Best of the Week
Most Popular
1.UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - Nadeem_Walayat
2.Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - James_Quinn
3.UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - Nadeem_Walayat
4.Billionaire Investors Backing A Marijuana Boom In 2017 - OilPrice_Com
5.Emerging Markets & Basic Materials Stocks Breaking Out Together - Rambus_Chartology
6.Global Currency Reserve At Risk - Jim_Willie_CB
7.Gold and Silver: Your Stomach Is Probably Wrenching Right Now - The_Gold_Report
8.Warning: The Fed Is Preparing to Crash the Financial System Again - Graham_Summers
9.Basic Materials and Commodities Analysis and Trend Forecasts - Rambus_Chartology
10.Discover Why A Major American Revolution Is Brewing - Harry_Dent
Last 7 days
Bitcoin Hits New All-Time High Over $4,400 As It Catches Paypal In Total Market Cap - 17th Aug 17
3 Psychological Ingredients behind Great Web Content - 17th Aug 17
The War on Cash - Rogoff, Orwell and Kafka - 17th Aug 17
The Stock Market Guns of August, Trade Set-Up & Removing your Rose Tinted Glasses - 16th Aug 17
Stocks, Bonds, Interest Rates, and Serbia, Camp Kotok 2017 - 16th Aug 17
U.S. Stock Market: Sunrise ... Sunset - 16th Aug 17
The Next Tech Crash Could Delay Your Retirement by a Decade - 15th Aug 17
Gold and Silver Precious Metals Nearing Breakout - 15th Aug 17
North Korea Showdown: Pivotal Market Turning Point - 15th Aug 17
Tech Stocks DOT COM Bubble Do-Over? - 14th Aug 17
Deep State Conspiracy or Chaos - 14th Aug 17
From the Trans-Atlantic Axis and the Trans-Asian Axis - 14th Aug 17
Stock Market Intermediate Correction Underway - 14th Aug 17
The Islamic State Jihadi Pivot to Asia - 13th Aug 17
Potential Pivots Upcoming for Stocks and Gold - 13th Aug 17
North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - 12th Aug 17
Gold Stocks Coiled Spring - 12th Aug 17
Neil Howe: The Amazon-Walmart Rivalry Will Determine the Future of Retail - 12th Aug 17
How to Alton Towers Half Price Discount Entry 2017 and 2018, Any Time, No Pre-Booking! - 12th Aug 17
Top 3 Technical Trading Tools Part 2: Relative Strength Index (RSI) - 11th Aug 17
What Makes Women Better Investors - 11th Aug 17
Crude Oil Price Precious Metals Link in August - 11th Aug 17
Influencer Marketing Predictions All Businesses Should Take Into Account - 11th Aug 17
Really Bad Ideas - Government Debt Isn’t Actually Debt - 10th Aug 17
Gold Sees Safe Haven Gains On Trump “Fire and Fury” Threat - 9th Aug 17
Why Is The Stock Market Not Trading On Fundamentals Lately? - 9th Aug 17
USD/CAD - Can We Trust This Breakout? - 9th Aug 17
New Monthly Rebate to Help Reduce Your Trading Costs - 9th Aug 17
Stock Market Divergences Are Now Appearing! - 9th Aug 17
Is Inflation an issue or did the Fed Mess Up? - 8th Aug 17
Top 3 Technical Trading Tools Part 1: Japanese Candlesticks - 8th Aug 17
Researchers Find $10 Billion Hidden Treasure In A Dead Volcano - 8th Aug 17
What Happened to Thousands of Sheffield's Street Trees 2017 - Fellings Documentary - 8th Aug 17
Solar, Bubble, Banks, War, and Legal Tender: Five Reasons Why You Should Buy Silver Now - 7th Aug 17
CRASH - If Some People Do It, Nothing Bad Happens, But If Everyone Does It, All Hell Breaks Loose - 7th Aug 17
Gold and Silver : The Battle for Control - 7th Aug 17
Precious Metals Sector is on Major Buy Signal - 7th Aug 17
Stock Market - Has Time Run Out? - 7th Aug 17
Get Ready for an Historic Upside Gold and Silver Run - 7th Aug 17
BOOM! Bitcoin Rockets To New All-Time High As Cryptocurrencies Surge Higher! - 7th Aug 17
U.S. Dollar: This Crash Signals the End - 6th Aug 17
Predicting The Price Of Gold Is A Fool’s Game - 6th Aug 17
Asda Sales Collapse and Profits Crash! UK Retailer Sector Crisis 2017 - 6th Aug 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Gold and Silver, Precious Metals Complex Getting Interesting

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

By: Rambus_Chartology

Commodities

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)

http://rambus1.com

FREE TRIAL - http://rambus1.com/?page_id=10

© 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

© 2005-2017 http://www.MarketOracle.co.uk - 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

Catching a Falling Financial Knife