Goldtent TA Paradise

Just the Facts (Charts).

Time to Hedge?

Looks like Coffee may have found a Bear Market bottom as it is breaking out today.

I picked up a position at the first pivot around 18. Not a big deal but further evidence that the CRB may be finding a bottom. Second chart is on DBA where I also have a small position. Note the breakout, BT and gap above the 200dma.

Here is a quote from Norvast (of Gann) on Yesterday’s move in Gold:

I do not trust this move! Looks to me as though we just pushed out the DCL on the USD by a few days and it will turn up soon quite rapidly (and gold move down).

Exactly the same thing happened in exactly the same time frame in 2009. Check out the high for the USD in Apr 2009 (20 Apr)

The date we suspect will be the ICL in Apr 2016. Looks “dodgy”!

Here is a close up of the Chart I sent him with the TC and IC Lows from 2009 and I have circled the one day spike that he mentioned was “dodgy” but pointed out that the subsequent IC Low was quite mild.

Will history repeat as W.D. Gann suggests? Time will Tell 🙂

In the meantime, I am sitting pat on my Spock positions but have lightened up a bit on some larger more liquid positions. A bit jumpy perhaps but I try to let my Forks guide me.

For those of you who remember my Gold Cup & Handle (seems to have dropped off the site) here is perhaps a similar Cup & Handle forming in Silver.

The USD just made a lower low than the last Trading Cycle Low in mid-Feb which means this Trading Cycle is Left Translated or has failed. A TC failure usually signals that the longer term Intermediate Cycle has topped as well and that the asset will start making lower highs and lower lows until the IC LOW is found.

I will post some charts later today.

Gold has now had 2 back-to-back short Trading Cycles at 21 and 20 days and both were very mild TC Lows compared to what we have seen during the Bear.

This begs the question on how much of a pull back we will see in the early April timeframe when I expect the longer term Intermediate Cycle Low. Perhaps it will be milder than we think (see my 2nd Chart).

Norvast suggested I take a close look at the chart out of the 2008 Bear Market low for clues on what kind of price action we might expect going forward.

Seems Crazy right. Yet my cycles work and other TA signals would indicate that the USD should move up here and Stocks, Bonds and Gold should all move down from here (for at least a few more days).

What could cause that to happen? Perhaps a rate increase? Not saying we should bet on it but it will be interesting to see what the FED has in store for us.

I reported over the weekend on Gold’s longer term 5 Month Intermediate Cycle outlook and today’s update will focus on the shorter term Trading Cycle (24-29 days low to low on average).

I have mentioned a couple of times that Gold and the Miners Intermediate Cycles have diverged and I still believe that may be the case. If so, the Miners may not correct as hard as the Metal into early April, when I expect Gold to find its next 5 month Intermediate Cycle Low. In fact, if my TC analysis on the Miners is correct here, their TC trend line is still in tact.

My first two charts are on Gold. I mentioned today in a quick post that Gold and the Miners had broken support but it now appears that just Gold has. During the Bear, the Miners often led Gold down. Perhaps now they are reversing their role and resisting Gold’s move into the next short term TC Low.

Time will Tell 🙂

Next chart is on the Miners (GDX). It would appear to me that GDX had a very mild TC Low on day 29 and is now on Day 9 of a new Trading Cycle and right at support of its current Trendline which appears to be a consolidation pattern for now unless it breaks to the downside over the next few days.

A break below the previous TC Low would indicated a Left Translated or failed Trading Cycle which would most likely move the Miners into their next longer term IC Low in April.

A move up from here to the upside of the current wedge would be bullish.

Gold has now made a Higher High in week 14 of the Current Intermediate Cycle (IC) out of the Dec 2015 IC Low. This is very bullish as every IC during the long Bear had topped between weeks 8-11 (perhaps week 12 at most). Gold can push higher from here but we should expect a top soon (perhaps next week?) based on Gold’s typical IC Low patterns (see my first chart). Note the divergences are showing up on the RSI, Slow Sto and other indictors.

While the shorter term Trading Cycle counts are a bit obscured by the Pendant and Flag formation, we should expect the next IC Low sometime in the first two weeks of April based my cycle counts.

Remember, the next IC Low will recharge Investor Sentiment for the next leg up.

Crude is on day 20 of its Trading Cycle (TC) and what sure looks like a new 6 month Intermediate Cycle (IC) as well. WTIC TCs last 36-46 days low to low on average.

To confirm a new IC, Crude should move above my Red IC Downtrend line but Crude is also in a spot were we sometime see a half cycle TC Low. The problem that I see is that my small blue line is the current TC uptrend line and it is very steep to sustain over the longer term IC.

As a result, I see two possibilities here: 1) WTIC is either near a TC high or just a half cycle high. If f crude moves down from here and breaks my blue TC line then it should find support at my lower Green fork if this is just a move into a half cycle low. A close below my lower green fork line will likely signal that the TC High is behind us and that we have started the move into a TC Low.

Even if we move into a TC Low here, I would expect a higher low than mid-Feb.

I am still expecting the USD to find a short term Trading Cycle Low here but longer term the USD is running into some interesting resistance on my 2 year Weekly chart. The Blue line had once been strong support and now appears to have become resistance right near my Red downtrend Fork out of the Cycle High (thus far) back in March 2015.

I am not saying the USD won’t break through an go on to make new highs but it is running into resistance.

Note also how the 30ema is starting to flatten out, perhaps signaling a move into Stage 3?

Here is an update on my 3 Year USD Cycle pattern (low to low). I have extended the chart out to April 2017 to perhaps where the USD may find its next 3 year Low. Time will Tell 🙂

I got stopped out of my short positions early on Friday as I had to respect the bullish nature of this rally. That said, many hurdles remain to turn the Bearish nature of the current trend around.

The first test for me is a weekly close above 2027 on the SPX (21 Month Moving average that Rambus has cited) which is only 5 points away. Many more hurdles ahead but this is the first.

Also attached is the weekly Ciovacco Video for perspective.

Ciovacco Video:

https://www.youtube.com/watch?v=Mk_4LHDCs88

I built my shorts perhaps a day or two early but I am expecting a mid cycle correction here or perhaps a choppy grind into a shorter term Trading Cycle (TC) low in early April where I expect a higher low. For the longer 5-6 month Intermediate Cycle, I am expecting a Lower Low in the June/July timeframe.

The USD broke below my Green Trading Cycle (TC) uptrend line on day 14. Unless this is a head-fake, we should expect that is is the start of its move into a TC Low (18-24 days low to low on average). It has also moved back inside my Blue down trend fork but it may be that the Red Channel I have also drawn is really the vehicle that is controlling Price.

Meanwhile Gold broke to the upside of its pendant formation early in the day. I believe that Gold is now on day 12 of Trading Cycle 3 out of the Dec 2015 IC Low. I believe the two day drop after the previous High in mid Feb was the TC2 Low. This TC High/Low combo formed the base of the Pendant and now Gold has made a new closing High which should be very bullish, especially if the USD is starting its move into its TC low here.

I loaded the boat on UGLD and the Rambus JNUG trade on the Breakout (in addition to my holding my Spock Miner base). BooYa!!!

My last chart is a repeat from an older post to keep the current move in perspective of where I think we are in terms of the longer trend from 2000 (text inside the chart should say “classic breakout from a Bull Flag”).

Bought a starter position in this one a week or so ago based on my cycle analysis that the CRB may be finding a bottom here.

Up 30% today. BOOM!!! Wish I had bought much more….

I don’t really track the Cycles of Copper but FCX is on a tear here having doubled off its recent low and benefiting from uptrends in Copper, Gold and Oil. Here is a very quick and dirty analysis on Copper. If Gold is leading the rest of the CRB out of a bottom here, one would think Copper may bottom some time soon. With weak global aggregate demand, I don’t see how that will happen but here are some charts.

The Russell is the weakest index out there so far and it is nearing my resistance zone. I may start building a position in TWM over the next several days. Stay tuned.

Over the past year and a half, Gold and the Miners have been making significant Intermediate Cycle (IC) Lows approximately every 5 months. While my shorter term Trading Cycle counts are a bit muddled here for Gold and the Miners, we should expect the next IC Low sometime in early April near Armstrong’s second Benchmark Low date.

Much depends on the USD as well as it has been making a bullish move out of its recent IC Low. I have the USD on day 12 and it usually finds a shorter term Trading Cycle (TC) Low between days 18-24 ((I would expect a near term TC high sometime over the next week).

GDX broke a couple of important trend lines today. If we are on day 29, as I suspect, we could find a near term TC Low this week or next. The more important low, however, will be the one I expect in early April where Martin Armstrong’s 2nd Benchmark is looming ahead of us. My second GDX chart shows some Fib levels that will be important to follow as this Low approaches over the next 5-6 weeks. Until then, action could be choppy in an epic battle between Bulls and Bears.

The USD is on day 12 here and is in a very bullish uptrend thus far. I would expect a shorter term Trading Cycle (TC) High to occur sometime over the next week.

Took profits on my day trades on SSO and DUST and rolled the proceeds into a Junk Bond Short here with SJG and some June Puts on HYG.

SJB looks to me like it has hit support right near the 5 month mark where I have seen other Intermediate Cycle Lows.

Due to the USD move yesterday and today, I picked up 12K shares in Dust at 4.30 this morning and currently have a Sell Limit Order at 4.75 based on my 10min chart patterns. DUST appears to be forming a Bear Flag here with a small “F” Flag inside it.

Top of my F Flag is 4.77 but 4.75 is fine with me for a quick scalp and some Beer Money.

Bought back my SSO positions this morning in size when the SPX touched my Green Trading Cycle trend line this morning. Not sure how bullish this move will be but price is testing my first red resistance line where I took profits last week.

My expectations are that Price will not make it above the second Red line but we may get a move up towards the 200ma here.

USD has now broken to the upside of my near term Cycle down trend Fork as of yesterday (peekaboo) and is continuing up along the Blue Trading Cycle Trendline today. Took Profits on all my Large Miner positions yesterday and near the open (NEM, AEM, SA, NG) and started a hedge position with DUST (@ 4.30).

This may just be a move down by Gold to test the lower Pendant boundaries but much depends on the USD here so I’m just being prudent.

http://traderdan.com/?p=9116

Sir Fullgoldcrown asked me if I would post a few charts here on our sister site until the main Rambus site gets back up and running again. From the November low last year the precious metals stock indexes and gold carved out similar consolidation patterns. This was a combo consolidation pattern that consisted of a triangle and H&S consolidation pattern as shown on the chart below. The bottom rail of the black triangle and the neckline were both broken to the downside in July of this year. From the breakout the anticipated decline began which was fulfilled on the PM stock indexes but gold refused to follow the miners to new lows. This daily chart for Gold looks a little busy so I put a red circle around the area I would like to focus in on. After the breakout from the bottom rail of the black triangle and the neckline gold started the backtesting process, which initially was on the strong side, as it took the top rail of the black triangle to finally hold resistance. Note the confluence of trendlines and necklines that all intersect in the brown shaded rectangle at the 1152 area. The smaller H&S pattern that has formed just below the much bigger triangle / H&S consolidation patterns, backtested its neckline this week.

Below is a shorter term daily chart for gold which shows the price action below the bottom rail of the black triangle and the neckline of the H&S consolidation pattern that we looked at on the chart above, red circle. I’m viewing the price action on the chart below as a fractal to the longer term daily chart above. As you can see there is a H&S forming inside the blue triangle which won’t be complete until the bottom rail is broken to the downside so there is still a little work to be done yet to complete the fractal.

Below is a daily chart for the GDM which shows its combo triangle / H&S consolidation patterns. The brown shaded area at the bottom of the chart shows the price objectives for the triangle and the H&S consolidation patterns which were met, black arrows. It looked like last week the smaller H&S pattern, that formed off of the price objectives, was getting ready to break the brown shaded S&R zone or in this case the neckline but it threw us one more curve ball by rallying back up to the height of the left and right shoulders giving us an unbalanced H&S pattern at this time. Again keep in mind the H&S pattern won’t be complete until the neckline is clearly broken to the downside. The big triangle / H&S pattern looks very busy but it has some nice symmetry. The left and right shoulders were made from highs from the individual blue consolidation patterns while the head was made up of a small H&S top labeled NL1. The neckline symmetry rail, which is just a parallel line taken from the neckline and added to the top of the left shoulder, showed us the height for the right shoulder. When comparing this daily chart for the GDM to the gold chart above it’s very clear that the PM stocks are still under performing gold in a big way which has been the case for most of the four year bear market. All the best…Rambus

PS: Just a couple of SLV charts. This long term daily chart shows the H&S consolidation pattern that broke down back in July of this year and has had three backtests to the brown shaded S&R zone or neckline at 14.80.

The monthly chart for SLV shows just how important the smaller H&S consolidation pattern, on the daily chart above, is to the overall big picture. This chart also shows you how hard it has been to try and trade the small counter trend rallies that only last one to 2 months or so. In order to be halfway successful one needs to catch the exact bottom and sell the exact top to make it worthwhile.

We have discussed the theory that once the gold bear enters phase III the classic 6-12 week BMR is a thing of the past. Instead we have shorter stick in the eye vertical short squeezes. I would say what we just witnessed is consistant with this observation. This current snap back from the breakdown entering into phase III lasted all of 14 trading days one could even count it as 9 days with a retest of the 9th day. Just under 3 weeks to reach a 25% gain, that’s pretty violent. Of the 4 BMRs we have had since the beginning of this bear the shortest was 6 weeks and that was our most recent “truncated” pre-phase III BMR which simply flamed out. The other 3 were more robust 9-12 week afffairs. So this current 14 day (really only 9 days) was just what we expected as a Phase III short squeeze. I think it actually started to resemble a BMR, but that was because there were still a few die hard Bugs out there that may not have yet lost hope. Well, I think gold’s price action along with the rest of the other commodities Oil & Copper just stompted out this thinking.

So here is a view of the first Phase III violent short squeeze (VSS) is what we shall we call it.

Here is his Weekend Report

http://wizzentrading.com/wp-content/uploads/2014/08/August-9-2014-pdf.pdf

Don’t Shoot the messenger

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