Gold Intraday Review: Correction or Return of the Golden Bear?

Gold has made some wild moves since its peak on February, 20 at the $1346 price level. I also dropped the degree level down by one degree which might not last too long as I do have the potential for a triangle to play out as well.

Commercials are still net short by a large amount and last week they added to their bearish outlook when they removed longs and added short positions at the same time.

What I’m looking for is a zigzag type of a move which should take us to new bearish lows. If that happens then my mythical triangle may also become more visible, which suggests a new record high can happen.

You can ignore that huge spike to the upside, as it only shows up in a bar style setting but it doesn’t show up when I switch to line type settings.  False spikes do happen and since the April peak, several other false spikes were also created, which I didn’t count.

The worst that happens with a spike is that your account provider scopes in a huge amount of stop-loss orders from the bears.

It used to happen to me when I was trading the mini gold contract as the liquidity was extremely low and spikes were pretty normal.

I know that the gold bulls are looking for investors to charge into gold as a safe-haven but those are emotional decisions which never last that long.

Gold has been in a bearish mood since the 2011 peak and unless you know how bullish they were at that peak we can make the wrong decisions thinking a standard  5 wave bull market has happened.

That 2011 peak was a 30-year ± 1 year mania peak as wave 3 in Cycle degree. Not only that but gold also finished a huge Primary degree zigzag at the same time.

All commodities run under an idealized diagonal world that has been active since the Little Ice Age. That all changed during the Roaring 20s as stocks and commodities separated and went their separate paths.

 

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Gold Intraday Gyrations Update

The US dollar plunged this morning and gold reacted with its own small spike to the upside.  Is gold in a small 5 wave sequence? If it is, then gold could cut right through the top trend line next week.

This is a diagonal wave count  I’m working at this time and it can spike back to $1310 before I have to call my bearish outlook in gold as dead. Maybe not really dead, but just postponed for now.

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Silver Monthly Chart And The Impending Death Cross Review!

Since the 1980 peak, the silver market crashed and turned into a bear market, with a bunch of “Truncated” bottoms or what I call A “Running” pattern that falls short of expectations.   The 2011 peak was also a shortened wave just barely breaking the 1980 silver peak.

The bullish phase from 2002 to 2011 was a 5 wave “C” wave bull market which alternated perfectly in pattern to the 70’s bull market. Readers may find it strange but the 2011 peak coincided very well with the first peak of solar cycle 24 while the 1980 peak matched solar cycle 21.

In the big picture of things, diagonal wave structures dominated the commodities markets and silver is just one shining example. I have been told that silver is in a bull market but that theory will get blown out of the water, once silver breaks critical support at about the $13.50 price level.

All bullish forecasts will be proven wrong once silver breaks this crucial support. Don’t get fooled when silver moves in small increments or seem very slow as there are no daily trading limits on most commodities, which can produce dynamic free falls that investors can’t handle. If we are in a Cycle degree silver market then any Cycle degree correction is still far from finished.

There are 30-year cycles between major bull market peaks and the next major peak could take until 2041 to complete.

Since the 2005 bottom silver has enjoyed the effect of a golden cross!  On this monthly chart, silver has already produced a “Death Cross” so being bullish in a death cross world may not work out too well in the longer run. Many if not most metals can be called, “Energy Metals”  and silver can be called that due to the fact the silver is used in solar panels!  which feed the “Green Economy”!

I will try and incorporate more and more solar cycle commentary as from my perspective the sun and its 11-year cycles control our planet.

 

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Platinum Weekly Chart Bull Market Review

I changed the wave count around a bit making the 2011 peak a short 5th wave. The commercial hedgers are still net short, but that hasn’t stopped the platinum price from rallying.

During the 2017-2018 sideways pattern sure fits a zigzag very well which crashed to new record lows, before platinum started cranking up again.  If the bulls are in control then the simple bearish trend line will not contain platinum prices.

The $760 price level is also the second time that platinum hit a major bottom which also happened with the 2008 market crashes. That fact alone could send prices soaring.

The sad fact is that the pattern in the last 3 or so years, can also work as an expanded pattern. The “C” wave bullish phase can still travel above the 2016 “A” wave peak. The rising bottom wedge is also very bullish so any nightmares of platinum prices going to $400 soon, may have a few more years to wait.

Even once this 5 wave run in Minor degree has played out, it can also be another bear market rally.  I think $1200 is attainable but then another platinum crash should happen.

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Gold Monthly Chart 1980-2019 Elliott Wave Count Review

It’s always a good idea to go back in chart history to do a complete review. All my Supercycle and Grand Supercycle wave counts I used to have no longer were making sense, so my degree levels eventually ended up at a Cycle degree.

Three-degree levels above and three-degree levels below Cycle degree is what I’m chasing.  All the Minor degree wave positions have not been filled out. They will not make any senses anyway if any Intermediate and Primary degree positions don’t make sense.

Basically, what it means we have to connect all the “Cycle Degree Dots” first before we can ever advance into the next higher degree.

I generally don’t like to use trend lines very often as I think they are very subjective.  The bottom trend line is based on the angle of the top trend line. The bottom trend line is pointing to the $500 price range.

Just so gold investors don’t freak out thinking I’m forecasting $500 gold, you can look ahead with the top trend line and it could be pointing to $3000 gold.

The top gold wave count ended on a very good 5 wave impulse move, blowing its top in 1980 at $850. Every wave analyst on the planet had some degree of a wave 3 top for 1980.  Even before I fully realized that commodities run as giant diagonals I started to apply it to gold.

From 1980 to the 2011 peak all we had was a zigzag. A fricken zigzag lasting 31 years and still only a Primary degree move. A bear market in gold lasting about 20 years was the result of the 1980 gold mania peak.

If we jump to the 1999-2000 gold bottom, gold was considered junk as it seemed that the entire world was trying to dump gold. Then a miracle happened and gold started to rally and never stopped for a good 10-year run.

I use the 30-year cycles in gold from 1920, 1950, 1980, 2011 with 2041 being the next 30-year cycle top. (SC Wave 3)

In late 2011, the gold price started to tumble and most of the wave analysts were looking for the bull market to come back. All the wave counting in the world will not help us if we have no clue what the 2011 peak really was.

It was another gold mania even more insane than 1980,  as $5,000-$10,000 gold forecasts were pretty normal.  Back at the 1980 peak, the gold price forecasts were $2000 or more. The only thing that has changed is the price of the forecasts.

If you believe that the 2011 peak is a wave 3 peak in Cycle degree,  then we can pick out 3 types of corrections that we can have. It’s pretty common Elliott Wave knowledge, that markets can fall back to the previous 4th wave of one lesser degree. The 1980-2000 bear market is not the 4th wave! It’s a “B” wave but they can act much like a 4th wave as well.

I think our present gold market is still in a bearish funk, but it could take a few years for us to see a better picture. The decline of solar cycle 24 is drawing gold prices like a magnet, but gold prices could also get repelled back up with the power of solar cycle 25 behind it. Sure we’ve had a long bearish phase already but history shows us that longer ones can happen.

 

Have a Great Easter!

 

 

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Palladium Intraday Bearish Update

This is a 90 min intraday chart with the standard moving averages as well.  Commercials have a heavy net short position which makes chasing a bull market wave count a rather futile endeavor.

There are no daily trading limits in many of the metals so they can crash in huge moves that can surprise many investors/traders.

Commercials are net short on most of these metals which does not bode well for an instant turn around soaring to new world high records.  I would have to do more research on how palladium reacts to the solar cycles, but maybe I can do a quick check by the next time I update palladium again.

Any reaction to the solar cycles can still take a few years until late 2020. I hope to post the progress of the solar cycle more often as they have a huge effect on all aspects of human activity here on earth and in all countries.

Make no mistake about it,  but the war on capitalism is in full swing as many governments and others seek the full shutdown of all fossil fuel use.

Our own government is in full destruction mode as it dictates and forces carbon taxes on all fossil fuel use.

 

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Gold Daily Chart Bearish Update!

Looking at gold from a daily chart perspective can give us an alternate opinion, especially if we are looking at a potential Head&Shoulder pattern.  I just labeled the “Head” while the right shoulder is still declining.

If this picture in gold is really a bullish pattern then, the right shoulder would have to blast much higher and not stop!  Of course, if the 5 wave sequence is close to reality then this decline will keep right on going taking out the $1160 price level.

Gold has a track record of crashing $$180-$200 in any bullish or bearish situation so any price below $1150 would certainly qualify.

The 200-day MA is down at the $1250 price level, but gold would have to travel much further before the death cross on this daily chart happens.

The death cross is much closer in the weekly and monthly charts than it is on this daily chart.

The commercial hedgers are in a very bearish funk as this is a strong net short position. With these numbers, it’s pretty hard for gold to soar to the moon again.  This Friday is a full moon so short term, gold could turn bullish.

When gold soars due to safe-haven buying,  then these moves never last very long as it’s all based on the emotion of “Fear”.

Silver and gold can and do move together, but they do so under different patterns.  In short, the overall bullish pattern in gold is painting us a false scenario, which silver and gold stock ETFs do not confirm.  Just because an asset class goes up does not mean it’s in a real bull market. Bear market rallies can last for years before they implode again.

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Silver Weekly Chart Bearish Review

As we can see on this silver weekly chart, for the last few years the basic trend has been down while gold’s trend was pointing up. Just because gold has been going up does not mean that gold is in a bull market.

Since the April 2011 peak silver has had many powerful rallies that “All” turned into bear market rallies by retracing the previous bullish move and then proceeding lower.  Silver is only about $1.40 away from a complete retracement of its 2018 bottom which would make it an 8-year bear market still in progress.  All the gold hype is brainwashing us while silver is being ignored on the most part.

Another strong dip below $13.56 would confirm that the big silver bear (Polar Bear) is alive and well.  The silver bear is already 8 years old and it will be important to watch for the next year or so.

The 2011 peak is a 31-year peak counting from 1980. The difference between the 1980 peak and the 2011 peak can hardly be measured. Both were solar cycle peaks, while solar cycle 24 had a secondary peak in 2014.

The solar cycle is what drives the business cycles on earth and silver could remain bearish until solar cycle 24 has ended. This might take until the fall of 2020 to play out.

The commercials added long and short positions, last week, which only changes the open interest as they are still net short.

When I have the moving averages turned on, we already had the Death Cross on the weekly and monthly charts, but not on the daily chart. This just supports any bearish outlook I might have at this stage of the game.

 

 

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Gold Intraday Slump Review

I was hoping for a counter-rally move and we finally got one this morning.  Gold peaked last night at $1310 and then proceeded to implode. In order for the April bullish move to remain bullish, gold has to form a very corrective looking pattern before it retraces 100% or more.

The gold price slumping below $1281 would confirm that this April rally was just another bear market rally.  Time is the unknown factor as any move can be fast or slow.  If gold breaks out to a new low it might take until the end of April for this to happen but otherwise, we are at the mercy of the emotional crowd.

Running in and out of gold assets for safe-haven reasons hardly ever lasts very long as those are emotional moves, not logic moves.

Gold also ran into the 50-day MA line at the $1306 price level after which it turned and headed south.  The 200-day MA is at the $1250 price level which is a big drop, with no guarantee that it will get there.

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Gold Intraday Update

Once I looked at the commercial hedger’s positions, there was no doubt in my mind that they are in a bearish mood.

I will add the gold COT report later. They were also just as bearish in silver so I can’t see gold or silver soaring to new record highs just yet. Most of these metals or futures contracts have no daily limit and gold/silver are two more. It is also one of the main reasons why these no limit contracts can free fall.

The death cross on the weekly charts is below us at the $1250 price level, and the $1160 price level will confirm this wild gold move mostly as a bear market rally.

Commercial hedgers removed 25,503 long positions and also added 10,272 to their short side. Combine them together and that is a substantial bearish move. Chasing a bullish wave count under these conditions is futile at best.

 

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Palladium Crash Update!

Finally, Palladium gave up and turn south. I was hoping that this would happen at the $1550 price level but palladium soared about $55 and turned at $1607.

The palladium bears have attacked, and I’m sure bull blood will flow. Right now palladium is sitting at the 50-day-MA. The 200-day MA is far down at the $1150 price level. The big question is, “Is this a short blip and the bulls will return”?

It all depends how big of a price bubble we were at?  The highest price in palladium’s history has just happened and if a Cycle degree correction is due then the above 4th wave will never hold.

Any drop down to the 4th wave would still only be a Minor degree move, but we would need three higher degree levels before a Cycle degree 4th wave crash has completed.

There is also “No” daily trading limit that I could see. Lack of a daily limit virtually allows the price to free fall so a little dip sure can turn into “Big” dip.

Commercial hedgers were net short by a little more than a 2:1 ratio so I expect this ratio to change in the future as commercials turn bullish again.

Palladium has also started to decline before the end of solar cycle #24 which may not end until late 2020. December 2020 is also the end of a 20-year cycle that started in the year 2000.

 

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Gold Intraday Gyrations Update.

You can blame gold’s gyrations on Turkey, if you like.  It sure seemed like the US dollar and the Euro benefited from the lira turmoil.

We did have a bullish phase in March, with only a few days left to go. Watch out for fake April Fool’s news, as the pranksters just love putting out fake news.

Today the media is easily manipulated, more than it ever has in history, and it’s only going to get worse.

The March rally started as a good impulse, but then it fell apart after the “A” wave peak in Subminuette degree. Gold is sitting on the bottom trend line and if the Golden Bears are in control, then this bullish support line will never hold.

If gold slices through the psychological $1300 price level with ease, then that would also help make my bearish case.  $1294 might give us 50%-60% retracement support, then again a very bearish gold price will not care about any support.

Where is the death cross?  I looked at the daily chart and then switched to the weekly chart and at about the $1240 price level gold would have to find support at the 200-day MA line. Even the golden crossings happened at about the same price level, so it will be very interesting when it gets closer. The 200-day MA is only $50-$60 below us and a crash this small is a walk in the park for gold.

 

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Platinum Monthly Chart Review

If you are looking for a “Head Scratcher”  wave count, then Platinum will provide it for us!  As much I would love to turn bullish on Platinum there is a good chance the bear trend is not over just yet.

We do have a quadruple bottom base at the $755 price level but that does not mean it will hold and then soar in a new bullish phase. The wedge pattern sure is a bullish signal, but the present pattern could push to a new record low just the same.  Commercial traders are still net short so that sure gives me pause in chasing a very bullish wave count.

All Commodities run on the diagonal wave structure and Platinum has its fair share of diagonal waves which are zigzags connected together.  I think the 2008 peak is wave 3 in Cycle degree but that produced a Primary degree wave count that I could not make fit.

After the 2008 peak, I had to drop down my degree level by one, as the odds of a Cycle degree 4th wave finish in the near future is still very slim at this time.

I would love to be more bullish but the commercials do not support it.

Being too early does produce a bunch of pain due to the leverage built into all commodities. Even the ETF, PPLT will give you pain if we are too early. PPLT is about 1/10 the price of a  single Platinum ounce and is sitting around $78.80 USD.

 

 

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Gold Daily Chart Update

I’ve made some adjustments to the wave count at this time.  The big question is, “Is this rally a Bear Rally”?  I like to think it is but only time can answer that question.  A Gold crash below $1160 would give us an answer.

First gold has to show us what the $1200 price level will do, as even numbers seemed to be a crowd psychology thing.  Crossing the $1200 price level could get the gold bulls very worried and a new rush of protective sell stops could get triggered.

At the $1350 price level another right shoulder will form and if there still is a big bullish gold price move, then the right shoulder will not hold.  In the last few years, we’ve had a few H&S patterns and they all have pushed gold prices back down.  Last week commercials made some bullish moves but they are still net short by a wide margin.

In little over 5 months, gold moved up $175, but they are forgetting that gold has an ugly history of crashing $100-$200 as well.

If investors are running to gold for a safe-haven to hide in, then that’s an emotional move, not a logical move.

Gold has also come to a screeching halt as it bounces around the 50-day MA line. Gold is still under the influence of a golden cross and gold would have to crash through the $1240 price level for us to witness a new death cross.

On a weekly chart, the new death cross is only about $20 apart!

 

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Palladium Daily Chart Review

Palladium has been on one crazy bullish ride, but I think another top is in at the $1556 price level reached on Feb 26, 2019.  Checking the commercial hedger’s positions they have a very healthy net short position with a ratio of about 3.57:1.

The speculators have gone the opposite direction as they are net long by a ratio of 4.17:1 They will be the ones to panic first once this palladium bear market shows itself.

In the past palladium has made very long and steep crashes so it sure can happen again, especially if the Cycle degree wave 3 has also completed.

The 4th wave bottom I do show is only a Minor degree bottom at about the $834 price level.  At best that may offer temporary support but a move below $500 would not surprise me.

I also looked at where the Death Cross might be and at this point where not anywhere near a Death Cross on any of the 3 time scales I normally use.

On the intraday 90 minute scale its another story, as palladium just crossed the 200-day MA line.

 

 

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Gold: Weekly Chart Impending Death Cross Review

I look at two sets of COT reports and this chart shows that the commercial hedgers have a very bearish outlook. Of course, the speculators are doing the exact opposite as they are chasing the gold bull market that many believe we are in.   When I see such a bearish position as the COT report above I’m not going to spend my time looking for a bull market, that may never come.

Between the silver chart and this gold weekly chart, we can see a huge difference.  Since the 2016 July, peak gold has a very bullish slant so wave analysts will show a bullish wave count, most of the time.  Silver and the majority of gold stock related ETFs do not confirm gold’s pattern as most of them are pointing down, not up like gold.

At present we have 3 major gold prices that if cross will make or break another bull gold market myth.  $1160, $1120 and $1050 will all be critical price levels, besides $1200 being a psychological number as well.  For now, gold is still under the control of a Golden Cross but will be set to change if gold keeps crashing.

With a monthly chart, the 200-day MA is down at the $1000 price level, while on a daily chart the 200-day MA is at $1240.

No wave count is written in stone but when the bullish leg that started in August 2018 retraces about $96 we could be ready for a reversal. We could get a 60-70% retracement as well but we better see a stunning correction like pattern when it completes.

Any price below that $1160 bottom will confirm that at least one leg of it was just a bear market rally.  Bullish and bearish moves can last for an entire month with March being a very popular turning month. It’s a seasonal thing as well, as people become more active in March when we start to get out of the deep freeze we’ve had this year.

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Silver: Crash, Death Cross Weekly Chart Update!

This COT report displays the Commercial bearish positions without having to think too much about it. Last weeks report they added to their bearish outlook so looking for a bullish wave count would be an exercise in futility.  Even if they shifted to a neutral position it would be better than what we have right now.

With this weekly chart, silver is still under the influence of a Death Cross and silver would have to make a big price jump for this Death Cross to become a Golden Cross.  Good luck with that as when we look at silver with a daily chart, we can see a big gap still open to the downside.

By $14.600 this gap will be closed and could offer support,  at least in the short term.  This is also where a bullish correction could take place, but if silver dips below the bottom trendline at $13.882, then the entire phase since the 2016 bottom will be classified as just another bear market rally from a Cycle degree perspective.

How many fake bull markets has silver had since the 2011 top? Add them all up and we still have one ugly bear market in progress.

I like the wedge I see but I never trust that the flat bottom will hold anything when as this chart can still plunge slice right through the bottom support line.

 

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Gold Weekly Chart Review

Bull market or bear rally is the million dollar question?  What the majority do call a bull market, can be just a big bear market rally from an EWP point of view.  Since the 2011 peak we’ve had more bear rallies than we can count, well we can count them if we have nothing better to do. Many were Minor degree moves with one Intermediate degree bull move that all have failed.

I was fooled as well but slowly succumbed to the bears as counter rallies were always completely retraced.  Sure, at times the price is important but the pattern is far more important. If we look back to the 2015 low ($1050), gold has been in a bullish phase since then and is now a little over 3 years long in duration.  Since the 2015 bottom, we’ve had two higher lows which is a conventional way of calling a bull market.

Each of the three bullish phases topped out and was followed by a crash and recovery. We ended up with three peaks that have to produce some serious resistance, with the third peak reaching $1346 before gold started to correct again.  We would need this gold run to continue past the $1400 price, and once that happens you will hear the world screaming, “Upside Breakout”.

Since the 2016 top, we now have two sets of Head&Shoulder patterns already formed. Are they bullish H&S patterns or bearish patterns? We also have a wedge that has formed, so any new direction is not all that clear at this time. Gold has 3 major support prices that would have to hold if a true bullish phase is still in progress, but if gold has been in a 3-year bear rally, then all three price supports will get completely retraced. The three support prices would be $1160, $1120 and the last one would be $1050?

Gold has also been in a rally right along with stocks, so gold could also crash right along with the stock markets. When fear strikes logic thinking is thrown out the window and all those little emotional “Algorithms” will panic, selling out before bullish investors lose money.  Sell stops are piled up below present prices, and you don’t need a smart “Algorithm” to trigger them.

AI trading is also becoming a major factor and I see it more of a bad thing than a good thing.

I would be far more bullish if the commercial traders were in a net long position, but the sad fact is that they are not!

 

 

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Platinum Weekly Chart Bear Market Review

This weekly chart of platinum is only about $28 away from hitting another major bear market low. Any price below $760 would confirm that the big bear market which started in 2008, is still alive and well. Little over a 10-year bear market and it’s still not finished. Bear markets don’t stop on a dime, even though at times it might look like it. This bearish phase could still twist and turn just to frustrate the hell out any wave analyst.

The best scenario would be a huge spike to the downside clearly visible on the bigger time series charts. In other words, this bearish move can still do a lot of damage to a bullish position. Commercials are still net short here, so I would like to see those numbers swing the opposite way before we get closer to a bottom.

I think my last Market Vane Report came in on the 12th and it shows a new record low amount of bulls present at 20%. This is the lowest reading in “All” of 35 different asset classes that make up the report. The 24-month low bullish number was 16%, so it will be interesting to see if 16% gets beat again. The lower the number, the more bulls there will be that can come back and drive a new bullish phase.

The bearish phase from the 2016 peak to the first 2018 peak is the same pattern as gold and silver have, except gold is the only asset that ended pointing up. Gold’s price action is brainwashing us because many mainstream analysts cover gold, but platinum is pretty well ignored.

I have to scan many mining blogs to catch the intensity of the platinum news, which I don’t have to do with gold. Any business related blog will have gold commentary.

 

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Silver Weekly Chart Death Cross Update.

This weekly chart shows the 2011 peak which was an insane mania peak ending 31 years after the 1980 silver mania peak. Crazy peaks like this do not correct in just a few short years but can take many years. 2011 also was an ending to zigzag peak in Primary degree, and topping it off with my Cycle degree wave 3. We are now a little over 7 years old in this bearish phase, and even if another major bottom materializes it could still take until 2021 to complete. 2011+30 years could give us a new Supercycle degree peak in 2041!  Once the Cycle degree 4th wave bottom becomes more certain, we can take that date and subtract that from 2041. I have counted out several silver bear markets that have lasted about 13 years, which would give us a bottom closer to 2024, leaving us with a potential 17-year bull market.

This is all fine and dandy but there is a big catch! This impending bull market will be in the shape of another huge zigzag in Primary degree.

In the last few days, silver has peaked and has now started to correct, depending on what you believe in. A true bull market cannot let silver crash below $13.50 which is only $2.06 away from doing so. On the daily chart, there is a huge gap still open that won’t get close until the $14.80 price level has been hit. This may supply short term support but if this so-called rally is a bear market rally then a new record low silver price will come.

The Death Cross on this weekly chart happened back in July 2018, with the daily chart Death Cross happening soon once silver gets near the gap.

Also, the monthly Death Cross is now having a big Valintine’s smooching feast as the 200-day and 50-day MA are kissing. The short version is there is no Golden Cross insight anywhere!

The silver COT report below shows commercials in the highest short position in close to a year so that reading does not entice me to stay in any long positions.

 

Friday night will give us some updated COT data but commercials would have to shift dramatically, and make that big red line disappear!

 

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Gold Intraday Bearish Update

In February gold has slipped back into a bearish mood now approaching the $1300 price level. $1300 is what I call a psychological price as the media picks up its commentary when this price level is getting close.  The other psychological price level is $1200. The gold analysts will go nuts if gold ever approaches $1200 again.  The question remains? Is gold in a bigger bullish phase, or was the move from $1160 just a big bear market rally?   Since the 2011 peak gold has made many bear market rallies where the majority were fooled into believing the return of the bull market.

I’m keeping my degree levels small at this time as small degree levels get trashed pretty quick, as it’s all about the process of elimination.

I would turn very bullish on gold if gold produced a big impressive spike to the downside, but gold must also display a huge zigzag or even a flat type of a crash.  It’s the end of “C” waves that do produce the huge spikes.

It looks like a nice run of 5 is starting so now its just a matter of time if another run of 5 completes. Sounds like playing cards when I talk about a run of 5, and it is. I used to play Big Bertha a lot where we always need to build runs. Even corrective waves come in runs of 5, like W, X, Y, X, Z.

Any drop in the gold price,  say from $1300 to $1200 is just, “Childs-play”, as gold can move very violently when it wants to. I also read that January gold runs don’t last all that long and even summers can be pretty boring for gold. When gold makes a run out of fear, “Safe-haven buyers rushing in”, then they can “Rush out” just as fast.

We are close to a 7-year bear market in gold so far, and I think it’s far from over. I’ve counted out 13-year bearish moves in silver several times, but that doesn’t mean it will happen this time.

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Gold Intraday Peak Update!

Last month gold has finally decided to back off in its price surge to $1325. If this so-called bull market in gold is real then a strong correction has to complete well before the $1160 price bottom. That’s a lot of price distance gold has to cover, which the majority of participants don’t expect. Banks are up to their usual tricks and have been buying gold in 2018.  The problem with banks buying and selling gold is they always buy high and then sell low at bear market bottoms. Back in 1998-2000, they were selling gold as fast as they could with countries unloading their gold stashes as well. In 1999 gold was considered an ancient relic, close to junk status.

As fast and far that gold can soar, it can crash even faster and deeper. We could see a correction, but don’t get excited as even a zigzag decline can crash to new lows if this bullish phase is just a big bear rally. Fear could engulf many asset classes where there is no place to hide as stock markets and gold crash at the same time.  Sure, I can be wrong and it will be important to recognize a correction when it’s going to finish.

I believe the 2011 peak was a 30-year mania peak in Cycle degree wave 3. Any Cycle degree bear market in gold does not end in just 8 or 10 years, as the bear market in gold during the 1990’s last 20 years.

Since the government shutdown, the first COT report was published last Friday. The way things are going the government could shut down again, with no COT reports being produced.

When I first saw the report I noticed a very large shift to the bearish side, with about 5-6 weeks backlogged data being published.

 

Commercials added 33,486 short positions and took away 2058 long positions, for a combined total of 35,544 contracts totaling just over 3.5 million Troy ounces.  Now, look over to the NON-Commercial side (Speculators).  We can see they did the exact opposite, chasing this gold bullish phase.  The problem is that both parties can’t be right!  The mass media always talk about what the speculators are doing and ignore all commercial hedgers action. From my perspective, the commercial hedgers have the best track record and ignoring them usually brings pain and suffering onto the bulls that think a trend can never end. What the COT report is telling me is that no super gold bull will start to soar anytime soon.

There is no corrective price bottom I want to use right now, as a 60%-70% net crash can happen. The $1200 price level is a gold psychological price level so if and when the gold price ever hits that area again it could put up a big fight!

Silver has a lot less distance to fall before it resumes the big bear market again.  Silver only has to fall below $14 and then below $13.50 and it would be back into its bear market.

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Silver Monthly Chart 1980-2019 Review

Many analysts and wave analysts are very bullish on gold and silver as they think it offers some protection or safe harbor.  Running into an asset class is an emotional decision, not a logic one.

Emotional runs rarely last that long and as we can see if we look back in history, how violent silver moves have been. Of course, 20-20 hindsight vision is all fine and dandy, but if we don’t look back further than 2011, it is hard to imagine how violent silver prices have moved in the past. It’s the nature of the beast as commodities all follow the diagonal wave patterns, not those pretty wave patterns that we have in the DJIA or SP500.  Diagonal wave structures break all the rules as overlapping is more like the rule than the exception.

I remember the days when the Hunt brothers were trying to corner the silver market and since they tried to do this near a 30-year 1980 record high it was doomed to fail.

If we look at the spikes in 1980 and 2011, what followed was a huge bear market. Commodities are just big zigzags that are linked together and silver is no exception. The 30-year cycle with a ± 1-year frequency to it can be tracked back by counting backward by 30 years each time. The 120, 90, 60-year cycles all contain the 30-year cycles as well. 2041 will be a Supercycle degree peak but that will not happen until the bear market since the 2011 peak is finished.

Last week the government bureaucrats went back to work and actually produced new COT reports dated February 1, 2011. During this downtime, the commercials didn’t get excited and jump on the bullish silver bandwagon but they turned bearish and increased their net short silver positions. The speculators did the exact opposite as they are still chasing the silver bull.  This gives me confidence that the bull market in silver can turn on a dime, and break a new record, below the $13-$14 price level.  The recent bullish phase in silver is just barely 3 months old and is lagging gold by a long shot.

Commercials added 2960 short positions and removed 1433 long positions. Combine the two and I see more bearish moves to come, than bullish moves. It’s the non-commercial hedgers that always get in a trap, not the commercials who work inside the industry.

Gold commercials made a big bearish move, which I will post and edit in my recent gold post.

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Gold 1950-2011 Review

I’m showing a big picture in gold that very few wave analysts will show us. Wave analysts have gold in a bull market with the contrarians making damn sure in telling me that I’m wrong that gold still has to form new record lows in the next 2-3 years.  The $1400-$1050 price range in gold is the argument and recently gold was heading to $1325, so the $1400 gold price move is not yet dead!

The main difference of opinion is what we think the 2011 peak in gold actually was?  If we think that the 2011 peak was just a normal peak in a normal bull market then yes,  many expect a new bull market in gold. From my Cycle degree perspective, this gold peak of 2011 is part of a 30-year cycle which had peaked in 1950, 1980 and now in 2011. We are out by one year but the next major mania gold and silver peak will not happen until 2041. 2041 would be the Cycle degree wave 5 peak, and since no 5th wave should ever be uncapped, 2041 will also be an SC degree wave 3 peak.

There is little doubt in my mind that this gold market has not completed any 4th wave in Cycle degree. At a bare minimum, gold would have to retrace deep enough to enter the price level of the 1980 peak of $850. The 2011  peak also matches the first peak of solar cycle #24. 1980 was also a solar cycle peak but I’m not sure of the exact cycle peak it was.  All commodities follow diagonal patterns and from the 1950 peak to the 2011 peak gold was just a huge zigzag.

Gold travels up and down with demographics as I started work at the bottom of wave 2 in cycle degree and the bull market in gold we do see was created by the boomers entering the labor force. In 1968 I was working for $2.98 CAD per hour, but we got a 20% pay raise every year for 4 years running!  I was able to save money and still blow much of it on having a good time.

If gold ever plunges below $500 in the next 2-3 years then gold will be a long term hold until 2041!  At this scale, the 200-day MA is still down at the $1000 price level and betting against gold hitting this 200-day MA may be a long term losing proposition.

What will happen first? Will gold close above $1400, before it closes below $1050? One price represents a bullish breakout while the $1050 price level would the bearish breakout!   Just to really make things interesting gold could shoot above $1401 and then turn around and head down to $1049!

 

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Gold Intraday High Update

This morning gold spike to a high of $1315 before gold started to back off.  Analysts are bullish but most of them give emotional reasons why gold has been going up.  “Trade Concerns”  is just another mild way of calling gold’s bullish run as a safe-haven run.  There is a good chance that gold can dip to the $1300 price level, and then give us another leg up.  Sure, silver has also gone up but gold has left silver in the dust!

Even the gold-related ETFs and indices are lagging far behind the gold price. At this 90 minute scale, we get more “Crossings” as it didn’t take to long to travel from a Death Cross, right back to a Golden Cross. On the daily chart, we are still under the effect of the Golden Cross.

Ultimately it’s the USD dollar’s bearish action that is pushing gold higher.  My Market Vane report has expired and my COT reports may get published this Friday. Last time the commercials had very bearish positions, so it will be interesting to see how they shifted their positions. This Friday economic reports usually come out as well and if investors interpret them wrong, it could start a mini sell-off.

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Platinum Weekly Chart Bear Market Review

This platinum bear market is about 7 years long with a major bottom in August of 2018.  With that kind of a bottom, we could turn very bullish.  There are no COT reports due to the government shutdown, but at least the Market Vane Report keeps on coming, which I will comment on later.

If we look at the pattern from 2016 to the 2018 peak, this pattern is identical to gold except with gold the entire pattern is pointing up. Virtually all other gold-related asset classes during the same time period have been facing down or sideways.  Silver was on the verge of a new bear market low while the price of gold was pointing up.

If the pattern in platinum can dip to new record lows, there is no reason why gold and silver can’t eventually do the same thing. The excuse that gold is special due to safe-haven buying is all pure BS as emotional moves never last long.  The pattern we see at the intraday scale looks corrective to me so a new record low should happen. Mind you it could be as slow as molasses flowing in the winter.

Any price plunge below $750 would sure help to support my near term bearish stance. After that, I will turn very bullish for a bigger long term bullish phase.  One reason I will turn bullish is the Market Vane Report (MVR) which showed that only 22% bulls are present.  In other words, there are a large number of bulls that will come back.  From a list of 35 MV items covered, the 22% low in platinum had the lowest reading out of all other asset classes.  The next lowest reading was the S. Franc at 30% bulls.

Palladium is at the opposite end, which is not covered in the MVR.

PPLT is the ETF equivalent to this futures chart and it looks like the ETF is doing a good job of tracking the metal.

 

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Palladium Daily Chart Record High Review

Since August 2018 Palladium finished a correction and then started to soar. Palladium produced decent corrections during this time. I believe we are coming to the end of this bullish cycle as on January 17 palladium peaked at $1430 and then proceeded into another correction. Many may think it will be a correction but a bigger bear market will push palladium prices much deeper than anyone can imagine at this time.

In January 2018 palladium also peaked and a 7-8 month bear market ensued.  The entire palladium Cycle degree Idealized wave count is diagonal, so another Primary degree zigzag bear market can happen and they happen when market players least expect.

If this wave 3-4-5 in Minor degree is true, then the 4th wave bottom in August 2018 will never hold.  Palladium might give us temporary support at $830 but bigger support would be closer to the $500-$600 price level.

You will read many stories about the palladium supply shortage with forecasts that prices will be much higher this year. I’ve heard all that “fundamental logic”  many times before in gold and oil, and still, the market in question crashed. All we need is for buyers to take a rest and all the protective sell stops can start to get hit.  All the bullish traders suddenly turn into palladium bears and the analysts will start telling us the change in fundamentals. Fundamentals are lagging indicators and you just have to be patient and the analysts will find you a reason why palladium is crashing.

The crowd loves to buy high, and they can get convinced to be “bullish” just when they should be very bearish. The COT reports are just about one month old, but commercials were net short in late December 2018 already. Not until the shut down is over and done with will the COT reports get updated.

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Gold Daily Chart: Bullish Review

Since the August 2018 bottom of $1160, gold started to make its present-day run. This came close to $1300 with a total run length of about $140. In the last day or so gold has started to retreat a bit. This run was choppy as waves overlapped and destroyed any true impulse we may have had. The gold bulls are confident that gold will still travel much further, but they need for gold to break out above the $1400 price level just to confirm that gold is still in a bull market.  The only way I can see that gold will continue is if the $1160 bottom was a “B” wave in Intermediate degree.   The COT reports are old as the government shut down has not produced any reports since December 20, 2018.

This diagonal set of 5 waves has to produce a “Correction”, in order for gold to produce two more legs up. How deep this correction can go, can always fall back to the previous 4th wave of one lesser degree. Of course where this previous 4th wave of one lesser degree actually is, is just an opinion at best. Folks, gold can crash in a 60%-70% net move that could send gold back down to the $1200 price level. $1200 is a psychological number and if gold dropped down below $1200 the gold bugs would start to get pretty agitated.

We are still in the Death Cross zone with this daily chart, and gold would have to keep soaring in order for the Golden Cross to become real.  On A weekly chart, gold is now well above both MA lines with the 200-day MA support being at $1234. Sure gold stocks have moved up as well but, they sure are acting like they don’t care about the gold price surge.  We have one gap open below present prices, which should get closed once gold retraces below $1270.

This entire move could still be a bear market rally and a complete retracement of the $1160 price level would have to happen.  What the majority don’t understand is that the 2011 peak in the gold price was a gold and silver price mania/bubble that only comes along once every 30 years or so.  Gold peaks of 1920, 1950, 1980 and 2011 follow Cycle and Primary degree moves, with the next big top being closer to 2041 when Cycle degree wave 5 is also due.

Those that did not pay attention or record all the mania readings during 2010-2011, will think we are in a normal gold correction and a new leg up is in the “Bag”, so to speak.

Elliott Wave International (EWI) is very good at recording these moods and I will insert their gold chart below.

 

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Silver Daily Chart Review

When we look at the last 2 years we can see the angle of the pattern sloping down.  This is nothing like what gold has done as gold has a much more bullish angle to it. It’s gold that is brainwashing us while silver only saw it’s a new record low in November of 2018. That would make the silver bull market just about 6 weeks old.  The record low in silver sure looks like an expanded pattern, so technically we could see silvers retrace its entire bullish move.

The bullish side of silver has already started to back off, so now we wait and see how deep any correction may take us.  “Correction” is a loose term as the silver decline has to make a pattern that can show a decent counter-rally in the next month or so. Vertical moves like this cannot be maintained, especially if this also was a run to safe-haven. Fear moves rarely last that long as they can crash faster than they went up!   The huge gap that opened up is a big hint that silver could crash to close off this gap which could take all of January to happen.

This Friday we get new government COT reports but Decembers report had commercials still building short positions. I follow two sites as they both have a bit of difference but it shows the net short positions in a more visual.

The commercial bearish outlook sure doesn’t inspire me to get all warm and fuzzy about a bull market with no end!  Since 2018, the commercial hedgers only have had net long positions 6 times.

Silver has also sliced through the 200-day MA which it has done many times before, after which silver crashed each time. The 50-day MA is at the $14.50 price level and if the bearish move returns then the 50-day MA will provide little support. Any price drop below $13.88 would definitely confirm this bullish phase as one giant bull market fake or bear market rally. Any bear market rally always retraces back to the point of origin and the only difference is the degree. If the majority can get fooled with just a Minute degree bullish phase, then the larger degree bear market rallies can easily trap the bulls.

 

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Gold Daily Chart Year End Update!

I still have a “B” wave peak in Minor degree as the decline could fit into a diagonal 5 wave sequence.  It is priceless to see gold scream higher and end in a near vertical spike to the upside at the end of the month and the end of a year.  Even though gold gave us an impressive run so far, I believe a correction is due.  Of course, this correction may never happen if the entire move in gold was just a bear market rally!   Gold sliced through the 200-day MA on this daily chart, but on the weekly chart gold just hit the 200-day MA. That hints of resistance which matches many of the peaks in 2017.

I labeled the Aug/Dec run as a triangle which can happen in 4th waves, but the exact same wave count can double as a diagonal set of 5 waves with a degree adjustment. A potential diagonal wave one will still force a substantial correction for gold, where gold can crash back down to the $1200 price level before it cranks up again.  This move has the look of a “fear” run as it started at the same time stocks started to move to the downside.   Gold would have to travel much further before a Golden Cross is created. The 50-day may not reach the 200-day MA before gold turns down again.

The December 20th COT reports showed that the commercials were making a very bearish move by adding to their already net short positions. At the same time, the commercial hedgers removed long positions which just adds to their bearish outlook. We’re not at any extreme but it sure does not support any huge bullish phase still to come. Gaps to the upside have opened up, so they will get filled before gold can keep heading north.

Meanwhile, the speculators are taking the exact opposite side of the trade as they are chasing this bull market. FOMO is a very powerful motivator, but emotional moves seemed to have a limited lifespan.

Silver has also soared with the COT reports showing the same moves as with gold.  2019 is a new year and we could get a new direction in gold as well.  Gold peaked in 2011 which matches the first peak in solar cycle #24, this peak was not some little peak in an ongoing bull market, but it was a once in 30-year mania peak.  In this case, it was 30 +1 years from the 1980 peak. 1950 was the previous peak all matching Cycle degree peaks. Do not underestimate the power of the solar cycles on gold as solar cycle turnings seemed to attract but can also alternate by repelling.

2011 was a wave 3 peak in Cycle degree so until I see a complete zigzag or flat coming to an end, I will look for the bearish moves.

Commodities run on a different idealized diagonal pattern than what stocks do, and it was the Roaring 20’s when impulse waves started to take over and the choppiness of commodities disappeared.

Have a Safe and Happy New Year!

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