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Monday, April 11, 2011

Gold - Potential Top

This may be a potential expanding triangle ending diagonal top for Gold.  If so, then volatility in Gold is about to increase dramatically.  That would present quick drops, and also strong bounces.  For Gold the next target could be $1270-80.

One of the reasons that I feel Gold may be topping out here is that Gold, Oil and many other commodities topped in 2008 after $SPX topped in late 2007.  According to my theory, we are "unwinding" that cycle now.  Gold, Oil and many commodities should top first, before $SPX, this time.  That would indicate a sharp decline in the near term for Gold, with a major lower high forming for Gold as $SPX completes it's final top later this year.

I plan to show more detail on some of the Gold cycles in the near future.    

4-hour Chart




















Example of an expanding triangle ending diagonal top:

36 comments:

  1. Looks good - this would indicate a pretty sharp reversal in the dollar from here.

    Any counts on the dollar - its a crowded trade to the short side, so maybe a big squuze here near term with gold plunging and SPX moving down to 1200 area ?

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  2. SC-re Gold-if it does decline there's one stock you might want to look at that im already long-NG = Nova Gold @ $9 or so Ill be buying more. Also-any downside target on SLV?? There was a million $$ put buyer yesterday of July25 Puts. As always-thank you.

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  3. chart is much appreciated SC

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  4. EURO hit my target trendlkine - http://2.bp.blogspot.com/-fGWXQUPZXL8/TaRfJ39clsI/AAAAAAAABH4/eqWA1ClL0Iw/s1600/6-5.jpg

    From here BIG plunge in euro may come and big dollar rally

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  5. The bears are at least beginning to show up today - lets see if markets can have a close in the -1 to -2% range , then we could see more major selling ahead

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  6. Well I have to say I'm very tempted to book short profits and sit in cash while the dust settles.

    I am confident with my target at SPX 1206, but the timing is more difficult, and we could bounce around first. Could also just stay short and wait for the big picture.

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  7. I don't have a target for SLV yet, but I am working on that. Thanks.

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  8. SC if your target is 1206 - then it does not make much sense to take profits from 1330ish to 1310 , when we should see 1206 or so....

    Seems like taking profits just when we are about to start a big nasty leg down ?

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  9. Your target date is 15th April right for 1206 - seems to me a bit early , but stay with your counts and lets see what happends from here next days...

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  10. I am comfortable with the price target, but the timing could get pushed back. Timing can be tricky. For example, it could be that April 15th is instead the real start of the decline that I am looking for. I know it's going to be an important date because it shows up in many time cycles.

    In a way it's just a personal preference which timeframe to trade. Regardless of timing I see minimal upside and substantial downside. Upside potential could be back to 1340, downside to 1206.

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  11. SC - true the thing is that we are not even close to getting oversold on daily charts yet - so I expect more selling ahead before , maybe minor bounce to 1320 area before heading down more ?

    Who knows maybe an inverse HS pattern setting up too with right shoulder at 1300 area before a big move to 1344+

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  12. I am not all that impressed with VIX today and financials are relatively firm. These are some signs that it may still be a touch early. Let's see how things unfold.

    I am pleased we are seeing some action anyways.

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  13. you are right on the money SC!

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  14. Someone buying HUGE open calls in "UUP" dollar - so a rally may come near term in the dollar - which means more weakness in markets..

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  15. you think this is just going to be an intraday bounce, SC?

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  16. There is still a shot at a lower low 1303-1307 depending on how things go this morning. Most likely over the next few days though I think we could see right back up in the 1330's again.

    The large move down to 1206 that I am looking for would happen right after that.

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  17. SPX may push up to 1325 or so, and could still make the lower low 1303-1307.

    Financials are weak this morning.

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  18. SC - I think we see 1300-1307 as the "low" this time , then we might see 1350+ area next so I'm holding shorts since 1333 and looking for 1300-1307 area , maybe tomorrow or so.

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  19. Still too much strength in too many areas to get anything serious going to the downside here.CMG,GOOG,WYNN,BIDU,,SINA,TZOO,GS,etc all up nicely today.Many others as well.The VIX is back below 17. Not good.Right now,I absolutely see no "signal" that indicates an 8 to 10% correction is right around the corner. We had some nice 'distribution' pullbacks in several stocks the last 2 days,but the S&P and other key indexes didn't move much and stayed well above their support levels,so we may drift "up" into OpEx. For now anyway,the bears dropped the ball again this morning...bigtime.

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  20. I think it drops to 1305 today! And then we have a HS formation. Next leg 1285 and then back to 1300-1310. After that the free fall!

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  21. What happens when we hit 1430's in June. That is the most likely outcome when considering the numbers. To many bears on these boards. They are being set up for ruin in my opinion.

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  22. I believe what has happened is that Monday's drop in the VIX has had the effect of enlargening the VIX triangle. That pushes the apex out, remember, this is one of my timing methods. There are several other methods of timing that I am using as well.

    My target is the same 1206 SPX even though we have more chop now anticipated first. I am not disappointed with these charts because they did indicate a significant downside move.

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  23. Very hard to "read" this thing. I don't know if whats happening here is all just the MM's burning off the last of the premium on the Apr calls and puts for an OpEx killing...or something else is slowly developing. Not really sure we 'can' know until we see where we're at this time next week...as in above or below 1300. For the possible TA factor here today..we just matched yesterday's S&P low of 1309 & change...and are now hovering just above at 1310. I suppose it's "possible" if we close below yesterday's low print(1309)...we might get some more downside action stemming from that. And I really emphasize the word "Might".

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  24. I suspect that was the low for today. I favor that we head up to 1325 from here and bottom after that 1303 or so.

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  25. SC, do you mean one more up and down, i.e. up to 1325 and back down to 1303?
    After that some tighter consolidation phase and then down to your original 1206 target?

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  26. I'll update a chart showing my near term view. From here up to 1325, down to 1303, and then up to 1340. From there down to 1206.

    Yes, we are in some swings!

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  27. SC,

    now that we hit 1303, u still think we head higher first(circa 1340), or progressively down to 1206? Do you not see a chance of lower levels (approx. 1275), before we bounce from there?

    Looking fwd to your update. Thanks and best regards,
    GL

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  28. It looks to me that we bottom out around this level and push back up to 1340. Covered my shorts. I am considering going long but will wait and see.

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  29. I think you are doing the wrong thing. 1280 in the next 3 days! in about 2o min the ES will go under 1300. March 29th support.

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  30. One major thing here this morning going for the downside lasting ,for at least today anyway...is that GS blasted down thru 160 to 155. That's a biggie,and a "must" if we're going to get under 1300 and stay there for a bit. Very hard to tell how much of this is OPEX related or if things are really starting to break down for a while.Part of the problem is that...there are no sellers in volume out there. But that another story. Anyway..we know every trader in the world is watching to see if the 1300/1303 area holds through OpEx.For now..I'm watching to see if GS rebounds...or not.

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  31. Watching the financials closely as well. Financials firming up would be one of my signals to go long.

    Not impressed with VIX...

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  32. Financials still lackluster. That may indicate we test the 1303 bottom again. No reason to chase the long side just yet.

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  33. Dollar and VIX both getting crushed again after a slight hiccup earlier....so this seriously not only abates the selling pressure, but is getting gold and silver to rally hard again.Oil too,which is not helping the downside picture here. But whether long or short here...it's a stockpickers rotational market at the moment. If you're long TZOO today...you're really happy.If you're short FSLR today...you're really happy. On the other hand..the DJIA and the S&P are in a very,very tight range...so there's not much to work with there until we get a breakout one way or the other.Unless we break 1300 convincingly sometime next week,I think it's going to tough to get that 10% everyone wants.

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  34. SC i think our visions match once again. I'm also not playng the long side anymore, due to the big yearly cycle close that is coming in next month, and remembering HOW it closed the last year (flash crash).

    I also expect a correction on gold, but I'm not going to short it. Too risky, it's the last bull market we have. Just took off my leverage.

    G.

    http://www.ellipsetrading.com/

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  35. SC-if you dont mind me asking-what happened re your charts ect? Not even close to 1206-im not knocking just asking-thank you.

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  36. I'll show the updated charts to explain. The timing has been pushed back, but the target remains the same at 1206.

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