Lee AdlerThe price has broken shorter term channel projections and a 9-12-month cycle wave centerline. But it is holding near that line. This report tells what to look for next for additional signs of trouble.
The smash last week and this morning broke cycle channels up to xx xxxxx duration. However, the xx xxxxx cycle up phase remains intact for now. That would not prevent a continued sharp correction. Gold would need a close below xxxx to form a clear top pattern that would suggest the end of the xx xxxxx cycle up phase.
I have been around long enough to have lived and traded through a parabolic extreme move like this in 1979-80. Do I believe that this is like that? Yes. It did not end well, but tops, even parabolic blowoff tops, take a few months to complete. The cycle projection on the 9-12 month cycle is doable, provided that any pullback holds above xxxx-xxxx. Any pullback below that would probably reduce the final target of this move.
Cycle projections for the 13 week and 9-12 month cycles have been reached. Indicators suggest the onset of down phases in shorter cycles, but it’s not clear that these will turn down in absolute slope. It would appear to mark only the beginning of top formation. We are taking profits in miner swing picks as gains have averaged 43% over an average holding period of 2 months.
Gold has exceeded long term trend limits. In the short run, the 4 week cycle has reached its projection, but the 13 week cycle still points to xxxx, ideally due by xxxxxxx xx. Closing below xxxx next week would be needed to break the uptrend. The gain in miner swing trades is now 44.7% over an average holding period of 8 weeks. With the charts now extended, I have added trailing stop recommendations.
The only cycle with a current projection is the 13-week pointing to a high of xxxx, due within the current few weeks. The price would need a daily close below xxxx by the end of next week to break the uptrend. Cycle channel resistance will be approximately xxxxx at the end of next week. Miner swing trade picks remain a hold, with an average gain of 31% on an average holding period of 7 weeks.
All cycles have entered or appear about to enter corrective down phases. Trend support is in the xxxx range for the week ahead. That needs to hold to keep the uptrend intact. If it holds, then a run to xxxx could follow. If it breaks, then a drop to support indicated around xxxx would be likely. But it is the long term charts that suggest that the greatest risk is building. There are no changes to miner swing trade chart picks, now showing average gains of 16% over 6 weeks.
Projections point to the xxxx range, which is where wave channel boundaries extend over the next month. Indicator patterns suggest an extended price, but not one ready to roll over yet. Miner swing picks show an average gain of 14.1% on an average holding period of 33 calendar days. There are no changes to the list this week.
Gold’s price is moving toward a test of projected intermediate term wave channel resistance in the xxxx range. Projections point to xxxx in September- October. The indicator patterns suggest the potential for an extended run.
Gold appears to be in a high base consolidation, which would normally lead to a breakout. Gold stocks are far stronger. Here’s what looks good, and what signals would suggest failure and danger.
While gold stocks have surged, the metal itself remains rangebound. A daily close above xxxx should trigger a big move. The Cycle Wave Composite has flipped to the buy side, suggesting the onset of an intermediate up phase with projections pointing as high as xxxx. However, it would not take much to abort the rally. A daily close below xxxx would suggest it.
While gold stocks have surged, the metal itself remains rangebound. A daily close above xxxx should trigger a big move. The Cycle Wave Composite has flipped to the buy side, suggesting the onset of an intermediate up phase with projections pointing as high as xxxx. However, it would not take much to abort the rally. A daily close below xxxx would suggest it.