In Feb. gold was already well into an intermediate advance. Now gold is very late in it's intermediate cycle and due for a reversal back to the upside. The huge volume in GDXJ is suggesting that trend reversal is now underway.
This is what happens at intermediate and yearly cycle lows. The market goes down long enough and far enough to the point where no one believes anymore, so they sit on the sidelines as the first half of the move passes them by.
I think that is what is happening right now. GDXJ is already up 15% but no one can bring themselves to buy the move. Everyone is looking over their shoulder waiting for the next shoe to drop while the train is now leaving the station.
As best I can tell, gold bottomed a year ago on June 28. One intermediate cycle later it bottomed higher (Dec 31). Now it appears to have, an intermediate cycle later, bottomed higher again (June 3). For me, that passes the test of an investment vehicle making higher lows and suggests the conclusion of a bear market in gold.
But the confounding aspect for me is that the intermediate cycle high of August 28 was NOT bested by the following intermediate cycle high (March 17).
So we have higher lows suggesting a conclusion of the bear market in gold. And we have lower highs suggesting a continuance of the bear market.
Gary - what sense do you make of this setup? Is there any precedence for this in the late '70's, or otherwise?
Anon - I think the yearly cycle low for gold in 2013 occurred on June 28. The intermediate cycle low of December 2013 was higher (and therefore NOT the yearly cycle low of 2013). Gold appears to be making a series of higher intermediate cycle lows, in other words.
Huge up volume happened in February as well...until $46 is taken out on a close, this will remain in bear territory. FWIW
ReplyDeleteIn Feb. gold was already well into an intermediate advance. Now gold is very late in it's intermediate cycle and due for a reversal back to the upside. The huge volume in GDXJ is suggesting that trend reversal is now underway.
DeleteThis is what happens at intermediate and yearly cycle lows. The market goes down long enough and far enough to the point where no one believes anymore, so they sit on the sidelines as the first half of the move passes them by.
I think that is what is happening right now. GDXJ is already up 15% but no one can bring themselves to buy the move. Everyone is looking over their shoulder waiting for the next shoe to drop while the train is now leaving the station.
We got on board the train last week...
Then the yearly low occurred in December?
ReplyDeleteyou're the best contrarian indicator i've ever met. i do the opposite of what you suggest and i get rich!
ReplyDeleteIt must be an imaginary rich then....
DeleteAs best I can tell, gold bottomed a year ago on June 28. One intermediate cycle later it bottomed higher (Dec 31). Now it appears to have, an intermediate cycle later, bottomed higher again (June 3). For me, that passes the test of an investment vehicle making higher lows and suggests the conclusion of a bear market in gold.
ReplyDeleteBut the confounding aspect for me is that the intermediate cycle high of August 28 was NOT bested by the following intermediate cycle high (March 17).
So we have higher lows suggesting a conclusion of the bear market in gold. And we have lower highs suggesting a continuance of the bear market.
Gary - what sense do you make of this setup? Is there any precedence for this in the late '70's, or otherwise?
Anon - I think the yearly cycle low for gold in 2013 occurred on June 28. The intermediate cycle low of December 2013 was higher (and therefore NOT the yearly cycle low of 2013). Gold appears to be making a series of higher intermediate cycle lows, in other words.
ReplyDelete