Best of the Week
Most Popular
1. Crude Oil and Water: How Climate Change is Threatening our Two Most Precious Commodities - Richard_Mills
2.The Potential $54 Trillion Cost Of The Fed's Planned Interest Rate Increases - Dan_Amerman
3.Best Cash ISA Savings for Rising UK Interest Rates and High Inflation - March 2018 - Nadeem_Walayat
4.Fed Interest Hikes, US Dollar, and Gold - Zeal_LLC
5.What Happens Next after February’s Stock Market Selloff - Troy_Bombardia
6.The 'Beast from the East' UK Extreme Snow Weather - Sheffield Day 2 - N_Walayat
7.Currencies Will Be ‘Flushed Down the Toilet’ Triggering a ‘Mad Rush into Gold’ - MoneyMetals
8.Significant Decline In Stocks On The Cards! -Enda_Glynn
9.Land Rover Discovery Sport Extreme Driving "Beast from the East" Snow Weather Test - N_Walayat
10.SILVER Large Specualtors Net Short Position 15 Year Anniversary - Clive_Maund
Last 7 days
Watch This Group Signal Stock Market Trend Changes - 22nd Mar 18
Stocks are Gapping Beneath the Trendline Support - 22nd Mar 18
Fed Action Casts Shadow on Bullish Case for Stocks - 22nd Mar 18
A Strong Economy and Weak Stock Market is Bullish for Stocks - 22nd Mar 18
Fed Raises US Interest Rates 25bp – Where Are We In The Stock Market Cycle? - 22nd Mar 18
Why Spotify Will Likely Surge During Its IPO - 22nd Mar 18
SY Police Arrest Woman for Blowing Trumpet at Sheffield Tree Felling Protest - 22nd Mar 18
Facebook: The Anti-Social Network Covert Data Gathering - 21st Mar 18
Additional Signs for Gold and Silver Amid Increasing FOMC Tension - 21st Mar 18
Credit Concerns In U.S. Growing As LIBOR OIS Surges to 2009 High - 21st Mar 18
Stock Markets Are Flat-to-lower Before the FOMC - 21st Mar 18
Will Powell’s Actions Pop Stock Market Perfection - 21st Mar 18
Economic Moral Hazards of the International Criminal Court - and Philippines Withdrawal - 21st Mar 18
Larry Kudlow vs. Vladimir Putin on Gold - 21st Mar 18
Trump Builds Economy and War Machine - 21st Mar 18
This Stock Market "Illusion" Can Destroy Once-Vibrant Portfolios - 21st Mar 18
Gold Short-term Pull Back in Progress - 20th Mar 18
Stocks Appear to be Under Pressure - 20th Mar 18
Time To Eliminate Your Wall Street Tax? - 20th Mar 18
The Beast from the East Snow, UK Roads Driving Car Accidents - 20th Mar 18
Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - 19th Mar 18
2018 Reversal Dates for Gold, Silver and Gold Stocks - 19th Mar 18
This Tech Breakthrough Could Save The Electric Car Market - 19th Mar 18
Stocks Set to Open Lower, Should You Buy? - 19th Mar 18
The Wealth Machine That Rising Interest Rates Create Conflict With The National Debt - 19th Mar 18
Affiliate Marketing Tips and Network Recommendations - 19th Mar 18
Do Stocks Bull Market Tops Need Breadth Divergences? - 19th Mar 18
Doritos Instant £500 Win! Why Super Market Shelves are Empty - 19th Mar 18
Bonds, Inflation & the Market Amigos - 19th Mar 18
US Housing Real Estate Market and Banking Pressures Are Building - 19th Mar 18
Stock Market Bulls Last Stand? - 18th Mar 18
Putin Flip-Flops Like A Drunken Whore On Bitcoin Cryptocurrency Legalization - 18th Mar 18
How to Legally Manipulate Interest Rates - 18th Mar 18
Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - 18th Mar 18
Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - 17th Mar 18
Strong Earnings Growth is Bullish for Stocks - 17th Mar 18
The War on the Post Office - 17th Mar 18
GDX Gold Mining Stocks Fundamentals - 16th Mar 18
Nationalism, Not the Russians, got Trump Elected - 16th Mar 18
Has Bitcoin Bought It? - 16th Mar 18
Crude Oil Price – Who Wants the Triangle? - 16th Mar 18
PayPal Cease Trading Crypto Currency Bitcoin Warning Email Sophisticated Fake Scam? - 16th Mar 18
EUR/USD – Something Old, Something New and… Something Blue - 16th Mar 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

Gold and Silver, Precious Metals Complex Getting Interesting

Commodities / Gold and Silver 2015 Sep 28, 2015 - 12:48 PM GMT

By: Rambus_Chartology


In this report I would like to focus on the PM complex as it has rallied for the last several days. During most of the bear market gold has held up better than the PM stocks and silver so we'll start there to see if we can find any clues on what's really going on.

Last week I noticed a potential small H&S consolidation pattern that was forming above the July lows. Last Thursday I seen the breakout and Friday looks like a backtest to the neckline as it held support through out the day. If this little H&S consolidation pattern plays out it will give gold a price objective up to the 1187.30 area. So far gold has produced a higher low but not a higher high off of the July bottom. The brown shaded support and resistance zone shows major resistance between 1215 and 1230 or so.

Spot Gold Daily Chart

Gold is testing the upper band on the Bollinger bands currently which may offer some short term resistance.

Spot Gold Daily Chart 2

The next chart for gold is a daily line chart that shows the blue triangle with the H&S formation that formed out toward its apex. So far the neckline has held resistance on two separate occasions at 1155. Note the possible little H&S consolidation pattern that is forming just below the apex that we looked at on the first chart above. The 150 dma is also just above the apex and neckline. Needless to say this is a critical area for gold.

Spot Gold Daily Chart 3

Lets look at one last long term weekly chart for gold which we been following for a very long time. This is the weekly reverse symmetry chart goes back to the big rally out of the 2008 crash low. Reverse symmetry just means how a stock went up is often how it comes back down as shown by the black dashed trendlines. What I want to focus in on are S&R lines labeled #1 and #2 inside the red circle.The thin dashed S&R line #1 ended up being the neckline for the smaller H&S that started to form last October and broke down in July of this year. Note how the S&R line reversed its role from support during the formation of the little H&S neckline to resistance on the first backtest around the 1170 area. S&R line #1 or the small neckline maybe tested once again at the 1170 area as a second backtest. If the small neckline holds resistance and gold begins to decline again from the 1170 area the little ping pong move taking place between S&R line #1 and S&R line #2 will have formed a small consolidation pattern between the two trendlines. The all important 65 week moving average now comes in at 1204. Needless to say this is a very important area of overhead resistance.

Spot Gold Weekly Chart

Now lets look at a long term weekly chart for Silver which is showing us a H&S consolidation pattern which is very similar to the one we looked at on the daily chart for gold. This H&S consolidation pattern has formed just below the bottom rail of the blue triangle consolidation pattern. Just like gold it broke its neckline in July of this year and has experience one backtest so far and maybe attempting as second backtest at the 15.75 area. If gold and silver break above their respective necklines that would be the first bullish signs for the PM complex in a very long time. Until the bulls can show their strength and break back above their necklines I will remain a bear. If the bulls do show strength I will have no problem in reversing my nearly four year bearish stance on the PM complex.

Silver Weekly Chart

This last very long term weekly chart for silver shows its potential massive H&S top that has been forming for about four and a half years or so. Again you can see how important the 15.75 backtest to neckline #2 is in the big picture. I know it feels like we may have missed the beginning of the new bull market for some of you in the PM sector but if you look at this chart we are currently trading just off of multi year lows. If for instance silver was ready to launch a brand new bull market the very first thing it would have to do is trade above the neckline at 15.75 and rally up to possibly the right shoulder high on the small H&S pattern. You have to have a higher low and higher high to begin an uptrend. There is no getting around that very simple basic fact.

Silver Weekly Chart 2

Now lets look at the GDX as a proxy for the other PM stock indexes. This first daily chart shows the breakdown from the double H&S top which led to the August low. Its been chopping out what originally looked like a H&S consolidation pattern but the neckline failed to give way and now the price action has rallied back up to the vicinity of the left and right shoulders. It's possible it's building out a more sideways consolidation pattern if the price action can rally back above the center dashed line at the 14.38 area which it has tested twice so far.

Market Vectors Gold Miners Daily Chart

Below is a daily line chart that takes out a lot of the noise a bar chart can make which is showing the possible trading range.

Market Vectors Gold Miners Daily Chart 2

This first long term weekly chart for the GDX shows its massive H&S top and our current and possible new trading range that is forming down at the bottom of the chart.

Market Vectors Gold Miners Weekly Chart

This next weekly chart shows the potentially bearish falling wedge. The breakout and backtesting has been rather laborious so far but nothing is broke yet in regards to the bearish falling wedge. If the bulls are in charge the very first thing that will get my attention is if they can take the price action above the top rail of the falling wedge. It's as simple as that.

Market Vectors Gold Miners Weekly Chart 2

The next chart shows a close up view of the falling wedge which is made up from the blue triangle and the H&S consolidation pattern. Real short term resistance comes in at the bottom rail of the falling wedge at the 14.40 area.

Market Vectors Gold Miners Weekly Chart 3

Next is a longer term weekly view for the GDX which shows the price action is testing the bottom rail of the falling wedge with the 2008 crash low coming in at 15.20 which has already been tested once so far, brown shade rectangle. The bulls are looking at this falling wedge as a bullish falling wedge which may come to pass but until the top rail is broken to the upside the main trend is down. If the falling wedge plays out to the downside I have the two different price objective labeled below using two different measuring techniques.

Market Vectors Gold Miners Weekly Chart 4

One last chart for tonight will be the long term monthly line chart for the GDX which shows the entire history for this PM stock index. This monthly line chart really takes out the noise and shows you how the bear market has unfolded since the massive H&S top in 2011. Maybe the current low is the beginning of the new bull market as so many folks are talking about right now. If it is this chart shows you that you have missed very little of the new bull market if the gold bugs are correct.This chart also shows you how hard it has been to trade the long side of this bear market.

I'm going to wrap up this Weekend Report and go outside and watch the lunar eclipse as Mother Nature is getting ready to put on a beautiful show for us tonight. All the best...Rambus

Market Vectors Gold Miners Monthly Chart

All the best

Gary (for Rambus Chartology)


© 2015 Copyright Rambus- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Rambus Chartology Archive

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules