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Replies to post #40210 on GOLDBUGS AMEX Goldbugs Index (GOLD)
11/22/20 12:26 PM
Up to now, we still have only a 1 month reaction rally from the low established during September. We must exceed the 3 month mark in order to imply a trend is developing.
While the historical perspective of the of this market included a decline from the major high established back in 2010 moving into a major low in 2016, the market has bounced back for the last 4 years. The last Yearly Reversal to be elected was a Bearish at the close of 2019. However, where there were 2 reversals elected, there was also a Super Position which took place with 1 Bullish Reversal elected warning that this immediate signal has been suppressed by the opposite force warning we may not see immediate follow through.
The perspective using the indicating ranges on the Daily level in the Gold & Silver Cash Index, this market remains moderately bearish position at this time with the overhead resistance beginning at 13903 and support forming below at 13456. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of November 2nd at 15621, which was up 6 weeks from the low made back during the week of September 21st. We have been generally trading down for the past 2 weeks, which has been a very dramatic move of 13.96% in a stark panic type decline.
Immediately, this decline from the last high established the week of November 2nd has been important closing sharply lower as well. Before, this recent rally exceeded the previous high of 15225 made back during the week of October 12th. Nonetheless, that high was actually lower than the previous high made the week of September 14th suggesting this market has really been running out of sustainable buying for right now. This decline has been rather significant coming within 0.15% of the last low formed at 13418 which is providing initial technical support for now. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action as well as trend. Looking at this from a wider perspective, this market has been trading up for the past 1 week overall.
Looking at the longer-term monthly level, we did see a correction from the key high of February for one month. Since that low made in March, the market has rallied for 7 months. Meanwhile, the past seven months has witnessed a rally of 44% percent. A month-end closing below 81569 will warn that the market is losing its upward momentum and should retest support below. It will take generally a monthly closing above 90068 to maintain a near-term upward rally.
Critical support still underlies this market at 9071 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
The Gold & Silver Cash Index opened within last year's trading range which was 10825 to 6585. Right now, the market is still trading above last year's high while we have an outside reversal this year with the last print at 13720. The last time such a similar pattern took place was 2016. Nonetheless, the market is still trading above the opening print for the year which was at 10786. As long as this market remains trading above 11404 yet above the opening print on a closing basis, then a year-end closing in this posture will warn that we could have a knee-jerk low in place this year.
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