Goldtent TA Paradise

So many attempts to conquer 95, and momentum is fading fast…

Will we get a flush to $1195 or thereabouts ? Either way, I believe we’re locked and loaded.

and thought of you Fully

https://www.facebook.com/animal.spirit.site/videos/256517284898989/

Just the charts…

94.62 as I write. I believe a drop to 91 is pretty much certain here. That would take us to a very interesting point, with what would look like an inverse head and shoulders set up. As I’ve said a few times, by the end of this year, it should be a lot clearer whether this is a dollar bear/gold bull or not. I believe it is, of course, and a drop below the 91 area would negate the bullish inverse H&S scenario, and a drop below 88 would seal the deal.

I’m a great fan of trying to keep things as simple as possible. This one indicator provides very strong evidence of what’s MOST LIKELY. I don’t claim any one method is foolproof. It isn’t. However, this chart speaks for itself…

One simple chart

Add the cyclical evidence (Norvast, Surf, Spock, Graddhy – on Twitter and others) and this smells like a big bottom.

I don’t know how many stop losses are set at that figure, but a spike below $1200 ($1195?) would make perfect sense to me. It would be perfect if we want to see $1400+ by the end of the year. Long term indicators are hitting rock bottom lows which gives a very high probability of a reversal. I’m going to stick my neck out and say that we will reverse upwards, convincingly before the end of next week and close the month above that lower bull market uptrend line. If that doesn’t happen, I’ll be very surprised and contemplating a return to bear market lows. It’s all about probability for me. Having examined all of the evidence I can find, I would place the odds at around 90% for a bullish resolution. All we can do now is watch and wait.

The chart makes my point…

The dollar bulls need to prove themselves here. Yet again, we’re testing the MA(200) and resistance as shown on the chart below. Another failure here, just as the dollar is overbought, and PM’s are oversold would have very bullish implications for PMs. Add to that the fact that the dollar is facing a cyclical downturn that will take us to 2023, and I see no reason to be bearish on PMs at this point.

I mentioned a couple of weeks ago, that gold may test $1200 before the next leg up, and it looks like we’re getting close. I believe this is just a typical final downdraft, flushing out any weak hands that are left at a cyclical turning point. The monthly close will be interesting. Look, rather than me trying to explain, a picture can paint a thousand words…

Gold has broken it’s bull market uptrend…

The chartology is terrible. However you cut it, the failure of a long term support line is not a good sign. BUT, after looking at it more closely, is it as bad as it appears ? Indicators can help, and understanding the cyclical nature of markets also helps. We’ve seen false breakdowns many times, and you have to have them to destroy sentiment and exhaust selling. That’s what sets up the most powerful rallies. Let’s see if we’re likely to be getting to that stage by studying the WM%R indicator…

So we’re just about as oversold as it’s possible to get. Interesting. How about the cyclical nature of the gold market ?

The dollar’s inverse correlation to gold price is often pretty strong. Let’s see if the indicators can give us a clue there…

So the dollar is overbought. Another clue maybe ? I know it can remain overbought for a long time and result in a huge rally like it did in 2014. The down-trending peaks in the WM%R might be hinting at an imminent turn though. Each peak is lower than the last. The dollar has it’s own, very reliable cycle of course. Perhaps if we know where we are there, that could give us some more clues as to which way this will ultimately resolve…

So the timeframe for the dollar top is behind us, and the cyclical dollar low is ahead of us, pulling price down like a magnet over the coming months/years. I rest my case for golds defence.

Regardless of where the dollar goes in the next few days, this is how I see it for the next few years

Maybe, maybe not, but I’m starting to smell a bottom. The miners are showing great relative strength. Amarillo Gold up over 30% today, Argonaut Gold up 7%, Liberty Gold up 6%, Marathon Gold 3.5%, Barkerville Gold 3%, Americas Silver 2.75%, and many others up, despite gold testing support. I think they’re sensing what’s coming. Gold has arrived at strong support in the $1240 region in an unloved, oversold state, at a cyclical turning point. Also at a cyclical turning point is the dollar, once again testing 95 after a good run up. Are we going to see a break below golds critical support and a very scary plunge to the $1200 area. It wouldn’t surprise me, who knows ? What’s important is we’re about to benefit from a cyclical upturn for PM’s for the next few months (in my opinion).

I was tempted to put a load of indicators on these charts to show how low the readings are for gold and how high they are for the dollar, but opted for the clean, simple, bare facts. Good luck all.

Either this triangle does what triangles do best, or gold will plunge to $1050 or less. I believe (very strongly) that we’ll break upwards in tandem with the dollar rolling over and resuming its journey to below 70.

…and cycle theory counts for anything, we are likely looking at a very exciting development in the next couple of weeks. I’m focussing on the bigger picture, but I think Norvast has it nailed with the daily and weekly cycles. Assuming another week or 2 before the dollar rolls over, we’re likely to see another spike above the 200dma much as we did in 2002…

If the dollar index climbs to 96, gold would equate to $1240-$1245, but a panic puke to the $1200 area wouldn’t surprise me at such a crucial, definitive turning point. Lets have a closer look…

and today…

I remain highly confident in this outcome (all things considered), but acknowledge the non-zero possibility of the dollar soaring and gold falling below $1000.

As Fully has said, it’s an important number. Will it hold ? WTFDIK ? Quite possibly not. The support line must be pretty hot though. Here’s my chart FWIW…

I know there are many here who expect the dollar to rally significantly in coming months, but I’m not one of them. Why ? Time and cycles are in charge here. As Norvast has explained (very well), the dollar bottomed back in 2008 and began its climb, governed by the upward part of its 15 year cycle. It peaked back in 2016, and has since been pulled down by the downward part of its 15 year cycle. By some metrics, this upswing has been further and longer than I anticipated. Nonetheless, looking back at the previous cyclical downturn, there are some marked similarities.

The dollar appears to be struggling to decisively breach the 95 area. The 200wma converges here too, and ominously, is beginning to flatten out, in preparation for the decline. It could yet manage it, and claim the 96-97 region, but the clock is ticking away, and I believe the next downswing will be the decisive one as far as the entire dollar/PM/commodities outlook is concerned. The miners seem to be sensing it, and have been very resilient over recent days. I firmly believe we’ll see the dollar fall below 70 by 2023 when its cycle bottoms. I’d then expect at least 3 years of sideways ‘chop’, as in previous cycles, allowing gold to reach it cyclical peak (along with commodities) around 2026.

Here’s how I’m seeing things develop…

Edit – corrected to 200wma

One ‘line in the sand’ is now behind us, the final one lies just a few dollars away…

This next chart is all that matters now. A false break below support is possible, but it would scare the s**t out of me…

This is where we find out if the power of the long 16-year gold cycle can save us. Place your bets…

EDIT – Thanks to Norvast for pointing out my typo above. 16 year cycle, should of course be 15 !

Disaster for PMs, or will it follow my expectations ?

Can be useful at times like this. The %R is a measure of how overbought or oversold a market is. Unsurprisingly, we’re now in a position where gold is about to encounter strong support with a very oversold %R, whilst DXY is right up against strong resistance in the 95 region with an overbought %R. Does this mean gold HAS to go up, and the dollar HAS to go down ? No, but it does mean the odds are stacked that way. As you can see on the dollar chart below, %R can remain overbought for a long time (or oversold). I would suggest that it can remain overbought for a long time in a bull market, and oversold for a long time in a bear market. The dollar was coming off multi year lows when it last remained overbought for a long time, without price retreating. Is that the case now ? Erm….no. Here are the charts, what do you think ?

Who is going to blink first ?

I guess the 3 year cycle low was February, so a new cycle is underway. That should lead to an upcoming high being printed, with a roll over thereafter. This is my initial take going forwards, but I’d really appreciate comments.

Looking for clues as to where gold price is going and when. The ‘when’ bit is probably a little easier if you use the longer term cycles, and don’t worry about weekly fluctuations. From that perspective, as I’ve already shown, we can expect a resolution within 6 months (and it should be much sooner than that). There are many indicators suggesting that a sizeable move could be in the pipeline. The historically low Bollinger Band width for example, as well as the Gold Sentiment Indicator, which is at levels which historically mark important lows. If you tie all of that in with a look at where we are in the larger, more powerful cycles, it leads me to believe the eventual break will be to the upside.

I’ve posted charts which show we have very little room to move here. A short, sharp move to the $1250 region is possible, but would temporarily ‘break’ some of the charts, and be very troubling. Absent a rapid recovery, we have some very scary scenarios from the charts. All that said, though, I’m still a gold bull. Just take a look at the chart below. Triangle formations, trending downwards in a very definite channel into the apex at the cycle lows. This is very normal, and what you’d expect. We now have the powerful 15 year cycle at our backs, so this should do the heavy lifting and give us the breakout. From the point of breakout, the last 2 cycles took us up approx. 40-45% and 0ver 500% respectively.

Zooming in a bit, there is strong evidence that we are very close to a 6 month cycle low. Gains of the order that we have been seeing out of these lows recently, would give us the long awaited breakout.

The next 2-4 weeks could quite easily give us some long awaited answers.

Rising strong support, meeting strong overhead resistance. This is nothing new of course. look at the DOW 100 years ago…

Compare it to gold today…

Where did the Dow go ?…

Where might gold go ?…

I can pretty much guarantee that BOTH will trend from bottom left to top right, because both are priced in rapidly depreciating and increasingly worthless paper. Just look at what $1 bought you 100 years ago, 50 years ago and today. Houses have gone from thousands of dollars, to tens of thousands, to hundreds of thousands in one lifetime. That’s the definition of exponential ! Keep adding zeros. There are already houses in the small town where I live in England which cost over a million pounds. That’s another zero that just got added !

I don’t think cup and handle chart patterns are meant to last anywhere near this long, but, just for fun, if we do break upwards from here, we may have a very large cappuccino brewing…

Here’s something I’ve been watching for a while…

One thing is certain. Time is fast running out. We have a maximum of around 6 months. The tension is clearly building (in my view). A sustained move down from here would break the bull charts. That’s not what I’ve been expecting though. I still believe we will hold and burst higher in the next few weeks.

Two long term wedges converging…

Trading Channels (on Twitter), posted a silver chart yesterday, which I’ve reproduced and tweaked a little here…

A failure to breakout here would be very, very bearish. This needs to break to the upside, and soon.