Gold in Giant Fake-Out: Real Bottom Comes in Early May
Gold and Silver (but more can be more profoundly seen in Gold) act on roughly 4-10 week cycles (with an average of a bottom hitting on about week 7-8 and lasting until about week 10). This environment is no different, however just like equities, we have seen some voracious snap-backs and pullbacks, but neither of which will alter the course of Gold and Silver. For those wondering "why isn't Gold going way up" - well - this is why.
Commercial shorts remain far too high and above 300,000. In new bull runs this value is significantly less. I suspect Gold and Silver in the coming week or so will break-down drastically, perhaps beginning as early as April. Our current low of 1450ish was far too short in duration in time and I suspect that this low was nothing more than a fake low and volume will increase in a week or so and bring Gold and Silver way down (note the RSI divergence as Gold has made temporary highs since 1450 -- also note the significantly lower volume in Gold during this fake "bull" run).
Investors should be very weary of any quick pump in Gold and Silver as the rallies will eventually breakdown to a new cycle low as I have indicated here. I suspect (as I have been saying for a number of weeks) that the "real" low in Gold and Silver will come in the first or second week of May. Interestingly, this will likely coincide with a final sell-off in equities that I have been talking about which should occur in the first week or two of April and last until late April.
So how low will Gold and Silver go? It is likely Gold will likely breakdown below 1450 and test the 1390-1400 level, while Silver will likely test the 9.5-10 range.
This type of "market behaviour" is where TA typically fails and one's knowledge of micro/macros come into play and often where investors get burned.
- zSplit
Important Facts
- Gold's temporary low of 1450 was too short in duration of time
- Volume remains significantly lower than normal (indicative of a fake-out to the upside); RSI divergence is present
- Current Gold cycle is skewed due to the equity bear market and "throwing people off"
- Commercial shorts remain much too high (over 310,000) for a "real" bull run to occur
- Equity bear market is not over thus further liquidation is inevitable
- Real bottom comes in early May for Gold and Silver
Commercial shorts remain far too high and above 300,000. In new bull runs this value is significantly less. I suspect Gold and Silver in the coming week or so will break-down drastically, perhaps beginning as early as April. Our current low of 1450ish was far too short in duration in time and I suspect that this low was nothing more than a fake low and volume will increase in a week or so and bring Gold and Silver way down (note the RSI divergence as Gold has made temporary highs since 1450 -- also note the significantly lower volume in Gold during this fake "bull" run).
Investors should be very weary of any quick pump in Gold and Silver as the rallies will eventually breakdown to a new cycle low as I have indicated here. I suspect (as I have been saying for a number of weeks) that the "real" low in Gold and Silver will come in the first or second week of May. Interestingly, this will likely coincide with a final sell-off in equities that I have been talking about which should occur in the first week or two of April and last until late April.
So how low will Gold and Silver go? It is likely Gold will likely breakdown below 1450 and test the 1390-1400 level, while Silver will likely test the 9.5-10 range.
This type of "market behaviour" is where TA typically fails and one's knowledge of micro/macros come into play and often where investors get burned.
- zSplit
Important Facts
- Gold's temporary low of 1450 was too short in duration of time
- Volume remains significantly lower than normal (indicative of a fake-out to the upside); RSI divergence is present
- Current Gold cycle is skewed due to the equity bear market and "throwing people off"
- Commercial shorts remain much too high (over 310,000) for a "real" bull run to occur
- Equity bear market is not over thus further liquidation is inevitable
- Real bottom comes in early May for Gold and Silver
Comment:
As forecasted (and the first one on here to hint about the overall picture), Gold has now fallen below 1600 with the highest volume in over 2 weeks since this fake rally began from hedge funds.
Probabilities are as follows:
- Down to 1500 = 100% chance
- Down to 1450 = 85% chance
- Below 1400 (1360-1390) = 70% chance
- Bottom: 1350-1390 (my thoughts are the 1390 level).
- zSplit
Probabilities are as follows:
- Down to 1500 = 100% chance
- Down to 1450 = 85% chance
- Below 1400 (1360-1390) = 70% chance
- Bottom: 1350-1390 (my thoughts are the 1390 level).
- zSplit
Gold has failed key support levels as I suggested in my idea. This is where trend analysis and commodity knowledge far outweighs trend analysis (which tricked the bulls).
We can expect Gold to likely plummet in April to 1400 or lower. I see the floor somewhere between 1360 and 1390.
We can expect Silver to plummet simultaneously and more voraciously. I see the floor somewhere between 9.5 and 10.
Cheers!