Ready to Show Their Hand …

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Are precious metals ready to show their hand? Precious metals have been in an intermediate cycle decline since late August. They printed a daily cycle low last Tuesday. But was it also an intermediate cycle low?

If it was just a daily cycle low we would expect a daily cycle peak on or before day 8. However, if this is a new intermediate cycle then metals should rally past day 12 or longer.

gold weekly

Last week was week 16 for the intermediate gold cycle. Since gold printed a lower low last week, a break above last week’s high of 1326.10 will form a weekly swing low. And a weekly trend line break confirms a new intermediate cycle.

The Miners seem ready to show their hand as well.

GDX Sharp Charts Workbench Stock Charts com 20

The Miners bottomed last Monday, prior to gold. That makes today day 6. The Miners are right up against the declining trend line as well as the resistance at the 25 level. If the Miners were to rollover, or at least backtest the low, this would be a good point to initiate a move lower.

If the Miners were to reverse here and break below the daily cycle low, then that indicates another 3 -4 more weeks of decline. However, a successful back test holding above this recent low would be a bullish development. That would mean a higher low has formed. Of course breaking above the resistance level at 25 and the declining trend line would signal a new intermediate cycle.

Palladium had good day today suggesting the intermediate low has been left behind.

PAY00 Commodity Futures Price Chart for Pallad

Palladium tends to lead gold. We see that Palladium formed its intermediate low in September. In October it delivered a higher low and last week broke out to a higher daily cycle high. Monday saw palladium provide some bullish follow through …

… and perhaps giving a hint to its hand …

1 hand


3 thoughts on “Ready to Show Their Hand …

  1. Non Farm Payrolls…

    My guess is 189k and market rallies hard….

    If ubber low figure i.e. 170k or lower….mkt will rally because the QE will stay even longer with us than before

    If ubber high figure i.e. 200k or higher….mkt will rally because it affirms the view that US economy is gaining momentum

    If inline with expectation…..mkt will rally because of the removal of overhang and near term uncertainty

    Basically, bears have zero chance in the current bullish cycle……might as well stick a head in a plastic bag and breathe and see how long you last.

    Breathe In, Breathe Out…….

    Be Long and Be Strong~

  2. Pingback: Tuesday October 22nd; Step right up and bet on the NFP numbers!

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