Charts from Today

GDX is beginning to crack. See for yourself.

Silver is too. Take a look.

Stay tuned, more to come next week. 

Darah

Gold and GDX Are Doing The Complete Opposite.

The market is full of bloggers who write their own forecast. They’ll tell you one thing, and then another. Some will call it early, some will call it late. Some call it late because they’re afraid to call it period.

But, what you don’t know is the trend. The trend dictates direction. Direction tells you where.  Direction tells you everything. 

The Gold market is in a BULL market. The long-term trend is up. The intermediate trend is up. The short term trend is down.

Name a point in time when levels of bullish sentiment were at extremes, and you have the majority of people calling for a top? 

It just doesn’t happen. 

Take GDX for example. GDX has extended to marginal highs, but if you look closer, its individual counterparts are struggling. GDX is made up of 49 stocks, 21 of which have reached new highs. The other 28 have not. 

Those numbers aren’t terribly bad. They’re also not great either. And if GDX goes higher, those numbers are subject to change. I know.

But, this ETF is cap weighted. And its top 10 holdings account for nearly 61%. 

Only 4 out of the 10 stocks have reached new highs. 3 out of those 4 are ranked in the bottom half. 

Can these numbers change? Sure. But if another stock, or group of stocks break to new highs it does not project a bullish outlook. It’s called front running. 

Front running is a trap. And a very costly one. Front running makes you think what isn’t. Front running is also short lived. 

The culprit will be the dollar.

From 2014-2015, the dollar rallied for 10 consecutive months. Today it suggests nothing short of a consolidation. Its intermediate trend is up, and still looks very bullish. It too will rise.

Monthly Chart:

The next few weeks should go something like this. GDX attempts to rally a wee bit higher. But, anything higher is only to form a top. Then comes the selling. 

And the correction coming is not going to be pretty. It’s not going to be short. It’s going to last for several months, and run late into this year. It’s also just around the corner.

GDX Weekly Chart:

Darah

GDX and Gold Rally is Suspect

The volatility on Friday created a technical aberration.  Still, the overall picture hasn’t changed.

It will also be pretty difficult for Gold to overcome the 50 MONTH moving average, on the first try. 

The Complete Coverage Report offers two subscriptions—$9.95/month or $100/year. It is well worth the information received.
www.thecompletecoveragereport.blogspot.com
Darah

GDX Topping

Very good chance the GDX has topped today, or will next week.  Be watching for gap fills on the way down. Also note, this correction should be much bigger.

The Complete Coverage Report offers two subscriptions—$9.95/month or $100/year. It is well worth the information received.
www.thecompletecoveragereport.blogspot.com
Darah

Chart of the Day

The market has completed its correction and now on course to new highs. Be watching the next resistance zone between 2130 and 2180.

The Complete Coverage Report offers two subscriptions—$9.95/month or $100/year. It is well worth the information received.
www.thecompletecoveragereport.blogspot.com
Darah

Market Update

The warning did not come until Thursday, when price had several attempts to rally, but instead dropped to its previous low.  Now after two failures, a third test of the lows would undoubtedly break support and send price in a precipitous decline.

S&P 500- 4 hour chart

Other clues came during the last 2-3 weeks of the advance, when price would accelerate to new highs, but after a few days a minor correction occurred. The pattern now has formed several mini peaks along the way, indicating momentum loss.

S&P 500- 4 hour (chart 2)

 
Technically, since we are still in an uptrend, there is the possibility of a final short-squeeze to higher highs. Anything upward of 20, even 50 points would theoretically take the S&P into May for a top. The result would be a divergent peak, indicating the rally is a bad one. It would also be the best scenario for the bulls - as price would form an even larger top, providing enough time for everyone to get out.  In any case, whether we drop immediately, or continue on, the coming decline should lead to a 2-4 week sell off.

Stay tuned, more to come next week.
Darah

http://thecompletecoveragereport.blogspot.com

ALL THE WRONG REASONS!

While most 4^th rate analysts unwittingly misdirect you into watching for a big dollar collapse and cling on to its alleged correlation to gold, all you have to do is look back a year and see their relationship is worthless. The gold trade has been an obvious disappointment and its most recent breakdown through 1320 has brought about a ‘think tank’ infested with analysts fetching for all sorts of reasons that seem rational for calling a bottom. None of which are true--and of course these same analysts that tell you to keep an ‘open mind’ are the ones mentally blocked from knowing the characteristics of a downtrend. And they’ve been sending you emails and newsletters for months saying this “JUST MAY BE the TIME” we have reached the final low!

As you all know the reality has been much different, with every rally being met with tremendous selling pressure, giving you no indication of a possible bull market. Did you ever think that once the bull gets underway and reaches 3200, they will all tell you it’s time to get out?? The same crowd of forecasters that were keeping you in at $2000 have ridden the bear “A L L- T H E W A Y- D O W N” to these current levels, still claiming every oversold condition is just a pullback to a much bigger uptrend! I’m sure after 22 months it will be that ‘conspiracy theories of manipulation’ or some ‘finishing wave count’ are the reasons.

Truth is, once you break the apex and have a lower low you add the width of the triangle from the breakdown point to get the measured move. This shoots for a price target of 1200, which is a minimum expectation, but perhaps on the next failing rally we will see a climax low to 1140.

CHART OF GOLD (1)

That also would have price return to the 61.8% area from the lows of 2008 to the highs of September 2011 and a good place for an extreme reversal bar to appear.

Chart of Gold (2)

 

Here too is a potential fold back measured move from the point the trend went parabolic in 2011, to where we are now in the current downtrend. Notice that the parabolic uptrend of 2011 equals the parabolic downtrend of 2013 in size and that it happens to fall in the vicinity of these same target lows. Not to mention, the downside volume is now much lighter which is a sign that most of the selling pressure is being absorbed by central bankers and giant institutions controlling the demand.

CHART OF GOLD (3)

Most people lose money in downtrends because they have no strategy, they become instant long term buyers, and, they must ‘wait it out’ only to recover 70% of their losses, if they’re lucky. Timing the market is not the same as ‘time in’ the market and you should know that after a price base of 4 to 5 weeks your odds of ‘a bottom’ is more likely. Or basically draw a horizontal line from 1200 out, and even with giving five or so percentage points to account for volatility it won’t be a surprise to see in a couple of weeks that price will be trading flat. We are hovering above extremely tough support on all time frames, and once 1350 is regained, the bull market will launch!

The Complete Coverage Report offers two subscriptions—$9.95/month or $100/year. It is well worth the information received.
www.thecompletecoveragereport.blogspot.com
Darah