Goldtent TA Paradise

Using the World Currency Unit as a proxy. Pure poetry…

This has to be one of the most beautiful, technically perfect charts I’ve seen. GDX, GDXJ and HUI are all the same. When this thing moves, there are some signs and indicators that we may be staggered just how far and fast it goes. I could be wrong of course, but just look at the size of that bullish wedge and geometrically perfect arc. It’s pure poetry, mathematics and geometry. Price is obeying all the rules – perfectly. I don’t know how many other people (investors/traders) are seeing this and realising the potential. Compared to the general stock markets, the amount of money invested here is tiny. I suspect some big, smart money will head this way and for those who have been getting positioned, the gains will be superb. The trick, as always, will be locking profits in and avoiding the inevitable mid-cycle correction when it comes.

All are hugely bullish. The final one highlights the big picture – a reminder that one last drop down to the $1400 region is still possible. The 200 Day and 30 week moving averages offer support above that though. None of this matters much to me though, because the overall picture is looking very, very bullish in the short to medium term.

Trump announces sign off on phase one Chinese trade deal ?

Fed now on supercharged QE4 ?

Exit polls suggest a decisive win for Boris Johnsons Conservative party causing the Pound and Euro to strengthen ?

All of the above have happened and the Dollar just broke horizontal support decisively.

We’ve already broken out. It’s just a question of how high we go in the coming weeks…

Interestingly, the announcement of no rate cuts, and probably none in 2020, and just one in 2021, resulted in gold advancing and the US Dollar falling. That’s more to do with market perception (QE4 is getting hard to disguise, and quite frankly, the suggestion of no cuts being required next year is, in my view, wildly optimistic). Just as important – rates can’t ever go back to anything like ‘normal’ without triggering economic meltdown. Gold knows this, and vis-à-vis all paper currencies, will continue to appreciate.

First up, my DXY chart, which just looks plain ugly. However, horizontal resistance is holding for now. My long term bearish view will only change if we break through the dome in the 99 area.

Next, what I see as the indicator which will tell us when it really is ‘game on’ for the PM sector. The point when silver begins to out-perform gold. It was breaking out, but interesting to see that has now become a wick on the candle, which is back below resistance (just).

The Bloomberg Commodity Index has bounced off the lower support on the channel which I’ve been following (as you know, copper has broken out, and is rising strongly).

And last, but not least, gold. What can I say ? Perfectly poised for a $200+ rally in the next 3 to 4 months. Confirmation comes when we break out of the current bullish consolidation pattern – we need about $1490 for that.

Happy investing Goldtent friends.

History may not repeat, but this looks like it rhymes…

Strongly suggestive of good times ahead

Commodity prices move in a cyclical fashion. I tend to look at charts visually, and just apply a visual ‘best fit’. That’s partly because I’ve come to realise that the exact date of the lowest price and highest price does not occur at the exact peak or bottom of the cycle. They’re affected by external forces, meaning the ACTUAL low/high can be left or right translated. That’s nothing new, and stating the obvious, but I prefer to be more fluid when looking at the ‘heartbeat’ that drives individual commodities or stocks.

In the following copper chart, you can see that I’ve identified the 2 most recent lows, and surmise that the next one will occur in 2023. I also suggest that we may see a new trading channel develop. Further evidence comes from the bullish wedge breakout and stocharstic indicator. As well as that, this is all happening within a clearly defined bowl, atop a cyclical low.

This type of behaviour can be seen in individual stocks as well. Here’s AngloGold Ashanti for example…

Sometimes price plunges very sharply, and rises just as sharply (red triangles). Sometimes the basing price action can be contained within a perfect arc. This brings us to the chart for Silver. Just how far and how fast it rises will be fascinating to watch 🙂

I’ve posted the copper chart a few times, most recently after identifying a bullish wedge coming up against the support offered by the round basing formation. The only way (if the pattern was to hold) is up. Fast forward to yesterday…

If price fails to break the $3 area, we’re looking at a strong case for more commodity deflation. If, however, we see a move above $3, I can’t see how anyone could argue against the case for inflating commodity prices. My recent posts of the Bloomberg Commodity Index support the case for a possible turn and move upwards here.

The importance of the outcome cannot be over-stated. It’ll shape the way the markets move for years to come. What’s it to be ? Inflation ? deflation ? stagflation ? Choose your flation, but, one way or the other, we’re going to find out in 2020.

The way I see it…

Looks good

Could be…

Health Warning – Not for the faint hearted…

It just won’t go away. Suggesting another $60-$70 downside

GSR has broken out (upwards). Gold and silver tanking after the jobs report. Unless we see a sharp reversal before the close today, it looks likely (once again), that $1400 gold and $16 could be tested. Gold is on a knife edge with the ‘bowl’ support…

I’m ultimately looking for a drop below 70 in the next year or two, but one step at a time…

Here’s one of my holdings. Up 15% today. Will it break out ?

Edit – and another one – Energy Fuels – up nearly 16% today

Drawn the chart slightly differently this time, but it still looks very inflationary/bullish to me.

The next FOMC meeting (10-11 Dec) will no doubt move the markets one way or the other, and further China trade deal news will have an effect, but the ‘big picture’ is (in my view), bullish for the PM sector.

We could move up before achieving these targets. What’s important is that we don’t move lower and break through the ‘bowl’. These are approximate numbers. If we get close, I’ll do a more detailed, ‘zoomed in’ analysis.

I’ve been fairly quiet lately. That’s because nothing has changed. I’ve read with interest, some fairly lively debate about the long term prospects for the PM market. Over the years I’ve refined my charting  and fine-tuned my thesis. I’ve identified, what I believe are the key patterns and chart formations. I’ve narrowed things down to a handful of key charts (but there are many others I’m also keeping an eye on). I want to try and keep things as simple as possible. I’ll show a mixture of charts in the coming months/years, including the individual miner indices, gold in foreign currencies, silver etc, but there are 4 I’m following daily – Gold price, US Dollar Index, the Gold/Silver Ratio and the Bloomberg Commodity Index.

That brings me to the reason for the title for this post. Take a look at the charts, and you’ll see what I mean…

There are plausible arguments to support the view that gold will go down in coming years, but I think the evidence favours a PM bull market into the late 2020’s (with a mid-cycle plunge leading into a low in late 2023 and into 2024). My long term basing pattern has continued to hold at each test. I fully expect that to be the case this time as well. Having said that, we’d be foolish to disregard the bear case. That’s why I’ve built this chart, so that we can all track it, and know where the support levels are. Follow the evidence and act accordingly.

The Trix is soon headed into positive territory. Keep in mind the Silver/Gold ratio, and what it’s telling us. It ties in with this chart, and what the indicators are telling us. Imagine what happens next…the Trix turns positive, silver surges 60% to $25 and the Gold/Silver ratio FINALLY plunges in confirmation, It all ties in very nicely indeed. All of these pieces of the puzzle are increasing the evidence and likelihood that we will see $1700 gold and $25 silver within 6 months. That would give us a gold/silver ratio of 68. How perfect is that ?

I’ve just put this together in a couple of minutes, but I think it gives the general idea…

Don’t take my black arrows for future silver price too literally, it just gives you the general idea.

Once again, we seem to be setting up for a very big move. Following a retest of $1400, this should advance at least $300 in the next few months. I really cant imagine how this chart could possibly look any more bullish…

There’s a clear harmonic pattern, with a wavelength of approximately 3 weeks. All I’ve done here is place the sine curve on top of the gold chart visually. It helps to consider this alongside my other gold charts which show the bullish descending channel and the end point of that channel (the edge of the ‘bowl’ curved support). It looks as if there could be one or two more ‘surges’ downwards, to take us to the low $1400’s. Once that happens, we’ll be in the ideal position to take off and break out of this down-trending channel.  One thing worth mentioning – we might just see higher lows starting to develop, meaning we trend towards the top of the channel, rather than hitting the bottom of it. Cycles experts will probably be able to shed more light on that. That’s the chartology, as I see it. All we can do now is sit back and wait to see if this stuff works.