Loading ...Consolidation in miners…
I’ve got to admit that the current consolidations across the PM complex are looking textbook perfect, almost too good to be true. (I hope I did not just jinx them. )
We’ve currently got pennants, boxes and very gradually descending wedges across the complex. Typically we get ugly and violent shake outs near the very tail end of these types of consolidations, and that is what I am still expecting. However, it would be nice to see the current, near perfect sideways consolidations actually play out by the book.
I would have absolutely no problem with them continuing this sideways churn for a few more weeks, because it will result in a more sustainable and powerful breakout.
However, looking at past behavior during the last bull run, more or less every intermediate cycle low in gold either tagged or came within spitting distance of the 200 dma. Therefore, at some point in the next 4-5 weeks, I am expecting gold to make a move below $1900, maybe finding a low between $1800-1850.
Yes But…today they are sucking wind Nautilus
I probably top ticked these consolidations with my post lol. It’s definitely looking like I top ticked today’s gold price when I posted.
BTFD
Gold is still relatively far away from its 200 dma. If you look back to the last bull run, almost every ICL either outright tagged the 200 dma or got within spitting distance. If gold just went perfectly sideways from here, the 200 dma won’t catch up until about January 2021. I don’t think that is realistic at all. More likely, gold is going to break down within the next 4 weeks and drop below $1900, maybe down to $1800-1850.
When we broke out of the June consolidation wedge in the goldy indexes we almost came back to breakout in backtest.
Gold is differentially stronger at this break out so I am guessing no BT.
The low at GDXJ 59.41 gives me my second touch on my new 10 min trading channel.
Nautilus. Absolutely agree we are way above 200 and should pull back to it to refresh. But Price rules.
In the great ones words, Joe Granville…. “What is obvious is obviously wrong”
Didn’t get you, Sir Plunger.
What is obvious here? That gold will certainly test the 200 dma? Or that this time could be different?
Thanks much for your time and wise words.
GL
I think he meant this time will probably be different. For me, the bottom line is this—gold is either in its bubble phase, in which case this is going to play out in 12-18 months and see a ridiculous move, or we are in a longer term bull move, in which case we are guaranteed to test or at least get close to the 200 dma at the end of 20-30 week cycles. And at some point, we will have a much larger consolidation where price goes sideways for a year or two (like after the 2006 peak).