Will Gold Ever Break Down?
Yes, silver has finally done it. It has broken strongly below support, and if I was just looking at silver alone, I would assume that we are on our way to a final bottom in metals in the October-November time frame, with an ideal timing of Thanksgiving.
However, silver does not live in a vacuum, and neither do I. So, I clearly have to view gold’s action this past week as well, and it does make me scratch my head a bit in wonderment. Even though silver has taken out the support which would normally signal that we are finally on our last run to the lows of the 3+ year correction, GLD has still stubbornly maintained over 114.46. That is, so far. As we closed the trading day on Friday, we have a micro 1-2, i-ii set up in GLD to potentially even have it gap down below that support early next week, should it decide to act upon this set up.
Now, silver, too, seems to have a set up for lower levels into next week, with a minimum target of 17.75, but with an ideal target of 17.20. I would question the potential for this set up if silver was to move back over the 18.15 level before these lower levels were struck. The next drop would then complete wave (v) of 3 of III in this final 5th wave, assuming both metals were able to see these declines into next week.
Assuming we see this decline next week, then we still have wave 4 and 5 of III to complete, likely into the middle of October, followed by waves IV and V, which can potentially take us into the Thanksgiving time period until they complete.
Now, allow me to take a step back and look at the bigger picture on the daily charts for both GLD and silver. First, if one were to look for another recent time period which exhibited an RSI as oversold as the one we have right now, we would have to go back to the April 2013 time period, when silver was bottoming in its 3 of iii of that particular pattern. Well, our count right now has silver potentially bottoming in a 3 of iii as well, which means that if silver were to play out a similar pattern, it still needs a 5 of iii, as well as waves iv and v to complete this current downtrend. And, interestingly, it took silver just about 2 more months to complete those waves, which is the estimated time I am thinking it will take us this time as well.
The daily chart in GLD is equally bearish, and has no indications of the positive divergences one would normally see at a market bottom of sorts. But, while we have no indications of a bottom in place, until the 114.46 level is taken out, the potential still exits that GLD may attempt the rally back to the 130 region for a larger degree e-wave. However, I must say that, based upon the recent action in silver and the technicals on GLD, it is much less likely that this scenario will play out to those higher levels before a lower low is seen in GLD. But, should we see the GLD move back over the 119.50 region, it still leaves the door open for that potential.
The one thing that still bothers me is the larger degree 4th wave I am expecting in the DXY. I still can’t help but consider that a rally in metals can still be seen while the DXY develops that larger degree 4th wave pullback. Yet, with the technical damage we have recently seen in silver, it makes it much harder to believe we will see such a rally in silver. So, until GLD breaks down below the 114.46 level, I have to keep this potential for the GLD in the back of my mind, while bringing it to the forefront of my mind should it climb back over 119.50. And, yes, it is even “possible” that silver sees a 4th wave which keeps it below resistance, even though GLD goes up to complete a larger degree e-wave – however unlikely it may seem at this time. Until GLD breaks 114.46, I am not discounting any possibilities.
In summary, as long as silver maintains below the 18.15 level early next week, I am going to expect further extensions down to 17.57 or as deep as 17.20 to complete wave 3 of iii. From there, I will expect a bounce for wave 4 of iii that should maintain below 18.75 at all times, and ideally below 18.15. This should set us up for a target of 16.25-16.65 to complete all of wave iii down sometime in mid-October, if we maintain the current larger channel.
As for GLD, I want to see us maintaining below 118 this coming week, which should then project us below the 2013 lows in a micro 5 wave structure which is currently set up as of the close of Friday. However, should we take out 119.50, then I will have to reconsider the larger 4th wave triangle in the alternative count.
As for my long time targets down in GLD, as you probably remember, I am ideally looking for the long term bottom in the 95-105 region. And, if there is a significant overreaction to breaking the 2013 support level, there is an outside potential we can see as low as the 75 region. In silver, my ideal target region resides between 15-16.50, with the overreaction price down to 13.50. But, I highly doubt that overreaction price region will be seen for very long, should we even get there. And, remember, these are not my “feelings” about to where I see the metals headed, but, rather, my calculations.
CFS, you might this interesting. Some food for thought.
Here is a small snippet from John Kaiser, a renowned industry expert that publishes the Bottom Fishing Report. The same John Kaiser that Al has interviewed many times.
Remember, its just another opinion to consider while sifting through the haze of double-speak and agendas.
This article can be viewed in its entirety at: http://ceo.ca/2014/09/20/john-kaiser-proposes-alternative-gold-bug-narrative/
Once gold drops through $1,180 it will unleash the final capitulation within the junior resource sector as shareholders totally disgusted with the conventional ideologically tainted gold bug narrative liquidate every resource junior still in their accounts.
In a sense this will be liberating, because it will rid the market of its obsession with advanced gold projects whose ounces in the ground are supposed to become very valuable when gold charges back above $1,500. I think the conventional gold bug narrative is absolute garbage, and I think it will in the next couple years be replaced by my alternative narrative which sees gold at $2,000 in real terms by 2020, provided we avoid descending into the global depression the Austerians so desperately crave in their delusion that it will be others licking their boots rather than they licking the boots of those who understand how unfettered “free markets” really work.
I suspect the latter will not let it come to that, but we may be stuck with several years of weak gold prices, for it feels very much like late 1999 when the non-resource equities were doing so well they were supposed to collapse, but went on to go exponential until the March 2000 flameout that ushered in a global recession that left gold and other metals in the doldrums for several more years until the rise of China bailed us out. This time there is no obvious China to bail us out; it requires a distributed global economic expansion which everything seems currently geared to stymie.
If gold does crap out, it will be liberating because then the audience that watches the resource juniors can get back to the model of the eighties and nineties when metal prices were assumed to be static and money was made by betting on a junior which made a discovery that worked very well at the prevailing metal prices. The ounces in the ground juniors will be quietly accumulated by the smart money, but the hot money will forage for good exploration stories, jumping on them when they erupt out of nowhere. We are admittedly in a poor situation for this to happen, because it is very hard to raise money for exploration, and those who have money are loathe to spend it until it is clear that it can be replaced at a higher stock price.
Just what I posted not long ago Vortex! Cheers.
Yes Bird, you have been very consistant with your calls.
He’s consistent because he’s always a gold bear.
A gold bear will never know a change in trend.
The trend goes up and its like the pimples on
his nose. Fails to see it.
They even turn the charts upside down.
Vortex, most of juniors are just stories which will never materialize. Even If gold goes to 10,000, it has nothing to do with them. How can they sell something they don’t have? They will crash or fade away regardless gold price and new ones are born. Betting on gold crash to clean out crappy juniors is a fantasy. If 1980-2000 bear market cannot stop it, there is nothing you can do. It is human nature greed and fear. I like John Keizer and agree with him. But I believe he is being naive on this, just like Gary believes one day manipulation will stop.
swwm+ seem
misplaced fingers again.
Not likely.
http://www.cnbc.com/id/102021996
Are they waiting to put some of it into PMs?
That must be a joke. These people don’t need to take big risks.
A simple look at gold:
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=1&mn=1&dy=0&id=p01500475920&a=366238868&listNum=1
A reversal looks imminent.
Same goes for silver:
http://stockcharts.com/h-sc/ui?s=$SILVER&p=D&yr=1&mn=1&dy=0&id=p62866744892&a=368707839
A reversal perhaps but it will not benefit many except those playing short term trends because both gold and silver have now settled at lower levels. So sure, there is some opportunity to buy but do not forget that metals prices have almost literally crashed in the past two months and invalidated the triangle configuration that had been suggesting a breakout. Your bullishness in such circumstances continues to strike me as bordering on the retarded.
“A reversal looks imminent”.
LaLaLa….I just lost half my money hunney but Matty says we will get a reversa soonl! Whoop whoop whoop! Because I am a retard sweetie and after 50% down if we get a couple percent up then we are in the money again! Hooray. Where is my glasses, cane and medications! We are going to party like its 1999. Cause the price is going back up even when the market is sliding in the gutter! Wheeeeeeeee!….hey baby……if we hurry fast we can get to the food bank before it closes!
And don’t anybody even start saying that a gold recovery is in progress today.
What we are seeing this morning is just a reaction to a severe oversold condition in conjunction with a dollar that is off 35 points already. Computer trading rules the markets. So I won’t accept any back slapping and theatrics from the usual suspects such as the above who might now claim “I told you so”!….because the fact is that any Turkey with no experience could see a bounce was in the cards after such a sharp decline.
That goes for you too Al. Please try not to breathlessly report the morning rise in gold without forgetting that shorts are selling to take profits and that is probably going to account for most of the mornings buying….not a stampede to cheap prices as most turkeys here will assert.
Gold is in recovery.
WHETHER YOU LIKE IT OR NOT !!!!!!
see ya at the finish line.
You can part ways there. Hopefully for good.
The sooner I see your sorry tail cashing out his gold at the pawn shop the better I will feel.
Only a scum bag would make remarks like that.
Oh don’t worry I know how you feel.
Known that 9 months ago.
You’re nothing but a bottom feeder.
AND A SWAMP HUNTER….
pathetic person you are.
You’re right HH. It says a lot about the people here who defend him.
You need a break….
Thats the problem.
The destructive bearman at work 24/7/365.
Nothing better to do with his time.
PATHETIC !!!!!!!
Its regretfully said but he’s no one’s friend here.
I have tried so many times to be his friend.
He’s only a friend if he can drag others down with him.
He despises anyone who profits on gold.
Then orders Big Al around, like AL takes orders from him.
Hangs out here for most of the day bashing gold.
This is a very weird strange guy. Loonie tunes ..lol
However, its not funny. He’s not playin with a full deck.
Friends? Give me a break.
Look at that. …bird is now ordering around Big AL
like a puppy dog.
Loonie tune behavior. Clowns are funny. I’m enjoying the entertainment.
Just hallerious….
Just challenging the status quo. Guys like you are wrecking gold for normal people.
You are a dangerous bird.
The fear mongering, scaring people, and you don’t
even know what your talking about ..very high odds.
YOU WILL…..part ways when the jury is out.
Keep flappin your yapper. Enjoy your glory while it lasts.
Buy buy buy, my friend. When it keeps coming down don’t say you were not warned. Chirp…chirp! 😉
Bye…bye…bye
Fly…fly…fly..
Have a nice trip to the north pole.
If the gold bear is dead…..
No one here is going go embrace your BS.
Well, I guess theres a sucker born a everyday.
Hopefully, not here.
HH,
I take it you feel that John Keisers article is full of a lot of hot air and gold will surprise to the upside both short and mid-term?
V…this is most likely now the bottom.
I say most likely because there is nothing 100 percent.
Always risk. This is your great fear bottom if there ever was one.
IMHO….hope this helps.
OK thanks, appreciate the reply.
V
Anytime V.
I owe ya a few :◆}
I like John and always agree with him except his naive idea of cleaning out crappy juniors. It cannot be done even gold goes to 0. These guys will just claim they are exploring for rare earth, uranium or something and come back to gold when gold comes back. These guys have nothing and where gold is has nothing to do with them because they don’t own any. I finally realized this after being puzzled by the fact john’s prediction never materializes. Rick rule is far more accurate on this. These guys have nothing to lose, the losers are the producers.
Only fools call bottoms……
You buys after the channel is broken,
fundamentals 101 – After 3 years of monstrous losses why are you guys fishing for bottoms……
Simply wait and buy on the uptrend that breaks the downward channel. The big fish know you are trapped so do not play into their hand…
I know the losses hurt, I’ve had many, but throwing your last dollars at buying bottoms or buying the dip foolishness has done what?
I’ve been here before, if you think the big gns are just roll it over and give you bottom you are dreaming. They are gonna take this to at least 1050, probably 950, before they take the last shares from all of those still hanging on..
You are far better to go away for awhile, recharge, and wait for the trend change…
Go invest in something else which you should have done anyway and come back at a later time… Like after Christmas. Catching falling knives without gloves is silly.
I have read your ” the bottom is here nonsense for a year”. Its time to accept that their is no bottom until there is one…
IMHO
sheesh
Good advice but can I ask who are “they” you referred to?
What I am afraid is meat grinder type of scenario which has happened and will happen again, in which the trend is identified and people jump in just in time to see it goes down again and they have to cut loss again. It happens again and again and you go broke. I feel Rick Rule is right on this “in the resource sector, you are either contrarian or victim”. If I have enough control for the market, I can make 95% of the people my victims since I can watch stats at any momment and know what to do.
And for what it’s worth,
You could buy a china, Indian, or Asian mutual fund or ETF after 2-3 years of bombing and hold that for the next 5 years?
I bought several DOW, SP500, NASDAQ mutuals and etf’s that were not leveraged in 2009 and tripled my money..
No manipulation, no fuss, no stress.
Why not emerging markets? The have been killed. Further, these markets are millions of times larger than gold and far harder to move and manipulate….
Think about it
IMHO>>>>
Make sense. Thanks.
Diversification is important.
“I bought several DOW, SP500, NASDAQ mutuals and etf’s that were not leveraged in 2009 and tripled my money..”
I’ll have to call BS on that one. More times than I can count you have tried to call the top in the bull market. Now you want us to believe you held your index ETF’s all the way through this bull, especially with a 20% draw down in 2011, and another big one in 2010?
My opinion is nothing is manipulated
It is my opinion that the counter trade has tremendous pressure on something.
Big investors always hedge and buy trade pairs…. Gold/USD for example…
USD explodes
Gold plummets.
food for thought…. as USD goes to a buck.
Is that manipulation of gold or just a hedge trade?
Half full or half empty I guess.
Don’t agree?
No problem – go check how big houses trade.
Then it starts to make sense
Barclays and Deustche bank both fined AGAIN for nefarious trading recently. No manipulation? The fines are in the 10s of billions already heading for 100s. Free markets? Hardly.
Retired Merrill Broker, Stewart Thomson, bought this price decline too:
“Technically, gold also looks ready to rally. Please click here now. I bought the recent “ebb” in Chindian demand, in modest size. Leveraged traders and options traders should wait for my price stoker oscillator to rise above the 20 line before buying, to capture a potential “momentum” style move. ”
http://www.321gold.com/editorials/thomson_s/thomson_s_092314.html
Stewart has also “been a substantially bigger buyer of gold stock than bullion, into this decline.”
Meanwhile, Elmer Fudd investors, like Birdman, twemble at the thought.
So you are a follower, not a promoter. I think I see what you are getting at. Baaaaa!
Sure, Elmer.
Bird called the recent action a “crash” while Stewart thinks as I do: “There has been a lot of drama displayed by investors and analysts since that last buy signal (in June), but there is nothing out of the ordinary occurring with gold stocks.”
Don’t misrepresent. I was referring to the gold price. It did in fact fall 10% in less than two months which would technically qualify as a crash even if it was a little extended in time. Furthermore it is threatening to fall even lower so while I do not know how deep the final declines will be on this cycle I am assured that in retrospect we will remember August and September as the months when gold broke to the downside and crashed in price.
You said: “Recall the other day he admitted to buying certain gold shares daily,
DAILY for Gods sake!!!! …”Nobody normal does that in a price crash…”
I’ve got news for you, BM, the biggest, smartest money around does that.
“Buy when there’s blood in the streets, even if the blood is your own.”
—Baron Rothschild
Learn something if you can:
http://www.investopedia.com/articles/financial-theory/08/contrarian-investing.asp
You did not respond to my post. Just the usual misdirection.
Silver hasn’t been this oversold in many years and SLV has NEVER been this oversold in its 8.5 year existence.
http://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=3&mn=7&dy=0&id=p51606932758&a=368739341
There is an article called cartel suicide, which may give us one more dimension. I can not verify the facts but it comes closer to what I know. http://news.goldseek.com/GoldSeek/1411416420.php
even you don’t agree, give it a thought. It may be true and we may not live in a totally honest system.
I will read it, but before I do, I can tell you that the system is the furthest thing from honest.
As we all know well, oversold conditions do not guarantee a price recovery nor even a significant bounce. It is popular notion but we have seen this same scenario play out again and again over the past months and disappointment often follows.
The market will decide the fate of silver. Perhaps it has already spoken as the key 61.8% Fib ratio was defiantly breached not so long ago. I am sure you noticed that event but neglected to mention that to the rest of the crowd here in your zeal to pump the market back up.
Dead wrong. (Yawn)
Not wrong. We have seen oversold conditions in gold and silver on a regular basis that were followed by further declines in price in spite of the insistence of people like yourself that a reversal was at hand. Of course you guys always turn around and claim that is a sure sign of manipulation. Did you forget about those events so soon?
The selling in stocks today swwm a capitulation-type move that often happens before a change of direction.
Fundamentals will win in the end, but who will wait?