Dec 19, 2012

It's been a tough trading year and there are only a few days left to get things straight. At this point, metals are nearly unchanged. This consolidation did not come without action, however.

There are many rumors flying about the blogosphere currently about why metals have corrected along with the dollar. I'll leave it up to you to find these and figure out which myth makes the most sense to you. It's in my best interest to try and ignore the noise and keep track of our cycles.

Sentiment has been very low since this breakdown in metals has occurred. This must mean that a bottom is very near.

There are several ways to approach what has happened. I'm not going to present all theories here. It's too time consuming and exhausting. So, I'll cover what I think  is going on with the cycles and we'll use that framework as we move along into the new year.

Dec 18, 2012

Today was a very important day in the metals. Unfortunately I just dont have time tonight to cover everything tonight. There will be a new update sent out tomorrow evening with fresh cycle counts and expectations to give us an idea of where we stand and what perhaps we can expect as we go into the new year. The market has thrown us many curveballs in the last few weeks and today was no different. We have a lot to cover. Stay tuned..

..until tomorrow, have a great night!

Sneak peak..

Early November was a fakeout ICL. Price never touched the 200 MA leaving behind a gap. Today, that mark was reached almost to the penny. A stretched ICL could be in play. We all know what comes from the result of ICLs right?!?

Dec 17, 2012

It's been a few days since my last update. Not much has happened, so I'll make it quick just to point out a few important changes.

The $USD has formed a failed daily cycle. I've talked about this several times. The intermediate and yearly cycle declines are in full force. Today was day 7 of the current daily cycle. It broke below the previous DCL, therefore creating a failed daily cycle. These are normally indicative of an intermediate decline. The average DC runs 18-28 days. This gives us 5-10 more days of downside.

Dec 12, 2012

Big day today!

The Fed released a statement at 1230 today indicating it would begin purchasing an additional $45 Billion in Mortgage Backed Securities per month beginning on Jan 1st, 2013. This is to take place of the expiring Operation Twist. OT is balance sheet neutral for the Fed. The buying of MBS is not. So, in total for the year of 2013, the Fed will print and expand it's balance sheet by $1 Trillion. This policy is open ended.. or until the unemployment figure hits 6.5%.

This is the inflationary fundamentals we need in place to make money from the metals bull market.

So, you ask.. why did we not see more fireworks today? Gold and silver are actually down in after hours right now.

Perhaps today was an emotional one for everyone.. but not so much for the big money of which we rely on to move this market. So how is it possible that we have such a big announcement and no big action to show for it?

Take a look at Money Supply (M1).

Now compare that to the price of gold over the same period..

Dec 10, 2012

Quick update tonight..

The swing for gold is in!

On Friday I said, "A swing low has not happened yet, but this was a nice setup to achieve one on Monday."

The swing is in, and we have also broken the declining daily cycle trendline. This validates the start of a new DC. This is the 2nd DC of a new Intermediate cycle.

Today is day 1.

Dec 07, Weekend Report

Since the $USD is the kind of underlying to everything we do.. let's tackle it first.

The dollar has thrown us several curve balls over the last couple of weeks. At first we thought we had a cycle bottom. It was then confirmed by a swing low on DAY 1! Also on the same day, the dollar reversed and sold off even harder creating a swing high and beginning a new decline! This lasted for only 7 days before creating another low. Since then, the dollar has created a swing low and broke the declining daily cycle trendline. The difference is, this time it was confirmed by a follow through. Since we had that "fakeout" daily cycle in the middle, we had a lot of confusion. But that "fakeout" only lasted for 7 days and no daily cycle has ever been 7 days. Therefore, the previous daily cycle was an EXTENDED daily cycle and bottomed on day 33.

Dec 04, 2012

Story of the day.. US Dollar.

The second headline is how metals are dropping.. while the dollar is dropping. Many are scratching their heads over this. The dollar is feeling incredible selling pressure from it's intermediate and yearly cycle decline.. therefore, the selloff. The metals are feeling pressure from their daily cycle decline. Once this DCL is in for metals.. lookout for a quick reversal. Remember the dollar has dropped significantly..

In my last update, I mentioned an alternate scenario where the dollar topped in it's new daily cycle.. on day 1. This is incredibly rare, and in my opinion, incredibly bearish. I went back and counted until I got tired, and I couldn't find a daily cycle that topped on day 1 of a new daily cycle.

The dollar bottomed, formed a swing low, then immediately reversed and began trending down. It has since formed a swing high. Confusing, I know.

Long term view..