Thursday, 25 August 2016

GDX return to base?

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

Wednesday, 6 July 2016

Gold price in GBP sterling has retraced 61.8% of its losses and more.

I just posted this on in reply to Mark's post.

Mark was looking at gold's move to $1369 and saying that in USD that is very close to a 38.2% retracement of the entire downmove from $1900+ to $1045 and possibly a point for resistance. I replied:

It is now $1368.70 / $1369.70 Bid/Ask on Kitco, right where your lines meet (1369.90).
High so far today was $1371.90, low $1364.00 (6 July 2016 10,00 BST UK time).
I guess you are looking at the 38.2% retracement of the entire downmove from $1920 to $1045 approx coming in around $1369, approx.
I am looking at gold in GBP and I can tell you that the retracement of the downmove is now more than 61.8% in sterling. Not that it is the most important price but it is interesting to note.

Actually I have taken a closer look and it is very close to 61.8% in sterling. Close enough still to be resistance. Also, today's sterling price (£1057) has just broken above the upper end of the support zone during the market topping process (2011-2013) which was from about 960 to 1015 BP. Last week's close price was about 1013 but today's is 1057 GBP. I don't know why the $GOLD:$GBPUSD chart is not giving me any of this week's prices but there you go! Here is the chart:

Wednesday, 15 June 2016

Gold's bull market pitchfork there all along.

Gold has been tracing out a bull market pitchfork structure that began in early 2011 at the $1309 low. Strange that $1309 was the level at which the price was rejected from re-entering that very same structure early in 2015 and stranger that so many are looking at $1309 yet again under the name of the "Matterhorn" - the goal to reach in the first leg of a potential new bull market.

Sure, $1309 is a crucial horizontal resistance/support level going back to early 2011 at least. However, my chart tells me that $1400 is going to be the  key. A move over $1400 is now needed to get gold back into this bullish pitchfork structure. Since it is an up-sloping channel, as time goes on, this target creeps gradually higher and will soon get to $1430 another key level of resistance in late 2010 and Summer 2013 - green line on second chart.

Strangely, or not so strangely, the recent bullish action in gold has followed a half width parallel pitchfork (show in orange) parallel to and just underneath the larger structure. Possibly that is encouraging, since it means that the slope of the larger structure is still in force or has re-asserted itself as a determinant of price action.

The median line of this structure is at $1750 so a move above $1400 or so back into the blue pitchfork would suggest a potential quick move to $1750:

The action-reaction lines and the symmetry of the trading pattern would suggest a quick move to $1400 after a hesitation near $1300 and then a pullback before another quick move to $1750. The final target would be $2100 at the top of the fork but let's not get ahead of ourselves:

Sunday, 1 May 2016

Silver's outrageous bull market pitchfork (and comparison with gold's).

OK, this one is for silverbugs:

Here is my outrageous pitchfork that stamps a bull market on silver that never ended, despite the 70% correction. Just for fun! Silver can go just below $16 again and not negate the pattern. Note the price support action since the December 2015 low has the same slope as all the price support between October 2008 and September 2010 before the bubble phase began:
silver outrageous bullish pitchfork dont care

The median line of this pitchfork has so many hits that it looks very good to me. Also the price top at $50 absolutely mandates the position of the lower line that has just been hit by the December 2013 lows. It could have hit a bit sooner or a bit later. Even so, this is not quite the same as my bullish gold fork. In the silver one the $26 level is key as is the reversal from support to resistance along the blue median line. The bear market Point Of Recognition started at the $26 level of horizontal support but was triggered by the move below around $30 on the blue line in early 2013.

With gold, the median line goes straight through the POR; not quite the as for silver I don't care. These look good to me; good enough for now anyway. Symmetry of the action and reaction lines on the gold chart also adds to the juice:


Saturday, 23 April 2016

Is the silver up-move overdone?

Is the silver up-move overdone? Bob Hoye on says "Yes" in his past two interviews:
Gold, Silver and Metals Rally Continuing
Precious Metals Show End of Bear Market

Bob is looking for a cyclical bull market in precious metals but is warning that the silver rally is very overbought. One of his favourite indicators ins the daily RSI (relative strength index) on the silver:gold ratio. If it goes above 78, he considers it a warning sign.

The RSI on silver:gold ratio has just gone over 80 and that is usually a sign of a very overextended move in the precious metals. Even higher levels on this RSI at over 90 have been seen at the secular precious metals market top in January 1980 ($850 gold, $50 silver) and at the silver market top of $50 in May 2011. The rebound in the market in September 2012 saw this RSI hit 84 and it is reaching that level again.

Bob is a senior in the marketplace and, though he is something of a deflationist and was wrongly bearish on the stock markets in 2009-2011 he is a real bright guy and evergreen in his analysis, which is usually spot on. You canm see interestingly that the three past spikes in this RSI were in the precious metals rallies in the third quarters of 2012, 2013 and 2014.

However, on these charts, it doesn't look quite as extreme as Bob Hoye implies in his interview. The RSI has spent only a little time over 70, less than on some other occasions and not all the visits well over the 70 level were disasters for price action; it's just that some were highly disastrous! SO it is a warning sign I guess.

Anyway, what about weekly and monthly RSI's? Are those not also important?

Daily RSI charts are shown below:

Thursday, 11 February 2016

Gold:oil ratio hits 43 as markets start to shakeout.

Gold:oil ratio is now 43. It broke out above a 30-year high at 33.30 some weeks ago, rocketed to 39, backed off to test support at 33 and now - voom! It's 43.

As far as I can tell from research of historic prices, the only time gold:oil was around 40 was around 1933 and that was not a very good year for the financial system.