There won't necessarily be a new chart every day, but we will do at least 1 to 3 per week.
July 19, 2017
Here is a couple seasonal charts on Gold. It does not mean Gold acts this way every year but on average we see weakness and bottoms often in June and July and stronger prices in the last half of the year. There are reasons why physical demand is higher in the last half of the year, but remember prices are most influenced now by paper trading rather than physical but it seems these trends are still often in place.
July 16, 2017
I note that the managed money long position is down to just 23,222 contracts from almost 200,000 at the early June $1300 high and Commercial shorts down to 73,916 contracts. Although these could go lower and they might because of the reporting delayed time frame, it is the best set up on the COT report since the December 2015 lows in Gold. The chart goes back one year and looking at the bottom graphs you can see the set up has not been this good in the past year. Pretty close in December 2016, but the Commercial short position was larger then.
We seen a bear raid June 26th (wee hours Monday) These things get labeled 'Fat Finger' trades or 'Flash Crashes'. More importantly this was just the first of three of these bear raids. We have seen a short bash Sunday June 25th, Sunday July 2nd and Wednesday July 5th wee hours with the July 4th holiday.
The short bash July 5th from 3am to 6.30am was a complete failure because Gold totally recovered to $1226 by the end of the Comex session that day. When I add my observation of price and market action with the COT report I am very confident that this recent correction is over. The Flash Crashes managed to break the bottom of the up trend channel but could not break the stronger support in the $1200 to $1220 area.
June 29, 2017
Weird disconnect between gold and the US dollar. Great symmetry in the past year between dollar and gold. I don't see any reason for it to break down at this point - we should see a move to a new 2017 high imo just off this dollar breakdown.
June 14, 2017
Leadership in the market is down to a handful of large tech stocks. Pretty much everything underneath is broken. Like how are commodities so out of favour at the same time as the dollar and the financials and the small caps? Curious.
June 13, 2017
I believe we are setting up for a summer rally, especially in the Gold stocks and the 'Sell in May and go away' will be proven wrong again.
We have a pattern and trend of higher lows because of strong underlying buying pressure in the physical market. June is probably the 2nd busiest trading month next to December and what I found of real interest - when Gold was taken down to $1220 in mid May, piles of London options with exercise at $1260 did not care, they hung on and at month end exercise time - Gold was back to $1260.
To me they said - 'we do not care if Gold is lower', they were willing to exercise and take delivery and pay $1260. There is strong support around $1250 and another reason Gold could not stay below this very long. We are seeing typical weakness ahead of a Fed meeting with a ¼ point rate increase already baked in for Wednesday. Gold will probably rally after the rate hike and $1250 area hold.
May 20. 2017
Interesting chart from GMP - Soft/weak/useless data is creating a lot of noise while Real data is flat'ish.
February 7, 2017
After some holiday time and a busy period we are back with some charts. This is another view of the Gold bear market, which we believe has ended. It measures the amount of financing coming in to fund the project or mining pipeline. It has been very poor since 2013. Note at the end of 2015 and Q1 2016, it was virtually dead man walking. We believe that junior stocks with great projects will become the market darlings in the sector in the years ahead. Their rarity will mean very high buy out valuations.
Oil market breaks out. This is a weekly chart of WTI Oil futures so drew in the last candle for Monday/Tuesday and we now have a clear breakout above $52. There is some resistance around $60 but nothing major until the $85 area.
Whiting WLL - Very bullish base pattern with a large volume pocket overhead. With the absence of volume you get fast moves. It can break out at anytime dependant on the price of crude. Looking at March 2017 $13 Calls under $1.00.
Probably is - or blow off top to 18 or 19?
Never seen such a strong rotation before...where the line for the XLF is literally off the chart!
To me looks like $$ coming out of more defensive sectors like utilities, health care and consumer staples and going into financials?? Industrials - I'm assuming people we're generally underweight the space and it's a buying panic now.
XLF has been overbought for the last 17 days. It will come to an end, but when??
This rally could really have legs - no buyers....no sellers. No participation (lack of volume is surprising..) means the air pockets on the downside could be very sharp. If participants aren't seeing a buying opportunity at these levels - why would they see a buying opportunity higher?
Oil bulls will claim there is a slight up trend on the chart. Bears will claim that 3 attempts and a break out failed. We believe the later untill we see a good close at $53 or higher. It will happen, but still a matter of when. Probably require proof of OPEC cuts and/or decent drops in Inventory from EIA
This morning it appears the Bond markets are breaking down. The 35 year old Bull market is ending. Below is a weekly chart of the 10 year treasury bond and we drew in the last candle with a drop well below the 125 level we were watching. Same with the 30 year treasury falling well below 153. We will need a very bad jobs report tomorrow to rescue bonds.
Whiting Petroleum NY:WLL shows us a very strong doji morning star reversal pattern. We see the down day on Monday and the gap lower on Tuesday with a doji star, marking indecision. Today we see the resolution of this indecision with the strong gap upwards. We suggested buying Whiting in our Seeking Alpha article in late October. We also suggested to buy the January 2018 $10 Calls around $2.30 at the time. With this strong reversal, higher prices are expected.
Because we made a typo, the 'w' in triplw represents triple top, We would like to see a little more strength to declare a breakout and a retreat from here, a triple top (IF it occurs) would be bearish long term. Bullish sentiment last week was over 90%, Readings this high are very rare and often signal tops.
Don't panic about Gold, it is having it's typical year end weakness. It has dropped into year end, every time since 2008. December is the most important contract month for Gold, a lot of hedge agreements and financings are based on the year end closes so Banksters always want weak prices at that time.
Out of the 9 years in a row it has gone down, it rallied back up in 8 instances and we expect a repeat this year. Same song - different dance. December Comex Gold options expire Nov 22 and December weekly options Dec 2.
The December futures expire December 28th, first delivery is December 1st. For sure we expect no significant rally in the next 2 weeks.
The 10 year Treasury Bond has been testing what we see as the next support level around 125. So far this is holding, but a drop below could be very bearish, but there is a little support down to about 122.5. After that we would likely see 2011 levels.
Gold is at critical support. We believe it will hold and will move back up. Trump is more inflation and current price is short term arberration
Its Halloween and the most scarey thing is the U.S. election race
Gold looks like it could fill the gap up to $1320, driven by a move back down in the US$ and election uncertainty. MACD also gave a buy signal several days ago. For the record we are predicting a Trump win. Simply because everyone is fed up with the establishment, we seen it with Brexit and now will in the U.S. I believe Polls are too close to call and generally they are skewed some by the status quo, most just can't imagine something other than what the establishment is pushing, and my have they been working overtime bashing Trump in the main stream media. Trump is good for gold. Clinton is good for gold - so either way works for the gold bugs.
On October 4th we sent our readers a number charts showing breakouts of wedge formations including the US$. This is a weekly chart of the US$ index and you can see the breakout of the wedge last week. We drew in a crude candle to represent this week so far and are closing in on 98. We expect we will now see a retest of the 99 to 100 area, forming a triple top, that would spell out the final top in the US$. In the short term this could mean a bit more weakness in the US$ Gold price and it is not good for the stock market as it is a negative factor on economic growth and corporate profits. It also means there is no way the FED will raise rates with dollar strength.
We all think about the price of Gold in US$, but Gold is a global currency like other currencies. The Brits have been buying Gold like crazy pre and post Brexit and it has served them very well. Sure they could buy USD, but probably already hold those too. This chart from Kitco, shows the Gold price in pounds is a much different story than in USD. And it does not include the $50lb pop this morning as the pound plunged 6%. That is being blamed on a fat finger, but that is another word for computer algo flaking out. Maybe we will update the chart this weekend after Friday's data
There is something wrong in the Bond and Financial markets. There has been much speculation about Gold getting taken down so hard during Chinese Holidays. The two main theories are the large commercial short position wanted to use the opportunity to whack Gold and cover shorts, or there is some big problem in Financial markets and it would be best if this news breaks with Gold much lower - contain the price and preserve the strength in the US$.
It might be some of both, the chart below on Gold Oct 4th shows the large managed money long position, the commercial shorts are basically the opposite side of the trade on the chart - we will post a new chart to compare when COT data comes in for this week. That will be October 14th, well after the fact. But what is obvious now is there is a problem in the Bond market. Repo rates were up some more this morning almost another 0.1%, but look at this chart of the 10 year treasury bond.
This is a weekly chart, so we drew in the black candle for this week so far. Bonds have been dropping since July and the pace really picked up this week. It is not FED propoganda about raising rates, that story has been around forever. There is some underlying trouble in the financial sector. Could it be Deutsche Bank or are the big banks using a market threat to ensure Deutsche Bank receives a much lower fine. It was expected the DOJ might impose $14 billion in fines for the 2008 mortgage scandal, but now the talk is $4 to $5 billion. Their $47 trillion in dirivatives? who knows, October is the scary month so if something is going to hit the fan, it won't be long!!!
We are watching the level just over $128, a fall below that would be a further bearish signal. And don't forget, someday the markets will no long support the huge U.S. debt at these ridiculous low rates, so we keep a watchful eye for signals of the day of reckoning.
In early morning trading Gold was breaking down through it's wedge and so was the Euro breaking down and US$ breaking to the upside, as shown by the 'X'. The Pound and Yen were weaker early this morning also. These trends were continuing in early morning, until noon when the U$ reversed and gave back all it's gains, The Euro reversed and is actually higher, the only thing not reversing is Gold and probably points to a buying opportunity.
But interesting -
Bonds were higher in early trading but reversed and plunged by 10AM. there is something unusual today. By Noon bonds have plunged further!!!!!!!!!!
There seems to be something strange in the financial system. The most obvious and important observation is the repo market. I talked about that market late in 2015 as a way the FED could use it to raise their ¼ point.
The REPO market is a key short-term funding source for Wall Street. It tumbled on Monday from its highest since the global credit crisis almost eight years ago, but it remained elevated on signs lending had not fully resumed by the start of the fourth quarter.
The interest rate on repurchase agreements, in which financial institutions use U.S. Treasuries and other securities as collateral to raise cash from investors, was last quoted at 0.75-0.80 percent after falling as low as 0.30-0.40 percent earlier Monday, according to ICAP data. USONRP=GCMN
The overnight repo rate rose as high as 1.75 percent on Friday, which was last seen nearly eight years ago during the height of the financial crisis. This market is often volatile at quarter end and start, but this time it is way more extreme. One analysts notes - if this lasts until Wednesday there is some fundamental change.
It is hard to get up to date quotes except on the repo futures index, and that seems quite delayed, but early this morning the December futures were down, meaning interest rates up and probably why Bonds continued to fall.
There seems to be a knee jerk down in Gold, probably responding to the stronger US$, but if the repo market problem manifests we will probably see a move back up in Gold, as it will become obvious there is a problem in financial markets. $1300 was holding as support, but with this break lower, I think the bottom of the correction will be found between $1260 and $1280 filling the up Gap we seen in late June. With all the reversals today, the bottom might be right now.
For traders, I would not be shorting Gold now but looking at levels to go long.
Honestly, we have no grudge with the 'DUST Sheep' but we have seen a new pattern emerge. Previously on 3 or 4 occasions they were simply led along the pasture and over the cliff (see July 5th below). Give them credit - the survivors became wiser! Now we see they are led up a hill side so they cannot see a cliff coming. And my, my is it working well, see how the volume has picked up and more are being slaughtered.
Now at least the better part of this pattern is that some sheep have been able to enjoy the greener grass up the hill and head back down before going over the cliff. Since most sheep (volume) join near the top of the hill we should see DUST go higher and volume go up. But beware this would be the 4th time they are led to slaughter this way so may have become wiser again??
This chart on the S&P shows the Bollinger Bands are pinching so a break out could be imminent, will it be up or down?
Despite the market holding up MACD has been trending down and the 26 Day has already crossed the 9, it appears we are approaching the Zero line as well. Stochastics have also moved into the over bought area above 80.
It is looking like the break will be to the downside. That said, ideally we get a one day spike, a paper umbrella or doji star to signal a top, but that might not occur. Big market players try to hold things together until triple witching which is later this month. You see it on the charts with the volume spike. After April triple witch we went higher. In June it was down and back up, so we could continue sideways for a while longer, but I would be raising cash levels and watching for an ultimate short signal
The chart below of the Gold Bugs Index shows we are in the 2nd correction of this Bull move. The one in May was about -15% and currently we are about -21% in the August correction. These are minor corrections when you consider the move up has been about 180% from the January bottom. Many indicators are pointing to a bottom in this correction but nothing has given a clear sign that a final bottom is in. RSI is very weak but sometimes hits 20.
Perhaps the strongest indication is we are in the support zone around 215 – 230. My feeling is Friday's job numbers may signal a bottom, no matter what the number. A strong number and a Fed rate increase is already priced in, a weak number and the US$ will sell off and Gold up.
June 13th we posted a chart of the day on Oil when it was around $51. We expected a correction down to support between $43 and $45. We have now seen this correction and bounce off of that support. We could see further tests of this support but we believe for the most part the correction is over and are looking at long entry points.
Honestly we are not picking on DUST traders, but see this as a good barometer to retail behavior
It is pretty sad that a number of investors have taken a bath 3 times. I would hope it is not the same investors over and over again, but this last plunge only took a week to happen but it looks like the daily number (volume) of sheep is up. The worst thing about this is the 30% or so plunges are occurring with gaps down at the open so no opportunity to cut losses with stop loss orders.
You probably heard the saying “Fool me once shame on you – fool me twice shame on me” There is nothing for a 3rd time but ad lib. I would say a 3rd time “you are the fool”.
There are many cliffs and steep slopes ahead for DUST. It is headed to $1 to $2 again and then they will adjust it back up 10 times to slaughter some more sheep.
Silver prices broke through $18 last week and the chart is now looking like the Gold one with a significant higher high. Many believe it is Chinese demand driving Silver higher.
Sorry, but we could just not help showing the DUST sheep being led over the cliff again last Friday. Fool me once and shame on you, but fool me twice and shame on me. Who is up for 3 times??
This is a weekly chart of Gold and I have drawn a crude candle in for today so far. Gold did pop just over $100 hitting a high of $1362 and around 8:30Am est it is about $1327. There is a near record short position on Comex by the commercials. Will be interesting to see if we have short covering in the morning. I drew in resistance area and there is more resistance around $1400. I expect we could now trade in a $1300 to $1400 range. The day is young, will be interesting.
The Nasdaq has rolled over after hitting the old 2000 high. Is it confirming the S&P top of 2015 or is the S&P diverging, going to a new high and proving the Bull market lives on. The next couple weeks could be crucial to the long term picture or even today's Brexit outcome. Watching for a breach of 2140 or 2020.
The S&P 500 could be forming a morning doji star reversal if markets stay with a good positive gain at the close. However, we see this as a short term rally. The big market players will try to keep the markets glued together until triple witching this Friday. After that we expect a larger correction, posibly quite a brutal summer. Stockastic also suggest some sort of rally. The idea is to enter short positions by weeks end, so we hope the market gets back to about 2100
We presented this chart on June 8th and I drew in the weekly candle at that time. Oil was over $51 and we expected a correction. The weekly chart is now complete and we have seen a correction last Thursday and Friday to about $49 thus far. We expect this to be a mild correction with support in $43 to $45 area to hold. We also see some support around $47 which would be the bottom area of the uptrend channel not shown here.
Avino Silver TSX/NY:ASM Entry Price C$1.42. Avino has seen a strong up move with the PMs rally and news of commercial production Monday.
Nobody knows where eventual tops to a new bull move will end up. We use a strategy of trailing stops and part profits, mostly selling 1/3 position and anther 1/3 at some point. We have not taken profits yet and suggest holding and moving trailing stop/loss up to $1.95 giving wide room for further gains and consolidation.
A lot of investors claim to fame is always making the last trade. They look at chart history and fail to see major turning points or trend changes where past patterns are no longer relevant
This chart is DUST etf that is 3 times short the gold mining stocks that were in a 5 year bear market. This has changed to a bull market but the huge volume indicates the sheep were led to believe there would be a big correction in the gold stocks, the cliff is obvious.