Originally published on January 24, 2019 by TraderStef at CrushTheStreet.
If you would be so kind, please pardon me while I redundantly offer more brain food for the adulterated. A few lost souls remain beholden to a religion that feels the precious metals market has a master behind the curtain controlling its every break-up or breakdown no matter how miniscule or large. Therefore, technical analysis is irrelevant due to a cartel of overlords that freakishly defy math, and nobody should bother with math because it is a method of madness smothered in futility, as every market is infinitely rigged.
The search for the quickest road or magic pill to solve such a dilemma is repeatable human nature, just like the patterns in our universe. Few are willing to put in the hours and study necessary to survive in today’s investment landscape. Many choose to remain in a comfort zone by searching for the quick fix or latest email opportunity that offers retirement wealth with penny-stock trade recommendations that have no liquidity to guarantee a trade out of it when the appropriate moment arrives. The automated trading platform has also led the trolls down a misty road that promises an automatic buy and sell algorithm to relieve you of a monetary or trading education. One other folly I hear often is from the friend of a friend who buys gold and silver from advertisements in financial magazines and wants me to know it is a great deal and I should buy it.
One of my favorite past-times is as a voyeur during hurricane season in the Northern Hemisphere. Watching Mother Nature spin out from chaos one of her most beautiful visuals and repetitious patterns that is viewable from above the Earth is her Fibonacci sequence.
Since it is a fact that government manipulates the weather and you suck in their aluminum- and barium-laced, brain damaging chemtrails, electromagnetic pulses, and any forecast model by government-sanctioned meteorologists that parade across your dumb-phone, desktop, laptop, or idiot box, it is reasonable to assume that weather forecasting should be ignored from this point forward. Forecasting the weather no longer matters because math no longer matters due to all the weather folks colluding with the global warming cartel. I hope you are not a farmer, drive for a living, or participate in any activity “in the weather.”
Weather Concepts That Confuse People – Including The Polar Vortex… “I write about this ad nauseam, but it just will not go away. I saw a post recently asking what our ‘guess’ was for the weather this week. I have been fascinated by this public tendency to perceive forecasts to be wrong. As I have written before, there are several reasons this happens. First, sometimes the forecast is wrong. However, it is right far more often. People tend to remember the less frequent event, the missed forecast. I am sure Chicago Bears fans remember the missed field goal in the playoffs far more than all of the kickers made field goals this past year. It is human nature especially if the missed forecast impacted their lives in some way. Second, many people do not understand what probabilistic forecasts or uncertainty is trying to convey… I think the successes of weather forecasts have also given the public the illusion that we can also do things we cannot. When that does not happen, they complain. Our models are not robust enough to tell you that it is going to rain at 4:32 pm directly over your dog’s water bowl in the backyard by the tomato plant. This is why we have to keep educating about math, statistics, weather, and overall science literacy with ‘teachable moments’ like the Polar Vortex.” – Forbes, Jan. 23
Here are a few news items and interviews to peruse before moving on to the gold charts.
Gold hits an all-time high in 72 currencies – FXStreet, Jan. 15
Yet another MAJOR reason to buy gold… “We’re right at peak gold here.” – Sovereign Man, Jan. 15
Do Mega Mergers Hurt Junior Miners?… “A new case to be made for Americans to buy gold over the next two years.” – Kaiser Research, Jan. 15
Wyoming Legislators Want State to De-Risk Investments by Holding Gold and Silver… “A group of Wyoming legislators have introduced three bills this week to de-risk the state’s financial holdings with modest allocations to physical gold and silver in the state’s pension fund, reserve fund, and mineral trust fund.” – Sound Money Defense League, Jan. 17
Billionaire Sam Zell Buys Gold for First Time in Bet on Tight Supply – Bloomberg, Jan. 17
Why Jeffrey Gundlach Likes a Gold Stock Fund… “China is a factor, but emerging markets are outperforming the U.S. broadly in recent months. What else does well when the dollar weakens? Well, you might want to buy gold. I turned bullish on gold in the middle of last year at $1,196 an ounce. Gold and commodities broadly should benefit this year, although I worry about the economic scenario for industrial commodities. To be aggressive, you could buy the $GDX ETF. It is a leveraged play on the price of gold. That is what I recommend.” – Barron’s, Jan. 18
Gold Fields Wants to Combine With Rival AngloGold – Bloomberg, Jan. 22
Turkish Treasury to start issuing gold bonds on Monday… “Citizens were provided with a safe investment tool for their gold savings, Albayrak said over his social media account. ‘With the gold bond and gold-denominated lease certificate issuance to be launched on Monday through five banks, our citizens will both win themselves and contribute to the national economy.’” – Daily Sabah, Jan. 24
‘Miles and Miles’ to go on China Trade… “The United States and China are a long way from resolving trade issues with China but there is a fair chance the two countries will get to a trade deal, Commerce Secretary Wilbur Ross said on Thursday.” – Reuters, Jan. 24
ICYMI, here is a synopsis of my recent analyses on gold.
“I suspect that short of a gold positive or negative news item, the price will remain stable until the FOMC meeting announcement on Wednesday. Following the FOMC, we have the potential for a government shutdown over the weekend. I remain neutral on price until the $1,251 high is taken out with conviction on the price and volume.”
“When the price broke away from congestion at the 200 Exponential Moving Average (EMA) and 38.2% Fibonacci level on Dec. 20, it quickly rose to a $1,281 close on Dec. 28. That was a nice $30 sweet spot–momo play opportunity. The spike in price has introduced an Ascending Scallop pattern out of a Measured Move Up. A price target can be calculated when a Throwback (aka handle) occurs after as a shallow reversal in price. A Throwback might take place as we approach the 68.2% Fibonacci level, where several layers of lateral resistance are located due to the price chop from Feb. through Jun. The studies are flashing bullish, as all the moving averages are below the price, the DMI-ADX momentum is strong with an Alligator Tongue set-up, the StochRSI is toppy but can remain there until a Throwback occurs, the MACD is positive, and buy volumes were strong during the rise in price. Keep your eyes on the 50/200 EMAs for a Golden Cross in the near-term.”
“A Throwback (handle) on the Ascending Scallop is taking shape as expected with a Symmetrical Triangle pattern. A 50/200 EMA Golden Cross also confirmed over the past week. All the moving averages are lining up nicely below the price trend. The StochRSI remained topside in overbought territory until a Throwback began, and it is now basing in an oversold position without a hint of breaking upside at this point. The DMI-ADX remains in positive territory but is stalling in momentum, which is positive while the price chops sideways within the triangle. Volumes are steady and solid, with no correlation or divergence with the price action. If the triangle resolves with a topside breach through $1,300 with conviction, the price will easily reach the next Fibonacci level at $1,323 and has a target of $1,350 based on the formula for Symmetrical Triangle breakout. If the price breaks downward and out of the triangle, the 50 EMA and $1,263 Fibonacci will provide support. It appears to be a matter of patience as to when the price chooses a direction. The lateral resistance at $1,300 is formidable and is drawn back on the chart through to 2016. I remain neutral until $1,300 is decisively breached before riding another sweet spot on this primary bull accumulation phase.”
To view a larger version of any chart, right-click on it and choose your “view image” option.
Gold daily chart as of Jan. 24, 2019…
The Symmetrical Triangle that formed within a Throwback of the Ascending Scallop has morphed into a Rectangle Top. The bullish breakout odds for a Symmetrical Triangle are 66%, and 63% for a Rectangle Top. The Throwback (handle) on the Ascending Scallop remains in play. The first lower trendline drawn up from Dec. 2018 and the 21 EMA are providing support right now. All other technical studies remain in similar positions as they were last week. There is a Golden Cross with the 50/200 EMA crossover, all EMAs remain below the price action, the StochRSI is giving no indication of a positive turn, but its bounce along oversold territory is getting long in the tooth. The volumes have begun to show a shallow fall since the Jan. 4 high of $1,298.54. The $1,276.66 low on Jan. 4 has not been taken out while the price chopped within a $22 range for the last two weeks. Price support on the downside sits at $1,270 at the 300 and 500 SMA and $1,264 at the 50 EMA and 50% Fibonacci level. I remain neutral until $1,300 is decisively breached before riding another sweet spot on this primary bull accumulation phase.
Gold monthly chart as of Jan. 24, 2019…
“The price must decisively retake the 50 SMA sitting at $1,230 and the next Fibonacci at $1,250 in order to have a sustained sprint back to the $1,380 zone” – TraderStef, Nov. 30, 2018
The most recent low on the monthly chart occurred in Aug. 2018 with a Hammer Candle pivot off the 2011 long-term trendline trendline and confirmed a secondary trendline drawn back to the Dec. 2015 low. An Ascending Triangle is now clear. The 50 EMA and all other moving averages are firmly below the price action. The StochRSI indicates a near-term bullish trend and the volumes remain in record territory.
Jan. 25 UPDATE: Here is the 1-minute gold chart from Friday until the 5pm close of $1,303…
Pi – 4. Fibonacci Sequence
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