Loading ...Plenty of Room To The Upside
Yesterday in his post, Plunger had this to say. “That’s where we are at. PM bear market separated Phase II with Phase III with a BMR. This is classic stuff. It’s been a hell of a kickoff. Defense is the game. Buy the dip Chartsmaster” Since there was no punctuation after the last sentence I don’t know if he was just tweaking me(I have no problem with that if he was) or asking if that was my strategy? As I said the other day, it has been a split decision so far, in the metals this week, despite all the gloom. While Silver has been spanked once again, Gold has held up fairly well. The good news is that the charts of both have significant room to the upside and are deeply oversold. Even if Plunger is correct, he looks for some bounce until year end. There is enough room for a sizeable rally. The real interesting part will be after such a rally, do we test the lows or break them. Plunger and others look for meaningful, lower lows, I will take the other side. There is now plenty of resistance above but the upper bollinger bands for both gold and silver offer significant upside possibilities. The charts and technicals should provide clues on what happens after the bounce plays out. Yes Plunger, I am looking to buy this dip, I just haven’t chosen how to play it yet?
It seems Plunger agree with Gary Savage at the moment (unfortunately I also thinks like that), a brief reaction and then a deep sell off in 2022.
David Hunter (that he has been right with everything except PM until now) still thinks that PM will have a strong upside move well into 2022 and then a sell off along with the stock market.
I would love Hunter is right but since we are into the WORST sector that planet earth have ever experienced I would bet that he will be proven wrong.
Gold and silver suck and have for quite some time. That is a statement of fact. Buy the dip is insane unless you plan to sell at the next BMR. Otherwise you will lose most of your portfolio’s value only to gain it back to where you started. Not a good plan.
I want to float this out there because it is coming to me from my intuition and not chart based. We have seen this play out before, a nasty downturn into the Christmas holidays. The god/silver Grinch will put it to all the bugs for trying to oppose our monetary overlords. This psyop should end towards the end of the year followed by a strong rally (whatever you want to label it a BMR or short covering). How to play it? I am buying out of the money calls on silver miners…if I am wrong it wouldn’t be the last time, if I am right cha-ching!!! I bought some of those silver maple leafs, yesterday, that will not see the light of day till we land on the moon…LOL
Good plan JSK. Can never go wrong with physical and calls give you max bang for your buck if correct and minimal loss if not.
I wasn’t QUITE expecting “this”.
I did call this as a BMR. I just expected it to be not finished.
So the recent top after the ABC up, I thought would be temporary. Its now much deeper, with no signs of a bottom on my tools.
Here’s the thing. We should still get another BMR part 2,
but after that, my LT charts are starting to line up very bearishly.
I’ll update on that point after EOY.
I am a bull too, but I have at least acknowledged that corrections in the space have typically lasted 1-2 years after significant price spikes like we got after 2020. In contrast, you have been calling for silver to breakout of the range it’s been in for the last 1.5 years pretty much immediately after it peaked 1.5 years ago.
You are crying wolf and no one is listening at this point. Obviously, at some point you will be right, but a broken clock is right twice a day.
The same is true for your calls on the US stock market. How many times have you called a final top in the last few years? the Nasdaq to gold ratio is a stone’s throw from matching it’s year 2000 top.
To me, none of this makes any sense. Why on earth should the Nasdaq be making higher highs vs gold after the Fed has utterly destroyed its credibility post COVID and the “Fed put” laid bare? Does any rational person actually believe the Fed can shrink its balance sheet or ever “normalize” rates??? It’s completely insane why anyone has faith in the system at this point, but here we are.
“To me, none of this makes any sense.” Here is my two cents on what makes sense. If you view all that you are seeing through this lens it will start to become clear. In order for the fiat money game to work there will be a program, which Jim Sinclair coined the term MOPE, management of our perceptions economy. When you think about the Fed and their allies, in this new digital world, they have the ability to manage every market. They want you to perceive that their currency is strong while they increase the amount of it, deluting and devaluing it behind a veil of illusion. They are putting out the idea they will introduce a digital currency and retire circulating currency. If this occurs it will game over for we the people. Precious metals are their enemy because holding it can empower you even if it has to trade underground. It is our resistance to them and if we lose the war it will a nasty world for all of the people not in their club.
While it is certainly possible that gold will continue to make lower lows into mid to late 2022, I personally do not think it will.
The June-July timeframe has consistently been a time for major pivots to form in the metals and miners over the last couple of decades, and I wouldn’t be surprised if we continue to make lower lows into that timeframe in 2022, but again, I personally believe we will see major low in gold in the next 6 weeks that may not even necessarily take out the last intermediate cycle low at $1675, although I will acknowledge there is certainly a significant risk of it happening since it would create the classic undercut pivot that often marks major reversals.
Thereafter, I expect the bull to either reassert itself in earnest with a very sharp rally (this is my higher probability scenario), or alternatively drift more or less sideways in a lower range but consistently make higher highs and higher lows, just nothing earthshattering, into summer/fall of 2022 before taking off to the upside.
I am basing this all off very long term moving average and bollinger band studies (especially the 200, 400, 500 and 600 week periods) and Ichimoku cloud studies.
No matter what happens in the next 6-8 months, I have high confidence that we are setting up an incredible run for 1-3 years once the correction/consolidation is over, so there is zero percent chance I panic out of my positions no matter how extreme a panic sell off we get.
BTW the comment was just a tweek. The only thing that makes the action of the gold stocks make any sense to me since Aug 2022 is observing the action through the lens of a bear market. This action for 16 months has been distributive NOT corrective. Just look at these BMRs distributing stock to the bugs who just don’t see it.
Tax loss selling will keep pressure and a cap on these stocks for another 10 days, after that I expect a corrective rally into the EOY. Possibly worth trading for the very nimble
Sorry Aug 2020
“The only thing that makes the action of the gold stocks make any sense to me since Aug 2022 is observing the action through the lens of a bear market.”
This is circular reasoning.
A simple explanation is that an index like the $xau was too far away from its 200 WMA in August 2020 and even in the last bull market would get very close or meet up with that MA before it could make a sustained run higher. I don’t know if it will tag its 200 WMA before this is over, but their are an infinite number of scenarios how it might do that between now and end of 2022. IIRC if price just went sideways from here, the 200 WMA would need until early 2023 to finally catch up to today’s price. More likely is that sometime between now and then price drop down to tag the 200 WMA (if it even HAS to do that, which I don’t believe it has to).