Silver and Gold: Bulls Are Starting To Question
Last weekend, I noted how bears in metals were quite scarce of late. Rather, everyone was quite certain that the bottom in metals has been struck and the bull market was back. Well, almost everyone!
Now, it seems at least some are beginning to question whether we have truly hit bottom. I still believe that the bottom has not yet been struck, but I am still net long since early November. Yet, I am looking for a set up at which I can develop a fully hedged positon for my long position (at this time, I am 50% hedged). And, that set up will either be after a 5th wave higher in this c-wave, or a full 5 wave structure to the downside, followed by a corrective 3 waves up.
As of Friday, the metals have left us in what can be considered the start of wave v of the c-wave higher. Well, truthfully, it is hard to consider silver in that same count, since its drop this past week was quite a bit more exaggerated than GDX or GLD, which has left a question mark in my mind as to what silver is actually doing. So, I am going to reserve judgment on silver until I see more action in the upcoming week, and will send out a Market Update to subscribers at Elliottwavetrader.net when I have more information. But, silver may have already topped and now developing a 1-2, i-ii scenario to the downside.
But, I want to continually reiterate that I am not convinced the bottom has been struck in metals, and still think we will see lower lows later this year. To remind you of my targets, I am still looking for a minimum target of 105 in GLD, with an ideal target of 95-100, with the potential to see an overreaction low at 75. But, a 5 wave drop into that region is going to be a STRONG buy. In fact, it may be the best buying opportunity you may see from this time forth for the next 50 years. In silver, my next target lower is 12.75. And, in GDX, I am looking for the low teens.
I also want to warn those bullish on metals that any upcoming upside move will likely end quite soon. In fact, should we see a new high in a 5th wave into the targets I have highlighted in GDX and GLD, I will finally have a reason to short this market since we struck the bottom in November. That could very well mark the top from which we finally see our lower lows I still expect.
GDX chart
GLD Daily chart
Silver Daily chart
Interesting analysis as always from Avi. Thanks for posting it.
Analysis? From what I red he said he didn’t know anything. Other than some people don’t think a bottom is in.
One thing about waves, if you don’t like how they work out you can always start at a different spot. Just what Ive noticed.
Reminds me of rune stones, if they were wrong it wasn’t the stones, it was how I interpreted them.
Avi has averaged a very high accuracy rate for the last few years, and attributes it to the 5 wave followed by 3 way counter trend, and so I appreciate the points he decides to use as the starting points and directional turns. I feel that there is an area of interpretation on all technical analysis that can come to vastly different predictions or scenarios, so that is why someone like Avi who has been correct more than most is a valuable perspective in my opinion.
Gold returns up v soon…. digestion is healthy
Avi I would like to know on a % basis the likely hood that gold is going to make a new low 30, 40, 50, 60 70, 80 %. What’s your opinion.
Peter
Unless you can prove with scientific method that printing a lot of paper money will increase its value, this stuff is just against common sense. I don’t believe people can make accurate predictions using charts. I you do, we can bet money on your predictions. People take manipulation as market trend. They can win the battles but they will lose the war. Gold rise from $35 to $1900 is not by accident. You will find that all your gold has been transferred to other countries and the currency will be backed by hot air.
Goldman has been talking about sub 1000 gold for almost two years and it never reach there. Is it intentional to put people in the parking lot while training is leaving? Is anybody accountable for go to the moon or go to the hell talk?
rain not training.
Hello Glenfidish,
Today, I am not buying shares. And to be specific, I don’t buy GDX/GDXJ but specific stocks.
So for me it’s on a case by case basis which means gold moving on its own is not exactly a catalyst enough for me.
My buy orders are still in place, but they haven’t been hit (one came close by a few cts last week on PVG…).
However, I am still inclined to trim on a case by case basis as prices move up. I did a second trim yday on the 2nd stock I trimmed last week. The stock continued to move higher, I had an order in place to cut exposure by another 10% and the order got hit.
If gold move in the $1350 REGION, I am inclined to buy some Dec 2015 Puts. I will take it easy as a start (probably 50% of the allocated capital), and likely deploy the other 50% if it moves in $1400 REGION.
As a “disclaimer”, this will just be a hedge given my net long exposure to the metals and the PM stocks. Think of it as an “insurance policy” against a downturn.
As an aside, and as mentioned to me last Friday, this week, the focus for me is more on intraday trading, fwiw.
Best to all and GL investing/trading.
LPG
LPG,
Sounds good to me and a fine good strategy! Cheers and thank you as always.
Lawrence,
I’m gonna address you for the 2nd time in this page, but please don’t take it as me picking on you.
Re: your comment on Goldman and their target on gold, my understanding is that it depends WHO you are referring to within Goldman.
There is the “Investment Research” unit, and there is the “Commodities Research” unit, lead by Jeff(rey) Curry and who is the most present in the media space when it comes to representing Goldman’s views on Commodities (hence including gold).
When it comes to Jeff Curry and the Commodities Research target on gold, it has NOT been (assuming we’re talking about the same unit within Goldman) SUB-$1000 but rather $1050.
And it has been $1050 for a long-time… I pulled up a few articles from the web with different time stamps:
* in Nov 2013: target $1050 by 2014-end
http://www.etftrends.com/2013/11/gold-etfs-under-pressure-banks-see-more-pain/
* in Jan 2014: target $1050 by 2014-end
http://www.cnbc.com/id/101331595
* in Sept 2014: sticking with $1050 target by 2014-end
http://www.cnbc.com/id/101971259
As for 2015, the year-end forecast has recently been hiked from $1200 to $1262:
* http://www.reuters.com/article/2015/01/23/metals-goldman-forecasts-idUSL1N0V21PS20150123
* http://www.bloomberg.com/news/articles/2015-01-27/goldman-downgrades-commodity-outlook-as-energy-metals-tumble
Lastly, please note their 2016-end forecast stands at $1089 (down from $1200).
Hope this helps.
Best to you and GL to all investing/trading.
LPG
I am with you Lawrence…………..two different games being played here…imho…..
this is like the moth being drawn to the light, and getting sizzled, and lights out for the moth.
I think Avi was bearish even when blood was on the street like last November.
Lawrence,
I don’t really SEE/INTERPRET things that way re: Avi’s views.
If I remember correctly, Avi actually initiated, for the 1st time in a few years a LONG position on gold – and if I understood him correctly, it’s a multi-year position – right at the end of the last bloodbath phase, early November. That would make him buy right near what has so far been a multiyear bottom.
Not exactly a sign of bearishness, IMHO.
Having said that…
… he also always highlighted over the past few months that he thought “THE” bottom was unlikely in – and to me, he’s been quite consistent in his views. Hence his 50% hedge. But when one is long and 50% hedged, then it means one is 50% net long. Again, not exactly a sign of bearishness per se, IMHO.
Personally, if gold moves near $1350 on a spot basis, I’ll likely by some Dec 2015 puts. Assuming this occurs, my NET exposure will still be long. But buying Puts will reduce my long exposure and/by provide(ing) me some hedging. In no way will buying puts make me a bear. If I was bearish, fwiw, I would be net short, not net long.
Best to you, and GL to all investing/trading.
LPG
LPG ,
Thanks for explaining this. I cannot see it from this article. I have been skipping most of his posts just make sure my buying decision is not deterred
lawrence and Jerry…………………D I T T O
Good post LPG. You have a good memory and are correct about what Avi stated in the past as far as I recall it. He took long positions not because he thought it was the absolute bottom but because the setup was too good to ignore. Over the past few years he has been one of the better analysts where gold is concerned. He sure took a lot of flack for it too. Each time he said gold might decline his subscribers and some outsiders went berserk. i mean they were apoplectic in the beginning. I was kind of shocked how much abuse got hurled at him for just calling it like he saw it….especially as he turned out to be right no so many occasions!
Anyway, if Avi says the bottom is not in then I would say…buyers beware. His record is good.
If Avi suggests gradually get into position, I will have no problem since this is what I have been doing. However he is suggesting shorting gold. Gold is currently in a low level, any shorting will get people out of sync with the market. Once you are out of sync, you will lose money in a bull market, as a bull even.
+3 My exact predicament as well…No one calls for 95 yet alone 75 gld and comes on here and say’s I’ve been long since november low.. Really?
It will be back to the drawing board for avi if 1350 is broken.
LPG,
He has mentioned many times to his followers not to short as yet.. Meaning he is 100% sold on going short at some point. And I don’t mean 20 bucks i mean one of those long waves that get extended. That is not the mentality of bullish but bearish imo. A person who despite gold rising the amount it has and is yet to be determined if we reach 1350/1400 still goes on record as to say to his followers not yet it’s coming. He is bigger bear then teddy i sleep with.
Just my honest opinion which im entitled to. 🙂
glen
Hello all,
To Lawrence: understood re: skipping most of his posts.
Personally, due to the precise targets he has, at some point, I used to copy/paste his posts and write down the targets/target zones. I did this to see how accurate he was (or wasn’t), on a consistent basis.
To Birdman: thanks for the insights/input re: Avi’s bearish views over the past few years.
Personally, I give credit to analysts who can maintain their views against the crowd as it’s easy to bend over to the crowd mentality and pressure.
If on top of this the analyst is right, then it’s even more credit to him.
To Glenfidish:
I understand that our diverging views re: how to qualify Avi’s positioning MIGHT have to do with the time frame he has in mind and his current positioning vs. upcoming positioning (ie preparing to add more hedging at higher levels).
Consequently, I guess we might have to agree to disagree on how to call his positioning (bearish or bullish). 🙂 🙂 🙂
Best to all, and GL investing/trading.
LPG
LPG, I am against the notion that bearish on gold is against the crowd. No,the crowd is bearish on gold. The bullishness on gold has been historic low. Some survey put it at 0 for equities. So bullish on gold is against crowd. Contrarian on contrarian is mainstream. This site is hard asset site so you have concentration of gold bulls , but not in general public. Most of general public could’t care less about gold. Even in this site, real bulls are minority, I remember how many people screaming gold was going to crash when it was on 1150.
It is not the point to be bullish or not. It is the stubbornness and lack of common sense, which exist among most of analysts. I am a scientist and engineer for my whole life. It is really hard to take the illogical conclusion of some of these analysis. Even worse, a lot of people forget what the said after the fact and claim how right they are. I am sure if gold rises for here , Avi will claim he caught the low a few years from now.
Lawrence,
Re: your post at 5:38am:
guess we see and interpret things differently.
Best to you, and GL to all.
LPG
LPG,
Well said and thanks for common ground. I have nothing against Avi’s as I said he is world class elliot wave technician.
On another note are you buying shares today or remain skeptical of a little further down?
Thank you
glen
Glenfidish,
I messed up with the page so the response to your question re: me buying today etc.. is ABOVE on this page (see post at 7:38 am).
Cheers,
LPG
Thanks Avi. Interesting analysis like always.
An interesting news.
China Development and Reform Committee (a committee under state council) has published a new guidance for minimum crude storage for oil consuming industry (e.g. refinery). The minimum storage of oil must not be less than 15 days by the company’s storage facilities. In case oil is higher than $130, the storage can be lowered to 10 days. It is said that this measure is aimed at increase crude oil reserve in China.
http://bbs.wenxuecity.com/finance/3603149.html
One of my friend said that her brother is working in a company manufacturing oil storage tanks. They are working day and night now.
Al – get this guy on at least once a week. His posts like this one are sporadic plz can you post or have him on at least once a week.
John Rubino’s Dollar collapse blog has just been suspended today just after he wrote an article on the future of electronic money being backed by gold. Any coincidence? Kind of reminds me of when Harvey Organ got shut down with no warning and no news. I was pretty curious to see the charts he had posted in his Zerohedge article but the link comes up dead now. All you get now is a big type message that says “This Account Has Been Suspended”…..I wonder who he pissed off?
And now he’s back…..maybe he forgot to pay the fee. Ha!
ARE you sure your pet turtle didn’t chew on the wire………
Pretty sure Jerry. I saw the page during the night when the rest of you were sleeping soundly. But they got it fixed before you guys woke up. This turtle is an interesting gal by the way. She has really taken a liking to avocados and lettuce lately. Especially Avocados but my flower beds are not safe either. People tell me they pretty much only eat grass in the wild but mine might be developing richer tastes since she gobbles up the fruit that falls off the trees before I get a chance to pick them up.
Hi Al,
I was wondering if you still have a relationship with Rodina Lithium (RM)
Regardless what gold is doing, I noticed the hidden bullish move of silver relative gold. Anyone feel that?
Yes, silver has been out performing gold all week and it is a bullish sign.
All one has to ask themselves on whether gold/silver have bottomed is “Have the governments and corporations in power lost any of that power to manipulate markets?” If the answer is “no”, then precious metals will continue to be suppressed in favor of fiat currencies. It will take a “yes” to change that outcome. Everything else is signal noise.
I disagree with your conclusion. Manipulate does not mean total control. Manipulation will never end and it has always been with us, contrary to what many appear to think.
+1. First time I use this. Government will keep manipulating and gold will keep going up, untill they collapse. If people choose to avoid investing in gold due to the fear of government manipulation, there is a bad news. They manipulate everything now, gold, real estate, stocks and gold, even cash. The only way you can avoid the manipulation is to spend all the money you earn immediately. Forget avoid unemployment and retirement then.
Not sure why Gary always assume they will stop?
Thanks, I’m honored to earn it from you! 😮
I never said to not invest in gold. I stipulate that even if you buy gold as an inflation hedge or deflation hedge precious metals will remain hated by governments and central bankers alike, and they will do whatever it takes to avoid losing their fiat currencies’ reserve or safe haven status.
So go ahead and buy gold, I would suggest physical bullion, but do not expect to be able to sell your holdings at a profit as long as gold is the alternative that all governments hate. The current system is fractional reserve banking with only fiat currencies. They are the natural enemy of gold, because gold represents limits and responsibilities to government leaders and central bankers.
Yes, CBs hate gold, always have and always will. So what? They have failed miserably at keeping it down. Gold has risen 61 fold since the Fed was created and there’s nothing anyone can do to stop its long term trend —which is UP.
P.s. – I had no problem selling most of my gold for a profit in 2011 and I will have no problem in the future.
Regarding silver I noticed there is a gap on the charts around $25 that should be filled as most gaps are. Timing is everything when speculating in leveraged accounts but for those looking long term in physicals just buy and hold at current levels for an easy 30% gain possibly in the next 9-12 months if not sooner. If silver drops lower then you’ll get silver on sale and who doesn’t like to buy at a discount?
Crazy sh1t hommies!!!!