around play IMO and their stock has started to reflect this, however look how the 50DMA chewed this up and spit it right out. And Fortuna just gave up its 200 DMA
seems to be the pattern for cad, aud, crb,oil…
ascending triangle on the daily? typically bullish?
NG is a very difficult trade. Think DUST/NUGT are difficult? NG has a mind of it’s own. However, if a trader gets on the right side of the trade.
Interpretation of the 2 hour chart…Even though the Elder Bars are red…DGAZ did close above the 50 MA. BULLISH. I am waiting for entry.
Tomorrow will be very interesting.
One can wait for the 13/34 cross because divergences can be negated…use this as a warning signal.
Again, also note the bollinger band constriction which portends a move.
EOD MACD has reset right above zero and looks to want to cross back up. Also, the 13 NEVER crossed below the 34 MA. This is BULLISH.
These 1 2 3 4 hr signals point to more down… 1190 is one ALGO program hitting the sell button
Until the daily makes a meaningful bottom and turn it’s no go for g g g gold imo,
I think the next meaningful rally will be in may or june if the 6 month cycle plays again. the last 2 or 3 times JNUG doubled. that is the trade to look for
DUST 1 hr
Edit a Better Look at the Dailys
We are in the AIR zone…back test of support line which is now resistance?
Also, when I feel we are about to go into an “impulsive” move fast and furious.
I use the 5 minute with 13/34 crossover and hang on for dear life until the 13/34 tells me otherwise.
The GDX has been in a downtrend since 1/21 and gold has been constrained between $1190 and $1222. The GDX should give us a bounce here as we enter the Full Moon Timing Window (centered on 3/5) which has supportive solar-lunar cycles but the rally could just be a spike. Gold needs to close above $1222 to be constructive but a close below $1190 would be bearish. Trader Jack
To follow the waves and turn windows of the SPX and gold, check out my blog:
if there is options (puts and calls) on Toronto on SSL (Sandstorm Gold).
Could not find any.
And if anyone have a chart, that is interesting, regarding this stock compared with gold.
when gold turns (spelling, remember swede)
Is this a fast moveing track, or could one just the same stick to $gold ( this is also a Q about down-trend. could one also find an extra push south when down).
Seeing how this plays out…I AM NOT AN EW Practitioner…
Wave 3’s are really fast and furious
13/34 has crossed bullish.
The fast reversal to the SAR buy signal after three days is bearish.
CANT POST THE REPORTS AS THEY ARE FOR SUBSCRIBERS BUT
1…GLD HAD A SIZABLE DRAWDOWN
2…India DECIDED NOT TO LIFT THE 10% IMPORT TAX
NOT BULLISH !
Cant imagine this isnt huge, hell I even want one
SO IT IS… and There you go… and WTF… I was mentioning in our skype room how DUST in the 12s or say 12.5 might be a good spot. I have to admit I was not watching closely on Friday other than to see GDX give up the gains and also on Thurs, this was a good clue.
I had no trades on, as I was not going to chase anything and thus did not have the emotional fires burning. Had I been watching closer, I would have noticed the super high 1 HR signal and the failing 15 and 30 min.
Also, never never fight the Daily, we have yet to eye drop down?
It does seem to me that we are dragging this out until Summer. Seems the 6 month cycle may be the trade long in the NUGts .