Several weeks ago the commercial traders changed into a net long position with gold which was the first time this happened since the late 1990s. I had to move my Primary degree “A” wave bottom to late 2015 which is back about 2 years and 8 months. This is another example of time traveling on paper as my old wave positions had me late or behind by 2.8 years! One wrong large degree can put us off by 100’s of years, if we do not know what that 2011 gold peak was.
The 2011 gold peak was a Gold/Silver mania peak that comes along once every 30 years + or – 1 year! Anybody with time to kill and a calculator can check these numbers by going back 90 years or going formward 90 years. 90 years make up 3, 30 year cycles, from 1980 forward. 2041 would be the year of the next SC degree wave 3 peak, which will never happen until the price of gold gets crushed in the next 2-3 years. $1160 in gold had a strong spike to the downside which may hold and deserves attention to make sure it will hold.
I mentioned it many times that gold could soar to that $1800 price level, but it sure will not soar $1000 like I said it might do. Now it would only soar $640-$650 to get to the same price target.
My triangle in the “B” wave stays exactly the same as I still need the higher degree change before it happens. If the $1160 price level holds it would be a running pattern for sure. I don’t believe in truncated patterns as I see all of these as running patterns. Even if gold started out and developed a 5 wave structure, it could also be a triangle inside the “B” wave.
We had the Death Cross in a daily chart but the Golden cross is still active in gold. In the weekly charts and the 50-day MA may not cross golds 200-day MA and even provide support for the next leg up in gold. Gold is still in a bear market rally as no Cycle degree correction has completed in gold at this time. It’s pretty sad when we can’t see the 2011 peak as a maina peak as all the numbers read “extreme” back in 2011. Bubbles do not end well and gold has been brainwashing us as it has not yet completed the mania bear market by a long shot.
It may take until 2022 before the real bottom in gold will arrive, after the gold price is “CRUSHED”! Only when an asset class is crushed in price does it become an investment and until then I will only trade the 5 wave moves. It takes me about 15-20 minutes of work at night and I can be completely in cash by first opening before I get out of bed. At the same time I can execute some long positions in GDX but in small increments of 100 shares each time. Some 5 cent call options will help the share count if we only have 400-500 share long positions. 25 calls are about equal to adding 2500 shares to a trade. Option failure depends on how you use them and how you handle the loss once they expire worthless.
It looks like if this $1160 price holds, then gold below $1047 will not happen and then $1400 gold will get breached. Once $1400 gets breached, I lose my 10-ounce silver coin. That’s ok, as I had some PUTs out, that coverd the loss of a 10 ounce silver coin. I also cashed in 20 October puts to cover the risk of all my options going to zero.
So far in the last 12 months I have enjoyed a 92% gain in my printouts, and I would be happy if that happened again on the long side.
Remember, that the gold price has nothing to do with printing money, it has to do with the “velocity” of the money in the economy. This velocity can increase with seasonal spending like for Halloween and Christmas shopping or January RRSP spending. Long term the velocity of money is going to decrease on a massive scale as 10,000 boomers are retiring every single day for the next 19 years! What will happen to the stock market once the pensioners have to cash in, I don’t think I will be “investing” if my cane can’t beat my mouse anymore! 🙄 All those boomers retiring will strain the private and government pension plans to the extreme, if not fail completely. Longer term deflation is the real threat, even when gold makes another strong showing.
Even my IWA pension plan, or the Ontario Teachers Union pension plan will see some hits that are hard to imaging at this time.