[edit] I am thinking about ways to bring communication with subscribers to a more intimate level, where I can be available to answer questions and subscribers can add input, etc. much like Bart did below with a comment. So please feel free to do the same if you’d like. Same goes for public posts, although I’d not want to present publicly what should be reserved for subscribers. So that’s a balancing act. Meanwhile, I’d also like to explore a platform whereby we can communicate. I want to take the service to a new level of… service.
The concerns about gold rising with the inflation trades, about its overbought reading, its CoT, seasonal and incomplete macro fundamentals are behind us now. Gold is getting a correction and the pom poms are getting put back in the cheerleaders’ lockers.
The main thing I have been bullish on gold for has been the technicals, not the incomplete fundamentals and certainly not cyclical inflation. The monthly chart technicals have been bullish since 2019, when gold crossed the 1378 bull gateway. More recently, in mid-2020 it ticked a new all-time high amid an overbought situation and much fanfare. The monthly chart’s bullish Cup needed a handle and it sure got one; a 1.5 year (+/-) bull flag/handle correction, from which it broke out in February, 2022.
Here is the daily chart showing that break. It looks like an A-B-C correction from the overbought high, with leg C in progress now. Look for initial support at 1872 and better support around 1830. As a side note, when gold dropped back below the 1920 gateway it signaled further correction will be needed, but it did not break the upside potential. Just delayed it.
The weekly view shows the handle breakout still well in play as it makes its first strong pullback. The two support levels noted above are shown here as well, with clear lateral support generally coinciding with the daily SMA 200 above.
The monthly shows the entire ongoing secular bull market. I think it is a good bet that gold is in the first significant correction of its next leg up (eventual target 3000+, perhaps in 2023 or 2024).
Yes i too think we are getting close to a major bottom in pm’s. Price technicals were good but now time technicals are getting real supportive as well. I would expect pm’s to make a higher low when the broads make their final lows.
Well, time technicals (cycles) are not in my wheel house, and so I appreciate that input. It takes a lot of patience, but patience pays off eventually.
Here is the bullish percent point and figure chart for the gold miners:
https://stockcharts.com/freecharts/pnf.php?c=%24BPGDM,PWUADANRNO%5BPA%5D%5BD%5D%5BF1!3!2.0!!2!20]
In my experience, whenever it gets as elevated as it did caution prevails. Profit taking, hedging, running for the hills, whatever one needs to do to manage their risk. Will it get back down to the 30 or lower level (which I’d much prefer)? Don’t know. It may bottom here but personally I will wait for a move back into a column of X’s before being a buyer (even at this level). Short term the group looks oversold, bullish percent point and figure charts are not something I use for trading, I use them for overall risk assessment to determine how much I’m willing to commit, hedge, reduce, or completely eliminate. This is not and should not be considered investment advice. It is merely an observation.
And a damn good one it is, MH.
Hopefully this link to the BPGDM chart I understand better will work. It shows the moving average having turned up, which is positive. But as MH says, it’s in need of continued pullback. Gold bug enthusiasm needs to be dampened. /wp-content/uploads/2022/04/bpgdm.png
To clarify, BPGDM is not a sentiment indicator. It’s an overbought/oversold indicator. But the O/B and O/S sure do tend to come with matching sentiment.
Bullish percent charts simply show the percentage of stocks in an index or sector that are on a point and figure buy signal. This is why it can only be as high as 100 or as low as 0. If anyone is interested in a further explanation on how things move from X to O and vice versa post the question otherwise I’ll leave this alone now. Gary is correct it is not a sentiment indicator and they do match at tops and bottoms.
I agree. At this stage of the bull it makes sense to look and pay attention to these type of indicators. During the more mature phases, you have to be careful as they can stay overbought for a long time.
Can this chart be added to Chart/Indicators?
Sure thing. I’ll add a chart of gold when I get a chance.
Okay, gold futures chart added.