I predicted that gold would rally last week up to the $1,155 area, and was also equally unsurprised when it was rejected the first time by that declining (see green trend-line on chart) resistance line. Those are standard or obvious Cycle pivot points, but how it continued lower yesterday to fall well below the 10 day moving average was not a “typical” development if you’re a supporter of the bull case in gold.
This is after-all supposed to be the most bullish period for gold, the heart of the 2nd Daily Cycle is where most of the solid gains are made during an uptrend. We wanted to see only a brief, possibly just an intra-day break below the 10dma, followed by a rally to smash through that trend-line. There is obviously still some time left for gold to rally, but the point is that it has taken up far too much of the 2nd Daily Cycle while remaining well below recent Cycle highs. During a series of bullish Cycles, new highs are made quickly and sustained relentlessly, they certainly do not languish like this.
So as I covered this past weekend (premium report) and warned then, I’m telling the bulls again to watch out. This is playing out just as past bear market Cycles have. That’s four years’ worth of Cycles and each one behaved and performed almost like this one has so far. And sadly we do not see any bullish divergences from Silver or the precious metal miners to hang some hope on. As I have consistently maintained, during any bear market we must assume surprises will move to the downside and that the trend will push the asset lower.
Remember though, Cycles depict the natural ebb & flow process of an asset. And in the very short term, a bounce out of a Half Cycle Low is now due and expected. Another test in the coming days of that resistance line is likely, but there is a very good chance that same resistance area will cause gold to fall sharply towards the next Daily Cycle Low. If the bulls are serious and want to significantly change this outlook, then they need to smash through the resistance area and make new Cycle highs above $1,156. Until that point, please be mindful of the dominant trend, it is much more powerful than us all combined.
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A Golden Surprise
/in Public /by Bob LoukasThe surprises are going to the upside for gold, and that is obviously a change in behavior. The miners are roaring higher and are outside of their Bollinger Bands for multiple days, a sure sign of strength. Up until very recently, the Investor Cycle had showed us relatively little to get excited about. But suddenly, eleven weeks into the Cycle and right where you would have expected it to turn lower, gold has found yet another gear.
The most bullish path (from a number of possibilities) has resolved itself this week and we have a solid new Daily and Investor Cycle high. This is by no means (yet) a sign that a new bull market has started, that type of conclusion can only be reached with consecutive higher highs at the Investor Cycle timeframe. I like how the sector has performed here, but let’s not forget that all commodities are doing well with a sharply lower dollar. And for those with short term memory issues, let’s not forget that gold has a habit of drawing in the gold bulls before unleashing another wave of selling.
However, we do have a monthly Swing Low in play now. Possibly for the first time in years, we’re seeing some real buying on demand, as opposed to counter-trending and forced short cover buying. The highs this week have come on week 12, the furthest any Investor Cycle has reached since 2011, and there is potential for further gains now that this is likely a Right Translated Investor Cycle.
In the short term though, some caution is warranted. Gold is well above the Bollinger Bands and significantly overbought. From a Daily Cycle timing standpoint, we’re deep into the Cycle and ready to begin a move towards the DCL. Even if the recent October 2nd Low marked a shortened Daily Cycle Low, gold in that case would still be ready to move lower into a Half Cycle Low. The point being, social media is suddenly a buzz over gold and a “new bull market”. Everyone is suddenly jumping back in here after an already extended move higher. This is setup to teach the bulls a little trading lesson and to catch them being a little too over-eager. Beyond a possible shake-out, the gold Cycle look very encouraging and a transition away from a bear market could be developing.
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, and Natural Gas Cycles. Along with these reports, members enjoy access to two different portfolios and trade alerts. Both portfolios trade on varying time-frames (from days, weeks, to months), there is a portfolio to suit all member preferences.
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Midweek Market Update – Oct 14th
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Commodities Firing Up
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Midweek Market Update – Oct 7th
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Trade Analysis – Oct 5th
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Pattern Changes
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Gold Cycle Running Out of Steam
/in Public /by Bob LoukasI predicted that gold would rally last week up to the $1,155 area, and was also equally unsurprised when it was rejected the first time by that declining (see green trend-line on chart) resistance line. Those are standard or obvious Cycle pivot points, but how it continued lower yesterday to fall well below the 10 day moving average was not a “typical” development if you’re a supporter of the bull case in gold.
This is after-all supposed to be the most bullish period for gold, the heart of the 2nd Daily Cycle is where most of the solid gains are made during an uptrend. We wanted to see only a brief, possibly just an intra-day break below the 10dma, followed by a rally to smash through that trend-line. There is obviously still some time left for gold to rally, but the point is that it has taken up far too much of the 2nd Daily Cycle while remaining well below recent Cycle highs. During a series of bullish Cycles, new highs are made quickly and sustained relentlessly, they certainly do not languish like this.
So as I covered this past weekend (premium report) and warned then, I’m telling the bulls again to watch out. This is playing out just as past bear market Cycles have. That’s four years’ worth of Cycles and each one behaved and performed almost like this one has so far. And sadly we do not see any bullish divergences from Silver or the precious metal miners to hang some hope on. As I have consistently maintained, during any bear market we must assume surprises will move to the downside and that the trend will push the asset lower.
Remember though, Cycles depict the natural ebb & flow process of an asset. And in the very short term, a bounce out of a Half Cycle Low is now due and expected. Another test in the coming days of that resistance line is likely, but there is a very good chance that same resistance area will cause gold to fall sharply towards the next Daily Cycle Low. If the bulls are serious and want to significantly change this outlook, then they need to smash through the resistance area and make new Cycle highs above $1,156. Until that point, please be mindful of the dominant trend, it is much more powerful than us all combined.
Don’t miss our annual Membership Sale, 50% off your first Quarterly Membership, ends Saturday October 3rd!
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Midweek Market Update – Sep 30th
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Annual Special – Save 50% on Membership
/in Public /by Bob LoukasThanks for following the blog, I try my best to publish some free public content when I can, but most of my time is devoted to servicing the premium members. I hope you’ve enjoyed what public content I have made available.
If you would like to see more of my work, I’m offering a steep discount to any new members for a 3 month period. I don’t do “sales & marketing” well, I’m more content with spending my time helping members and producing content, rather than promoting myself online. But every service needs to do some level of promotion, which is why we’re offering a one-time membership special that I hope will be too attractive to pass on.
If you sign up for the Quarterly recurring membership with the coupon code: Half , you will receive 50% off and pay just $49.50 for the first three months ($16.50 a month!) of membership. This offer is available to new or returning members only.
Please visit the below link and select the Quarterly option. Use the coupon code on the checkout form:
https://thefinancialtap.com/#fintap
Sincerely,
Bob Loukas
Churning Time
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