Goldtent TA Paradise

Looks like a bull flag forming just below the crucial breakout level

Looks like a big move is going to unfold

Like most I’ve looked at – preparing to break out

Clear breakout levels to watch…

From February https://goldtadise.com/?p=457434

50,000 has become a million, and will become many millions. The economic ‘worst case’ scenario is now certain. Looks after yourselves and your loved ones. Stay home. Stay safe.

That’s where it all starts, and that’s where it all ends, with everything. Birth, life, death. It’s all cyclical.

It’s just that we’re not accustomed to seeing it on a planetary scale, laid out in front of us in real time.

Zero. That (near enough) is the amount of trade being done by every hotel in most of the world. It’s the number of flights that are up in the air and making money. It’s the number of shops open in our high streets/shopping centres/malls. It’s the number of property sales that are taking place, the number of cafes, bars and restaurants that are open and the number of theatres, gigs, shows and sporting events that are taking place. The Olympics are off, and so is every major global sporting event this year.

2020 vision – it’s not a pretty sight. Total global paralysis and simultaneous collapse of (nearly) every  business activity in the real world. Sure, there are some things that can be done online, but there’s no marketplace, no consumer, for the vast majority of goods/products/services. Food, medicines and lifes ‘essentials’ are all that’s left.

If the government of your country doesn’t do what the UK is doing (pay everyone indefinitely), then there will be an apocalyptic collapse of almost everything. Even here in the UK there are already news stories suggesting that, despite the mechanisms in place, up to 20% of small and medium sized business will be bankrupt within a month. Business loans are no good either – some banks are charging up to 30% interest. How can a business ever afford to pay back such a loan after all of this anyway ?

Edinburgh is a beautiful Scottish city which relies heavily on tourism (especially the annual Festival, which attracts over 4 million visitors and 25,000 artists to perform on it’s streets and venues every August). The festival has been cancelled. That trade is not coming back – it will put many into instant bankruptcy. So many properties are rented out by private landlords to visitors via Airbnb and suchlike. With no income, many will need to sell, thereby crashing the property market. Long term that may not be a bad thing, bringing prices within the reach of those who need housing. In the short term though, the losses are likely to be enormous, and devastating. This will be repeated in every tourist city around the world from Budapest to Boston, Lisbon to London.

This could go very badly wrong if we’re not careful. Either a golden opportunity to learn, improve, get things better, or a perfect excuse for the hidden forces of this world to grab more power and influence at our expense and make our world a much darker place.

I find this particular chart fascinating. Since the dollar/gold link was completely severed in 1971 we only have two complete cycles, with two tops and 3 identifiable bottoms.

There is an approximate 15 year ‘heartbeat’, with lows coming in approximately 1980, 1995 and 2010. That’s not entirely true though, the exact bottoms came in 1978, 1992 and 2008. So why do I say the cycle is a 15 year one ? Think about how the exact bottom is achieved. There is a ‘period of time’ shown by the red circles in the chart below where the low is expected. It’s a period of 4 years or so, during which, at any point, something will happen in the world of geo-politics and global finance which will cause a spike down. The psychology of market bottoms are very different to tops. Sentiment is rock bottom and there is much reluctance to be overcome. For that reason, major cyclical lows are typically long, drawn out affairs which result in the ‘arc’ or ‘bowl’ patterns. The right-hand side of the arc represents the ‘wall of worry’ we often hear about. Regardless of the EXACT date of the low, the time between the centre of each cyclical low ‘risk period’ is 15 years.

The next ‘risk period’ is 2023 to 2027 (in my humble opinion). That doesn’t tell us which way we’re going in the immediate future – there is still time to go for a ‘moonshot’, with the large ‘bullish’ arc guiding us up to 120, 140, 160 even. That brings me to my next thought – the psychology of market tops. It’s often the case that a stock or a commodity will rise very rapidly into its final multi-decade cyclical peak (look at gold, silver, uranium, copper, oil, crypto-currencies and indeed the Dollar). This results in a sharp (inverted ‘V’-shaped) top. We’ve all heard the term ‘FOMO’ (fear of missing out), and that’s the reverse of what is happening at bottoms.

So, the question is, was 103 the Dollars best shot ? It’s also worth bearing in mind the dynamics of the Dollar Index are very different to any other market, with Dollars (and ‘Euro-Dollars’) etc being held externally, outside of the US and largely outside of its control. The enormous cranking of the printing press increasing the balance sheet exponentially will eventually have major ramifications (exactly what the implications are depends on who you listen to and what your own views are, but I don’t think it’ll be anything good).

Finally, there’s my inverted ‘Dollar Dome’ and the potential diamond top reversal pattern. My conclusion is this…

• The Major 15 year cycle low is ahead of us, sometime between 2023 and 2027
• A break below the 94 area will confirm the diamond top and also render the ‘arc’ invalid, targeting MUCH lower (below 70 in my view)
• A sustained move back above 103 opens up a very bullish scenario which could take the US Dollar Index towards the all-time highs

Charts for gold, silver and GDX…

US Dollar failed miserably in its attempt to break free. This chart lives to fight another day.

Tilted, inverted head and shoulders anyone ? Maybe it just gets smashed instead…

Watching this sector very closely in coming weeks/months

Sometimes a stripped-down chart says it all…

Behaving as it did at the start of the last PM bull market

Just over a month ago I wrote this https://goldtadise.com/?p=457434

Case numbers were around 50,000 and today they stand at well over 600,000, with nearly 30,000 dead. The logarithmic curves for case numbers and deaths appeared to be flattening, but they are once again accellerating…

This horror is sweeping the planet. We have numerous ‘field hospitals’ being built in the UK – the series of ‘NHS Nightingale’ facilities with thousands of beds in each…

Over 40 doctors and nurses have died from the virus in Italy (fit and healthy people). For anyone in the US who is kidding themselves that this is comparable to the flu – when did you last see your health service collapse because of flu, taking the lives of hundreds (soon to be thousands) in a day ? When did you hear of dozens of healthy doctors dying from flu in a couple of weeks in a single country ? This plague is going to take down the US healthcare system, with patients dying on their own, with no treatment, no friends, no family and no funeral – just a rapid cremation. Your president took no notice of what was happening in the rest of the world, saying everything was great, it would soon go away, and you’d be back to normal by Easter. He closed his ears to medical advice. He knows best and everything is great. Utter bullshit and lies.

Here in the UK, like the rest of Europe, the Prime Minister followed the advice of the scientists very carefully. The only mistake I think they made was not going for the lockdown until Monday last week. the prior weekend was pleasant and sunny, with too much socialising going on. They probably should’ve locked down on Friday 20th. We’re going to have to live with the possible consequences of that.

We expect case numbers to peak in 2 or 3 weeks time, so it’ll be at least another 2 or 3 weeks after that before we can think about loosening some of the restrictions. Best case – total lockdown with near-zero business activity for 2 months. Worst case, numbers rise again, and we can’t come out of tough restrictions until there is an effective treatment or cure or enough ‘herd immunity’. That could be another few months quite easily. So maybe near-zero business/economic activity for 6 months or more.

Stop and think how this virus might play out in countries with very poor healthcare systems – Africa, South America, India, Pakistan.

Someone please explain to me how this doesn’t result in mass redundancy, business failures, banking crisis. monetary disaster. Someone please explain to me how the valuations of the companies that make up the stock market indices can miraculously recover. The world that emerges from all of this will not be the same world that we started 2020 with. Demand for holidays/vacations/hotels/bars/restaurants will be severely hit due to reduction in overall spending power and general reluctance to travel. Non-essential spending will collapse, and I’d expect a spike in demand for more basic goods.

Trust in this broken system will be eroded so much that gold and silver will be in very strong hands – those who know what is coming and won’t part with it for any price. As paper money is printed to oblivion, gold could easily see it’s ‘paper money’ value having zeros added to it.

The winds of change are here. These are historic times.

Watching closely

Needs to turn up and close the month above my ‘dome’. If not, my thesis is still alive.

On balance, I still expect a short, sharp move upwards in the next few days. An equally sharp pullback is then quite likely, before an attempt at the all-time highs. The question then is, do we blast straight up as a result of the monetary chaos, or do we spend many months, perhaps a year or more, building out a handle ? Something to think about.

103 – Was that it ? Could my ‘Domed Dollar’ chart be accurate after all ?

It’s broken out of its bullish consolidation pattern

The pattern developed into a bullish descending wedge/pennant

The pattern has morphed – still bullish in my view.

At the time of writing…

Gold down 2.83%

Silver up 1.63%

HUI up 2.89%

GDX up 6.12%

GDXJ up 7.44%

(uranium miners up too)

But $2000+ if you actually want a gold coin in your hand (if you are lucky enough to find one for sale)

It’s not easy to know what the gold price really is. It’s different on every site I look at. Using goldprice.org it looks like we’re breaking out of a bullish descending wedge…

Demand for physical gold has been outstripping supply for many days now. Every time the dealers get anything in, it’s sold instantly because of the enormous number of people that have ‘pre-ordered’ and locked in the price from a few days ago. Mine supply may become limited due to the virus, with some mines closing down, and the transport/delivery network completely broken, plus refiners being closed. It has to be a perfect storm to take gold beyond $2000 very quickly.

Maybe physical gold goes to $2500 or more, but paper gold stays hundreds of Dollars less. Then what ?

Worth watching