Loading ...I took a look at Bitcoin and it looks finely balanced between a possible bullish triangle and a bearish head and shoulders top. Looking at the bigger, both bitcoin and Litecoin are ‘on the edge’. Will the arc do its job once again, or will the arc sink ?
To be signed into law in coming hours. 16 million in lockdown. Nobody in, nobody out https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2020-03-07/italy-to-impose-virtual-ban-on-entry-to-lombardy-corriere
Gold mining stocks should begin to out-perform gold in the near future
Edit – Chart for HUI added – notice the massive discrepancy between how well gold has done, compared to the mining stocks.
I really love to have my ‘model’ challenged. It causes me to go back, re-examine and re-consider. In the case of the Dollar, it’s been my long held belief that we are now in the bear-phase after hitting the inverted bowl 3 times and dropping away from the recent bearish rising wedge somewhat rapidly. I could be wrong (of course), but the key is knowing WHEN to change your forecast. As Fully has pointed out, 93 is the magic number. He has a bullish scenario based on 93 holding. Here’s my bearish interpretation, based on 93 failing…
Another chart I’ve been plugging for a long time. I know some said this currency pair wasn’t important anymore, but it seems it was/is. It’s just another important piece of the puzzle, which along with all the others, was telling us this turmoil was on the way.
I first posted this chart over 2 years ago now. My view hasn’t changed.
I think it’s highly likely that something is going to ‘snap’ next week. Just clear your mind, step back and consider the following…
1) The gold/silver has made a break above a bearish looking rising wedge. I believe this is a fake move, just like the fake move the US Dollar made outside my ‘domed top’ formation. Why ? Because it’s at multi decade, historic highs already – it’s very, very stretched.
2) The US Dollar is no longer a safe haven as it’s lost it’s advantage over the Euro/Yen etc. The Dollar cycle high is behind us, with the next low due around 2024 (in my view).
3) More rate cuts are inevitable. Very soon.
4) Silver has built a very clear ‘bull flag, formation.
So I’m going to suggest it’s ‘highly likely’ that it happens next week, following a weekend of terrible headlines. Silver takes off, gold makes a run towards $1800 and the GSR breaks down. Of course, I could be wrong, but that’s what the charts are suggesting to me.
HUI is up over 100% in 4 years. Another 100% is on the way. Just a little more patience is required.
I have to give credit to Graddhy, an ex-member of this site who first drew my attention to ‘false moves’ followed by an ‘around the apex’ move in the opposite direction. If silver launches from here (looking likely), that’s exactly what we’ll have, and a perfect textbook example too.
I know I’m probably still in the minority thinking the Dollar is toast. I’ve been saying it for a long time, with charts going back years. I’ve never known why it would happen, just that my charts suggested it’s much more likely than DXY 120 or more. In this context, the following is interesting…
The dollar nursed savage losses against the yen and euro on Friday as a plunge in U.S. yields to record lows wiped out the currency’s single greatest attraction for investors — higher interest rates.
Mounting fears over the fallout from the coronavirus has driven a truly tectonic shift in expectations for U.S. rates as markets wager the Federal Reserve will have to cut rates by 50 basis points for a second time this month.
The resulting collapse in Treasury yields — which fell another 10 basis points in Asia — has been the death of one of the most popular carry trades globally — borrowing at negative rates in the euro and yen to buy U.S. assets.
“Select USD pairs like EUR/USD are turning because of a dramatic and decisive shift in U.S. rate expectations and related spreads,” said Alan Ruskin, global head of G10 FX strategy at Deutsche Bank.
“The USD has lost the single most important source of its over-valuation, a strong carry advantage,” he added, warning this could end a dollar uptrend that has lasted since mid-2018.
Edit: Chart added
I suspect the global financial response will be what pushes GDX past the $31 threshold and on to much higher targets.
The bearish rising wedge is being stretched now. Is a plunge about to take place, with silver price taking off ?
If the breakdown continues, we will have another piece of the jigsaw falling into place and confirming a cyclical PM bull market.
Almost 100 a little while ago, now we have a 96 handle. I know I’ve been plugging this chart for a long time now, but until it’s broken to the upside, this is my high probability outcome. Why ? Because of where we are in the Dollar cycle and because it’s what the chart is saying to me. I’ll change my mind if/when the pattern changes. Until then it is what it is…
Perhaps the US Dollar is no longer the best safe haven…
Edit – Gold miners are also building out a blindingly obvious bull flag on the monthly chart
Tiny numbers in the context of global population. However, as there is no immunity and no vaccine, a true global pandemic, with those death rates would kill many millions. Containment and a hope for the thing to recede in coming months may lead to much, much less global health impact. The cost to the world economy is likely to be too much though. Too much to recover from for many years. This really does look like a historical turning point in the making.
Gold may need a little more time. Silver still has work to do to prove itself…
Love in an elevator…
Just taking stock of where we are. Following todays 50bps cut, the Dow dropped, the Dollar tanked and PM’s launched back inside the bullish patterns I’ve been charting. Was that plunge an ‘anomaly’ ? I’ve not seen anything quite like it. Just as we were about to cross that $31 threshold on GDX, the ground opened up and swallowed us.
So here we are, just a few days later, close to where we started, and I’m wondering…is that the point of recognition ? I wasn’t expecting to come quite like that, but will that prove to be the defining moment for this PM bull. Have investors been shocked out of their complacency and forced to consider a ‘safety hedge’. If the look seriously at GDX/GDXJ/HUI and their ratios to the SPX/DJIA even a chimpanzee could figure out the imbalance and the prospect of a reversion to the mean. If just a small percentage of the wealth that was pulled out of stock markets in the last few days finds its way into PM stocks, well, you can imagine.
Now take a look at the GDX chart below. IF we finally break that $31 line (and we’re already breaking out of the bull flag), then we can expect to see stocks out-performing the metal, and silver out-performing gold as the GSR reverses. One day at a time though. Here are the charts…
And what it is, is very puzzling. You can see on the chart below, just how well the arc has done its job. The left hand side was defined by multiple touches (highlighted). The right hand side has also been defined by multiple touches (also highlighted). The trouble is that we’re running out of time now. It’s breakout or fail. A move below 26 (on a monthly closing basis) would be a signal to dump all PM stocks and wait for the dust to settle. It would surprise me, after such a long time seeing this pattern build out (exactly as predicted), for it to fail at the final hurdle, especially given that I was expecting the big drop (and pattern failures) leading into the 7 to 8 year cycle low in 2023/24 (I say 7 to 8 because it’s very unlikely to be exact). Very nervous here, I have to admit…
So far, nothing more than a bullish consolidation, but watching very closely.
At a decision point. Break upwards or break down ? If it’s up, I don’t believe it will last – a sudden spike followed by a rapid drop, signalling the next stage of the PM bull.
Northern Dynasty…
Back up over 12% today, but the bigger picture is entirely unchanged by everything that’s happened in the last few days…
