Price Pattern Sentiment
Indications and Upcoming Expectations
When I review the various miner
charts, I will say that the GDXJ suggests that the complex can see
a lower low in the coming week, with silver providing a similar
potential. However, the GDX has developed in such a manner in which
we can consider the low on this drop to have completed. So,
unfortunately, I do not have clarity as to whether a lower low will
be seen in the complex in the coming week before the next rally
takes hold, since the shorter-term patterns disagree. But, if the
GDXJ is able to "impulsively" (an Elliott Wave term of art
referring to the structure of a market move) rally over 38.90, then
it would suggest the next major rally phase has potentially begun.
In GDX, that level is 23.30, our prior support.
Now, due to the strength of the
drop in silver, as well as some of the miner charts I follow, it
has opened the door to the potential that the market may
consolidate a bit longer than I had initially expected. This means
that as long as we remain below the recent highs struck in the
market a few weeks ago, we may develop more of a consolidation
before the next break out phase.
I also want to tell you that Dr.
Cari Bourette, of MarketMood.net, noted that she sees a major
change in sentiment for the metals complex in the coming week. She
stated that, based upon her proprietary indicators, "gold in the
coming week has the largest positive change in sentiment in over a
year!" So, the question is if this next major sentiment change will
finally be the beginning of the smaller degree 3rd wave rally we
have been expecting, or if it will just provide us with a
corrective rally, keeping us in this consolidation for a few more
weeks. The structure will likely provide the answers over the
coming two weeks.
For GDX, the chart is looking quite bullish. In fact, any
immediate and strong follow over the 25.10 region is pointing to a
minimum target of 26.90, but, more likely, the 28 region, before
the next consolidation takes hold.
Now, to be completely honest, I cannot say that our EWT Miners
Portfolio is 100% invested just yet. Since exiting most of
our positions back in September when GDX was in the 28.50 region,
we have been building our positions back up in November and
December of 2016. But, since our decisions are mostly based
upon the individual charts we prefer, there are still a few that do
“need” a bit more of a retracement before we enter our final
trades.
As you can see on my 144-minute silver chart, we have what can be a
completed (1)(2)(i)(ii) structure off the lows. Clearly, the
market can still support another c-wave down towards the
16.70-16.90 region for a more full wave (ii), but, right now, any
break out over 17.85 opens the door to a strong spike directly to
the 19 region. So, as long as we remain over the 16.70 level,
you should maintain a very strong bullish bias.
And, should we break out over 17.85, you may move the stops on your
longs up towards the 17 region, for a failure to follow through
over 18.20, with a break back down below 17.40 (once 18.20 is
struck) would open the door to breaking back below the December
2016 lows.
Sentiment speaks, Seeking Alpha, Avi Gilburt, just
published:
While the market can certainly
pullback some over the next week or two, I will tell you that our
EWT Miners Portfolio is positioned for a break out sooner rather
than later. However, we still have some cash on hand available to
be deployed if a pullback can still be seen.
The main signal level one should
watch for at this time is the 17.85 level in silver. Since we broke
through the major resistance at 17.50, the market told us that the
probabilities have strongly shifted to the bullish side of the
market. And, a break out over 17.85 will likely catapult us quite
quickly towards the 19 region, on our way up to the 20-22 region
before the next major consolidation .
So, my next larger targets are
set for the GLD, silver and the GDX heading up towards the August
2016 highs over the next several months. Once we see that region
struck, the next larger degree consolidation will take hold into
the summer, and will set up the strong break out over the August
2016 highs later this year, on our way back towards the 2011 highs,
which may be seen as early as the middle to late part of
2018.
Someone sent me this
chart: https://s23.postimg.org/w2qe13saj/COT_INDEX_011317.jpg
which is a different way of tracking the commercial data, as
they use it as a swing system for going long and short GDX with
pretty good results. Can you decipher their settings and what they
are doing? I would like to have this type of chart to use. Maybe it
could add to your tracking GDX on BPT.
Posted by steve101 on 29th of Jan 2017 at 10:15 am
Last weekend, I provided you with the relevant support levels,
above which we must maintain a bullish bias:
The support in silver resides
between 16.10-16.50. . . As far as the GDX is concerned, our main
support resides between 20.50-21.65. . . In GLD, the relevant
support resides between 110.50-112.65. Should we see a
strong break out over the highs struck this past week in GDX, as
well as silver taking out 17.50, that is our trigger telling us the
market is likely heading back up towards the August highs to
complete wave 1 of wave iii. For those following us this past week
in our Trading Room at Elliottwavetrader.net, you would know that
we had a completed downside structure in place right before the
market took off to the upside on Friday. However, that does not
mean that we are certainly about to take off immediately to the
August highs based upon that micro-structure. Silver still only has
completed 3 waves off Friday's low. That means we CAN see another
downside move before we begin the rally towards the August
highs.
Posted by steve101 on 22nd of Jan 2017 at 08:30 am
Price Pattern Sentiment
Indications and Upcoming Expectations
The analysis I am going to provide you this week is quite simple.
As long as the GDX remains over its support region between
20.50-21.65, silver over its support between 16.10-16.50, and GLD
over its support between 110.50-112.65, you should view this market
bullishly. Moreover, a strong move in silver through the 17.50
region is your initial confirmation that the market may have begun
its next rally phase back towards the highs of August 2016. Once we
reach that region, I will expect a multi-month consolidation,
likely in the spring or early summer, which will set up the next
major run in the complex later this year.
Posted by steve101 on 21st of Jan 2017 at 09:49 am
Posted by steve101 on 21st of Jan 2017 at 09:44 am
Posted by steve101 on 21st of Jan 2017 at 09:39 am
Posted by steve101 on 15th of Jan 2017 at 02:48 pm
So, while my primary expectation will be looking for a pullback in
GDX back towards the 21-21.75 support region and in silver to the
16-16.35 region, I am going to be on high alert for a break out
which can potentially propel us much higher than the majority
currently expect, which will likely cause the next "great chase" as
some serious FOMO kicks in, along with major short covering.
While there is room for GLD to pull back in the coming week, it
would seem that this is what most of the market is looking for.
And, when the bulls and the bears are aligned for the exact same
action, the market often disappoints the great majority. So, while
the primary expectation would be that the GLD should pullback, and
hold over the 109.50-112 support region, I am going to be on high
alert for a break out which can potentially propel us much higher
than the majority currently expect, which will likely cause the
next "great chase" as some serious FOMO kicks in, along with major
short covering. As far as the projection for GLD is concerned, it
seems that both the bulls and the bears are expecting a pullback in
the price.
In the bigger perspective, I will be much more comfortable with the
longer-term potential once GLD reaches the 125-130 region for wave
1 of wave iii, as that would be a major bullish indication for the
complex for the remainder or 2017. Until then, I am going to put
much more emphasis in the silver and GDX charts for their more
clear clues about the complex.
"On Friday, the market pulled back in what counts best as a 3 wave
structure, which bodes well for the confirmation process. I am
currently counting Friday’s pullback as the a-wave of a bigger wave
(2). But, I want to warn you that if we break back out over
Thursday’s high at 23.35 and continue through 24, it becomes likely
that we are on our way to complete the larger degree wave 1 of iii
in the 28-30 region.
So, unless we see “break out” action, I would expect (this week) to
present us with more consolidation. And, as long as the
market does not break down below 20.40 (the .618 retracement of
wave (1), then I can maintain a bullish bias for the GDX.
But there was some positive news for GDX bulls on Friday:
institutions were net buyers of it in private exchanges (dark
pools) that day. Readers may recall we subscribe to
Squeeze
Metrics (and have an affiliate relationship with them, so
we are compensated when our readers join the site), which tracks
trades in dark pools. We have GDX on our watchlist on that site, so
we get emailed when there's unusual activity in it (Squeeze Metrics
defines unusual activity as a one-standard-deviation change from
the previous 120 trading days). On Friday, there was unusual
activity in GDX and two other names, Ford (NYSE:
F) and Gilead (NASDAQ:
GILD), prompting
this email from the site:
Hey there,
Looks like there was some unusual dark pool activity in some of the
tickers you follow.
F had a DPI of 42%.
GDX had a DPI of 77%.
GILD had a DPI of 46%.
DPI, you may recall, stands for Dark Pool Indicator, and it refers
to the percentage of dark pool trades that are buys -- and in the
case of GDX, 77% of them were buys on Friday. Clicking through, we
pulled up this chart on GDX:
Excerpt:
So, as we are now striking the support regions we were looking
towards back in September, I think we have a small window left for
the bulls to be stepping forward. If we are correct that the market
is now bottoming out, then you have an opportunity to buy into the
market at prices you may not again see in your lifetime.
However, if we are wrong, and are forced to stop out, and the
market drops to levels below the lows seen in December and January,
offering us another “sale” in the market, I view that as a huge
opportunity for metals investors, and not something to be
feared. So, to be honest, is there really any downside in
either of these situations for long term metals investors?
For those that really understand the long-term opportunity in the
complex, the answer is a clear “no.”
For now, my primary expectation is that the markets are bottoming,
and are going to begin their next bull market phase in the near
term. As long as silver holds 16, GLD holds the 111/112
region, and GDX holds 19.80, then there is nothing to worry
about. However, as I have noted many times, the metals may
spike below their ideal supports, and then strongly reverse, which
often happens in markets, as it shakes out those counting on
support to hold and then turns back up. This is why one
should always place their stops just under their ideal support
regions.
So, I will note that there is a 15.75 level of secondary support
below in silver and 18.70 in GDX, below which the bears can very
well take control of the market again to drop it to levels lower
than those seen this past December and January. A break below
18.70 in GDX will then set us up for a test of 16.50-17, which if
broken, points to as low as 7-9 in the GDX. Again, this is
not my primary expectation at this point in time, but I always have
to understand the risk in the market at any point in time so that I
am seeing the market as it is rather than as I hope it to be.
A trend where fiscal policy takes center stage, lending a hand to
central banks, is becoming increasingly likely, feeding
expectations about global acceleration.
Gold reacted negatively to a jump in long-term real rates which
have reached an 8-month high.
Gold investors haven’t reached a level of ultimate capitulation
yet,and there are strong macro forces which could push real rates
even higher, making the global environment unfriendly for gold.
When gold
began its correction, soon after the US election, it looked
as
it was only the beginning; and contrary to what many wanted to
believe, this proved to be the case. In addition to this fact, and
to the disappointment of the yellow metal's investors, gold's
negative dynamics have not exhausted their power yet. The global
macro backdrop is rapidly changing. A new regime shift is about to
occur in the US, and gradually to spill-over to the rest of the
developed world as well. In anticipation of this regime shift,
which involves the accommodation of monetary policy with fiscal
expansion for the first time in many years, long-term real interest
rates began their ascent, weighing on gold's price (NYSEARCA:
GLD). What is more,
if other governments beyond the US and the UK begin to adopt this
paradigm, like for example Germany or France under pressure from
the Italian referendum vote, then the new era of fiscal and
monetary coordination will have vast repercussions for financial
markets. Among these repercussions, long term real interest rates
could climb higher. In this light, gold seems to have not found its
ultimate support level during this market cycle, meaning that
investors could experience more troublesome volatility ahead.
What Drives Gold's
Correction?
Since the US
election day, gold plummeted by more than 7%, driven by an abrupt
spike in long-term real yields. In fact, the 10-Year real interest
rate, as calculated by the difference between the 10-Year swap rate
and the 10-Year breakeven inflation rate, has rebounded strongly
from the sub-zero territory to 0.30%, reaching an 8-month high.
This means that the long-term perspectives for US bond holders have
rapidly changed from negative to positive, since the interest
income from holding their bonds to maturity more than compensates
them for the risk of inflation. As a matter of fact, these
long-term perspectives haven't changed only for US investors but
for the rest of the world too. As long-term bond yields have jumped
in most of the advanced and developed economies across the globe,
their respective real rates moved up as well. This resulted in a
generalized drop of gold with respect to the most important
currencies, in addition to that against the US dollar. The ratio of
gold's spot price over the US dollar bear ETF (NYSEARCA:
UDN) has corrected in
the aftermath of the US election. The drop of this ratio, which is
the gold's price in terms of a weighted average of the euro, the
yen, the Sterling, the Canadian dollar, the Swedish krona, and the
Swiss franc, is a testament of a truly global force behind recent
gold's action, and should not be taken lightly.
When such a
shift in real-rates happens on a global scale, investors begin to
substitute their precious metals for the greenback, and secondarily
for other currencies, as the option of cash gives them more bang
for their bucks. The direct negative correlation of long-term - and
not short term as many believe - real rates and gold is clearly
evident in the latest behavior of these two markets. This means
that in order to estimate where gold is heading to, we basically
need to know in which direction the long-term real rates are
going.
These real
rates have two components, the interest rate and the inflation
expectations. Exogenous shocks to the global economy can cause
either inflation or rates or even both to move abruptly. The latest
two shocks, namely the Brexit vote and the Donald Trump's victory,
have moved both of these variables in a counterintuitive way.
Inflation went up but long-term rates climbed even faster. Italy's
referendum has the power to produce a third shock, accelerating the
bullish trend in long-term real rates if it manages to set in
motion a new policy paradigm in the Euro-area. In case of a "no"
vote, systemic fears of disintegration in the Euro-area may prompt
the core members, Germany and France, to react by indicating that
they are willing to relax their fiscal tightness. This could not
come at a better time for the world's economy, because it could
coincide with similar indications from the new US administration,
as well as by Teresa May's government in the UK. In such a case
long-term nominal yields will most certainly go higher, driving
real rates up with them.
For the first
time in many years and just at a
point where monetary policy
has spent all of its ammunition, the fiscal hand seems willing to
come in play with a promise to relieve the monetary hand from its
exorbitant burden to save the world's economies. Even the mere
speculation of that happening, could drive real rates substantially
higher from current levels, and that's a reason to pay close
attention to the Italian vote in early December.
US Dollar Funding Shortage
Pressures Gold
Apart from
the economic policy shift, gold faces another threat closely
related to the global financial system; USD funding shortage in
developed as well as in emerging markets. After the US money market
fund reform took place, the cost of borrowing and hedging dollars
internationally skyrocketed, since the pools of money which could
cheaply finance dollar lending disappeared. The elevated costs of
dollar hedging force big non-US investors, like sovereign pension
funds, who need to invest in US interest-bearing assets to do so
without buying foreign exchange protection. This pushes the
greenback upwards. As USD hedging cots increase with time, the
greenback strengthens (NYSEARCA:
UUP) and this weighs
on gold's price.
Under such
light, there are only two circumstances which could halt dollars
bullishness and revere gold's fate. Either the Fed unleashes its
USD swap lines with other central banks in order to alleviate USD
funding pressures internationally, or these funding pressures
become so extreme that freeze dollar lending abroad and initiate
the collapse of the global economy. In the latter case, long-term
yields would dive back to new lows, lending a hand to gold.
In any of the
above cases, the US dollar could ultimately correct and gold could
reign again, as long-term rates would plummet. Until, and if, that
point arrives, though, gold has another big reason to weaken
further.
Gold's Retracement
Levels
With so many
negative forces weighing on gold, it is of no surprise that its
technical dynamics point to a test of the $1,100 level. A sizable
head and shoulders topping formation, solidified earlier this
summer, makes gold looking still bearish and points to this
target.
Source: tradingview.com
Equally
important though, is the fact that the international price of gold
has begun its own correction towards the support of its long-term
uptrend line (trend line F), which rests about 8% lower than
current valuation levels. Chances are that the foreign price of
gold will try to test this trend line, before bouncing back up
again, in a new appreciation cycle, and that leaves the yellow
metal technically vulnerable.
Source: tradingview.com
Investors Have Not
Capitulated Yet
Despite all
these bearish macro and technical dynamics, investors have not yet
exhibited an extreme negative positioning in gold, which could
reflect their ultimate capitulation. The latest CFTC gold
speculative net long positions have certainly shrunk to about 170K
from 300K+ earlier this summer, but they in no case constitute an
extreme bear sentiment, as that which was witnessed during the
previous gold market's turnarounds. Just before the gold's positive
turnaround in early 2016 took place, for example, speculative net
long positions almost zeroed. The same capitulation was evident a
couple of weeks before the gold's positive turnaround of August
2013, as well as that in early January 2014. Currently, investors
haven't been forced to unload their full speculative long
positions, possibly because of the fear of well-advertised systemic
risks. Yet, the nature of market swings is such that most reversal
points occur exactly at a time that investors feel there is no hope
in keeping their long positions; and gold's market hasn't yet
reached such a degree of desperation. This means that from a
probabilistic and sentiment standpoint, the trough of the current
gold market cycle hasn't been reached yet.
While,
admittedly there are a lot of systemic risk factors out there,
spanning from abrupt yuan devaluation to an escalation of the USD
shortage crisis in emerging markets, gold has more pain to feel
before it serves its wealth preservation purpose. For the time
being, the cyclical behavior of gold market will be driven more by
the political seismic shift towards a global fiscal initiative and
the inflationary acceleration of the Asian region, and less by
concerns over cataclysmic risks. Investors have used to perceive
gold as a safe haven asset, but this time Italy's referendum might
demonstrate, for a third time in a row, that safe havens can
suffer.
Posted by steve101 on 25th of Nov 2016 at 08:35 am
In the overnight futures, around 9PM we got down to 1170.3. That
is slightly below the area for a .618 retracement of the whole move
up. In Elliot Wave wave 2's typically correct 61.8% in new uptrends
coming off of major lows. So, it caught my attention.
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GDX chart
Posted by steve101 on 14th of May 2017 at 10:09 am
It seems GDX will complete a 5w rally to around $23, which is good news for bulls as another rally should then develop after the first corrects (at point [2]). The correction should take GDX to a higher low while gold and silver make their last low for wave 5.
Still Need To Be Cautious April 05, 2017, 08:16:28 AM EDT By Avi Gilburt
Posted by steve101 on 8th of Apr 2017 at 12:15 pm
Read more: http://www.nasdaq.com/article/still-need-to-be-cautious-cm769984#ixzz4dfvXDQAl
GDX chart with Elliot Wave count
https://cdn77.elliottwavetrader.net/images/charts/201704/full-9kLq5hTPDGSbEouBvOrmG.jpg
Sentiment Speaks article today Seeking Alpha - precious metals, Avi Gilbert
Posted by steve101 on 5th of Mar 2017 at 03:09 pm
Price Pattern Sentiment Indications and Upcoming Expectations
When I review the various miner charts, I will say that the GDXJ suggests that the complex can see a lower low in the coming week, with silver providing a similar potential. However, the GDX has developed in such a manner in which we can consider the low on this drop to have completed. So, unfortunately, I do not have clarity as to whether a lower low will be seen in the complex in the coming week before the next rally takes hold, since the shorter-term patterns disagree. But, if the GDXJ is able to "impulsively" (an Elliott Wave term of art referring to the structure of a market move) rally over 38.90, then it would suggest the next major rally phase has potentially begun. In GDX, that level is 23.30, our prior support.
Now, due to the strength of the drop in silver, as well as some of the miner charts I follow, it has opened the door to the potential that the market may consolidate a bit longer than I had initially expected. This means that as long as we remain below the recent highs struck in the market a few weeks ago, we may develop more of a consolidation before the next break out phase.
I also want to tell you that Dr. Cari Bourette, of MarketMood.net, noted that she sees a major change in sentiment for the metals complex in the coming week. She stated that, based upon her proprietary indicators, "gold in the coming week has the largest positive change in sentiment in over a year!" So, the question is if this next major sentiment change will finally be the beginning of the smaller degree 3rd wave rally we have been expecting, or if it will just provide us with a corrective rally, keeping us in this consolidation for a few more weeks. The structure will likely provide the answers over the coming two weeks.
Same author, on Gold Eagle as Sentiment speaks on Seeking Alpha
Posted by steve101 on 7th of Feb 2017 at 07:42 pm
http://www.gold-eagle.com/article/are-you-still-waiting-pullback
For GDX, the chart is looking quite bullish. In fact, any immediate and strong follow over the 25.10 region is pointing to a minimum target of 26.90, but, more likely, the 28 region, before the next consolidation takes hold.
https://cdn77.elliottwavetrader.net/images/charts/201702/full-YsA7PgOkYOMXq6Tg7yQxd.jpg
Now, to be completely honest, I cannot say that our EWT Miners Portfolio is 100% invested just yet. Since exiting most of our positions back in September when GDX was in the 28.50 region, we have been building our positions back up in November and December of 2016. But, since our decisions are mostly based upon the individual charts we prefer, there are still a few that do “need” a bit more of a retracement before we enter our final trades.
As you can see on my 144-minute silver chart, we have what can be a completed (1)(2)(i)(ii) structure off the lows. Clearly, the market can still support another c-wave down towards the 16.70-16.90 region for a more full wave (ii), but, right now, any break out over 17.85 opens the door to a strong spike directly to the 19 region. So, as long as we remain over the 16.70 level, you should maintain a very strong bullish bias.
And, should we break out over 17.85, you may move the stops on your longs up towards the 17 region, for a failure to follow through over 18.20, with a break back down below 17.40 (once 18.20 is struck) would open the door to breaking back below the December 2016 lows.
https://cdn77.elliottwavetrader.net/images/charts/201702/full-DRTJ2cupI2T08RBvUpo1V.jpg
Sentiment speaks, Seeking Alpha, Avi
Posted by steve101 on 5th of Feb 2017 at 09:09 am
Sentiment speaks, Seeking Alpha, Avi Gilburt, just published:
While the market can certainly pullback some over the next week or two, I will tell you that our EWT Miners Portfolio is positioned for a break out sooner rather than later. However, we still have some cash on hand available to be deployed if a pullback can still be seen.
The main signal level one should watch for at this time is the 17.85 level in silver. Since we broke through the major resistance at 17.50, the market told us that the probabilities have strongly shifted to the bullish side of the market. And, a break out over 17.85 will likely catapult us quite quickly towards the 19 region, on our way up to the 20-22 region before the next major consolidation .
So, my next larger targets are set for the GLD, silver and the GDX heading up towards the August 2016 highs over the next several months. Once we see that region struck, the next larger degree consolidation will take hold into the summer, and will set up the strong break out over the August 2016 highs later this year, on our way back towards the 2011 highs, which may be seen as early as the middle to late part of 2018.
Steve, it won't print. Just
Education: More Examples of Patterns
Posted by steve101 on 5th of Feb 2017 at 09:05 am
Steve, it won't print. Just prints a blank page.
Answer: Then simply save the link or download the file onto your computer.
Why I am in precious metals heavily since late December, early Jan
Posted by steve101 on 2nd of Feb 2017 at 05:43 pm
https://s24.postimg.org/mf41p3ekl/XAUUSD_020217.png
Commercial net short
Wednesday Newsletter
Posted by steve101 on 2nd of Feb 2017 at 05:40 pm
Matt,
Someone sent me this chart: https://s23.postimg.org/w2qe13saj/COT_INDEX_011317.jpg
which is a different way of tracking the commercial data, as they use it as a swing system for going long and short GDX with pretty good results. Can you decipher their settings and what they are doing? I would like to have this type of chart to use. Maybe it could add to your tracking GDX on BPT.
Steve
Avi GIlburt, Sentiment Speaks, this morning Seeking Alpha article excepts
Posted by steve101 on 29th of Jan 2017 at 10:15 am
Last weekend, I provided you with the relevant support levels, above which we must maintain a bullish bias:
The support in silver resides between 16.10-16.50. . . As far as the GDX is concerned, our main support resides between 20.50-21.65. . . In GLD, the relevant support resides between 110.50-112.65. Should we see a strong break out over the highs struck this past week in GDX, as well as silver taking out 17.50, that is our trigger telling us the market is likely heading back up towards the August highs to complete wave 1 of wave iii. For those following us this past week in our Trading Room at Elliottwavetrader.net, you would know that we had a completed downside structure in place right before the market took off to the upside on Friday. However, that does not mean that we are certainly about to take off immediately to the August highs based upon that micro-structure. Silver still only has completed 3 waves off Friday's low. That means we CAN see another downside move before we begin the rally towards the August highs.
Seeking Alpha - their best precious metals guy. Matt kicked his butt at August high 2016 as he got out 2 weeks latter.
Posted by steve101 on 22nd of Jan 2017 at 08:30 am
Price Pattern Sentiment Indications and Upcoming Expectations
The analysis I am going to provide you this week is quite simple. As long as the GDX remains over its support region between 20.50-21.65, silver over its support between 16.10-16.50, and GLD over its support between 110.50-112.65, you should view this market bullishly. Moreover, a strong move in silver through the 17.50 region is your initial confirmation that the market may have begun its next rally phase back towards the highs of August 2016. Once we reach that region, I will expect a multi-month consolidation, likely in the spring or early summer, which will set up the next major run in the complex later this year.
Posted by steve101 on 21st of Jan 2017 at 09:49 am
Posted by steve101 on 21st of Jan 2017 at 09:44 am
Posted by steve101 on 21st of Jan 2017 at 09:39 am
Sentiment Speaks article today Seeking Alpha - credible trader
Posted by steve101 on 15th of Jan 2017 at 02:48 pm
So, while my primary expectation will be looking for a pullback in GDX back towards the 21-21.75 support region and in silver to the 16-16.35 region, I am going to be on high alert for a break out which can potentially propel us much higher than the majority currently expect, which will likely cause the next "great chase" as some serious FOMO kicks in, along with major short covering.
From Avi Gilburt: http://www.gold-eagle.com/article/could-gold-and-silver-miners-have-provided-ultimate-fake-out "On Friday, the
Posted by steve101 on 11th of Jan 2017 at 11:11 am
From Avi Gilburt:
http://www.gold-eagle.com/article/could-gold-and-silver-miners-have-provided-ultimate-fake-out
"On Friday, the market pulled back in what counts best as a 3 wave structure, which bodes well for the confirmation process. I am currently counting Friday’s pullback as the a-wave of a bigger wave (2). But, I want to warn you that if we break back out over Thursday’s high at 23.35 and continue through 24, it becomes likely that we are on our way to complete the larger degree wave 1 of iii in the 28-30 region. So, unless we see “break out” action, I would expect (this week) to present us with more consolidation. And, as long as the market does not break down below 20.40 (the .618 retracement of wave (1), then I can maintain a bullish bias for the GDX.
See charts illustrating the wave counts on the GDX, GLD and Silver (YI) at https://www.elliottwavetrader.net/scharts/Charts-on-GDX-GLD-Silver-201701081465.html .
Hedge funds are buying GDX heavily past 9 days.
Posted by steve101 on 9th of Jan 2017 at 03:45 pm
https://squeezemetrics.com/monitor/benefits
But there was some positive news for GDX bulls on Friday: institutions were net buyers of it in private exchanges (dark pools) that day. Readers may recall we subscribe to Squeeze Metrics (and have an affiliate relationship with them, so we are compensated when our readers join the site), which tracks trades in dark pools. We have GDX on our watchlist on that site, so we get emailed when there's unusual activity in it (Squeeze Metrics defines unusual activity as a one-standard-deviation change from the previous 120 trading days). On Friday, there was unusual activity in GDX and two other names, Ford (NYSE: F) and Gilead (NASDAQ: GILD), prompting this email from the site:
Interesting GDX, Gold, Silver article published last night
Posted by steve101 on 1st of Dec 2016 at 07:42 am
http://www.gold-eagle.com/article/there-no-downside-metals-investors
Excerpt: So, as we are now striking the support regions we were looking towards back in September, I think we have a small window left for the bulls to be stepping forward. If we are correct that the market is now bottoming out, then you have an opportunity to buy into the market at prices you may not again see in your lifetime. However, if we are wrong, and are forced to stop out, and the market drops to levels below the lows seen in December and January, offering us another “sale” in the market, I view that as a huge opportunity for metals investors, and not something to be feared. So, to be honest, is there really any downside in either of these situations for long term metals investors? For those that really understand the long-term opportunity in the complex, the answer is a clear “no.”
For now, my primary expectation is that the markets are bottoming, and are going to begin their next bull market phase in the near term. As long as silver holds 16, GLD holds the 111/112 region, and GDX holds 19.80, then there is nothing to worry about. However, as I have noted many times, the metals may spike below their ideal supports, and then strongly reverse, which often happens in markets, as it shakes out those counting on support to hold and then turns back up. This is why one should always place their stops just under their ideal support regions.
So, I will note that there is a 15.75 level of secondary support below in silver and 18.70 in GDX, below which the bears can very well take control of the market again to drop it to levels lower than those seen this past December and January. A break below 18.70 in GDX will then set us up for a test of 16.50-17, which if broken, points to as low as 7-9 in the GDX. Again, this is not my primary expectation at this point in time, but I always have to understand the risk in the market at any point in time so that I am seeing the market as it is rather than as I hope it to be.
See charts illustrating the wave counts on the GDX, GLD and Silver (YI) at https://www.elliottwavetrader.net/scharts/Charts-on-GDX-GLD-Silver-201611291425.html .
Article on why gold needs to correct further.
Posted by steve101 on 29th of Nov 2016 at 10:21 pm
I post the whole article because seeking alpha blocks your entire viewing unless you subscribe.
Gold: The Correction Came, But It's Not Enough
Summary
A trend where fiscal policy takes center stage, lending a hand to central banks, is becoming increasingly likely, feeding expectations about global acceleration.
Gold reacted negatively to a jump in long-term real rates which have reached an 8-month high.
Gold investors haven’t reached a level of ultimate capitulation yet,and there are strong macro forces which could push real rates even higher, making the global environment unfriendly for gold.
When gold began its correction, soon after the US election, it looked as it was only the beginning; and contrary to what many wanted to believe, this proved to be the case. In addition to this fact, and to the disappointment of the yellow metal's investors, gold's negative dynamics have not exhausted their power yet. The global macro backdrop is rapidly changing. A new regime shift is about to occur in the US, and gradually to spill-over to the rest of the developed world as well. In anticipation of this regime shift, which involves the accommodation of monetary policy with fiscal expansion for the first time in many years, long-term real interest rates began their ascent, weighing on gold's price (NYSEARCA: GLD). What is more, if other governments beyond the US and the UK begin to adopt this paradigm, like for example Germany or France under pressure from the Italian referendum vote, then the new era of fiscal and monetary coordination will have vast repercussions for financial markets. Among these repercussions, long term real interest rates could climb higher. In this light, gold seems to have not found its ultimate support level during this market cycle, meaning that investors could experience more troublesome volatility ahead.
What Drives Gold's Correction?
Since the US election day, gold plummeted by more than 7%, driven by an abrupt spike in long-term real yields. In fact, the 10-Year real interest rate, as calculated by the difference between the 10-Year swap rate and the 10-Year breakeven inflation rate, has rebounded strongly from the sub-zero territory to 0.30%, reaching an 8-month high. This means that the long-term perspectives for US bond holders have rapidly changed from negative to positive, since the interest income from holding their bonds to maturity more than compensates them for the risk of inflation. As a matter of fact, these long-term perspectives haven't changed only for US investors but for the rest of the world too. As long-term bond yields have jumped in most of the advanced and developed economies across the globe, their respective real rates moved up as well. This resulted in a generalized drop of gold with respect to the most important currencies, in addition to that against the US dollar. The ratio of gold's spot price over the US dollar bear ETF (NYSEARCA: UDN) has corrected in the aftermath of the US election. The drop of this ratio, which is the gold's price in terms of a weighted average of the euro, the yen, the Sterling, the Canadian dollar, the Swedish krona, and the Swiss franc, is a testament of a truly global force behind recent gold's action, and should not be taken lightly.
Source: tradingview.com, St. Louis Fed.
When such a shift in real-rates happens on a global scale, investors begin to substitute their precious metals for the greenback, and secondarily for other currencies, as the option of cash gives them more bang for their bucks. The direct negative correlation of long-term - and not short term as many believe - real rates and gold is clearly evident in the latest behavior of these two markets. This means that in order to estimate where gold is heading to, we basically need to know in which direction the long-term real rates are going.
These real rates have two components, the interest rate and the inflation expectations. Exogenous shocks to the global economy can cause either inflation or rates or even both to move abruptly. The latest two shocks, namely the Brexit vote and the Donald Trump's victory, have moved both of these variables in a counterintuitive way. Inflation went up but long-term rates climbed even faster. Italy's referendum has the power to produce a third shock, accelerating the bullish trend in long-term real rates if it manages to set in motion a new policy paradigm in the Euro-area. In case of a "no" vote, systemic fears of disintegration in the Euro-area may prompt the core members, Germany and France, to react by indicating that they are willing to relax their fiscal tightness. This could not come at a better time for the world's economy, because it could coincide with similar indications from the new US administration, as well as by Teresa May's government in the UK. In such a case long-term nominal yields will most certainly go higher, driving real rates up with them.
For the first time in many years and just at a point where monetary policy has spent all of its ammunition, the fiscal hand seems willing to come in play with a promise to relieve the monetary hand from its exorbitant burden to save the world's economies. Even the mere speculation of that happening, could drive real rates substantially higher from current levels, and that's a reason to pay close attention to the Italian vote in early December.
US Dollar Funding Shortage Pressures Gold
Apart from the economic policy shift, gold faces another threat closely related to the global financial system; USD funding shortage in developed as well as in emerging markets. After the US money market fund reform took place, the cost of borrowing and hedging dollars internationally skyrocketed, since the pools of money which could cheaply finance dollar lending disappeared. The elevated costs of dollar hedging force big non-US investors, like sovereign pension funds, who need to invest in US interest-bearing assets to do so without buying foreign exchange protection. This pushes the greenback upwards. As USD hedging cots increase with time, the greenback strengthens (NYSEARCA: UUP) and this weighs on gold's price.
Under such light, there are only two circumstances which could halt dollars bullishness and revere gold's fate. Either the Fed unleashes its USD swap lines with other central banks in order to alleviate USD funding pressures internationally, or these funding pressures become so extreme that freeze dollar lending abroad and initiate the collapse of the global economy. In the latter case, long-term yields would dive back to new lows, lending a hand to gold.
In any of the above cases, the US dollar could ultimately correct and gold could reign again, as long-term rates would plummet. Until, and if, that point arrives, though, gold has another big reason to weaken further.
Gold's Retracement Levels
With so many negative forces weighing on gold, it is of no surprise that its technical dynamics point to a test of the $1,100 level. A sizable head and shoulders topping formation, solidified earlier this summer, makes gold looking still bearish and points to this target.
Source: tradingview.com
Equally important though, is the fact that the international price of gold has begun its own correction towards the support of its long-term uptrend line (trend line F), which rests about 8% lower than current valuation levels. Chances are that the foreign price of gold will try to test this trend line, before bouncing back up again, in a new appreciation cycle, and that leaves the yellow metal technically vulnerable.
Source: tradingview.com
Investors Have Not Capitulated Yet
Despite all these bearish macro and technical dynamics, investors have not yet exhibited an extreme negative positioning in gold, which could reflect their ultimate capitulation. The latest CFTC gold speculative net long positions have certainly shrunk to about 170K from 300K+ earlier this summer, but they in no case constitute an extreme bear sentiment, as that which was witnessed during the previous gold market's turnarounds. Just before the gold's positive turnaround in early 2016 took place, for example, speculative net long positions almost zeroed. The same capitulation was evident a couple of weeks before the gold's positive turnaround of August 2013, as well as that in early January 2014. Currently, investors haven't been forced to unload their full speculative long positions, possibly because of the fear of well-advertised systemic risks. Yet, the nature of market swings is such that most reversal points occur exactly at a time that investors feel there is no hope in keeping their long positions; and gold's market hasn't yet reached such a degree of desperation. This means that from a probabilistic and sentiment standpoint, the trough of the current gold market cycle hasn't been reached yet.
Source: investing.com
While, admittedly there are a lot of systemic risk factors out there, spanning from abrupt yuan devaluation to an escalation of the USD shortage crisis in emerging markets, gold has more pain to feel before it serves its wealth preservation purpose. For the time being, the cyclical behavior of gold market will be driven more by the political seismic shift towards a global fiscal initiative and the inflationary acceleration of the Asian region, and less by concerns over cataclysmic risks. Investors have used to perceive gold as a safe haven asset, but this time Italy's referendum might demonstrate, for a third time in a row, that safe havens can suffer.
see also Tom McClellan on Gold's cycles
I don't use Elliot but looking at Gold Daily I ...
Posted by steve101 on 25th of Nov 2016 at 08:38 am
http://www.mcoscillator.com/learning_center/weekly_chart/golds_13-1_2_month_cycle_low/
In the overnight futures, around
I don't use Elliot but looking at Gold Daily I ...
Posted by steve101 on 25th of Nov 2016 at 08:35 am
In the overnight futures, around 9PM we got down to 1170.3. That is slightly below the area for a .618 retracement of the whole move up. In Elliot Wave wave 2's typically correct 61.8% in new uptrends coming off of major lows. So, it caught my attention.