Best of the Week
Most Popular
1. Dollargeddon - Gold Price to Soar Above $6,000 - P_Radomski_CFA
2.Is Gold Price On Verge Of A Bottom, See For Yourself - Chris_Vermeulen
3.Dow Stock Market Trend Forecast 2018 - Nadeem_Walayat
4.Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - P_Radomski_CFA
5.Why The Uranium Price Must Go Up - Richard_Mills
6.Dow Stock Market Trend Forecast 2018 - Video - Nadeem_Walayat
7.Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - GoldCore
8.More Signs That the Stock Market Will Rally Until 2019 - Troy_Bombardia
9.It's Time for A New Economic Strategy in Turkey - Steve_H_Hanke
10.Fiat Currency Inflation, And Collapse Insurance - Raymond_Matison
Last 7 days
Golden Sunsets in the Land of U.S. Dollar Hegemony - 20th Sep 18
5 Things to Keep in Mind When Buying a Luxury Car in Dubai - 20th Sep 18
Gold Price Seasonal Trend Analysis - Video - 20th Sep 18
The Stealth Reason Why the Stock Market Keeps On Rising - 20th Sep 18
Sheffield School Applications Crisis Eased by New Secondary Schools Places - 20th Sep 18
Precious Metals Sector: It’s 2013 All Over Again - 19th Sep 18
US Dollar Head & Shoulders Triggered. What's Next? - 19th Sep 18
Prepare for the Stock Market’s Volatility to Increase - 19th Sep 18
The Beginning of the End of the Dollar - 19th Sep 18
Land Rover Discovery Sport 'Approved Used' Bad Paint Job - Inchcape Chester - 19th Sep 18
Are Technology and FANG Stocks Bottoming? - 18th Sep 18
Predictive Trading Model Suggests Falling Stock Prices During US Elections - 18th Sep 18
Lehman Brothers Financial Collapse - Ten Years Later - 18th Sep 18
Financial Crisis Markets Reality Check Now in Progress - 18th Sep 18
Gold’s Ultimate Confirmation - 18th Sep 18
Omanization: a 20-year Process to Fight Volatile Oil Prices  - 18th Sep 18
Sheffield Best Secondary Schools Rankings and Trend Trajectory for Applications 2018 - 18th Sep 18
Gold / US Dollar Inverse Correlation - 17th Sep 18
The Apple Story - Trump Tariffs Penalize US Multinationals - 17th Sep 18
Wall Street Created Financial Crash Catastrophe Ten Years Later - 17th Sep 18
Trade Wars Are Going To Crash This Stock Market - 17th Sep 18
Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - 17th Sep 18
Financial Markets Macro/Micro View: Waves and Cycles - 17th Sep 18
Stock Market Bulls Prevail – for Now! - 17th Sep 18
GBPUSD Set to Explode Higher - 17th Sep 18
The China Threat - Global Crisis Hot Spots & Pressure Points - 17th Sep 18 - Jim_Willie_CB
Silver's Relationship with Gold Reaching Historical Extremes - 16th Sep 18
Emerging Markets to Follow and Those to Avoid - 16th Sep 18
Investing - Look at the Facts to Find the Truth - 16th Sep 18
Gold Stocks Forced Capitulation - 15th Sep 18
Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - 15th Sep 18
Trading The Global Future - Bad Consequences - 15th Sep 18
Central Banks Have Gone Rogue, Putting Us All at Risk - 15th Sep 18
Gold Price Seasonal Trend Analysis - 14th Sep 18
Growing Number of Small Businesses Opening – and Closing – In the UK - 14th Sep 18
Gold Price Trend Analysis - Video - 14th Sep 18
Esports Is Exploding—Here’s 3 Best Stocks to Profit From - 13th Sep 18
The Four Steel Men Behind Trump’s Trade War - 13th Sep 18
How Trump Tariffs Could Double America’s Trade Losses - 13th Sep 18
Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - 13th Sep 18
Trading Cryptocurrencies: To Win, You Must Know Where You're Wrong - 13th Sep 18
Gold, Silver, and USD Index - Three Important “Nothings” - 13th Sep 18
Precious Metals Sector On a Long-term SELL Signal - 13th Sep 18
Does Gambling Regulation Work - A Case Study - 13th Sep 18
The Ritual Burial of the US Constitution - 12th Sep 18
Stock Market Final Probe Higher ... Then the PANIC! - 12th Sep 18
Gold Nuggets And Silver Bullets - 12th Sep 18
Bitcoin Trading - SEC Strikes Again - 12th Sep 18

Market Oracle FREE Newsletter

Trading Any Market

Gold Miners’ Status Updated

Commodities / Gold and Silver 2018 Jan 13, 2018 - 02:49 PM GMT

By: Gary_Tanashian

Commodities

After a positive year-end with the expected precious metals rally we noted on Dec. 31, in NFTRH 480:

“With HUI dwelling just under the 195 resistance parameter, a pullback can come at any time. But there are enough other factors still in line to expect a resumed rally after any grind at resistance comes into play.”

and then on Jan. 7, in NFTRH 481:

“What HUI actually did was immediately push up into the 195-200 resistance zone, become overbought and hang around there all week in consolidation. Here is the noisy daily chart once again. Let’s focus on how the most recent RSI oversold condition in December did indeed spring a tradable rally. As chartists saw the October/November shelf of support break down and then the July lows breached the call was ‘BEARISH!’ far and wide. Shorts were taken on the say so of people who know how to look laterally and see one thing lower than the other thing.


Yes, that is a swipe at charting in a vacuum. There were other things in play like sentiment, seasonals and a rapidly improving Commitments of Traders. The other thing we had going for us was a backlog of experience. Simply as a human (as opposed to a chart reader) I’d seen trap door washout whipsaws in this sector all too often. In 1st half December, the bottom was in.

While my gut says there is more rally to come, we are at the ‘bounce’ target of 195-200 and traders who do not care about scouting new bull markets or the like, should have taken profits in that zone. I simply took a few profits, but hold positions still. Huey could test the SMA 200 (black) and fill the gap (blue shaded oval above) and possibly test the green dashed support line before another leg up if another leg up is coming.”

We have been on this rally since chartists far and wide sounded the alarm on the false breakdown and whipsaw that cleaned out the sector in mid-December. See December 15’s Amid Bad Fundamentals Gold Sector Rally May Have Begun.

The plan had been for a pullback to shake the tree and that is exactly what we got, to the noted green dashed support line. While suggesting pure traders take profits at the initial target (195-200) I had done only very minor profit taking before the pullback and as noted in the Trade Log, was buying during and just after the hit of the dashed support line.

Of course, HUI is just a rough guide. The individual stocks I’ve bought and those reviewed in NFTRH have presented their own opportunities in their own ways. Anyway, HUI makes a good – if blunt – guide for the sector. Here is the above daily chart updated. Today confirms the view that the sector would have another leg up in January.

Let’s look at the longer-term ‘perspective’ views that we have kept at the forefront in NFTRH.

The monthly chart has for 1.5 years now been instructing that the chop and grind after the summer of 2016 is a consolidation to the impulsive leg up in the first half of that year. Everybody got aboard back then and it happened with too much force and momentum… and it happened amid badly deteriorating fundamentals! This flag or right side inverted shoulder had a job to do and that was to kill everybody’s spirits. But through the endless drudgery we have noted all along the way in NFTRH that it appears to be a bullish consolidation.

Another prospective big picture is of the HUI/Gold ratio. We have been watching this pattern form since the initial rally blew out in mid-2016 as well. Can you imagine the bludgeoning over eager and/or committed gold bugs have taken, and the frustration of overly skittish ones who got flushed in December? Meanwhile, nominal HUI and its ratio to gold simply lumber on. Markets move slower than our hyper kinetic brains and they don’t care what we think we know on any given daily or weekly basis (aided by the media’s hysterical inputs, no less).

Ah, but all of the above are just charts. The whole reason we did not get shaken out of the rally is because there are other short-term factors involved. Those were seasonal, sentiment and CoT related. As for the most important aspect, the macro fundamentals, a quick look at some gold ratio charts in my list tells me that things are improving there. But due to the big macro party the improvement is not yet substantial. We’ll update the sector view in NFTRH 482 along with quality miners and explorers.

For now, the precious metals are rising with the ‘inflation trade’. When the hysterics fade and inflation traders are one day sent to walk the plank then it will be time for the real distinct bull market in the PMs, probably after a flush of some degree with said inflation trade.* There is a rhythm in play and the majority will not dance to it.

Meanwhile, Garth Gary parties on with the rest of ’em.

* It is tradition in the gold sector; the periodic running of the inflationist gold bugs.

Subscribe to NFTRH Premium for your 40-55 page weekly report, interim updates and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com and Biiwii.com. Also, you can follow via Twitter ;@BiiwiiNFTRH, StockTwits, RSS or sign up to receive posts directly by email (right sidebar).

By Gary Tanashian

http://biiwii.com

© 2018 Copyright  Gary Tanashian - 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.

Gary Tanashian Archive

© 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