Anatomy of a Neckline – Gold Chart
I have been chatting a lot recently with Kevin Vecmanis who is the founder of Vanaurum. Vanaurum is a service that uses AI to play out a wide range of scenarios focused on gold, silver and GDX. From these thousands of results his system develops a 21 trading day outlook for the 2 markets. When analyzing his system Kevin also writes some interesting articles with his findings. The article below caught my attention and I think is a good start to understand a bit about his system. Be sure to click the link below for another article that is a bit more technical but explains a bit more what his system is able to do.
Here is the initial article focused on gold and a “neckline” on the chart.
I’m going to dedicate time in this article to discuss some of the real-world mechanisms underlying chart patterns and price movements. Some view technical patterns as merely shapes, but these shapes are representing real underlying supply and demand characteristics. There has been a lot of discussion recently regarding the basing formation in the gold price and I want to dive into the mechanics of how these structures work, how they form, and how the implication of their resolution is derived.
Price is the Intersection of Supply & Demand:
It’s easy to look at market prices and forget what’s actually going on behind the scenes. Buying or selling a stock, ETF, commodity, or any other financial instrument involves dealing with another person (or algorithm acting on behalf of a person). There can be any number of reasons for selling something:
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You think the instrument is expensive
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You need to liquidate the investment for other non-investment purposes
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You fear the price falling
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You think something else has more value
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Your expectations of the instrument have changed
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etc…
The reasons for buying a financial instrument are often fewer. Typically one buys a financial instrument because they expect to make a profit in the future – whether through cash flow or price appreciation. There can be other reasons – diversification or status, to name two.
With commodities like gold, more often than not the interaction between buyers and sellers is predicated upon one party thinking it’s cheap and the other thinking it’s expensive. At certain price levels, there may be nobody that thinks it’s cheap enough to buy so the price falls until ‘bids’ start entering the market. Conversely, there may be times when everybody thinks the price is too cheap to sell so the price rises until an ‘ask’ (offer) enters the market.
“Cheap” and “expensive” are often the wrong paradigms to view the market through, especially with gold. What’s normally prevailing is expectations. If the number of people expecting the price to rise equals the number of people expecting the price to fall, typically you have reached a price equilibrium in the market. But we live in a dynamic world and the expectations of the investing public are always changing. Prices are always moving to reflect the prevailing expectations of those purchasing a specific asset.
Because investors are people, and the thoughts and behaviour of people are affected by time, the importance of price levels also becomes a function of time. Why is this the case? A person may sell a security now out of fear. Six months from now, if the price of that security has remained unchanged (or even appreciated), the emotional impact of that fear may have subsided and that same person may be inclined to purchase the security again without any fundamental aspects changing. This is a connection that was made by an economist named Edwin Coppock, who did investment work for the Episcopal Church and noted that there was connection between human bereavement cycles and the recovery period of markets.
Bull markets are characterized by consistently lobsided expectations of a market’s prospects. As a bull market progresses through time, the memory of downward price trajectory begins to fade and people become comfortable and accustomed to upward price trajectories. More buyers move into the market expecting higher prices. Higher prices end up validating their expectations and this becomes reflected in the bid stack – more bids than offers. There becomes a point in time when, despite the expectations of market participants, the majority of those able to buy have accumulated long positions. Transactional volumes decline as people hold their positions expecting further rises, and those that didn’t participate in the rally bid for fewer and fewer shares.
The longer this process continues, the greater the disparity in unrealized gains between the investors that have participated in the bull market. Those that purchased most recently are sitting on small gains or no gains, expecting more. Those that purchased earlier are sitting on larger gains and have more to lose if the trend reverses.
Intelligent investors sitting on large gains begin to introduce offers into the market to book their gains (selling shares). Those selling at the top are competing for buyers in a diminished bid stack. Eventually, the amount of offers overwhelms the amount of bids and the price begins to fall so that there’s equilibrium between the supply and demand of shares.
However, as we discussed the supply and demand of shares is dependent on expectations. Fear grips both those who are sitting on sizeable gains and small gains. Expectations of higher prices transform into the immediate expectation of lower prices and the dynamics of the bid stack collapse. Because not enough time has elapsed for the people involved to forget the upward price trend, they view the dip as a buying opportunity. The emotional selling quickly depletes the offers in the bid stack and bids reassert themselves. This causes a sharp snap-back rally which affords those who missed the first opportunity to sell a second opportunity to realize profits with a bid stack now flush with bids.
Profit booking overwhelms the bid stick once again, and by now enough time has elapsed for most market participants to forget the upward trend that once persisted. Offers dominate the bid stack until irreparable damage is done to the bull-market psychology. At this point, as Edwin Coppock discovered, only time can heal the wounds.
Sound like a fictional tale? This is the story of the gold market from 2002-2013, and every bull market that has come and will come. See below:
Anatomy of a Neckline:
After the sell-off in gold accelerated in 2013, the highest level the market was able to rally to was a shade under $1450 in the summer of 2013. Every rally from that date to the bear-market low in December 2015 reached a lower and lower price level. The opposite psychology that we discussed earlier took hold. But what’s happening here?
As time goes buy and emotions dissipate, supply begins to get absorbed by those with expectations that the price will rise. Gold changes hands from those that are fearful and bearish to those that are optimistic and bullish. A percentage of those that are optimistic and bullish will be easily frightened during price declines because the memory of a downward trend is still fresh in their memories (remember Coppock’s bereavement cycle).
On price declines a percentage of these investors will sell to optimistic and bullish investors that are not so easily discouraged. This cyclical process continues until, quite literally, there is nobody left willing to sell at the low price level. This process reached its terminus in December of 2015, almost four and a half years after the peak.
At this point, with a bid stack depleted of offers, the price rose dramatically so that supply and demand could reach equilibrium. With little-to-no offers, it doesn’t take many bids to move the price significantly. Some of those “strong hands” booked significant profit when price matched the January 2015 high, and then more in the late summer of 2016. This wave of profit-taking sent a surge of fear into the market, with many in the space predicting a continuation of gold’s bear-market decline. At this point it has only been 6-8 months since the last memories of relentless selling.
This selling arrested itself at $1150, a higher low by almost $100. Memories of the bear market are diminishing, and expectations of higher prices are returning. Remember that as a market bases and declines there are people accumulating along the way that seek to either profit or jettison their positions as soon as price moves back to their break even point. The more time an asset spends within a specific price range the more galvanized the holders of the asset become. Some of the accumulators on the way down shift to become “weak hands” as soon as their trade becomes profitable. Their selling goes into the hands of strong hands with longer term expectations, even on the way up.
We’re seeing the offers in the bid stack become depleted at higher and higher levels. This is representative of strong hands with bullish expectations beginning to dominate the supply. $1370 and $1450 will be formidable resistance levels in this market. There are still those who are underwater on their investment below these levels that will be whole when these prices get reached. However, because so much time has elapsed it could also be the case that their expectations have reversed. One should expect strong waves of selling at these levels as the last hold-outs from the prior bear market dump their holdings to more bullish participants. It remains to be seen how large this selling is and how well it gets absorbed.
A breach of the neckline of any bottoming formation represents an end to the bereavement cycle of the prior down move. The more time that elapses, the longer the churning process becomes. Memories fade, optimism rises, and the story starts from the beginning.
About the Author:
Kevin Vecmanis is a professional engineer, quantitative market analyst, machine learning practitioner, and a candidate in the CFA program. He graduated from the University of Western Ontario with a degree in Electrical & Computer engineering in 2008 and currently lives and works in Vancouver, British Columbia.
Click here to read a more in depth article about Kevin’s system and checkout the rest of his site.
Joe six pack with the retirement account is going to throw up…..
DJIA……..800 to 1000 down……is going to spook some people….
Johnnie will be shaking in his booties tonight
https://www.zerohedge.com/news/2018-02-05/vix-spikes-above-20-sp-drops-5-dow-down-1600-points-highs
WOW………………Dow………Down……1175 pts……..that is well over 2.4%….
ok, how about tomorrow
https://www.zerohedge.com/news/2018-02-05/it-traders-panic-xiv-disintegrates-after-close
Looks like we are headed lower again…..no problem here….
Zinc producer moving today:
ZNG.V.
I do not own shares in Group Eleven. It came to my attention because MAG Resources does.
All things considered, the gold and even silver miners are holding up very well today.
I don’t own KDX but I know it’s popular:
http://stockcharts.com/h-sc/ui?s=KDX.TO&p=D&yr=1&mn=1&dy=22&id=p07024594312&a=551920966
Agree………..about time…………
I do
With both gold and silver green today, GDX is red and SIL is red. You must have a special meaning for “holding up very well”.
The miners are still stocks spanky — and risky ones at that. Do you know anything about how this works?
I know it’s lost on you but GDX finished UP almost 4% versus DIA today. That’s a big deal when DIA is plunging.
http://stockcharts.com/h-sc/ui?s=GDX%3ADIA&p=D&yr=1&mn=0&dy=9&id=p12565531866
The GDX:$indu chart put in a hideous reversal candle today. No way no how today’s move is the foundation for a *sustainable* rally in this ratio. Like get a tag or close above the declining 100 dma and then bombs away.
http://stockcharts.com/h-sc/ui?s=GDX%3A%24INDU&p=D&b=5&g=0&id=p21076414979&a=575847336&listNum=1
Who said it was?
You said it was significant, suggesting some sort of underlying strength. Today’s candle was weak and the ratio will drop back lower. Which means the miners should be shorted and the Dow should be bought on any further move to the upside.
The relative strength of the miners IS significant but that doesn’t mean a sustainable rally is necessarily imminent.
Go ahead, short the miners and buy the Dow.
Nothing, even sewage, goes down in a straight line.
waste trap…..to keep the stink from rising…..
Well the S&P 500 has “gone down in a straight line” the last few trading sessions.
As they say stocks take the escalator up and the elevator down.
http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&b=5&g=0&id=p56351324634
Along with today’s action, two big fork supports suggest that KDX has probably bottomed:
Monthly:
http://stockcharts.com/h-sc/ui?s=KDX.TO&p=M&yr=10&mn=0&dy=0&id=p87430947787&a=575380302
PVG is also doing well today and has pulled off a Fibonacci 61.8% retracement on huge volume…
http://stockcharts.com/h-sc/ui?s=PVG&p=W&yr=4&mn=8&dy=0&id=p30452655680&a=574766039
3 insiders, including Quartermain, bought 30000 shares of PVG in the open market last week. That’s a good sign. Does anyone here own DGMLF? I put in an order to buy@.09 when it was .099 this morning, and my order filled this afternoon. Watch it fall to .07 in 2 days…
Yes, that’s a good sign and it needed a reset anyway (along with KDX) so that it could better participate in the coming huge moves. Such market leaders began their bull markets years ahead of the pack and were out of sync cyclically as a result.
What is that like $5 worth of stock?
More like $300,000.
Do you know what oversold looks like?
http://stockcharts.com/h-sc/ui?s=PVG&p=D&yr=1&mn=0&dy=9&id=p29171563295
Last month’s candle is going to take *years* to recover from, if ever.
There is no third party, the need for a third party will become evident if Wall Street goes down. Who will make America safe for dividends and stock prices. The Democrats and Republicans will both have to shoulder the responsibility and the people will demand a change to the Two Party System. It will become fashionable to criticize the banking, industrial world, as well as the political one. DT
The two headed snake has been in place for year……..
we have talked about it for years……..it just happens to be eating itself…..
It’s a two faction, one party system — a snake with one head and two asses is more like it.
The masses would get it if they understood economics or knew their history. Fuhgeddaboudit.
https://memegenerator.net/img/instances/50911063/fuhgeddaboudit.jpg
I like that one……..
Hello………..GSR………80 to 1
The drop in Auryn was painful today!
But two of my microcaps that trade 10,000 shares/day were up 30% plus today. You must be a terrible stock picker.
Look for Trump to initiate a press conference shortly to try and convince the public that The American economy is strong. That is what happens when a crisis is underway in the stock markets. It can’t be too little to late and maybe now Trump will get funding from the Congress for the wall and money for infrastructure. McCain will get sliced and diced for trying to stop the wall. DT
Could tomorrow be Black Tuesday?
You’re Canadian, can you say that without being called a racist?
Thats funny actually.
Dont think we are allowed to tell a woman she is pretty anymore either, need a consent form signed first.
He could just say….BLT……and hold the tomato….but, then the tomato pickers might feel left out……….
I’d say Bubba in trubba
19 month bull market in gold vs silver set to explode higher. The 2016 high should provide a few weeks worth of pullback to form a handle on a giant cup and handle continuation pattern.
Has anyone noticed that gold is trying to gap up to 1340?
Whats it mean?
Gold gonna start jumping up, or the gaps gotta get filled and down it comes?
long gold, short miners–the trade of 2018 so far.
The Federal Reserve Board has not expressed their fear of inflation, but inflation which they are powerless to stop will bring us hard times. Ask Paul Volker what should be done but the debt bomb is so huge that all they can do is lower interest rates and pray. What else do you think they can do with financial levers, they have lost the war. DT
The general market was interesting today. Part of the time was simple rigging. (Running the stops) Hence the very fast jump to only close 1100 down
Looks more probable the stock market/ gold ratio gets back closer to 1 or 2 again, one of these days.
Gold:silver ratio headed to 95. You can make a case for a completed cup and handle on the monthly chart so we don;t even need a pullback at this point.
gold:silver ratio monthly chart–looks like a beautiful bull market. Absolutely nothing bearish at all on this chart:
http://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24SILVER&p=M&b=5&g=0&id=p58048837760&a=575854613&listNum=1
Trick or treat………..cryptos…….
https://www.zerohedge.com/news/2018-02-05/cryptos-are-suddenly-soaring
The religion of Tolerance:
Priest calls on Catholic Church to appoint more exorcists
https://www.irishtimes.com/…/priest-calls-on-catholic-church-to-appoint-more-exorcis…
5 days ago – A renowned Irish exorcist and priest has called on the Catholic Church to appoint more exorcists. Fr Pat Collins, a Vincentian, Dublin-based priest, said the church needed at least one trained exorcist for each diocese as he gets messages daily from people looking for his help.
Don’t allow the crude title stop you from listening to the logic:
Is not democracy great!
The Dow found buyers today right at support provided by a fork that was 15 years in the making. If today’s low fails on a monthly closing basis (it will), then the Dow will likely be on its way to the 17,000 area.
http://stockcharts.com/h-sc/ui?s=%24INDU&p=M&yr=15&mn=6&dy=0&id=p09558136758&a=553400959
And I will take this as you calling a top. If not, please clarify.
Tomorrow you may see the Dow open higher but it is the end of the day when routs typically happen. Is The Big Bull Market on its last legs. The Big Banks can see a possible panic brewing, for them anything is better than a panic. They will probably pour money into the markets tomorrow morning. Anything to stop a precipitous fall, if they get stocks to recover, The Federal Reserve authorities will be beaten because the system will be manipulated and not allowed to cleanse. The sh*t will still be clogging the plumbing pipes like Bob M say’s.
A deep wick hammer bottom tomorrow would signal a turnaround of unknown duration.
The “wick” is called a shadow and it would be something else if anything at all could turn such an ugly chart around so soon. I consider it extremely unlikely aside from a short term bounce.
https://www.babypips.com/learn/forex/what-is-a-japanese-candlestick
Some call it a ‘wick’, and none of us know the future.
Yes, you’re right — in candlesticks… “pin bar” is the best term.
Nothing about my comment suggested that I know the future. “Unlikely” is not the same as impossible.
If it happens, it would be the first reversal of its kind that I am aware of. Can you point to a case in which any sector reversed from a setup that matched this one? (For example, I’m referring to the 90+ weekly RSI(14) reading that collapsed into the 50s and a MACD and ADX coming off of similar heights – among many other things.)
The odds are very much against this market cruising on to a significantly higher high (if we see a higher high, it will come with major negative divergences).
To clarify my stance, any higher high will be slight and brief unless the dollar completely collapses – which I do not think is about to happen.
My point is that if tomorrow is a hammer then a significant turn will have occurred.
I just went through the the DOW, SPX, COMP, NDX, and RUT. In every case, two primary uptrend lines have been broken and a third one is below such that, if broken and then a hammer forms, a 10-12 % overall correction will have taken place.
Just speculation, but if it happens then recent highs will likely be tested.
I get your point and understand that candle but my point is that such a candle would likely fail to deliver under the current circumstances. In other words, other technical factors would trump it.
So, I will be very surprised and wrong if it goes that way.
The more likely event is “Three Black Crows”, but if a hammer ….. lol.
you are dreaming. The Fed will kill the dollar or the yen before that is allowed to happen. My guess is the yen takes a bullet for US markets. New ATHs within a month or two.
GCC about to break down after a 2 year consolidation. The yen ($XJY) has formed a huge H&S on the weekly chart, and the Dow is oversold and arriving at support. There is no way in hell commodities are going to be allowed to rip higher here. The declining 200 WMA will be the absolute maximum that GCC will be allowed, and I personally don’t even think it will hit that. It’s close enough for the next leg down to begin. That should provide a nice tailwind for US stocks.
What is tomorrow going to be like when…..you have…..Termination….
https://www.zerohedge.com/news/2018-02-05/it-traders-panic-xiv-disintegrates-after-close
“Termination Event” Arrives: Traders Panic As XIV Disintegrates -90% After The Close
lso, recall that last Thursday saw investors poured a record $520 million into an exchange-traded note that gains when VIX drops…
Have not heard from any HODLers…………Bitcoin at $6900
OOTB – Didn’t you get the memo: It is only cool to Hold On for Dear Life when prices are going up up and away…… (that is when you buy the HODL sweatshirt and wear it with pride).
When prices are cratering and everyone and their grandmother (that they probably got to by into cryptos over the Thanksgiving holiday last year) is selling like crazy and running for the exit doors, then the poor schmucks sell just like everyone else.
That is why we are printing new t-shirts and sweatshirts this week with the following tagline:
Cryptos RFDL (Run For Dear Life)
Problem is …….None of the HODLers will have any cash or bits., to pay for the shirts.
🙂
Some will look like idiots, …..some have already ran away with the cash….and some just do not know what the heck just happened……But, but, but…..
Agreed. Don’t worry, they can just use their crypto debit cards to buy the new RFDL shirts.
We’ll have a 65% off sale, since they only have 65% of the value left.
🙂
The Fish is rotting from the head.
Years of Obama/Clintons put liars and partisans into top positions of the DoJ, FBI.
Bush may have been incompetent, but Obama was a traitor turning the U.S. into a country with third world moral values.
China armaments:
http://en.people.cn/n3/2018/0205/c90000-9423875.html
It would be interesting to know if the U.S. had ship-bourne, pulsed particle beam weapons.
We’ve got a great looking double top that is about to complete/activate in Dow:Silver (Dow priced in silver):
http://stockcharts.com/h-sc/ui?s=%24INDU%3A%24SILVER&p=D&yr=1&mn=1&dy=0&id=p50272965973&a=575890093
Priced in gold, the Dow has already confirmed its double top and is short term oversold:
http://stockcharts.com/h-sc/ui?s=%24INDU%3A%24GOLD&p=D&yr=1&mn=1&dy=22&id=p19381459355&a=488381051
There have been a number of crypto “experts” (and I use that term very loosely) that have been calling Bitcoin “Gold 2.0” or stating that it is a good store of value.
There is no doubt Bitcoin has been an exciting speculative trading vehicle, but it has fluctuated wildly in value measured against the Dollar and other currencies and doesn’t really fit the “store of value” smell test.
Case in point: With all the volatility in the general stock markets, and bonds, the VIX, and other currencies the last few weeks, Gold has been very resilient, while Bitcoin and most of the other cryptos took a nosedive.
Which asset class looks like the more stable store of value – Gold or Gold 2.0 ?
http://stockcharts.com/freecharts/perf.php?$GOLD,$NYXBT&p=1&O=011000
What is most comical is that despite all the bravado from the HODL (Hold On for Dear Life) mantras parroted in chat rooms, on bumper stickers, on t-shirts & sweatshirts, etc…… the reality is that when the poop hit the fan in the markets since late December, most of those courageous HODL’ers folded up shop and practiced RFDL (Run For Dear Life).
When people repeatedly tried to patiently explain, over and over and over again to fanatics that Bitcoin and many of the cryptocurrencies were in bubble territory, the die hard believers like John McAfee believed that there was a “new paradigm” and that bubbles and corrections were mathematically impossible now….. (lol).
It is NEVER different this time.
Bitcoin has crashed 65% in 2 months, which is way beyond just a correction, and qualifies as a bubble that has popped due to it’s severity and the speed with which it got smashed down.
The damn fools still don’t grasp that it acted EXACTLY like every other bubble in history every step of the way. 😐
Yes, of course it did….. human psychology and the madness of crowds never disappoints.
Gold in contrast took 5 years in its bear market to correct down about 46% from the $1921 high to the $1045 low. 5 years not 2 months, and for all the wailing and gnashing of teeth it was nowhere near as severe as this most recent Bitcoin unraveling.
What will escape most new millennial crypto investors, is the difference in a bear market in an asset class, versus a sudden pin-prick bubble pop in a speculative frenzy.
Ever Upward.
Brilliant, Ex… wait…
On February 2, 2018 at 9:50 pm,
Matthew says:
Yes, BC came down the same way it went up – fast. Down 60% in a month is more proof that it was/is a bubble. Gold took more than four years (52 months) to drop 45% following the 2011 top but came down much more like BC back in 1980 (about 50% in 3 months). Gold was no bubble in 2011.
🙂
ha! Nice. Maybe this will be a light bulb going on for certain investors that believe the latest flavor of the month will be any different than the next one when things get Bubblicious. 🙂
The great part about bubbles is that they can be reblown or reinflated as soon as the herd gets full of hot air on the next one.
Ever Upward!
The Dow closed the day at fork support/resistance that goes back to 2011. The intraday move well below it suggests that it will not hold — and so does that MACD…
http://stockcharts.com/h-sc/ui?s=%24INDU&p=W&yr=9&mn=0&dy=0&id=p53469866019&a=421704680
I think this is a first……..no trading overnight……
https://www.zerohedge.com/news/2018-02-05/tradestation-halts-all-overnight-futures-trading-due-extreme-volatility
This is going to make a few people nervous………jmo
Uh-oh…….
It’s funny that they never stop or halt trading when stocks are rocketing higher, and nobody puts a circuit breaker on mining stocks if they get trounced in daily action.
They should just take all the circuit breakers and halts away and let the chips fall where they may. If robo-investors and HFT algos liquidate everyone’s positions, then maybe they’ll get the clue to stop using them.
In a truly free market where value is exchanged, then there are no training wheels, no arm floaties for the pool, and no circuit breakers.
Can you recall this happening in the last several years…..
Yes, they put on a circuit breaker in trading during the taper tantrum in 2013 and also back in 2008 financial crisis. The Chinese put on circuit breakers in 2016 when their markets crashed.
In the US markets there are actually 3 levels of circuit breakers than can get triggered:
When do circuit breakers kick in? CNBC Explains
Zack Guzman | Mark Koba
Mon, 24 Aug 2015
https://www.cnbc.com/2015/08/24/when-do-circuit-breakers-kick-in-cnbc-explains.html
You also see trading halts when an individual and widely followed stock crashes too much on the day to prevent further selling.
In contrast, I can’t remember ever seeing a circuit breaker if a stock was moving up too quickly by 20% 30% 50% or 70% in a day. It’s just a curious double-standard.
Oh – and I forgot about the 2015 trading halts due to that sell off:
Trading was Halted 1,200 times Monday
Matt Egan – August 24, 2015
“The selling on Wall Street was so dramatic Monday that it triggered unprecedented emergency freezes on stocks.”
“Stocks and exchange-traded funds were automatically halted more than 1,200 times, according to Nasdaq.”
“The high level of trading pauses highlights just how extreme the selloff was in a short span of time. Fears about China’s economic slowdown caused the Dow to plummet over 1,000 points when the market opened. The Dow ended down 588 points, its worst decline since August 2011.”
Thanks……I knew it had been awhile……just did not remember how long ago….
Ex….this is for you……Seattle….
https://wolfstreet.com/2018/01/30/us-cities-with-housing-bubbles/
I’m hoping everyone paid for their homes in cryptos, and that bubble pops.
I showed the prior article you posted to my sweetie and at first she was stunned at the charts comparing the different cities, (but not really surprised because she’s been surfing real estate there for years).
Then she said, “I told you we should have just bought a house a few years ago, but you were worried about a financial reset….” and then walked out of the room. 🙂
Of course, I let her know she was right and apologized for exercising caution.
She will kiss you …..when the bubble burst and you can buy with no money down, and sellers will carry the mortgage, and reduce the price …..remember….the boomers are ready to unload. There are not as many people waiting in the wings, to purchase those house above $750,000, due to the new tax laws….Prices are going to readjust …..
Hopeful thinking………..:)
Interest rates have only one way to go…….up., and when they do, the prices are going to come down…..
Thanks OOTB. I appreciate the words of encouragement 😉
Just remember,…..the girls are always correct………. 🙂
Happy Wife Happy Life….
Funny, cbc business was talking about bitcoin.
They said bonds,stock market and gold are all overvalued.
If only 2% of investors moved to bitcoin it will be worth lots and lots I forget how much.
Where have I heard that before? lol
I figure if only 2% of investors move to…. i duno…pop bottles, pop bottles will be worth a fortune.
Its never different.
cbc…..like the way they say gold is undervalued…..must have been told to keep with the narrative….until the new fed chair gets his legs underneath himself….
Major Thom to Plunge Protection Team!!
Looks like silver wants to go higher…….and it should……the GSR……today was 80 to 1
What to look forward to ….Tomorrow…….
https://www.zerohedge.com/news/2018-02-05/vol-market-finally-broke-quant-explains-what-happened-today-and-what-coming
The issue NOW is the pile-on going-forward across assets, as the systematic “short vol” community’s models are now completely toast, and they too will be forced to cover remaining “short vol” positions that didn’t trade today—i.e. BE PREPARED FOR A MAJOR VIX FOLLOW-THROUGH TOMORROW.
The “white knight” of corporate buybacks (which by the way were running at 300% of volume today per a competitor as they were pumping the mandates to hold-up their stocks) will be extraordinarily tested with keeping the stock-market “propped up,” especially as the traditional active community is likely to back-away until there is a better sense on how this event shakes out… few will willingly be in there tomorrow prepared to catch this falling knife.
Tomorrow will certainly get interesting.
Uranium Demand: Is it Coming or Going?
By SightlineU3O8 – February 5, 2018
https://sightlineu3o8.com/2018/02/uranium-demand-is-it-coming-or-going/
Understanding Russia’s Appetite for Uranium
5 February 2018 – Maximilian Hess
“Russia is quietly competing with China for influence over global nuclear energy production, whether that means jostling for nuclear plant construction contracts, or securing access to uranium extraction in Central Asia.”
http://intersectionproject.eu/article/economy/understanding-russias-appetite-uranium
Impressive volume for SPY today:
http://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=1&mn=0&dy=0&id=p52360157028&a=575912854
I don’t know why I put that under an unrelated post. 😐
That was mostly panic or forced volume. As such it was almost meaningless re. sentiment.
The volume on a chart is just that, and it doesn’t distinguish whether it was “panic” selling in an index, or a fund liquidating a company, or robo-trading and HFT algos tripping the sell signal.
The whole point of looking at a chart is that it takes the narrative out things, and that volume and the huge candles down on Friday and Monday are very significant.
Panic or “forced” volume is hardly meaningless, CFS.
Bitcoin, OUCH!!! I commented yesterday whether bitcoin was collapsing or just in a harsh correction phase. Well another 2 grand knocked off its price, I think its fair to say it is collapsing.
Bitcoin from 20,000 to Bitcoin USD (BTC-USD)$6,327.38
Down -$609.70 (-8.789% loss)
As of 5:20AM GMT. Market open.
A 68% crash is beyond a correction at this point…. and most would say it qualifies as collapse, considering the relatively short time duration.
In under 2 months Bitcoin moved down through it’s Fibonacci retracement levels of 23.6%, 38.2%, 50%, and 61.8%. That’s pretty steep, but so was in the incline up of the parabola.
Ironically all those who thought Bitcoin would replace Gold as (Gold 2.0) and that people would flock to cryptos during market instability were sadly mistaken.
Gold on the other hand hanging steady above $1340 and has barely moved during the selloff in Cryptos, the flash crash in the general markets, the epic spike up in the VIX and the general chaos we are seeing in the markets.
So is Gold still a “Store of Value”. That question was answered in spades today.
Which asset class looks like the more stable store of value – Gold or Gold 2.0 ?
http://cdn.ceo.ca/1d7i1ga-Gold%20versus%20Bitcoin%20in%20real%20volatility.JPG
Bitcoin Tumbles, Called Potential ‘Threat To Financial Stability’
Neils Christensen – Tuesday February 06, 2018
Calling a crash in Bitcoin a ‘Threat To Financial Stability’ is a bit over the top, as relatively speaking it is still a very small market and I doubt if 1 in 100 even has any Bitcoin. These are the sensational headline grabbing days we live in though….
Bitcoin it up about 3-4% on the day, but that isn’t saying much considering the fall it had.
The ‘Threat To Financial Stability’ is to the lemmings that borrowed from credit cards or home mortgages to pile into Bitcoin in the $15,000-$20,000 range, when it is now around $7,000 (and dipped down to near $6,000 yesterday).
If they get their clocks cleaned, then they will have learned a very valuable lesson about borrowing more money than one has to speculate on highly volatile risky trading vehicle. The market giveth….. and the market taketh away…..
Oh yeah….. and pigs get slaughtered…… 😉
NEWS FLASH……..cancel the T shirt order……Cryptos EMBRACED BY CFTC>>>>>>>
OK. We’ll tell the people on the line at the T-shirt factory to switch it from RFDL back to HODL. The next batch of crypto bubble is waiting to be blown….
> Largest VIX Spike In History
by @Goldfinger on February 5, 2018
“Say hello to the largest 2-day VIX rise in history…”
#VIX at 38 Is Waterloo for Short Vol Trade That Everyone Adored
Bloomberg -Rachel Evans, Elena Popina •February 5, 2018
“Of all the harrowing things seen in the stock market Monday, one was a special nightmare for investors in what has become one of the stock market’s favorite strategies.”
“It’s short volatility, a bet against equity turbulence that traders have been piling into for years, lifting assets in related exchange-traded products to more than $3 billion, a record. Estimates of how much money is tied up in the tactic overall vary but one estimate from Chris Cole of the Artemis Capital Advisers hedge fund puts the total at more than $2 trillion.”
https://finance.yahoo.com/news/vix-38-waterloo-short-vol-003731716.html
A few people might have lost their shirts on this:
http://stockcharts.com/h-sc/ui?s=SVXY&p=W&yr=7&mn=0&dy=0&id=p33046045907&a=417767798
Yes they have, but the VIX reversed course sharply today. What a wild ride….
We have been talking about the missing MONEY PENTAGON
https://www.zerohedge.com/news/2018-02-05/pentagon-auditor-cant-account-800-million-spending
It’s the 2400 humV’s Obama and TJ (traitor john) gave ISIS ??
Oh, that is good…………
I think you have a valid connection……Ok, for the 800billion,,,,,Now how about the $21 Trillion…..
Remember how the maufia had two sets of books? Same principal. With fiat currency you get the sheeple to pay for the debt on the books and use the other side of the ledger against them. Think: black budget.
It’s more complex than that, but that’s the simpleton view.
It’s not a coincidence that we have 20T debt and 20T missing.
The deep state , before, got to do what ever they wanted, because the general public was not aware….now more and more people have become aware, ..It is no longer tin foll hat, the facts are out there for anyone willing to put in the work to do the research.
The exposure is putting the heat on …….Remember the mafia Capone had two sets of books , and his accountant squealed like a stuck pig….Now, there are some squealing pigs, running for cover.
I agree, OOTB. The pendulum has swung…
BTW…..thanks for all your leads in the past……
BTW: Your comment about Switzerland yesterday? Spot on. And the Vatican has Swiss guards? And the BIS is owned by who? And the citizens are armed to the teeth, why? And no talk of gun control like they try to pull on the American people, why? Bingo!
The CIA…..is now exposed
(ASM) AVINO ANNOUNCES RESULTS FROM ITS CURRENT EXPLORATION DRILL PROGRAMS ON THE CHIRUMBO, GUADELUPE AND SAN JUVENTINO AREAS OF THE AVINO MINE PROPERTY
February 6, 2018
(KTN) (KOOYF) KOOTENAY SILVER REPORTS HIGH GRADE INFILL DRILL INTERCEPTS AT LA NEGRA, MEXICO – HIGHLIGHTS INCLUDE 1,161 GPT SILVER OVER 5.15 METRES
February 5, 2018
Currently in the pre-market power hour:
Gold $1336
Silver $16.71
Oil $63.37
US Dollar $89.93
DOW 23,606
Bitcoin $6,924
Let’s see where this day goes…..
Some weed stocks are looking very Toppy to me, I like Floppy Toppy at the beach but not in the markets. LOL! DT
What gets high must come down?…
Toronto housing bubble starting to crash. http://business.financialpost.com/real-estate/january-home-sales-in-greater-toronto-area-down-22-per-cent-from-year-ago
Forewarned…………….I think we were saying it was coming……
Told to TURN OFF THE SWITCH……..control the burn……Fidelity DOWN…..
https://www.zerohedge.com/news/2018-02-06/fidelitycom-down
This is going to inspire mom and pop….to sell, sell, sell…..this promotes fear……jmo
The Fed is back at the control board……Munuchin has had an opportunity to change his depends, and now, ….let’s get back to normal………..:)
Silver is setting up to crash against gold. Commodities have also “topped”. Get long AMZN for a ride to $2000+ within the next 3-4 months easily.
When the dollar rallies, it’s all over for the metals and commodities. This will coincide with the stock market likely doubling in the next 6 months. It will be soul-crushing for anyone long commodities or miners. Silver is setting up for a crash, as are many of the silver mining stocks.
spanky – did you even look at the weekend chart on the Dollar from David Vincent (aka SPOCK), who is one of the better technicians in this galaxy?
The dollar isn’t going to be heading up too high any time in the next few years, so your “When the dollar rallies….” statement is a bit overstated.
http://www.kereport.com/wp-content/uploads/usd-2-feb-768×456.png
G.S. of SmartMoneyTracker agrees with David V.
Dollar: multi-year bear / Gold: multi-year bull
https://blog.smartmoneytrackerpremium.com/2018/02/dollar-multi-year-bear-gold-multi-year-bull.html
The commodities and resource sectors will only prosper in a crashing dollar / inflationary environment, so nothing to get worried about.
I’m not talking about a rally to new highs. Any multiweek rally in the dollar, including the dead cat variety (which is long overdue) is going to wreck the sector. Just watch. Silver is the one that is going to get absolutely thrashed since it will be breaking below multiyear support.
“wreck the sector” is a bit extreme.
Again, when the dollar plummets to 84 moving forward, how will that affect you thesis?
What do you think the metals will do in that environment?
First, I don’t think it is the DXY that is really driving commodities. It is the yen component primarily. And until the yen ($xjy) takes out the September 2017 high, I think it has a bearish posture with the potential to break down like in 2013-14. That breakdown in the yen is what is going to drive an absolute tidal wave of $$$ to flood into the US stock market from around the entire world.
Well, the Yen has had a strong correlation with Gold direction, but it isn’t the only driver of Gold. The DXY, the 10 year note, interest rates, and the general stock markets all factor in. It is more complex than just having only 1 driver.
Also Gold started diverging lately from the lock-step correlation with the Yen and moved higher even when the Yen pulled back some. Their general directions are still mostly in tune, but they are both inversely correlated to the greenback.
However, even that inverse tendency can breakdown, and there are scenarios where Gold & the US dollar can attract the safe haven bid together.
http://stockcharts.com/h-sc/ui?s=%24XJY&p=D&yr=2&mn=0&dy=0&id=p18739154842
Every single major inflection in the miners corresponds to a major inflection in the yen (there are a handful of instances where this was not true over the last 3 years). Now, that being said, I will grant that there is a pretty large divergence currently between the miners and yen, with the miners falling far below yen. I should note that we got one such very large divergence the fist two week of 2016 and we all know what happened next. Does history repeat? I highly highly doubt it. I think yen is going to catch down to the miners here shortly, tanking commodities. I’ll admit that I’ve been conditioned negatively, but a 19 month bear market in silver miners will do that to you.
That’s right, Ex, the yen does not drive gold.
Spanky, your imagination is getting the best of you. Commodities are in a new bull market.
CRB daily:
http://stockcharts.com/h-sc/ui?s=%24CRB&p=D&yr=2&mn=1&dy=0&id=p87659322075&a=422938654
As we’ve discussed a few times, watch Gold, and if it breaks out to a new high above the 2016 peak of $1377.50 then it is game on. Gold will drag Silver higher with it, and then when the momentum traders pivot back to the PMs then Silver will kick on it’s afterburners and outperform Gold. The Silver miners will really get wild and crush the other sectors.
For now Gold will be the metal doing the heavy lifting, until the momentum turns.
This will coincide with the stock market likely doubling in the next 6 months.
Dang, that’s quite a prediction. So the Dow will be at 48,000 in August??? That sounds, quite completely insane.
spanky likes to sensationalize a bit. Sure why not 48,000 Dow in August…. (lol).
Bill Holter’s Commentary
Do you remember the witch hunts of 2008-09? This will be far bigger…because the leverage is far bigger!
Yes indeed.
This will be one for posterity:
http://stockcharts.com/h-sc/ui?s=%24SPX%3A%24SILVER&p=W&st=1980-01-01&id=p44092569866&a=576079571
Dang, Peter Who sounds like he’s a thousand years old…wonder if the banksters put something in his drink…
He’s probably just tuckered out from screaming into the mic 24/7. 🙂
Just listening to schiff, he is thinking along the same lines I am, with a difference.
He is not mentioning this could all be intentional.
Maybe he should watch Bill Stills the money masters.
He could read Makow too.
I think its a coin toss between cash and gold, arguments for both, but ya still cant get a cuppa tea with gold. lol
Silver could get absolutely crushed, if this is the central banks move.
Guess I got my answer concerning the gap up yesterday.
Gold came back down again.
Seems to me, everything is getting crushed, gold maybe not so much as other assets but still not going anywhere.
I wonder if this isnt the time to be cautious.
Just maybe we could be witnessing the start of the collapse pundits have been talking about for years.
I was thinking awhile back cash might be wise, now I think that could have been prudent.
All stocks, including jr miners could be very dangerous right now.
Having cash reserves to deploy during a market rout is a beautiful thing.
Yes, Gold has held up rather well all things considered (selloff in markets, cryptos, bonds….). It was a better place to camp out compared to most asset classes.
To your point, the markets have been unhinged from their normal patterns the last 2 weeks and Friday’s action along with this weeks has been a “sell everything” environment. The VIX finally woke up and with volatility back, having a larger cash position isn’t a bad strategy.
Nice to be in a “rogers” position and own everything, but for those of us that are mortal, the question really is…cash or gold.
Well, imo anyway.
How can I not mention my precious pot shares? lol
Schiff really thinks golds..in his words..”go ballistic”
Maybe hes right.
GAME CHANGer……..CFTC…..embraces cryptos………according to BIx Weir….just heard..
To the Moon baby…………… 🙂
What to Expect When CFTC, SEC Chiefs Talk Crypto With Congress
Stan Higgins – Feb 5, 2018
https://www.coindesk.com/cftc-sec-chairs-strike-open-tone-on-new-crypto-exchange-rules/
Unified Crypto Regulation Proposed By Russian PM Dmitry Medvedev
February 5, 2018 – Maricel Custodio
“Russian Prime Minister Dmitry Medvedev said that cryptocurrency regulation should be common across the Eurasian Economic Union (EAEU). The EAEU’s members are Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.”
“Speaking at the Digital Agenda in the Era of Globalization forum in Kazakhstan, Medvedev urged that “We should not be focused only on national policy … Let us pay serious attention to it as our economies are far too closely linked. It will be impossible to implement these principles in one country. We should bring our approaches closer together at the Union level.”
Interview With India’s Three Largest Exchanges: Cryptocurrency Ban Rumors are FUD
By Joseph Young – Feb 04, 2018
Always a Game changer………
speaking of games in the markets…..
To me all these speculative trading vehicles like Cryptos, Pot stocks, Lithium, Biotech, and the PM exploration stocks are all like a giant game of #WhackAMole…… with one popping up for its run, then it recedes as the next pops, etc…
Bitcoin Dips Below $7k Amidst News of China’s Full Ban of Cryptocurrency Exchanges
By Helen Partz – 17 hours ago
Banks, Retailers, China Have All Turned On Bitcoin
FEB 5, 2018 – Forbes
Something Else is going on, ….when the CFTC , Embraces cryptos………….America Leads..
This just Give JPM….more time to Steal the SILVER…….
give to gives……
I’ve got 2 different crypto miners that will make money by creating new Ethereum and Bitcoin regardless of where the prices settle, so I’m fine however things work out.
Just going to be more manipulation by big trading desk…..Shake and Bake…..
with the help of the bogus CFTC.
Bigger institutional funds will continue to push the prices around (like they do in every market).
Again the miners will keep making new cryptos every day, regardless of where the fluctuations take things. Gradual accumulation quarter after quarter will win in the end.
I still think there is a giant H&S in play in yen ($xjy) If it can get above 93.18 it would diminish the likelihood of a top. I don’t think there is a change of that happening. We all know how these markets work. Even if you think the yen is going to rally to new highs, the banksters won’t be able to resists breaking the neckline to create panic selling, just for kicks. Again, so way do they just allow multiyear breakouts without tearing the tree out of the ground first. I think the next logical stop for the $hui will be 150. Getting above 220 would probably mean the miners are safe, but again, there is no way in hell that is going to happen with out a break of the neckline first, again just for kicks and because they can.
http://stockcharts.com/h-sc/ui?s=%24XJY&p=D&yr=3&mn=0&dy=0&id=p88022327983&a=576021012&listNum=1
Lots of typos above. Sorry.
spanky that doesn’t really look like a typical H&S pattern. If one stretches the idea to go with that then the right shoulder is sloping up dramatically which is not nearly as bearish as if the right shoulder is sloping downward.
The trend line should offer some support, but if it breaks below that in a meaningful way, then the Yen would be in trouble.
Sure, I suppose upward slanting H&S are less bearish, but the formation is clear as day to me. And whatever it is, it’s godawful ugly. That is NOT the picture of a nascent bull market, sorry.
It depends on if the support at the trendline holds like it has repeatedly thus far.
Again, there is more to Gold pricing than just what happens with the Yen.
CFTC……….ON CRYPTOS>>>>>>>you can read the letter………
https://www.banking.senate.gov/public/_cache/files/d6c0f0b6-757d-4916-80fd-a43315228060/A2A6C1D8DDBB7AD33EBE63254D80E9E3.giancarlo-testimony-2-6-18b.pdf
Bee token ICO aims at AirBnB .
Better run to the HIVE………..
$HIVE is now in Harvest’s blockchain ETF.
http://harvestportfolios.com/wp-content/uploads/2018/02/Blockchain_Technologies_ETF_Why_Invest.pdf
Getting into crypto-business
Air Date: Jan 23, 2018
“Harry Pokrandt is CEO of HIVE Blockchain, among the first companies to allow people to invest into crypto-mining”
http://www.cbc.ca/news/business/getting-into-crypto-business-1.4500931
SIL waterall decline/spike lower is imminent:
http://stockcharts.com/h-sc/ui?s=SIL&p=W&b=5&g=0&id=p60106456618&a=576023581&listNum=1
That’s just silliness.
The stock market is going to make a massive V-shaped recover, which should correspond to a breakdown in everything near and dear to you.
You have got to be a millennial. 😉
Couldn’t it also “imminently” stay in that trading range or also break to the upside?
Just because the BBs are narrowing doesn’t mean it has to break down, as it could also break up. As to when that happens it may be now or in 4-6 months, so putting an “imminent” time horizon on it is a bit over the top.
I’ll concede that at present it looks more bearish than bullish, but “waterfall” is a pretty strong conclusion to have arrived at.
Thank you. the lower BB is lubed up and ready to receive. Also, the MACD is about to roll over. Again, no way they will allow price to just smoothly ramp up from here. There will be a massive dump before the next pump. Just like always.
The daily chart has looked more bearish than bullish for the last two weeks.
More likely than a waterfall is spanky marking the low.
Look at the SLV weekly MACD. It is so weak. At a minumum, it is going to roll over and go negative for at least 1 week, and that’s the best case scenario. You basically never see the histogram go from positive to zero and then back to strongly positive. It’s possible, but there is a .00001% chance that happens. More likely is silver rolls over hard for a week and then turns and heads up (if you are lucky) or it just crashes lower. The other possibility that I give about .00001% chance of happening is silver stages a huge rally this week to send the histogram strongly positive. Ain’t gonna happen. Anyone long SLV currently is smoking hopium, plain and simple.
http://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=D&b=5&g=0&id=p39648807267&a=576030609&listNum=1
Wrong chart but you know what I mean.
“Anyone long SLV currently is smoking hopium, plain and simple.”
Spoken like the card-carrying herd member that you are. I wonder what you were thinking at the bear market lows two years ago. You and I both know that you weren’t bullish.
How many waterfall calls have you made Spanky?
How many have been correct?
SIL:SLV ratio still has further to go. No way that ugly black candle from nov. 20 isn’t taken out at this point. I think the double top projection will just about be met at that point. So I would expect some sort of rally, even a meager one. It is that bounce that will define SIL’s fate.
http://stockcharts.com/h-sc/ui?s=SIL%3ASLV&p=D&b=5&g=0&id=p98359639909&a=576025461&listNum=1
Late Tycoon Goldsmith on Risk, Gambling, Momentum and Management in Investing
by @tommy on February 1, 2018
Raging commodity inflation, CBs in a panic…. not. GCC monthly:
http://stockcharts.com/h-sc/ui?s=GCC&p=M&yr=3&mn=0&dy=0&id=p95466626891&a=576028098&listNum=1
SLV:GLD going lower. No way the last two days candles established a low. If anything, they are signaling “red alert”.
http://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=D&b=5&g=0&id=p39648807267&a=576030609&listNum=1
Sometimes the title says it all.
funny graphic at the top about adding one more passenger to the “short volatility” trade.
Oops!
Credit Suisse decides to halt XIV ETN
CNBC Videos • February 6, 2018
(again they’ll halt if they’re losing money, but rarely halt when it is screaming higher)
https://finance.yahoo.com/news/global-markets-tumbling-135534564.html
Global markets are tumbling
Myles Udland -Yahoo Finance•February 6, 2018
“After suffering back-to-back losses, U.S. stocks were being whipsawed on Tuesday in a highly volatile trading session.”
https://finance.yahoo.com/news/global-markets-tumbling-135534564.html
Seven drill ready targets – (MMG) Metallic Minerals | VRIC18 | Mining Insights
Seven of Japan’s Ten Power Companies See Falling Profits Due to Higher Fuel Costs: Key Is Restarting NPPs
By SightlineU3O8
Zinc Market Moving from Tight to Tighter
Equity Research February 6, 2018
Every fiber in me says I should sell my miners before the bottom falls out and go long the stock market. It is so tempting to just be rid of these things. I’m not going to though. I know I am going to regret this for years.
If you feel that strongly that miners will waterfall down, and the stock market will double in 6 months, then that is exactly what you should do if you have conviction in the charts and statements you have made the last few days.
AXU weekly MACD about to roll over hard. It’s a clear short here. I am a total idiot for holding onto this thing for so long watching and waiting for the inevitable.
http://stockcharts.com/h-sc/ui?s=AXU&p=W&b=5&g=0&id=p51346914392&a=576040883&listNum=1
The MACD is a lagging indicator, especially if looking at the weekly, so much of the price drop has already happened to get the weekly down to where it is.
If you want to look at what will happen more imminently then look at the stochastics for turns, or the RSI.
Here, this chart will be more instructive of the AXU short term picture:
http://stockcharts.com/h-sc/ui?s=AXU&p=W&b=5&g=0&id=p12197381876&a=576040883
If you want more “imminent” then the daily should be used over the weekly:
AXU Daily Chart:
http://stockcharts.com/h-sc/ui?s=AXU&p=D&b=5&g=0&id=p03080418979
If anything, AXU looks ready to bottom and head back up from here in the short term.
Right in time for them to release the Bermingham drilling results in the next few weeks. 🙂
Analysis with regards to Elapse Time This comparison works by learning and as well as noting specific period when a number is wearing its sitting time – be drawn up again right away its keep working for winning working hours. Players will almost certainly also recognise the likelihood or specific winning chance of targeted numbers based mainly on a new elapse period of time. If i would say the elapse instant is longer, the route to win is more substantial.
Dead cat bounce……oops
https://www.zerohedge.com/news/2018-02-05/us-equity-market-dead-cat-bounce-dies