Loading ...So what am I not seeing? Chart looks very bearish…
Reading the posts on this site leads me to think the bulls are firmly in charge. So what am I not seeing in this chart? The 50 day is about to cross over the 200 day, and volume turned up on the downside move through the bottom support line.
Avacado:
I guess it’s just a matter of personal opinion, but unlike you I have detected a rather bearish slant has captured the gold tent. For example, see Avi’s most recent post (“30% chance GDX hits 7”).
In any event, board sentiment is probably hard to quantify and would agree that chart looks bearish.
Jim,
I’m a long term bear myself. I compare the rally from the bottom in 2015 as an almost year long bear market rally to consolidate the previous decline that stretched out over the previous two plus years. Quite a lot of gold bugs like to compare today with the 70’s, I was a gold bug back then and made money on it, but the backdrop was very different to today. We had a peak in 1980, then a 20 year bear market with rallies. Since gold is counter trend to the economy its bull markets are a lot shorter than its bear markets. So I’m expecting it to drop to $700, give or take a $100.
I’m also waiting for Plunger’s phase 3, which he so eloquently laid out previously. The bottom in December 2015 was very quiet. Hence the rally we have seen is not the start of a new bull market, but a bear market rally.
Re read Plungers Posts on Phase 111
THE BOTTOM IS SUPPOSED TO BE VERY QUIET
But for sure this site is bearish in the short term here
I was taken by Plungers comments about phase 3 as the action of flushing a toilet. I see noting in the chart that even comes close to that prior to the December 2015 bottom. A slow decline on low volume preceded the bottom, not what one expects from a total annihilation of the bulls.
I’ve experienced many phase 3’s in my 45+ years of investing. We have not yet gotten to the phase 3 that Plunger described.
I do not do charts well, or comment well about them for that matter, but…
It does indeed look bad. Very bad. People seem to be Grasping at Straws, as you perhaps imply.
However there are ambiguities. “[I]s about to” does not equal “has”. A lawyerly argument could be made that the 200dMA could serve as something the 50dMA will bounce off (but there’s the counterargument that such a bounce would be questionable in the face of a declining trend).
Some serious chart reader may contradict me, but doesn’t the low around May-June count as so-called “support”? And if it goes a touch below that a potential “false” breakdown, a tiny “slingshot” or something like that? And then there’s the counterargument (reasonable in my opinion) that if it does break down below that it goes all the way down to where it was around the beginning of 2016. If if.
Again, I don’t do charts much, but I do think that a single chart over a single time frame can be insufficient. At the moment, when I go to
http://www.kitco.com/charts/livegoldw.html
I see an ugly looking 1 yr chart and what looks like a very nice 5 yr chart. The 10 yr chart to my very amateurish eye looks ambiguous but more good than bad to my eye (I’ll spare you my arguments on that). The 5 yr chart happens to coincide w/ my own goals, but I think it’s useful to use multiple charts from multiple time frames. Also to look at multiple other entities (such as other PMs).
Your 10 year Kitco gold chart is also bearish. Its a linear chart, but still useful. It shows that the recent rally stopped dead at the declining trendline created from the topping process in 2011-2012: (I own the BookTrakker.com website, so its safe to click)
http://www.booktrakker.com/Economy/10YearGold.jpg
Note that it tried several times to breakout, but failed. I think we are about to do leg three of the bear market.
I expect you are correct from the perspective of nearly all Goldtent readers.
It is not my perspective. I will now bring up my comments on the 10 yr chart since you commented. I do not think lines and breakouts and all that are total balderdash, but I’m not so sure about them. They’re great until they aren’t. Breakouts except when they’re false breakouts. Signals that work until they don’t then become failed signals that mean their opposite. All that stuff. I think using sharp lines gets people in trouble. Probabilities and cloudy stuff is more like it in my mind.
I used to spend a lot of time with raw data and looking at time vs price correlation probabilities; also I used it in other settings. I got a good sense of how strong trends were. I don’t have the software anymore or the time to use it for that matter. However I got to know the results when I eyeballed charts. I’m rather sure that if you will see a strong positive correlation of time and price over 10 yr. The earlier part of the data will give the strength of the positive correlation (very long term positive trend) the most oomph, but the past year’s general rise will add to the oomph. You will also get a strong negative correlation (negative trend) from late 2011 on. 2016 will for the most part remove some of that oomph. I am not sure which trend overall is stronger. Therefore I go with pattern recognition–my own. I think it looks overall as if it’s going up, but it’s obviously not a clear call.
I probably did not make myself clear (and I probably made any statistician reading the above want to scream).
You brought up to some extent linear vs log charts: a decade ago I got an ancient edition of Edwards/Magee used and skimmed it briefly. I thought I got from it that the point of log charts was that they tended to be better than linear for price objectives (though as I recall they presented no rigorous data for that contention).
I’m not sure that there’s any rigorously proven way in which log chart vs linear would be better here. I personally like looking at both if it’s easy and I have time to spare, but I’m not sure why.
It could just as well be a channel / bull flag on $GOLD, that upper trend line alone does not say that it is going down:
https://goldtadise.com/?p=387413
1. To me, as for Avocado Pit, the 1 yr chart bad for holders of gold w/ respect to this time frame.
2. I will now lose whatever slight credibility I might have now, but nowadays I literally look at charts to see animals in them. Graddhy, your 2 yr chart–for me an especially interesting one–shows a monster or snake, head up but looking down, snout down too. Maybe it wants to dive down to wreak some havoc. But that might be too much of an effort. Also, monsters often seem to look down to check just before going up. It seems to have had some fun going up fairly recently, so it might have even already decided to go up some more, but that would also take effort, maybe even more effort than going down. It might want to cruise along making up its mind. That’s something monsters find pleasant to do (except when they plunge or take flight), I think.
I’ll forgo the menagerie for other time frames, but to me it looks as if one has to be awfully brave or agile–or tied to the terminals–to want to be long on the short term. Medium term time frame (my interest): monster could do anything — just watch. The monster looks relatively content cruising along at 2 yr , and content may mean an upward bias since its head is high.