Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Gold and Silver Precious Metals Pot Pourri

Commodities / Gold & Silver 2019 Mar 08, 2019 - 04:13 PM GMT

By: Rambus_Chartology

Commodities

I know it may have come as a shock to some of you on why I raised some capital by selling a few PM stocks today. Whenever you see a false breakout of any chart pattern and the price action trades below the bottom rail of the original pattern that can setup a bearish situation. It’s like a head fake. The stock forms what looks like a great breakout and maybe even accompanied by a breakout gap. Everything looks fine. Then you get the backtest to confirm the breakout. Sometimes we can see several days of backtesting waiting for the breakout move to begin.

The first sign of trouble is when you see the price action trade below the breakout point or below the top rail in this case the bullish rising wedge. Many times the trade can still be saved if the bottom rail of the rising wedge ends up holding support. Once the bottom rail gives way then red flags start flying that something is amise. Many times when you see a false breakout of a chart pattern you can see a strong move in the opposite direction. Again, its like a head fake that gets you moving in the wrong direction before the real move takes place.

Lets start by looking at a daily chart for AU which built out a very nice looking rising wedge formation complete with a breakout gap above the top rail. AU was one of the leaders and it looked like it was showing the way higher for the PM stocks but after the reversal bar at the top of the chart AU declined back into the rising wedge negating the breakout. All was not lost yet as the bottom rail of the falling wedge could still provide support and save the pattern. Once the bottom rail was lost that put me on high alert to watch the price action very carefully for more deterioration. Monday morning AU opened with a downside gap and today the price action closed below the 50 day ema which strongly suggested to me it was time to get out of this trade.


All is not lost yet however as AU could be in the process of building out some type of consolidation pattern with the first reversal point being the false breakout high. What we need to see next is for a low that would create the second reversal point, another rally followed by one more reversal to the downside to create some type of four point consolidation pattern. Right now there is no way to know what kind of consolidation pattern may form. One important aspect of this daily chart is the one year H&S bottom which should support a much bigger rally than what we’ve seen so far. As you can see the rally out of the August low was very strong so now is as good a time as any to see AU consolidate those gains.

Below is a weekly chart for AU which shows its strong impulse move out of its 2016 bullish falling wedge. Note the blue triangle that formed in the middle of the 2015 bearish falling wedge as a halfway pattern to the downside. As AU was in a strong decline one would have expected the triangle to breakout to the downside. AU is now moving higher so we should expect to see whatever consolidation pattern builds out should breakout to the upside.

BTO.TO also built out a nice looking rising wedge formation but it too failed to take off and should now be forming some type of consolidation pattern on top of its H&S neckline.

I was hoping that the rising wedge was the consolidation pattern that was going to give BTO.TO the energy it needed to finally takeout that massive overhead resistance line that goes all the way back to the 2011 high. There is already the 2016 rectangle that has been forming below the 2011 high. That will be a big deal when BTO.TO finally moves above that massive line in the sand. There are just a few PM stocks that are trading near their all time highs.

XGD.TO is another PM stock that had a false breakout above the top rail of its rising wedge but failed to follow through to the upside.

This long term weekly chart still looks good with the top rail of its 2016 falling wedge and the 30 week ema coming in at 11.25.

The only real question is will we see a complete backtest to the top rail on this long term monthly chart?

The daily chart for GPL shows it has formed a rising wedge above its nine point rectangle reversal pattern. As you can see it has been in backtest mode to the top rail for about a week now with the 200 day sma helping so far with support. As long as the price action can trade above the bottom rail of the blue rising wedge I will hold on to my position.

This weekly chart for GPL shows the problem I’m seeing with many of the PM stocks I follow. Most have put in some type of small reversal pattern at the fourth reversal point within their 2016 falling wedge or downtrend channel. Many have now rallied up to the top rail and are backing off which tells us the top rail is still hot. We had a similar situation back in 2013 when the PM stock were breaking down from their massive 2011 H&S tops. They all didn’t break their necklines at the same time. Back then the weakest PM stocks broke down first with the rest taking their turn until GG I believe, was the last one to finally break below its neckline. In our current setup we should see the strongest PM stocks breakout above the top rail of their 2006 trading range first with the laggards to following behind.

GPL monthly. Close but no cigar just yet.

AR.TO shows a perfect example of the small reversal pattern forming at the bottom of its 2016 falling wedge with a rally up to the top rail. It’s now backing down and hopefully will find support on the neckline before it tries to take out the top rail again.

This long term monthly chart for WPM shows it has broken above its 2016 bullish falling wedge but has another important area of resistance to overcome which is the top rail of the black 2011 expanding falling wedge. We could even see a ping pong move between the blue and black trendlines.

SAND is setup a little differently as it formed a symmetrical triangle as its 2016 consolidation pattern and has broken out above the top rail. Note the small double bottom that formed at the last reversal point.

SAND is currently trading between the top rail of its 2016 triangle consolidation pattern which is the right shoulder of a very large H&S bottom. Here too we may see a ping pong move between the neckline and the top rail of the blue symmetrical triangle.

This weekly chart for AEM shows the price action touching the top rail of its 2016 falling wedge and backing off a bit.

The long term monthly chart for AEM shows the 2016 falling wedge forming inside of the massive 2008 rectangle.

This long term monthly chart for BVN shows the 2016 bullish, RISING WEDGE, forming the right shoulder of a very large H&S bottom.

FNV broke out of its 2016 bull flag and looks to have completed a backtest to the top rail.

FNV has always been one of the leaders when it comes to the precious metals stock. This long term monthly chart is a “WHAT IF” chart. What if this is a massive bullish rising wedge?

RGLD is another precious metals stock that leads the rest of the PM stocks higher. It too has a “WHAT IF” possible bullish rising wedge. Note the blue rectangle that formed at the fourth reversal point.

This long term monthly chart for NEM shows its been building out its 2016 falling wedge but unlike a lot of PM stocks it hasn’t been able to rally up to the top rail and is showing relative weakness.

GG is one of the biggest dogs in the big cap precious metas stocks areas as its still trading below its 2008 low.

What these PM stocks above show is that there are some bright spots within a sea of mediocrity. The leaders will lead the way as they always do and the rest will move when their time is right. I know it feels like one needs to be fully invested but there are going to be many new buy signals when we see the top rails of those 2016 trading ranges begin to give-way. If one is a long term investor then you can sit tight but for most of us mere mortals sitting tight can be very difficult when we see our profits slowly slipping away. I think the name of the game right now is patience and let some of the PM stocks that have had a strong run out of the October low to consolidate those gains. There is nothing I can see right now that calls into question that the next leg up in the bull market that began late last year is in trouble.

All the best

By Rambus Chartology

https://rambus1.com

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

© 2019 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

© 2005-2019 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