That something was a big smash in gold and especially silver over night and then a head spinning reversal. Exactly the kind of thing we look for to be buyers.
Silver actually got near my target zone, which is 17-20. But there is a bump of long-term support elsewhere (noted this morning in an NFTRH update) that could hold for a rally or better. When items like gold and silver have been this badly decimated and people have come to hate a concept like honest money this vehemently (while being compelled to worship inflationary policy making), you need to give merit to the idea that the next rally could be the rally.
Silver’s CoT data still shows some open interest by whatever gamers or evil interests there may be in the paper and digital markets, but its structure is very bullish. Yet until this morning, everybody hated silver.
Now, lack of follow-through and another flop would reset and extend the agony that honest money advocates have endured, but there seemed to be enough going on today in gold, silver and the associated stock indexes to stand up and take notice.
May/June is after all, the time frame we have been expecting for some pretty important changes in the macro markets. Did something happen today? We’ll find out very shortly.
What are the chances that if the pig in the top panel corrects the POS in the bottom panel might rally? Now, will the pig correct?
S&P 500 & HUI, daily
Take it for what it is worth… a bullish divergence in the HUI Gold Ratio.
HUI Gold Ratio, daily
Although there is nothing like the ugly daily chart of HUI to illustrate the long and terrible southward journey gold stocks have been on.
At some point this crap will bottom. Is today’s attempted reversal that point? Bullish divergence has not stopped new bear market downside in the past. But rallies have to start somewhere. Bears watching… and no, no pun intended.
This target has been on radar for months upon months and most intently since support was lost at 26.10 a few weeks ago. Today silver is doing this…
If the breakdown holds, there is nothing but hot air between current levels and sub-20. Here is the disgusting chart produced 8 weeks ago in NFTRH
238 [edit: 230]
Some improvement again this week.
Gold Commitments of Traders
Silver Commitments of Traders
Here are some possible bear flags in the making, compliments of the precious metals sector. These are weekly charts and the flags may not yet be mature. Indeed, we have been managing a would-be rally by the miners off of the capitulation low of a couple weeks ago, and that is still in progress.
HUI, GLD & SLV daily
But the weekly view is not a good one technically for the precious metals complex. Maybe what we need is for the “community” leaders to get emboldened just a little more.
People who understand the value of their physical metal are sleeping soundly. Unfortunately, the majority of players are just casino patrons dressed up as value players and they are micromanaging every tick in gold. Do you think it is just going to breeze through 1524 with all that hope and angst built in?
The gold generals (with egos as big as their reputations) may be debunked by the time this is all over. All along they have used dogma to keep the troops in line and other smart guys have used charts to call bottoms that really weren’t… ‘see, I have a chart to back up my biased viewpoint!’; but the problem is real people with real lives, loves, problems and joys read this stuff and think ‘expert’.
Nobody knows what the fuck is happening out there for certain. If the bear flags above turn out to be wrong, I’ll admit as much. That is because a chart cannot predict. It can only hint and prompt risk management or speculation. It is all about hard work and discipline.
Sorry for the negative attitude, but this whole process has disgusted me more and more the longer it has gone on. I read things every day by dangerous people that make me want to puke. Gold is monetary value, not an idol of worship. Keep religion out of it. Keep fear out of it. Keep greed out of it, and you’ll be fine.
We have been anticipating a rally attempt of some kind. There are targets to the upside that can actually extend all the way to the broken neckline of the big fat Head & Shoulders at 375. There are several rally target points lower than that, plotted by daily charts. There are also parameters to the current rally’s viability, which were not eliminated by Friday’s down thrust.
But it is Mr. Fat Head (the monthly chart) who owns the big picture until such time as 375 is taken out. Mr. Fat Head’s target is an unthinkable 100. The problem is that 250 was unthinkable when we began putting it on radar months ago. Just a friendly reminder in the event things get bullish in the short-term as has seemed probable.
This is a battle between scenarios. Was it THE bottom at the washout low a couple weeks ago, as the index came to the 62% bull market Fib retrace? Is the trend line in the low 200′s going to contain it? Or is Mr. Fat Head’s 100 target going to one day prevail?
In my opinion, week to week management by charts on shorter timeframes will work best. They have worked so far. There is a scenario in play here where the precious metals are bouncing with the inflation trade and another bump in the maturing stock bull market. I would not read much more into it just yet.
Another non-technical sign would be the Chest Beating indicator. You know the one. It’s a week to week, take the pulse type of market until real technical damage is negated.