Thursday, 5 January 2017

Gold pitchfork worked a treat, $1120s target at lower line almost reached.

I have been waiting to see if the downtrend in gold would go all the way to the bottom of the pitchfork that I originally drew in January 2016 - and it did. Will it hold?

Actually, I have been looking at two forks. Both seem to sum up aspects of the trading. Earlier (Nov 2016) I had this chart with initial target of $1177 and final possible target of $120 at the bottom of the larger fork:
Note that the confluence of the two median lines marked the moment of the crash, right non US election day + 1.

As of 5 January 2017, the lower line near $1124 has not been fully tested though there may be two tests of a slightly higher parallel line just visible at lower right:

Putting the small pitchfork back in we can see the price at $1181 is still well below the lower line of that fork and needs about $1220 to re-enter it. In fact, it would be possible that an outside parallel to that small fork coule also be in play near $1124, about the same distance below the lower line as half the width of the small fork:

So, the bull run isn't fully dead yet. $1180 is a key resistance level (that was support in June and December 2013) and needs to be exceeded on a closing basis. Any move below $1124 would kill this bull rally pretty much, I feel since it would break an uptrend structure (the large fork) that has been in formation since the left hand end of this chart at the end of 2014 (2 years).





Saturday, 26 November 2016

USDX chart from March 2013 with Price objective of 102!

USDX point and figure chart from March 2013 with Price objective of 102! This target flipped to 75 near the end of 2013 for just a little while, then became back in early 2014, when the dollar was in the low 80s and then what happened? The dollar has gone to 102!




Thursday, 27 October 2016

CPI has informative correlation with energy prices.

The CPI index for all items, year over year, has a remarkable correlation with energy prices over the past 16 months.

So much so, that one can take the year over year energy price changes as given by the Bureau of Labor Statistics (BLS) in their inflation reports and track the All Items inflation rate to within about +/- 0.3%.

In the following chart, I have used the energy price changes, scaled them by a weighting and overlaid it on the CPI all items index graph. EC on the charts stands for Energy (price) Contribution. Energy typically contributes about 7% of the CPI with slight month to month variations in the BLS data.

Blue line is CPI All Items index year over year for each month reported
Red, green and purple lines are calculated from changes in energy prices using three slightly different models.

I believe that this shows that inflation is critically dependent on energy price changes as the energy bear market might be starting to flatten out and turn up. This has big implications for interest rate policy and gold prices going forward.

I have prepared a more comprehensive report showing the methodology and covering a wider time frame. This is planned to be made available at the end of February 2017 at a nominal fee and incorporates a forecasting model for CPI inflation.


The basic comparison between CPI and energy price changes:










Monday, 10 October 2016

Target for Pound $1.11, gold $1170 or $1100, gold might still be near £1000/oz.

My charts as of last week:

Target for Pound $1.11, gold $1170 or $1100, gold might still be near £1000/oz.

Once $1250 region is breached, $1170 and $100 come into play at the lower ines of the Andrews pitchforks:



As for you Britush pound, $.11 target would just need a duplicate of the Brexit fall in a typical Trident Trading ABCD pattern (not marked):

1st move $1.48 to 1.30, next move 1.29 to 1.11. It could be worse. It could be taken from 1.50 to 1.28 then 1.29 to 1.07:



Target for Pound $1.11, gold $1170 or $1100, gold might still be near £1000/oz.

My charts as of last week:

Target for Pound $1.11, gold $1170 or $1100, gold might still be near £1000/oz.

Once $1250 region is breached, $1170 and $100 come into play at the lower ines of the Andrews pitchforks:



As for you Britush pound, $.11 target would just need a duplicate of the Brexit fall in a typical Trident Trading ABCD pattern (not marked):

1st move $1.48 to 1.30, next move 1.29 to 1.11. It could be worse. It could be taken from 1.50 to 1.28 then 1.29 to 1.07:


20 months EMA on gold being tested - Twins?

Looking at the monthly gold chart posted by FullGold crown on goldtadise, the 20 months EMA on gold is being tested. Do we have twins? For bears there probably needs to be a little end run around this average before the plunge. For bulls, the 20EMA had better hold.


Thursday, 25 August 2016

GDX return to base?

GDX has returned to the breakout point of a pitchfork structure (click to enlarge):