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Category Archives: PRECIOUS METALS

Silver Daily Chart Update: Bull Trap?

This is a daily chart but I have increased the bar count from a normal 500 to 1500 which stretches this daily chart. This way the top wave 2 in Intermediate degree is showing.  Silver is not even close to looking like gold and I don’t think it is going to catch up. Catching up rarely happens as silver works much better as a leading indicator to what gold is going to do.

Since the 2016 peak, silver has executed a grinding bear market, which does work as a triangle in a “B” wave. Silver also has a wedge that is horizontal, further compounding the forecast in which way silver can go.  We do have a few waves that show higher lows, but that could be just a “D” wave.  Short term gold and silver can fall right along with crude oil.  The fact that silver has been struggling to gain bullish momentum also helps any bearish outlook.  Any “C” wave, crash, can happen so fast it will surprise us all.  I don’t like surprises, so it’s always a good idea to look for them before they happen.

If the bearish 4th wave scenario is true, then the silver market has to crash to new lows, even by a very small amount.

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Gold Daily Chart: Is $1375 A Bull Trap?

 

Our present gold bullish phase was an extremely choppy ride and gold has been struggling as of late. We can go back 5-6 years and gold have struggled around this 1375 price level many times before. Based on the top line we also have 4 H&S patterns of various sizes, which would be very bullish in a bull market, but it would be very bearish if a big correction is coming.  I cannot stay bullish when I see this as it looks too much like a gold bull trap to me.

I did raise my degree level up by one, and the “A” wave I’m use can switch to a 4th wave easily. The rally that started in early 2017, can work as a triangle in a “B” wave. Any triangle in a “B” wave like this is very bullish in the long term, but short term gold bulls could be trapped.

We also have a rising wedge which we know can produce some violent trend reversals. Our present top could be a running inverted zigzag so a dip below $1300 would be the first logical price target to get breached.

Gold could turn bearish, along with the stock market, which has happened before during the 2008 crisis.  Gold could roll around some more, but if the entire gold bull market was a fake, then it must start to tell us soon.

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Gold Daily Chart Review

The Gold crash of late 2016 has just about been completely retraced and gold is finding tough resistance at the $1360 price level. Many times I have mentioned the $1375 price level as the price to beat to confirm the 2016 crash as a correction. We’re still about $25 away from the $1375 breakout and I’m confident gold will still clear $1375 with flying colors.  Wild moves in one direction and then a wild move in the other, seems to be the normal state of affairs.

I show a simplified “C” wave still in progress, but they are all diagonals, which is what we should expect for a “C” wave bullish phase.  All this is still pointing gold to the $1500-$1600 price range. A short term correction may still be in progress so I expect some violent moves as gold gets closer to a breakout situation.  Emotional investors jump in and out of gold for “safe-haven” reasons, so based on that it is impossible to know when investors suddenly get the urge to “buy”.

In the end it will be the US dollar bear market that will keep gold very active and until the US dollar is ready to charge back into a full bull market, the upward pressure on gold should remain.  It’s when this daily chart goes vertical, we have to wake up, as vertical moves do produce big bearish phases.

The biggest threat will come from stocks, when they start on bigger counter rallies. Gold and gold stocks will always find competition from the general stock markets and the idea is to spot any reversal before it happens, not after. It is the mass media that are always late in recognizing a trend change as the fundamentals are lagging indicators, not leading indicators.

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Palladium 1980-2018 Review

I have spent years working palladium, trying to figure what this overlapping bull market is. When we can’t figure out where we are, we sure will have problems forecasting anything. In the chart above, we’re lucky if we can see a decent impulse wave anywhere except for some Minute degree runs. I look at palladium from a diagonal wave pattern perspective, with Cycle degree wave 3 terminating at the January, 2018 peak. Time will confirm  if our present peak will hold

When Palladium crashed from the 1980 peak it crashed with a zigzag containing a long tail that is nowhere being equal in length to the “A5” wave. If a zigzag  has ended with a long “C5” wave just once, then I allow it to happen in all my wave counting at all degree levels. 1929-1932 is another prime example of a long trailing “C5” wave, so the precedent has been set.

The crash down into the 1982 bottom and the bullish phase to the 2000 peak, was also a zigzag with a stretched “C5” wave. Long trailing “C5” waves are very common, so I look for them all the time.  Now that I have talked about those nasty long “C5” waves the 2000-2009 crash was a “flat” and it even turned into a running flat as well. The crash in 2002 was also a zigzag but it was a leading “A3” wave into a flat. (3-3-5).  In a diagonal wave pattern,  the flats do appear, but they can appear in wave 2 crashes as well. As long as wave 2 and wave 4 alternates the flats and zigzags are acceptable. It is wave 1,3 and 5 that should contain zigzag wave structures and with a bit of variability it will keep the wave analyst busy trying to force a diagonal into an impulse wave structure.

Crude oil made the same diagonal rally from 1999 to 2008,  yet every expert wave analyst forced this bull market into an impulse. Palladium seems to have a good track record of horrific crashes so there is no reason why we can’t expect another palladium crash. Will palladium stop at the bottom trend line or will this trend line get sliced in two?

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Gold Daily Chart Update: More Upside To Come!

Gold is making what looks like a correction, but with a bit more downside left to go next week.  Since the entire December 2016 low gold has created a choppy bullish phase that has been a real challenge to say the least. These choppy bullish moves also tell me that diagonal waves are involved, which develop in any degree “A”, “C”  in 5th waves. At this time the gold bullish phase is not finished, and that gold still has to break above the resistance price of $1375.

Bull markets don’t end when they are pointing down, they end when the charts are pointing up mostly in blow-off conditions. This blow-off condition should still happen which could push gold to $1400-$1600. At $1550 gold would run into the bottom of resistance, so gold has its short term bullish battle cut out for it.

The COT report has not been updated, but the previous week they added to their long positions in gold and silver even as they are still net short. With silver the commercials are just a bit shy of being even, which is a big change from what they used to have.

The US dollar bear market is far from finished and also has a bit more correcting to do. Also, as long as stocks are very bearish, then this alone could give gold a big boost! Some people are really hung up on the Gold/Silver ratio, which I think is irrelevant from a bygone era when silver was fixed to gold. Even though, I took a reading today, and the Gold/Silver ratio is at 81:1, which is the same ratio that happened with the 2016 bottom in gold. I will do a few more backward checks, but I don’t expect to find any Gold/Silver ratios helpful.

I use this gold futures cash chart for all my ratio calculations.

Gold stock ETFs  look like they are creeping down, but they can also still show us a good run. It is very common that gold can act much differently than gold stock ETFs can.

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Gold Intraday Rally: Impending correction?

An inverted zigzag could have started in the first part of March and they can always get retraced by 100% or more so until this clarifies, I have to look at a short term potential bearish move in gold. Besides that I am starting to notice that I’m working into degree levels that are getting smaller and smaller. I only have two smaller degrees left from what I’m using which is not a good sign. It means I have to take another look on the daily charts to see if a higher degree is warranted.  Any move down to $1300 would accomplish a complete retracement, but diagonal waves can trash the bearish outlook easily.

The US dollar may have a short term bullish surprise for us and until that has played out, gold will see downward pressure.  Any moves in this commodities world can be very violent which many traders do not like! Get used to it because leverage is one of the main causes of violent moves. Bitching about violent swings or thinking commodities shouldn’t crash is a totally naive outlook. In commodities “fear” is the main driver of prices. In the general stock markets, it’s greed and hope that drive prices.  Fear comes into play when stocks start to correct or head down.

I think gold still has to go well above $1375 as the  bull market has consistently produced higher lows. If we don’t pay attention to higher lows then we will always get out before it’s time to do so. When gold makes a vertical move, then it may be a different story.

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Silver Daily Chart Update: Starting Another Bullish Phase?

Recently silver has been declining until today as silver woke up! This daily chart is vastly different than gold. Sure, they both do go up, but they are vastly different wave counts. From mid 2016 silver has pattern swings that overlap every wave next to it. To put it bluntly, there are only very small 5 wave sequences which turn into zigzags and then reverse trends.

For the correction down to July 20, 2017, a triangle is my favorite, but a very complex diagonal will also work. The last drop into mid 2017 has also ended with a clean zigzag, which happen in the diagonals as well as triangles.  Once we look carefully from the 2017 bottom, (B Wave) we had two higher lows which is the sign of a bull market or big bullish phase still in progress.

Higher lows are created by crashing flats or zigzags and in a bigger bullish phase zigzags retrace everything from where it started from. There is a big zigzag that has not been completely retraced as silver would have to go above $18.20 to do that. Above $20.80 would be the ultimate prize.

Even at $18.50 silver could head south again, but we will deal with that if and when the time arrives. In the last week I have handled a few of those new 10 ounce silver coins and they are some of the best looking coins I have seen. Silvers recent correction looks like it can contain an expanded flat, so I better start the count as the first stage to zigzag.

In order for that to get confirmed I would need silver to head to $17.80. On this daily chart, we have two major price hurdles to clear before any bullish move is completed. Sure, it all has been slow going, but when a “C” wave gets unleashed, the short players will get burned.

I’m not concerned about any rate increases that may still be coming this year as that is a sign of impending inflation, and it’s when gold and silver is supposed to shine. Sure silver and gold can fluctuate wildly in price, but it has an intrinsic value to it, where it can’t fall to zero like “any” paper  or  cyber tech asset can.

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Gold Intraday Bullish Reversal?

I am looking at a potential move that might resemble a 5 wave run in a “C” wave bull market. We already have a higher low this month, which is the conventional description of a bull market. Gold is still creating higher lows since late 2015 when the bullish phase began.   I mentioned it many times that gold should still completely retrace the $1375 price level, which it had tried to do many times but has failed each time.

As long as the US dollar has not finished its biggest bearish move, then gold will see upside pressure regardless of what the expert opinions are at any given time.  We can’t rely on supply and demand scenarios as there is no end to the supply when we see pictures of the gold in the vaults.

Any rate increase may stun the gold bulls temporarily, but back in the 70’s rates were soaring right along with gold so it can happen again. The rate increases scheduled don’t even amount to a bee sting compared to what happened in the 70’s.

I think we will see the end to any rate increases by watching the 30-day Fed fund rate after it has flattened for a year or so. It may not even last that long as the first 1 to 2 pauses might be enough.

The gold bullish cycle so far has been very choppy, which do not fit into the perfect world of an impulse.

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Platinum Monthly Chart: More Downside To Come?

It’s been a long time since I looked at platinum. When we go back to the 1980 peak we see what followed what looks like 5 waves down. Ok, but it can count as a flat if we see a single zigzag first, then “B” wave rally and a choppy 5 wave decline. (3-3-5)  I saw the pattern during the 90’s as a running zigzag. I’m not inventing a new pattern, but zigzags do have a habit of never being even.

Either way, that bearish phase ended in late 1998 before another rocket move soaring to the $2100 price level. From early 1985 platinum can also work as a big zigzag terminating in late 2007, which is a lot more common in diagonal wave structures.  Then the big crash of 2008 sent platinum south, stopping hard at the $800 price level again in late 2015.

This $800 price level is important because platinum has pivoted around this number 4 times already, since the 1980 peak.  If platinum gets close to the $800 again, then we are faced with a big downside breakout situation. This may not stop until platinum hits the $550-$600 price range.

Since the 1980’s peak platinum resistance produced major reversals at the $550-$600 price range, so this price has significant meaning.

At the late 2007 peak, I show a Cycle degree wave 3 top, which I used to have back at the 1980 platinum peak. I spent years with wave 3 in Cycle degree at the 1980’s peak, but this would move us into SC degree wave counts to soon. I refuse to play the big wave count game anymore, due to the bull markets they have missed.

It takes an incredible amount of time to get a wave count refined to a point we can “see” bull markets coming, but todays wave traders only use the EWP as short term trade setups!

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March, 8, 2018 Gold Intraday Crash Update

Since the December, 2016 bottom, Gold has created higher lows which is the general accepted pattern that defines a bull market. Gold has finished a correction in early March and is now in another correction, which should not travel to any new low below $1304.  Gold might turn at the $1316 price level, but that remains to be seen. I have mentioned it many times that gold still has to retrace that $1375 price resistance level, and I will stick with that until it happens.

The pattern in the last 6 weeks or so sure looks like a correction, but to confirm it gold must travel above $1375.

Gold’s moves are more dictated by the US dollar when it rallies and declines. As long as the US dollar is still in a bear market, chances are good gold will react the opposite way. Besides the US dollar, the fear of a stock market crash may force a jump into gold.

When gold pushes higher and produces many inverted zigzags, then this will be a signal for yet another correction, but so far that has not been the case. We have about a $10 window to allow gold to still decline, so this would be enough to scare all the gold investors to make panic moves.  I will not fill in many of the previous waves, because this one little correction could fail, and I would have to work a new count anyways.  No gaps below or above present prices have opened up, so that is a good sign.

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Gold Daily Chart Review $1375 Or Bust!

Do you love choppy charts? Well, we have our share of wild moves in this gold market. I may have to change my wave 1-2 in Minor to an “ABC” also in Minor degree. At this time it’s not an important issue, as either way that $1375 price, should still get hit and or exceeded.

Since the late 2016 bottom gold has produced higher lows which is the conventional description of a bull market still in progress. The wild market action in gold in the last month or so, sure suggests a potential correction has taken place. The $1304 price level has been holding, so next week should tell us more.

February’s gyrations could just have finished so gold could see another leg up.  Gold also left a nice spike in its wake, so that also adds to a potential reversal. From the December gold bottom, gold soared $120, which I add onto the $1304 bottom. This ends up at the $1424 price level. If this happens then it may take all of March to play out.

All those that are complaining that the fundamentals in the stock markets haven’t changed, then you are not paying attention to Trump conducting a trade war! President Trump has declared tariff wars on steel and aluminum imports. The bears have tons of fundamental reasons for the markets to crash now. Conducting a trade war at the record stock market peaks of bull markets, is sure to bring down the house.

The last time they crashed the markets with a trade war, was when they past the Smoot-Hawley Tariff Act of  June 1930!

Smoot–Hawley Tariff Act – Wikipedia

 

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Gold Intraday Crash Update.

In my last gold update, I thought another move north would happen before gold resumed its decline. This did not happen, instead gold dropped like a rock. Since the January peak the pattern has far too many overlapping waves, which sure can fit into a corrective pattern.

The wild bullish moves in the US dollar, was the main reason for gold’s decline. Gold and the US dollar move inversely to each other many times, and therefore once the US dollar rally comes to an end, gold should make a very positive run.

Right now gold has come to a stop at the $1304 price level, but a quick drop below $1300 could still happen. Overall a flat could be forming, where the “C” wave is part of a regular flat. If another fake bull run starts to happen, and it also becomes another zigzag, then we may have to look at a potential 3 sets of zigzags, with a potential “D” wave bullish cycle about to take off.

There is no way that I would count out a wave two correction with a triangle, so any triangle will force a change to that January peak. Another zigzag should travel well above my “B” wave in Subminuette degree which is at the $1360 price level.

As I post gold is still on a rally so hopefully we will get more than just another counter rally. As long as stocks and the US dollar have the potential to decline, then golds strong bullish phase can still happen.

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Gold Intraday Gyrations Update

Since mid January gold still has not pushed higher, but has gone sideways with some wild counter rally moves.  This alone suggests that gold is still in a bigger bullish phase.  In the last few days, we had a move that could fit better into a potential 4th wave, but could still see a rally before pushing lower one more time. A gold push below $1300 can still happen, but the bullish moves of the US dollar have kept gold from breaking out. I’m getting close to spending all my degree levels with only one degree left, and when that starts to happen, I’m forced to review all my Minor degrees and higher wave counts.

In the last few months the pattern has been so choppy that it still fits into a bigger corrective pattern. Eventually that $1375 price level should get completely retraced, but any vertical type of a move, could set gold up for another big correction. As much as the gold pattern looks like the footsteps of a drunk in the snow, gold can become the hedge for safe-haven buying.

Gold seems to be reacting a bit after the end of a month, so it may take until the first week in March before gold is ready to turn again. At the $1304 price level, gold would be finishing a H&S pattern which can produce a double bottom base for gold.

There may be more short term downside moves in gold, but in the longer term I’m still bullish, as I have no intention of selling any of my gold stock/ETFs.

When the gold charts are pointing down, investors are in a panic to sell, but in the real world smart money is buying bullion. It’s the dumb money that is running to the gold dealers to sell gold and silver to buy Bitcoins. In the future Bitcoins may go from zero and right back to zero, but gold will still be here. Gold and silver have served as a medium of exchange for thousands of years, which no other medium of exchange can ever claim.

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Gold, To Die Or Not To Die Is The Question?

Gold has executed a pretty choppy decline, which I see as a good thing. Choppy declines can just be part of bigger corrections, and this gold decline has no shortage of choppy declining wave structures.  I would rather see a nice spike to the downside and then the reversal, so more downside may still be the order of the day. Gold reacts more to the US dollar than any other economic fundamentals, like oil might do, so I remain bullish on gold in the longer term.  Short term anything can still happen, so we have to remain open minded for more downside to come.

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Gold 2011-2018 Review

Once the late 2011 gold peak ended, we had one difficult decline, which at this time could be a 4th wave decline in Intermediate degree. This big bull market started in 2000-2001 with a set of very small 5 waves.  Yes, the bull market was very choppy, which was followed by a very choppy bear market as well. By late 2015 gold had a bottom of 1050 before gold charged up again, which I can only fit into a diagonal. Since I have 5 waves up in 2001, then any present 5th wave should also give us another set of 5 waves up.

Any 5th wave can be a diagonal 5 waves as well, so I will use this wave count until it fails. Running this wave count is the only sure way of eliminating it as it takes time for key patterns to materialize.  I’m expecting a gold correction, so how far this decline goes could trash  this wave count sooner than what we think. By constantly eliminating wave counts that don’t work,  we end up with a wave count that may work. Elliott Wave is about consistently eliminating wave counts that don’t work.  Any move specific to the degree always has 5 options, so we constantly have to eliminate 3 choices to narrow it down.

Any higher degree top for 2011 and the $1050 bottom is not nearly deep enough to call  it a completed Cycle degree bottom.  Too high of a degree also makes us less sensitive to the bearish mood, so this can freeze us into always waiting for lower lows, when contrarian indicators tell us to do the exact opposite.

When gold stock insiders have bought or are buying their own stocks back, we know that a new bullish phase will start to happen. Insiders buy early and they buy as their company stock prices are tumbling. One thing is certain insiders do not buy on a whim nor do they ever sell out on a whim. Any bearish wave count under those conditions will never survive.

On Friday I walked into my favorite gold dealer to buy one of those 150 year Canadian anniversary silver coins. They are gorgeous coins and I bought a couple of them last week. This is not a big deal, but what the proprietor told me was, many gold coin owners came in last week to sell their gold ounces so they can buy Bitcoins!

I really had a good laugh when he called “Bitcoins” Bitchcoin!  He even showed me a physical Bitcoin which I instantly called a fake which both of us knew. Shit, I wanted that coin just for a laugh to show other people. In the bigger picture you should never touch a real Bitcoin as they don’t exist and never will.

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Palladium Daily Chart Bull Market Review

Every trend comes to an end eventually. Palladium sure started out with a decent impulse wave structure, but that started to fall apart starting in early 2017. From then on Palladium converged in a wedge like pattern, with smaller and smaller wave structures.   The waves also started to overlap about the same time, which suggests a diagonal 5th wave, or a “C” wave bull market is in progress.

There could be more upside, but  I think a big correction is coming, and this entire bullish phase could get retraced.  The previous 4th wave of one lesser degree could take Palladium back to the $660 price range. Palladium prices may be  linked more to the economy than investing demand so if there is an economic slowdown, then Palladium prices could take a big hit.

Palladium seems to have rolled over a bit already, but this could be just a little flat.

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Gold Intraday Gyrations Update

After a great run, gold has now started to back off.  Any top trend line I could use is useless as it would be a race to see which trend line will get sliced first.

Sure, gold can keep right on trucking, but there could be a bigger correction than what the majority is anticipating. A “Flash Crash”,  type of a move would be the perfect outcome. The markets always love to try and fool as many experts as it can and gold is no different.

On other occasions we could see a %61 net crash of a single wave 1 which would be a pretty normal correction. This would be closer to the $1278 price level. It may never happen, but corrections can go very deep with commodities. On the positive side gold can just keep grinding higher, brushing all the corrections to the side until a really big gold correction surprises us all.

When all the gold bulls are making bullish calls, then that’s when the gold market can start a reversal. There may be a bit of a gut move by day’s end, which only gives us until the end of the month for a turning window to show up.

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Gold Intraday Bull Market Review

Gold has had an amazing run, with a net move of about $100.  This great gold bullish phase could be coming to an end if  another wave 1 is getting close to completing.  Depending on the strength any wave 2 can dip back down with a net 60% retracement. This would make the 1270 price level a target. There is also no way of knowing how bullish the correction can be, especially if we get a flat of some kind. Running flats are a part of the wave landscape which can produce extreme moves to the upside.

The bottom trend line is just a guide as any correction bigger than expected, will slice right through this trend line.

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Gold Rocket Rally Update

10 charts that show why gold is undervalued right now | MINING.com

It’s amazing that analysts have just figured out that gold is undervalued, when the gold price is pointing up.They sure didn’t come up with any undervalue charts when gold was at $1125. Matter of fact, they were downright bearish when gold hit a bottom in December of 2016. They were dumping gold for Bitcoins was the main theme at that time. Who needs that ancient relic in our portfolios,when stocks are still going up?

Gold bullion should always be part of any holdings, but we should never buy gold when it is pointing up. Buying high destroys any cost averaging advantage and most of all it defeats any protection that gold offers against inflation. In 1999 gold investors also ignored gold as a hedge against inflation, but they sure loved gold as an inflation hedge when the gold price touched $1920.  Emotional investors have not changed one bit as they still love to buy high and then sell low in disgust when gold heads back down.

The short story is that the majority always does the wrong things at the wrong times, just like they are doing now. Due to this rapid rise, I think gold needs to correct, but picking correction bottoms usually doesn’t work, due to the fact we could be on another diagonal run.  We could get a very fast reaction, after which the bullish trend will just return and carry on.

Maybe the gold’s rise is all about the rise in the minimum wages this year? They are calling a $15 per hour a living wage, which only a few states are trying to implement. In my province, we are at about a $10.50 CAD minimum wage. This works out to about, a USD (.25) gold gram per hour, or two gold grams per 8hr day. ($84) per day.

Increase in wages does translate into more inflation down the road, but in my working days we got 20% pay raises per year for 4 years in a row. That really kicked in the inflation in the mid 70’s, but our wage increases couldn’t keep up with the rate of inflation. Eventually the middle class got wiped out during the 80’s and wages stagnated. In 2-3 years’ time, when gold touches $1600 US,  you would have to earn $200 per day just to keep up with inflation.

When the gold price shoots up, but the wages refuse to follow, then we are always falling behind in the rate of inflation. Having gold assets mitigates this effect when money becomes worth less in our future.

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Gold On A Run Update: Time For A Rest?

It seems like gold is on a marathon run, hardly taking a breather. No trend lasts forever, even at these small degree intraday levels. This rally changed from bigger wave corrections to smaller corrections that we can hardly count out.  This has the classic diagonal wave structure signature, so until better subdivisions come along, this will have to work as an inverted zigzag.

It could be a slow correction or a mini flash crash like move, with no real firm retracement level in sight. Even though it looks like a vertical move on the daily scale, in this intraday scale it has a bit more of an angle to it.

We are coming up to a potential H&S setup so this may add some resistance as well.  We’ve seen these types of H&S setups many times before, with most of them ending up being extremely bullish.  I don’t expect, this time to be any different.

This gold rally got help from the US dollar decline, causing stupid emotional investors to jump on the bandwagon.  Many investors only care that something keeps going up, as they couldn’t care less about any fundamentals. Without those trend chasers, contrarians have nobody to pick on, or no gold bulls to sell to in the future.

The big bull market in gold is still in progress, and it could take all of next year before it becomes more clear to a greater majority. That day has not arrived, even though gold is pointing up, like what we would see in a final blow-off situation.

The main price level of $1375 still has to get retraced in the short term, while longer term the Gold/Gold-stock ratios, will need to shift to the expensive side.

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Gold 2011-2017 Review

Since the 2011 peak, gold suffered a bearish phase for about 4 1/2 years before it exploded in 2016.  In general, when a wave count just doesn’t fit well at certain points, then I try and work it from a lower degree perspective. I know that the majority of participants work only from a price perspective, and I get that, but the sad truth is that contrarians don’t work on price. They work on crowd psychology. They also never waste their time drawing a bunch of useless trend lines, nor do they spend their time drawing numbers and letters on any chart. The majority of the trading world works on “Price”, and short term trade setups. One main reason that there are so many short term traders is because they have no clue what the big trend actually is, or what it’s going to switching to.

Gold is extremely cyclical and the contrarians love this. In the cyclical gold market, “If your not a contrarian you become a victim”. Buy Low, Sell High is the contrarian way. When insiders in gold companies are buying their own shares back, then this has to get reported. The same applies when they are selling. In 2013 the gold news was full of insider buying reports and even now gold stock insiders of gold companies are buying into their own shares. I have a contrarian friend I visit regularly, and he constantly looks for insider buying before he takes any positions in any single gold related company.

Ignoring this public information, ignores a great contrarian indicator that helps us in forecasting a bull or bear market in gold and gold stocks.

Any real contrarian cannot afford to miss any big bull market in gold stocks. Sure, many times they are getting in too early, but high net worth individuals need that extra time to accumulate large positions. The idea that we should never add to a losing position is irrelevant to any contrarian. In the contrarian world, it’s all about accumulating positions in preparation for the bullish phase still to come.

I dropped the 2011 top down to a lower degree wave 3 in Intermediate degree. A lower degree level is far more sensitive than higher degree levels are, and the 2011 peak is a prime example. Many were calling for a Gold Supercycle to go to $5000-$10,000, yet gold did the opposite thing and crashed to $1050. For a Cycle degree  wave 3 top in 2011 to be in play, the $1050 price level is not nearly low enough for a Cycle degree correction to be over, but a $1050 Intermediate degree bottom, could fit.

For now, and maybe a bit longer into the new year I will look at the commodity bullish market from an Intermediate degree perspective. Since that $1050 bottom gold jumped 130% before another bearish phase kicked in. This bearish phase that ended in late 2016, is not part of the bigger bearish phase, but it’s part of the new bullish phase that started in 2016. If this is reasonably close, then eventually gold will travel above the $1919 price level. Even if doesn’t perform that well and never makes it to a new high this time, then it will do it at another time in our future.

It would be pretty exciting to see a potential diagonal set of 5 waves develop in gold, but we have to keep our options open as well.  Any big bullish phase in gold will not end just because of a big bearish dip in price. They end when the majority display extreme optimism.  Not owning bullion when the stock market is pointing up, is a constant mistake investors do and have done many times in the past.  When stories come out that investors and fund managers are dumping gold to jump into Bitcoin, it tells me investors have learned nothing about gold. Emotional investors jump on anything that’s going up, and they jump off when it’s going down.

I will try and get a few Gold stock related reviews in,  but will take a break until next week.

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Bitcoin Crash, Gold 2.0 Myth Busted

I increased the degree level to where the start is now a Minute degree. During the last 5 days Bitcoin crashed about $9000 and has now recovered a bit. From my perspective, I have not run into a set of good looking declining 5 waves in a very long time. Any little 5th wave acted like a diagonal, which makes Bitcoin wave counting an excellent experience. There could be more of this counter rally to go, but sooner or later the counter rallies will get bigger and take longer to play out.

I started the 1-2, 1-2, 1-2 count quickly, and so far have not had to change it, but may have to at a later date. Three sets of visible 1-2 waves will certainly give us a wave three extension, until the next 5th wave decline starts. If the last  5th wave contains many choppy wave structures, then that will help to confirm a new higher degree will be forming. Also, any 4th wave triangle that may form will also help in confirming our location.

Bitcoin plunges again, now down more than 28% since Sunday’s all-time high – MarketWatch

Unless I can see a clear zigzag or flat starting to set up, there will be no telling how deep Bitcoin can crash. We heard the stories about the myth that Bitcoin is Gold 2.0 which has now been exposed as pure bullshit. At one point $200 billion worth of Bitcoins evaporated in a puff of electronic smoke.

This Bitcoin crash changed the Gold/Bitcoin ratio form a peak of 15:1 to a bit under 11:1. This is not even close to the 3:1 ratio we did have at one time. Also, there is no guarantee that Bitcoin will ever rise from the ashes again.  At a 3:1 ratio Bitcoin would have to fall to $3800 USD, which is very close to the cost of mining one Bitcoin.   As of today, the Crypto count is about 1377, with no end in sight just yet. When the list stops growing or even starts to shrink, then this Crypto party is over.

Below, we look at gold and how it reacted to the Bitcoin crash during the same 5 days.

Gold, dipped a bit, but in most part gold completely ignored the crash of Bitcoin. Gold kept chugging along, pushing higher every step of the way. I think gold has more room to make gains in the short term, but it’s starting to form a nice spike on the daily charts.  I didn’t touch my bigger wave count as I just couldn’t find a more convincing alternative at this time. Either way this gold bull market has a long way to go in time, and price.  It’s not the top projected price that’s important, but the mood that will be present, is far more important. Also, the Gold/Hui, and gold ETF ratios should become very expensive.

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“Gold On A Run” Intraday Bullish Action Update.

So far our December, 12th bottom is still holding which is a good thing. Any price move can mean nothing in the bigger scope of things, if we don’t understand the type of pattern that has ended. Recently, many analysts have been bashing gold, as the majority have been selling and running away from the gold markets. Dumping gold and running to Bitcoin or stocks will backfire like it has happened many times before. Calling Bitcoin the new Gold 2.0 is a silly brainwashing tool. Gold, has been around for thousands of years while Bitcoin is only 7 years old. The antics of the herd will never change when emotions take over.

Gold is the “Real” money, as we can exchange into any other currency when we need to. Gold retains its value over time as well. Sure, it swings widely in price, but that just shows how much the price can be compressed into one ounce of gold. Back in 1999 gold had an extreme low price of $253 an ounce, and the majority of all experts hated gold at that time.  Then 11 years later gold’s price had exploded to about $1919, a 758% gain. The hype to own gold in our investment portfolio at the peak was the strongest, yet they didn’t give a shit about owning gold in 1999, when they were calling it the “Ancient relic of the past”.

Recently the fund managers have been throwing gold away (selling), not knowing how much the gold ounce can compress in price.

Chasing a bull market is sheer greed and fear, plus it wrecks havoc with your cost averaging ratio. Any gold bull market is not over until the US dollar starts on a new and very bullish path, which must break 2016 highs. Well, maybe the US dollar implodes to new record lows instead,  like it did from the 2001 peak.

It’s always good to own gold bullion, but only when you buy it when it’s pointing down.

When investors start to see that the Nasdaq and Cryptos are starting to head down, and gold is heading up, what do you think the emotional investors’ reactions will be?

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“Nobody Cares About Gold” Commentary

‘Nobody cares about gold’ as hedge funds seek thrills elsewhere – MY Stock 118

The present stories about the Non Commercial traders dumping gold to join the Cryptos Mania is nothing new folks. Back in 1999 when gold was $260, banks were dumping gold, individual countries were selling gold, which they called the, “Ancient relic from the past”. Stocks were peaking as well, so nobody wanted gold. At that time you could only find 14% bulls present, as published in the Market Vane Reports.  From this ugly bottom gold turned and soared 730% as the majority again never saw it coming.

I documented that turning very well in 1999, as even hedge fund managers were dumping gold when it was $260 an ounce.  Back then, mining companies were switching to the Dotcoms which was also called a “New Era”. Just switch the name Dotcoms for Cryptos and voila, we have another “New Era” 20 years after the first one. “New Era”,  are keywords that come in a bull market just before the stock market starts to turn bearish. . In the end, what we did get was the “Old Era”, bear market and small recession.

The sad part about this news is everybody thinks, that the hedge funds (managed money), is the smart money.  Sad to say, but the media is reporting to you what the dumb money is doing, not what the Commercial traders are doing. It’s the Non-Commercials that chase the markets up and down, and they eventually always get into a trap. Last week it was the Commercial gold traders that closed off their gold short positions and, added to their long positions. Commercial trader activities hardly ever get mentioned in the media, so a one sided reason, just sends fear into the hearts of gold investors,

As soon as the bad news for gold came out, gold soared $20 per ounce.  The problem is, nobody studies gold history anymore, and the herd can’t remember anything as a group, so these cycles happen over and over.  Gold is one of the most cyclical markets on the planet, and the real smart people are the contrarians, buying what so called professional “money managers’, are throwing away! Even the ETF GLD has to sell gold to reduce their shares.

My bet is that when gold crosses $1355, we will read the news about managed money buying gold again. When the emotional investors realize that the stock market and Crypto prices are starting to head down, but gold doesn’t  then what do you think they will do.?

It would be a real pleasant surprise to one day see, gold spiking like Bitcoin has. Most people think price is everything, so when the see the gold price falling they think gold is losing its value. In reality the gold price is going back and hiding in the gold ounce. In 1999 nobody could forecast that a $260 priced gold ounce actually contained $1920 cash.  Right now gold has been pointing down while the US dollar and the DOW have been pointing up. This all looks great for an impending reversal for 2018.

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December, 15,2017, Gold Daily Chart Update

Our recent gold crash, seems it has turned a corner about 3 days ago, and so far so good.  A wild move in both directions is still possible, but if we just finished an “ABC” correction, then gold, “Must not”, fall below July 2017 lows.  From the July 2016 peak of $1375, gold also created a deep zigzag crash, which eventually must get retraced. Now from the 2017 peak, we have another zigzag looking crash, which “must” also be completely retraced. To say the least we have an interesting setup for gold to rally well into 2018 or longer. 

We have higher lows, through much of the bearish phase, which is a sign of a bull market. “C” wave bull markets can extend past any realistic expectations, because bandwagon jumpers just love to buy high, thinking that a greater fool will take these assets off their hands. We are not anywhere near this euphoric stage, so we have a long way to go, before the big bullish scenario has completed. 

We have two major price hurdles for gold to cross next year, which is the $1355 and $1375 price levels. 

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Gold Intraday Bottom Update

Gold hits a bottom at the $1237 price level, and has now started to charge back up. I use the smallest three degree levels to start with, but over time will adjust as each degree level starts to materialize.  In this case I would need 5 waves up in Minute degree, so I make a rough calculation in what I think I may need. For now we have come off a wave 2 in Minor degree, but this may also get changed. The big thing to remember is that gold is in a bigger bull market than what we can imagine at this time. No, gold is not going to $5000 $10,000 this trip! Gold is very cyclical 

Nobody has the patience anymore, to play these bull/bear cycles, but when gold goes vertical like a Bitcoin, then you will see investors jumping on the gold band wagon.  They just love to buy high in a cycle and the contrarians love to sell to them.  The gold bullish cycle could last a lot longer than I originally was thinking, but if 80% or more of my indicators show up earlier than expected, then we have to have a serious second look. 

Gold is a hedge for inflation, so when we forecast the price of gold to go up, we will see inflation numbers rise as well. To make gold work as an inflation hedge you have to buy gold “before” it starts on a bull market, not after everybody has already jumped in. 

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Gold Crash Daily Chart Update.

 

Last week gold took a beating along with many of the related ETFs.  Does this mean that the bull market in gold has ended? No, not at all as    bull markets don’t end when their charts are pointing down, they end when the related charts are pointing up.  Since the start, in 2016 this has only happened 2 or 3 times, while the gold market has dipped down many more times than that.   We can see that a lower high has also formed in September of this year, so that can be used as evidence that gold is in a bear market. 

Since the January 2017 start, we still have higher lows that are forming so that is the conventional explanation for a bull market still in progress. In the last week or so I have reworked my entire gold wave count starting back with that questionable bottom during 1999-2000. 

I always had a problem with that major bottom as we all tried to force a wave 1-2 onto it. I found it very hard to believe that the starting wave 1, contains 5 waves in Intermediate degree. I even looked at it with a magnifying glass and all I could see is five waves in the smallest degree. 

If the 2011 gold top was Cycle degree or higher, then a correction to that $1050 price level is not nearly deep enough for the correction to have completed. From my perspective the gold bull market can fit much better into a wild diagonal, which would make our late 2015 bottom plenty deep enough.  Just like the crude oil bull market, in 1999-2008 which soared as a 3 wave pattern, gold can do the exact same thing, but just one degree lower.

Any “C” wave bull market in gold’s future can produce a stunning run. The real contrarians will keep holding their gold stock related assets  until the herd of gold bulls comes rushing back in.  Regular stocks have been pointing up, along with the US dollar, while gold is pointing down. This is a no brainer for a reversal from my perspective. During the past week, I’ve been in e-mail contact with Steven Jon Kaplan, and he is very generous with his information. He has made it pretty clear that gold related assets still have a long way to go. 2018 could be a banner year for the commodities sector, while the stock markets and Crypto Currencies, crash and burn. 

For the rest of the year, or even longer I will be working gold as an Intermediate degree, diagonal 5th wave bull market. 

Even though gold has taken a beating I’m bullish in the long term as the gold bull market is far from finished. 

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Silver Daily Chart Crash Review: Last Chance

Silver is on its last chance to finish displaying a zigzag crash. Any new record low below $15.20 kills this wave count, so it will be critical for the next few weeks. There is a rally starting to happen, but the rally is questionable starting out. Either way we are heading for a third bottom, if silver breaks. Since the August 2016 peak, silver has been in a bearish phase that has very few sets of impulse waves in it.

To put it mildly, “Choppy as Hell”! 😯  Even though silver seems like its going to fall into the abyss, that doesn’t mean it will. Who cares about silver when Bitcoin dominates the news in the financial world. The seasoned contrarians know better, that when the public hates an asset class, then they should be buying at depressed prices. 

I lowered the wave degree back down by one degree, just in case we are in a diagonal 5th wave. I have done the same for gold as the 2011 top, may not be a Cycle degree top like I have been using. It could be a  diagonal wave 3, in Intermediate degree. Back in late 1999 they hated silver at that time as well, and look what happen to silver after that!  They hated gold even more back in those days, as anybody that had a warm body was selling gold and silver. 

Any “C5” wave bull market from a zigzag  still amazes me because they can soar so disproportional to the “A” wave.

For the rest of the year I will use this degree level in silver. I have already started the same idea with gold, which I will post this weekend.

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Gold Crash From A Daily Chart Perspective

That choppy November rally sure looks like it can fit into a running “C” wave.  Gold is on the borderline where an expanded bottom will not work anymore. Presently we do have a small spike to the downside that formed, but that may only bring us another correction. Gold could dip closer to $1220 before it stops, but that is not written in stone.

At this time gold is leaving that $1375 price peak in the dust, but longer term gold will eventually exceed that $1375 price level.

As I post gold is still crashing as it’s at $1246 already. I’m sure the gold bears just love it for now, but eventually they will get into a bear trap, when this downward trend starts to end.

 

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Gold Intraday Crash Review

Since the November peak gold has developed a pretty good long impulse to the downside. Gold is on the border line of a downside breakout, as another little 5th wave may need to play out. Any new downside move can now work as an expanded flat pattern with the potential for a “C” wave bullish run still to come. 

I switched to a Minor degree diagonal wave 3 at the September peak, but it’s not chiseled in stone at this point.  In this potential rally we have to let the full run play out. The higher it goes the better, as the declining “C” wave, will then be shorter. 

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