Jnug to Gold Oct 28th
So just as I thought, a huge huge GDP report. And no I am not one of those people that thinks that it was priced in or anticipated to be a good report. If you follow along with stock twits, almost everyone (sentiment) was thinking that there was no way we could get up to even the forecasted 2.5%. But 2.9% is really a surprise. Yet we went on a roller coaster throughout the day. Take a look at your own gold chart and compare it to the miners. Now tell me, do you really feel this is for the miners. I don’t. The miners ( Jnug ) was starting to tank not too long after open. The only thing that could be argued that saved it was the Hilary Clinton FBI emails announcement. Even though gold went up quite a bit for most of the day, miners did not make a higher high and closed weak. That, in my opinion is a big red flag. (It has been said over and over that the miners lead the price direction for gold ). Also, gold did drop back down to the 1275 level at the end of the day. I think follow through from the great GDP report is coming on Monday and Tuesday. On the weekly, we sure look like we are possibly making a . So obviously don’t allow yourselves to be biased. Monday and Tuesday will tell the tale.
My take is that we are just starting to move down into the 5th wave of our C correction. This does not mean that it can’t stop right at the and then turn up. But with a phony huge GDP jump, I think the pressure to gold miners will be too great until the FOMC rate decision comes and goes. I think we go down until that decision and then a nice hard rally for a couple weeks. Another thing that should be noted is that we haven’t really had that huge green day with follow though yet. As far as Technical indicators, I really like to use the Willaims R. I modified it to 13 and 18 because those two levels have been very reliable forecasting ‘the’ big moves. I also modified the . I will post charts with both modifications so you can check it out for yourself. When both are either oversold or overbought at those levels, it has been very reliable that a big move is near. So it currently shows that its still moving down with a little more to go. That’s just one of the many things I use.
It has been said that October is the most volatile month. I would say they are correct. It is very difficult to trade medium term with this kind of price action. However, if I am correct about this being the start of the 5th wave down, then this 4th wave fits perfectly I would say. It is a shallow correction, complicated, and has been an all around pain in the ass.
Cyclically speaking, we are getting near the end of the cycle. This also suggests that we need to move down further. I think for miners, the cycle will bottom on the 2nd. With no rate hike, Jnug and gold should pop. Then there is the election. I have this strange feeling that Trump will somehow win and then that will provide another much bigger pop. (just look at what happened today when this new email stuff came out). Then I think this next cycle will be stretched a bit due to the rate hike date on December 14th.
So that’s about it. Short and sweet this weekend. As always, if I have forgotten anything, then I will update it later.
Daily chart with modified RSI
I see bearish divergences. I am wondering if the non farms payroll and unemployment come in much better than expected to help Hilary for this election just like the GDP. I guess tomorrow will call it. Volume on the miners is getting lower on these up days. That's not a good sign. And all of my oscillators are showing over sold. Does not mean it cant go up a little more. I am leaning very short term bearish until the 8th with a huge swing low on very heavy volume.
Besides, the uptrend line which started with Oct 11 low has been holding well so far and, at the moment, the price is trying to breakout of the massive wedge. which takes its origin at Aug 11 high...
I agree that JNUG might drop a little more in the next week. I noticed that it took a LOT of XAUUSD movement to pull JNUG up, while a tiny drop smashed JNUG easily.
On the other hand: election is near and more and more uncertainty/angst builds: this is generally very good for gold!
Definitely a roller coaster coming up this week - I think of getting a JDST position from MO-THUR and then switch to JNUG until after the election.