Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Plunger’s Gold Bottom Watch

Commodities / Gold and Silver 2015 Nov 10, 2015 - 05:52 AM GMT

By: Plunger

Commodities

That’s where it appears we are now, the final drive to the bottom. Rambus’ weekend charts still show how bearish the PM charts are and it will take a lot of work to turn them around and get them pointed back up, Having said that I see the initial components we should expect to see of a bottom and turn entering into the picture. Call these pathway elements as they come before the bottom and take a bit of time to have their effect of bringing about the turn. First off what will propel the next bull leg in the PM stocks is the investment case for metal stocks. That is primary defined by the real price of gold and input costs into mines, That has been improving for over one year now. Mainly driven by the oil price, which imputes itself into all costs of a mining operation. Cheaper oil impacts not just extraction cost but costs of materials, explosives, those big expensive truck tires etc. Plus communities and governments are warming up to mining projects. Ecuador is a case in point, since oil revenue is down they need taxes from other sources and the mining sector is becoming favored again. Here is a view of the gold/oil relationship, note how the trend (30 EMA) is higher.


Since mid-2014 this dynamic has been working its way into the finance equation. On the chart below we can see this same effect on a much broader cost view using the bloomberg commodity index. Note how the peak in the real price of gold peaked right at the top of the bull market in late 2011 and declined into the summer of 2014. So this is an improving picture setting the backdrop for a bottom and eventual advance in the PM shares.

Decreasing Volume: We should know that bear market bottoms are normally associated with lower volume as the price action has no longer served to excite or to draw in new participants. I am seeing that now across the board. It is not as pronounced among the majors, however the juniors are showing it. My interpretation of this is that the majors still have a good wash out ahead of them. Also many of the smaller miners are looking much better chart wise. A good example of this is the components of the GLDX etf. If you review all the stocks in this ETF they are actually looking much better as their 30 W EMA has flattened and some are breaking above it announcing bottoming action. There are a few disasters in this ETF such as RBY, XRA, CNL.to, if these were removed the index would have already bottomed! Keep in mind this index has gone down 90% and now is exhibiting bottoming action. I am posting 2 charts on this the 5 year and 2 year. Note on the 5 year how it is exhibiting a maturing Weinstein stage 1 look. On the 2 year notice how the volume is now trailing off. I think one could now buy this index on any spike down. The stocks that make up this ETF are actually pretty good quality.

Now I defer to my friend Mark Lundeen, who does compelling independent work using the step sum indicator he has developed. FLASH NEWS ALERT-The step sum is finally crashing. This indicates we are in the give it up final phase. There is no indication how long, but this is an important indicator that few even know exist.

Finally, I would like to pass on 2 anecdotal stories which I experience recently which also fit into this bottom narrative. I attend 4-5 mining conferences a year and last week was at the New Orleans Investment conference. Now these conferences have been suffering dwindling attendance for 2 years now so the statement that animal spirits were at a low doesn’t really pinpoint a bottom too accurately since that’s the way its been for 2 years now, but two things happened to me that really made me take notice. First was that I went by the Sprott Booth and saw Rick Rule there standing alone. That’s right, alone. Normally there is a mob scene around Rick trying to pepper him with questions and to find out the latest story. Well I engaged him for 20 minutes without anyone even coming by to try to but in. Frankly I have never seen this occur before.

That was a anecdotal bottom indicator in my view, Next I went to the GATA briefing. Chris Powell and Bill Murphy gave the drivel, nothing really new, but I was curious if anything had changed…it hadn’t. Now I have never really been a GATA follower, although I do believe they are correct, but its not something to involve oneself in because, although true, it mainly serves to distract oneself away from the business of making money. Nobody has made money from these guys is what I am saying. But here is the thing that struct me…They both came across to me as defeated. They have mentally lost the righteous battle they have been fighting for 15+ years. They freely admitted they couldn’t change anything and it in fact wasn’t going to change. This is such a sea change from years past. Its just an anecdotal story with out much specific meaning, but when one puts this in context with all these other bottom indicators I am picking up it says something.

Interesting Times

Plunger

Editor’s Note : Plunger is Resident Market Historian with Rambus Chartology

More Plunger

http://plunger.goldtadise.com/

Copyright © 2015 Plunger - All Rights Reserved

All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. The information on this site has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any information on this site without obtaining specific advice from their financial advisor. Past performance is no guarantee of future results.


© 2005-2019 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

6 Critical Money Making Rules