Sunday Sept 28 I dont know what it is… it’s either when I write about the Gold/ Silver/ Metals market or maybe its whenever I write something that is contrary to what the crowd is thinking, but after one of those two ideas is presented, I get a lot of feedback ( and I love it! ). I got a good number of comments below the previous article for the public to see, but also many write to me by email and share thoughts or ask questions too. It was really a lot of good constructive feedback, so thank you! I’ve decided to do a follow up to Thursdays report that I posted Friday morning and I’ve dug into more charts to explain what I am seeing. Some of it basic and some of it a bit deeper.
To start with, lets I review what was happening on May 30 2014. Gold had recently broken down from a “Continuation triangle” the ‘measured’ target was $50 lower, but most felt $1180 would be broken, maybe $1150 or worse would get tagged. EVERYWHERE I looked , articles were talking about “SEASONALITY” in Gold being Late July & AUG . THATS when “we should buy the bottom” , they were saying…the LOWS would be in then. I wrote an article saying that it might be time to buy now (I had entered JNUG & NUGT and few select Miners). That article is here if you want to read it. http://www.chartfreak.com/2014/05/31/learning-to-be-patient/
It Seemed that everyone was or wanted to go short- or just hated the metals all together.
As a quick review, the charts I used went like this MAY 2014- Triangle price projection near $1200, seasonal lows in Jul/AUG
I had noticed some very interesting things happening with Miners and even the Metals charts themselves, SO I posted this Next chart below as a contrary idea , one that would leave everyone waiting for “Seasonal Summer Lows” behind …
This is a clip from that report- and this is exactly what happened.
I really wrote this because I was seeing a few things ( and some buy signals) that indicated a change could happen sooner than most think. Miners then took off and no one wanted to “CHASE” it, so they waited for a pullback (That never really came) Some even tried “Shorting ” this “Bounce” daily. Miners ran to Highs in JULY and they started to rise so fast & sharply that JNUG went from $13 to $30 in 3 weeks, and peaked at $36 in JULY. Some made huge money, others totally missed it due to Fear or a Bias. Heres another interesting point….SEASONALITY AND SUMMER LOWS then became the sell off period right down to today.
Fast Forward to today. Now we have a “Continuation Triangle break down” in SILVER. People have targets of $13 or $10, many are short , others HATE THOSE STUPID METALS & MINERS FOREVER. (Thats Good). Please understand that we “MAY” still hit Silver $13, I’m NOT saying its wrong to think so, but what I am saying is that The GOLD Triangle break was a false break down looking back. It didnt reach its target. Fake outs in the market happen. Additionally, What I saw in May 2014, and DEC 2013 and JUNE 2013 at those MEANINGFUL LOWS – is similar to what I see now. I dont like to follow the crowd (Unless its an established trend, then we use “Timing” to try to enter and exit at key levels) but it’s more than just a contrary thought. I see evidence of a low approaching, or a bounce as mentioned in Fridays report. (Here) http://www.chartfreak.com/2014/09/26/illusion/#more-1464
The point of todays article is to also show you the other side of what I wrote in my last post and answer some of your questions.
1. IS IT POSSIBLE that these arent THE next meaningful LOWS?
2. Possible that it’s Not an ICL for those followers that view it in Cycle terms?
3. Could we just bounce & drop again?
Sure…thats what I want to point out here. Lets just examine more of the facts, in addition to Fridays report, and allow the markets to tell the story.
Starting with the C.O.T. , it tells us 2 things. 1. We are now at the same level as it was in MAY, and we know we got a strong Bounce / Rally. 2. It is NOT as low as it was in Dec 2013 (Click to enlarge) , but does that matter? Maybe not, since we rallied in May at these levels.
Elliot Wave technicians like to see things in 1-2-3-4-5 step move to feel that it has completed. I agree, I see it ALOT of the time. I even look for it often. Here is an example easy to see with the EURO.
GDX – Cant see the 5 waves really – so bounce and another small drop? Maybe.
But what if I wait for that wave 5 , And it’s already there? Honestly, I COULDN’T see 5 waves up on the May to July leg up either (But now I can label it so- see chart below ), and its easier to see with B.B.’s – so I also guess I can label the recent drop 5 waves down if I have to. E.W. is not always crystal clear until after it plays out…I NEVER use it alone to project price, or as seen in the 2 charts above , it can be too tough to enter the trade . So to me, it’s not crystal clear right here with E.W. if the 5 waves are complete, but 5 waves MIGHT already be in.
So at this point, to answer my Elliott Wave wave followers, I’d have to look to additional signs for more clues, such as some of the things mentioned in my last report.
I want to address something else I noticed while looking at charts Saturday morning ,
and that is “Timing”.
“Timing” between those Meaningful lows (ICL’s) has averaged lately about 6 months. We are short here. It HAS happening in the past that they’ve come closer together than 6 months, so for now I can dismiss it…however its a valid point to keep in mind when the question comes up, “Is it possible that we just bounce now and put in the ICL (meaningful solid lows) later?
The chart below shows 6 months, 6 months, 4 months (Bounce like last October for 2 weeks & another drop? Or RALLY and leave many behind?) We’ll see.
That “BOUNCE” last October (what a coincidence, its October next week) was an oversold bounce that lasted 2 weeks & rolled over. I point out the similarities here of breaking to new lows (Stop run) , Full stochastics deeply over cooked, etc etc . The RSI is as deeply overdone as the prior ICL’s however, thats interesting to me. As mentioned in my last report, I got an RSI(2) Buy signal too, and I usually only get those at ICL’s
In JULY Gold was looking like it could drop again just be trend line worthy. I did the 6 month, 6 month, 6 month thinking when I drew this. We have dropped since this was taken and its close to that line now. Could be good enough.
Now my last GDX chart is not for the fainthearted. Sometimes I really like to look into things. I like to dig deeper. Some of my charts are probably too cluttered with ‘thoughts & ideas’ to post here…and this one may be too. If you dont like “Cluttered Charts” , then feel free to stop here, your report ends here . In summary , I hope it was helpful and it basically shows that I believe my Friday post , we are at some sort of lows…however we COULD bounce & go a bit deeper. That we can watch as things progress. Many things currently match prior lows. Thanks for reading along, I appreciate it.
Now- If you like digging in, or you want to see something else that I was looking into, and try to follow along, then this will be our last chart .
I wanted to use a ‘cycle circle ‘ tool and see again the ‘timing’ of prior lows. BELOW the chart – I will try to step by step it, to make it easier to understand.
1. Orange X’s along the bottom of the cycle circle chart are about 6 months apart & have often hit Meaningful lows. Dec 2012 was a miss in the Liquid Sell Off, but most others are a match.
2. THEN- along the top of the cycle circles at roughly 1 o’clock are a row of purple X’s – they too hit minor ‘lows’. It was then that the 2013 October rally fell into place, and it is also roughly now.
DOES that indicate that we will just get the 1 o’clock bounce and then later the ICL? Maybe. You may notice that the 1 o’clock X for March 2014 failed. It was too Weak & No low presented itself, so its good to know that its not perfect every time, but you see how often it has been. SINCE we are currently at the 1 o’clock point, a Low of some sort is ‘likely’ and it may just be like the markets to’ ICL’ it early & leave us chasing. After all, the MAY LOWS were not supposed to be until Seasonality lows in JULY….IT WAS 2 MONTHS EARLY.
So Will the lows due in Dec of the Cycle Circle wave hit 2 months early as a result? No one knows at this point.
Lets just try to allow the markets to tell us what they want to do. We’ll try to listen carefully, without any bias. ‘Summer lows’ and ‘Seasonality’ were off this year, 2 months early. I like where we are right now, and its a good time to listen to what the markets are trying to say. Maybe re-read Fridays report if you have time (I did this morning) and draw your own conclusions. Most people HATE GOLD & SILVER now…yet some of the Miners are ‘firming up’ nicely ( Fridays report) . I dont know what the next 1 or 2 days will do. I posted Friday A.M., and Gold didnt rocket out of there…No Biggie…Nothing has changed yet. The may lows were sideways for a few days too.
Thanks for tuning in and the feedback was helpful for me to know what some of you were wondering. Elliott Wave, Cycles, etc etc – it all weighs in at times. If you want to comment in the comment section, Its helpful because maybe you are asking what others wonder too. Everyone benefits. I’ll read it when I’m at my laptop & reply as soon as possible, usually same day (I hate using my phone for lengthy writing, etc ). Some have mentioned that they cant post comments in a public forum by request of their employer...I Totally understand. I try to answer all emails as quickly as reasonably possible too.
Thanks again for reading along, I hope it is helpful!
P.S. The Gold Market is not open yet as I post this, who knows what tomorrow will bring, but I have 1 more set of charts that I will post IF / WHEN Gold blasts out of these lows : )