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Replies to post #40234 on GOLDBUGS AMEX Goldbugs Index (GOLD)
12/19/20 6:25 PM
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 bullish currently with underlying support beginning at 14424.
On the weekly level, the last important low was established the week of November 23rd at 12915, which was down 3 weeks from the high made back during the week of November 2nd. So far, this week is trading within last week's range of 14979 to 13526. Nevertheless, the market is still trading upward more toward resistance than support. A closing beneath last week's low would be a technical signal for a correction to retest support.
Looking at this from a broader perspective, this last rally into the week of December 14th reaching 14979 failed to exceed the previous high of 15621 made back during the week of November 2nd. That rally amounted to only three typical reaction weeks. Right now, the market is above momentum on our weekly models hinting this is still bullish for now. Looking at this from a wider perspective, this market has been trading up for the past 7 weeks overall.
Interestingly, the S&P 500 Day Futures has been in a bullish phase for the past 8 months since the low established back in March.
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. Immediately, the market is trading within last month's trading range in a neutral position.
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 14490. 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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