Best of the Week
Most Popular
1. Will Gold Price Breakout? 3 Things to Watch… - Jordan_Roy_Byrne
2.China Invades Saudi Oil Realm: PetroDollar Kill - Jim_Willie_CB
3.Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - Nadeem_Walayat
4.The Stock Market Trend is Your Friend ’til the Very End - Rambus_Chartology
5.This Isn’t Your Grandfather’s (1960s) Inflation Scare - F_F_Wiley
6.GDX Gold Mining Stocks Fundamentals - Zeal_LLC
7.US Housing Real Estate Market and Banking Pressures Are Building - Chris_Vermeulen
8.Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - Buildadv
9.Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - Nadeem_Walayat
10.Warning Economic Implosion on the Horizon - Chris_Vermeulen
Last 7 days
Fox in the Henhouse: Why Interest Rates Are Rising - 23rd Apr 18
Stocks and Bonds, This is Not a Market - 23rd Apr 18
Happy Anniversary Silver Investors! - 23rd Apr 18
The Hottest Commodity Play In 2018 - 23rd Apr 18
Stock Market Correction Turns Consolidation - 23rd Apr 18
Silver Squeeze, Gold Fails & GDX Breadth - 23rd Apr 18
US Economy Is Cooked, the Growth Cycle has Peaked - 23rd Apr 18
Inflation, With a Shelf Life - 23rd Apr 18 - Gary_Tanashian
Stock Market Predictive Modeling Is Calling For A Continued Rally - 22nd Apr 18
SWEATCOIN - Get PAID to WALK! Incentive to Burn Fat and Lose Weight - Review - 22nd Apr 18
Sheffield Local Elections 2018 Forecast Results - 22nd Apr 18
How Long Does it take for a 10%+ Stock Market Correction to Make New Highs - 21st Apr 18
Sheffield Ruling Labour Party Could Lose 10 Council Seats at May Local Elections - 21st Apr 18
Crude Oil Price Trend Forecast - Saudi Arabia $80 ARAMCO Stock IPO Target - 21st Apr 18
Gold Price Nearing Bull Market Breakout, Stocks to Follow - 20th Apr 18
What’s Bitcoin Really Worth? - 20th Apr 18
Stock Market May "Let Go" - 20th Apr 18
Overwhelming Evidence Against Near Stock Market Grand Supercycle Top - 20th Apr 18
Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - 20th Apr 18
The Incredible Silver Trade – What You Need to Know - 20th Apr 18
Is War "Hell" for the Stock Market? - 19th Apr 18
Palladium Bullion Surges 17% In 9 Days On Russian Supply Concerns - 19th Apr 18
Breadth Study Suggests that Stock Market Bottom is Already In - 19th Apr 18
Allegory Regarding Investment Decisions Made On Basis Of Government’s Income Statement, Balance Sheet - 19th Apr 18
Gold – A Unique Repeat of the 2007 and How to Profit - 19th Apr 18
Abbeydale Park Rise Cherry Tree's in Blossom - Sheffield Street Tree Protests - 19th Apr 18
The Stock Market “Turn of the Month Effect” Exists in 11 of 11 Countries - 18th Apr 18
Winter is Coming - Coming Storms Will Bring Out the Best and Worst in Humanity - 18th Apr 18
What Does it Take to Create Living Wage Jobs? - 18th Apr 18
Gold and Silver Buy Signals - 18th Apr 18
WINTER IS COMING - The Ongoing Fourth Turning Crisis Part2 - 18th Apr 18
A Stock Market Rally on Low Volume is NOT Bearish - 17th Apr 18
Three Gold Charts, One Big Gold Stocks Opportunity - 17th Apr 18
Crude Oil Price As Bullish as it Seems? - 17th Apr 18
A Good Time to Buy Facebook? - 17th Apr 18
THE Financial Crisis Acronym of 2008 is Sounding Another Alarm - 16th Apr 18
Bombs, Missiles and War – What to Expect Next from the Stock Market - 16th Apr 18
Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold - 16th Apr 18
Will Bitcoin Ever Recover? - 16th Apr 18
Stock Market Futures Bounce, But Stopped at Trendline - 16th Apr 18
How To Profit As Oil Prices Explode - 16th Apr 18
Junior Mining Stocks are Close to Breaking Downtrend - 16th Apr 18
Look Inside a Caravan at UK Holiday Park for Summer 2018 - Hoseasons Cayton Bay Sea Side - 16th Apr 18
Stock Market More Weakness? How Much? - 15th Apr 18
Time for the Gold Bulls to Show their Mettle - 15th Apr 18
Trading Markets Amid Sound of Wars - 15th Apr 18
Sugar Commodity Buying Levels Analysis - 14th Apr 18
The Oil Trade May Be Coming Alive - 14th Apr 18

Market Oracle FREE Newsletter

Trading Lessons

Gold Price Trend Forecast, Where are the Gold Traders?

Commodities / Gold and Silver 2017 Feb 06, 2017 - 03:04 PM GMT

By: Bob_Loukas

Commodities

This is the 3rd piece on gold that highlights how unloved gold remains today.  Considering the 2016 rally in gold and the turbulent times we now find ourselves in, to be honest I'm rather surprised there are not significantly more gold traders all over this market. Part 1 and Part 2 cover the initial stages of this rally from the December lows. Below is an excerpt from the Financial Tap Member weekly weekend report.

I am rather surprised to read across the blogosphere how a majority of Gold Traders appear to discount and undermine the current gold market. I can appreciate that the longer term cyclical outlook remains unresolved, but in the short-term at least, I believe the gold sector looks to be in great shape.


My view comes with the hindsight of the Cycle count. From what I can see, we recently completely a clear 1st Daily Cycle Low and have already moved higher to new Investor Cycle (Weekly Cycle) highs. Historically, with the second Daily Cycle just starting out, we are now in the most bullish portion of a 26 week Cycle. That means the performance over the next 3-4 week normally shows the best return for the entire Investor Cycle period.

In looking at the chart below, I see that new highs on Thursday confirm that we have a new Daily Cycle in motion. The DCL was relatively mild and short, but then again being a 1st DCL this is not unusual or particularly surprising. And if we consider the 1st DC rally was orderly and not excessively overbought, then there was no real need to see a punishing Cycle decline to counter that rally. Because the 1st DC that was extremely right translated, my most favored outlook is to expect a significant surge in gold over the coming 10 to 15 trading days.

Daily Gold Chart

I often receive emails from concerned members or posts on the Bull Bear Talk forum (http://www.bullbeartalk.com) asking if I'm sure the market completed a Cycle Low. If I see the possibility of a Cycle Low decline to come. Their concern is out of fear of losing, rather than seeing the opportunity in the setup. And generally that fear comes from a lack of proper trade sizing and risk management, because losing trades for some people ending up costing them far too much of their capital.

My answer is generally the same, in that we should always favor the possibility that best fits the evidence. If you're concerned about taking a trade, then take half the size so it's not a mental burden. But do not look for the outlier possibility to every scenario out of fear. If you're going to follow Cycle's analysis, then stick with the most plausible scenario and build your trade position around that narrative. Picking trade winners is difficult enough, but coming up with correlated asset arguments or unlikely Cycle outlooks means you're automatically going to be trading an idea that has a 33% win rate at best.

Always look at the evidence as it stands, meaning the recent price action and what has occurred, not what might occur. Look at the chart of precious metal miners below, for example. Sure, this could be a sinister move designed to draw in the bulls. But that goes to my point above; we cannot sit back and look at the worst case scenario, that's what defining a stop point is designed to protect us against.  The chart below, with the evidence seen in gold/silver price, tell me that we have a great setup ahead.

VanEck Vectors Junior Gold Miners ETF Daily Chart

What I like most about this setup is that sentiment has actually been going down. A similar phenomena is being recorded within the COT report, where speculative traders have yet to offload their short position, let alone begun the normal short to long rotation see during every Investor Cycle.

Unless gold is back into a bear market trend, such as circa 2011-2015, then the sentiment chart below indicates that gold could rally for another 2-3 months before reaching the overbought levels associated with bull market, IC Tops.

Gold Optix

We have now completed seven weeks of this Investor Cycle and in my opinion we have a perfectly formed bull market Investor Cycle. The 10-week moving average has turned higher now, and trailing technical indicators show support for a mover higher supported for another month or two.

We also have a weekly MACD bullish cross developed. Essentially with a 2nd Daily Cycle just starting out, we have all the right confirmations and pieces in place now for the next powerful move. I continue to stress that nobody can tell you if this will end up as a powerful Right Translated Cycle, as seen in the first half of 2016. But I can say that a powerful bullish setup has formed and Gold Traders want to be positioned in a way where we can capitalize on a 2016 like rally. At the same time, it's not a call to be all-in, we want to remain defensive enough (risk defined) to come out relatively unscathed if a bear market decline returns.

Gold Weekly Chart

The Financial Tap – Premium

The Financial Tap publishes two member reports per week, a weekly premium report and a midweek market update report. The reports cover the movements and trading opportunities of the Gold, S&P, Oil, $USD, US Bond’s Cycles. Along with these reports, members enjoy access to a real-time portfolio with trade alerts.

NOTE:  It’s just $99 for a full 3 months of membership, a fraction of what one stopped out trade is likely to cost you.  Consider joining The Financial Tap and receive two reports per week and the education you need to become a better trader or investor   See >> SIGN UP PAGE!

By Bob Loukas

http://thefinancialtap.com

© 2017 Copyright  Bob Loukas - 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.


© 2005-2018 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