Loading ...The Elephant is in the Room.
I am IN PMs …I like the Miner Charts , Especially many of the juniors and micros. And Miners usually lead Gold
Gold itself is no hell…Lots of concern with that chart. But the Cycle ologists , Surf Norvast and Spock all see the December bottom as a good long term bottom. So on balance I’m a Bull.
BUT
This Chart has not resolved as of yet. It still is one of the Cleanest Textbook Chartology Patterns ever. Chartology 101 : US Dollar Weekly :
A Pretty crisp back test so far. Tomorrow of course is the end of the week , but unless there is a strong move down in the Dollar tomorrow this chart remains very Bullish and remains The Elephant in the Room .
Maybe as some say it is TOO Obvious. But if its so obvious how come most are ignoring it ?
Agree with the title 100% fully. Expecting a dollar rally for a few days or so now. Metals very interesting right now, my thesis on the handle isn’t playing out which means I expect some
Sort of shoulder to be built out (silver) as Gold is too mainstream these days!!
Question for you here though Fully is how often do we see two relatively strong backtests of a ‘hallway’ pattern? If it was a bull would it have just gone to the races like the INDU and spx?
I find the best patterns have a relatively quick backtest before taking off. This fits the bill.
It is better to get a backtest over with quickly of coarse as if the price takes off you may still be cautiously waiting
then jump on board and get Backtested !!
Rambus shows many laborious backtests on halfway patters. There is no rule a backtest is needed BUT when you get one and it holds and price takes off…you have a pretty sure thing.
Of course, makes sense. From a chartology perspective, at what point would it be noticeable the pattern has been voided if that was the case? Is simply re-entering the previous pattern enough, or does a confirmed break below need to occur?
I wish there was a definitive answer to that. But because there are NO 100% rules in this TA Discipline we need to go with probabilities.
1…If the price closes back into the pattern , you can become more Bullish on the PMs.
2…If it drops below the midpoint , even more bullish
3..If however it drops below then squirts back above , we may have a “straddling pattern”
Rambus shows repeatedly , when a pattern forms just below or just above or On ( straddling)
an obvious trendline that Usually ( high percentage) means a good strong impulse move is on the way
A Continuation.
The thing is ..right now ….the odds ( discouting all the noise about fndamentals…just the
odds of the pattern breaking out UP are much higher than the opposite.
For the simple reason , an estimated 70 to 75 % of all patterns are continuation Patterns , NOT reversal patterns .
Having said all this, we are NOT trading this chart per se. We are trading PM Stocks and the PM Stock indices have mostly negated their H and S Top Patterns ( on the daily)
and some have even broken out to new highs
AND for whatever reason Miners almost always lead Gold ..!
Its tough to ignore the Dollar however. Welcome to the Wall of Worry !
The dastardly Dollar. Interesting points made, will look forward to continuing views put forward in this space and also by Rambus too.
Yes …don’t ignore Rambus…he started this whole mess
🙂
Believe me its not too obvious…. Think of all the screaming voices out there saying the USD is set to tank and tank tomorrow. This is one of the main reasons I have recently gone to cash.
This chart alone should as a minimum make those holding PM trading positions put ones selling finger on the trigger.
Find it hard to believe it’ll tank tomorrow. PM cycles have ‘topple’ and if they are searching for a low might not arrive till next week sometime as per RF.
I have emphasized often the concept of the post bubble contraction. We are in one and they last a long time. The senior currency gets stronger
There is no reason gold and usd can’t go up together. I believe tho would need to double check but I believe the long term 30 year correlation is only approx .25ish.. so that tells me people are overstating the importance.
See chart above. The negative co relation is very strong . Almost perfect. There are very few times the Dollar and Gold move together.
There are a few but they do not really stand out nor do they go for long. Have a look and see what you think
The current situation is interesting.
The USD has turned up and close to confirming 26 Jan as a DCL after which the expectation is that it will peak early (around 11 Feb) forming a left translated daily cycle then move lower into it’s weekly cycle low (ICL)
Meanwhile gold is seeking a DCL so when it does turn up it will be against a rising USD for at least a few days.
This situation is not all that much different to the period 14-27 Jan 2016 when gold entered the second daily cycle against a rising USD.
I do not expect the FED to raise interest rates again until the FOMC meeting 15 Mar which may trigger the SPX to move into it’s weekly cycle low.