PRS LIVE#1 I [HAVE] CONSIDERED ALL THE ROUTES
THIS IS A BREAK DOWN OF WHY I CHOSE THE "DARK HORSE" ROUTE TO BE THE FAVORITE.
1) First the red route, which is the 2009-2010 fractal and eliminated a while ago. In this this route, gold would have been rejected at all time highs and gone down already. Honestly, this was not ever considered seriously because of the way prices moved up without any real pullbacks. Once it pushed past 1930 and kept going, it was obvious this is not happening.
2) The green route is what I originally forecasted in PRS LIVE#1 version 2. This was forecasted based on the "average expected move" in this situation for gold in a bull market. It hasn't been completely eliminated, but has already missed the first move bc the correction never dipped under 1900 in spot or futures. Price/volume picture really doesn't say this is going to happen. That leaves really two choices.
3) The black route IS THE EXACT ROUTE OF 2011 BAR FOR BAR, DOLLAR FOR DOLLAR. This is different from a "fractal", which only has to be similar in a number of ways. For example, the red route in 2009-2010 is similar but 3:1, meaning it would only be the same if you view 2009-2010 in daily bars and current move in 8 hour bars, AND cap the current move at 1938. For 2011 move, I just traced it and lined it up. This is still very much in play for that very reason. If you took the 2011 route and squeeze it into 10-15% faster, THAT IS EXACTLY what price has been doing. I am "starting" to think this "maybe" the favorite, but I have other reasons why not.
4) The blue route is current forecast, the dark horse route I introduced a couple days ago that became and is still the favorite. This is the 1980 fractal. How so? Like 2011, it is about 15% slower than current move end-to-end (measured from the low at 1670). But it is also different in proportions. This means that the base and the spike are proportional in ratio but not %-wise moves. 1980 was much more massive. In order to be similar in % terms, we would be over 3000 right NOW, and we're not. However it is similar to the current moves if judged by comparing the "complete regression fractal" viewed from different angles because changing bar size makes the regression picture look different for each chart. This is to say that if viewed from 1-day and 2-day full of regression lines, you get a very similar result both times. NOT TRUE FOR 2011. Plus this 9 green day 1 black day is exact same for 1980. This illustrates the smoothness of the momentum and lack of selling that is convincing me of that this is the favorite. When I pull up PIVO on several time frames, volume trends say the move is half done at the most. The smoothness of the volume trends and the agreement of volume trends across multiple gold instruments (futures, spot, etf, etc...) forces the conclusion that if this moves up, it should follow the 1980 fractal due to:
a) momentum of price and,
b) momentum of momentum, meaning not just moving a certain direction but the even-ess and lack of counter-trend correction of said move and finally,
c) GC1!, GC2! XAUUSD (OANDA, XAUUSD (ICE/IDC), and GLD very seldom ALL AGREE in terms of bullishness over the intermediate horizon (20-days) out like they do right now.
>> I'm still thinking hard about this. First we won't really find out until end of NEXT WEEK, which is where the the moves really diverge in terms of price. What the 2011 route has going for it is the move HAS BEEN DOLLAR FOR DOLLAR, so this is also VERY VERY CONVINCING. Plus it requires a correction or pause in prices to allow gold to move higher. THIS ARGUMENT IS VERY STRONG IN TERMS OF PRICE ACTION. It's hard to say that this is SOMEHOW the one unique time that gold breaks a previous high and move 15% up without a stronger correction in price and time before moving higher. I am not against gold moving higher, I just think that based on historical price action it's VERY HARD TO SAY 2300 NEXT 2 WEEKS. I chose that anyway because my software projects that in volume and price, essentially a mathematical projection based on where we stand, period. So we will see if PRS can get this right, this would be so interesting if we really do take the blue route.
I will add comparison charts IFF I have time.
1) First the red route, which is the 2009-2010 fractal and eliminated a while ago. In this this route, gold would have been rejected at all time highs and gone down already. Honestly, this was not ever considered seriously because of the way prices moved up without any real pullbacks. Once it pushed past 1930 and kept going, it was obvious this is not happening.
2) The green route is what I originally forecasted in PRS LIVE#1 version 2. This was forecasted based on the "average expected move" in this situation for gold in a bull market. It hasn't been completely eliminated, but has already missed the first move bc the correction never dipped under 1900 in spot or futures. Price/volume picture really doesn't say this is going to happen. That leaves really two choices.
3) The black route IS THE EXACT ROUTE OF 2011 BAR FOR BAR, DOLLAR FOR DOLLAR. This is different from a "fractal", which only has to be similar in a number of ways. For example, the red route in 2009-2010 is similar but 3:1, meaning it would only be the same if you view 2009-2010 in daily bars and current move in 8 hour bars, AND cap the current move at 1938. For 2011 move, I just traced it and lined it up. This is still very much in play for that very reason. If you took the 2011 route and squeeze it into 10-15% faster, THAT IS EXACTLY what price has been doing. I am "starting" to think this "maybe" the favorite, but I have other reasons why not.
4) The blue route is current forecast, the dark horse route I introduced a couple days ago that became and is still the favorite. This is the 1980 fractal. How so? Like 2011, it is about 15% slower than current move end-to-end (measured from the low at 1670). But it is also different in proportions. This means that the base and the spike are proportional in ratio but not %-wise moves. 1980 was much more massive. In order to be similar in % terms, we would be over 3000 right NOW, and we're not. However it is similar to the current moves if judged by comparing the "complete regression fractal" viewed from different angles because changing bar size makes the regression picture look different for each chart. This is to say that if viewed from 1-day and 2-day full of regression lines, you get a very similar result both times. NOT TRUE FOR 2011. Plus this 9 green day 1 black day is exact same for 1980. This illustrates the smoothness of the momentum and lack of selling that is convincing me of that this is the favorite. When I pull up PIVO on several time frames, volume trends say the move is half done at the most. The smoothness of the volume trends and the agreement of volume trends across multiple gold instruments (futures, spot, etf, etc...) forces the conclusion that if this moves up, it should follow the 1980 fractal due to:
a) momentum of price and,
b) momentum of momentum, meaning not just moving a certain direction but the even-ess and lack of counter-trend correction of said move and finally,
c) GC1!, GC2! XAUUSD (OANDA, XAUUSD (ICE/IDC), and GLD very seldom ALL AGREE in terms of bullishness over the intermediate horizon (20-days) out like they do right now.
>> I'm still thinking hard about this. First we won't really find out until end of NEXT WEEK, which is where the the moves really diverge in terms of price. What the 2011 route has going for it is the move HAS BEEN DOLLAR FOR DOLLAR, so this is also VERY VERY CONVINCING. Plus it requires a correction or pause in prices to allow gold to move higher. THIS ARGUMENT IS VERY STRONG IN TERMS OF PRICE ACTION. It's hard to say that this is SOMEHOW the one unique time that gold breaks a previous high and move 15% up without a stronger correction in price and time before moving higher. I am not against gold moving higher, I just think that based on historical price action it's VERY HARD TO SAY 2300 NEXT 2 WEEKS. I chose that anyway because my software projects that in volume and price, essentially a mathematical projection based on where we stand, period. So we will see if PRS can get this right, this would be so interesting if we really do take the blue route.
I will add comparison charts IFF I have time.
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Okay, so this is 1-day view of the three regression charts 2020 vs 1980 vs 2011. 1980 wins hands down.
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So, this is a 2-day view. On short term (blues) we are actually closer to 2011. On intermediate term (the positions of red and black waves) 1980 wins hands down. Since we questioning the move 20 days out, intermediate term matters more.
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Here's 3-day:
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Here's 4-day, again 1980 wins hands down in 3- and 4-day bars. What you get from looking at these are:
1) There could be a longer move (in terms of time) then 1980 when adjusted for everything.
2) There should also be more volatility in between.
3) But we should have no problem reaching 2270.
1) There could be a longer move (in terms of time) then 1980 when adjusted for everything.
2) There should also be more volatility in between.
3) But we should have no problem reaching 2270.
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Futures volume comparison: 2020 vs 2011 (don't have history back to 1980). Does premium let you do that?
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I mean look at the explosion for current run. It's can't be the same going forward. That black/gray wave is off the chart probably above 18000 right now, blues 12000 and higher. Blues in 2011 had trouble staying above 4500.
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here is spot from IDC/ICE
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100K vs 14K (the blue wave marker), not even in the same zip code
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BUT HOLD ON A SECOND, WHAT ABOUT GLD?
Word on the street is that recent buying in the etf been driving prices up. Is this true? Are retail traders joining the chase? NOT YET! AND THAT'S BULLISH, TOO. HERE'S WHY:
Word on the street is that recent buying in the etf been driving prices up. Is this true? Are retail traders joining the chase? NOT YET! AND THAT'S BULLISH, TOO. HERE'S WHY:
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First, the futures and spot charts for volume were 6 hour bars. For GLD it is daily bars. What does it show? Well retail traders HAVE ONLY BEGUN TO CHASE judged by the blue and black waves being roughly comparable to 2011. Note that the black waves are lower than 2011 but the blue wave is actually higher. What does that mean?
That means that on short term buying 10 days or less, 2011 had more buyers. But 10-30 days, it is higher NOW. BUT really long term stuff 50 days higher, no where even close to 2011 with all longer waves 400K and higher.
That means that on short term buying 10 days or less, 2011 had more buyers. But 10-30 days, it is higher NOW. BUT really long term stuff 50 days higher, no where even close to 2011 with all longer waves 400K and higher.
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What I am trying to say is retail hasn't joined the club yet.
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NOTE, I DIDN'T USE OANDA for 2011 comparison bc the only began global expansion in 2011. Back then they were not as a big deal as they are today.
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Here is tactical trading guide from a few days ago, before I declared it the favorite. I only considered in to be a 1:3 dog at the time bc of historical price action. This point really bugs me bc gold just doesn't move THAT fast to and through a previous high. Even if it was last year, not to mention 9 years ago. And yet here we are trying to break 2K.
www.tradingview.com/...ARIO-TACTICAL-GUIDE/
www.tradingview.com/...ARIO-TACTICAL-GUIDE/
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hmm... the charts don't show up anymore? Sometimes they just appear as hyper links.
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Note: I wrote this piece primarily to show the real analysis I do before posting a certain idea. I don't do all the evidence charts post usually because it takes too long.
I do however understand that this 2300 call in next 10 trading days is very strange, and I have stated why above. Based on historical price action, gold does not break out on the first try. BUT IT JUST DID.
SO WHERE IS THE RETEST BEFORE IT MOVES UP? I CAN'T ANSWER THAT.
This projection is based on price regressions, fractals and volume adjusted oscillators which discounts the volume that doesn't matter (i.e. just because there's huge volume does not mean it's bullish and vice-versa).
I do however understand that this 2300 call in next 10 trading days is very strange, and I have stated why above. Based on historical price action, gold does not break out on the first try. BUT IT JUST DID.
SO WHERE IS THE RETEST BEFORE IT MOVES UP? I CAN'T ANSWER THAT.
This projection is based on price regressions, fractals and volume adjusted oscillators which discounts the volume that doesn't matter (i.e. just because there's huge volume does not mean it's bullish and vice-versa).
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Here is the derivative map:
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ONE LAST THING: THIS IS WHAT I MEANT BY INSTRUMENTS DISAGREEING:
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At 1670, the only instrument that really said that was the low was OANDA's spot ticker. ICE/ICD spot ticker is hinting at it but still very unsure. If you've followed me since the beginning, I used discuss whether spot or futures were driving prices and this is what I meant. You could tell through the instruments, where the buying or selling is coming from. Right now they are all buying.
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The PIVO quad-chart above was 4 hours. Here is a 16 hour chart on them all.
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MASSIVE BUYING. That type of buying doesn't "just die". The most bearish case ould be the the quadruple top I posted a while ago. Here it is:
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This one I drafted expecting "normal price action". But what is normal anymore?
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FRIDAY MORNING: Someone asked me if there are other alternatives possible. Look, EVERYTHING IS POSSIBLE. But based on historical price action and volume trends, what is likely? That's the point of analysis. Other moves MAY happen, but they need to first develop. Even the "impossible" March draw down to 1450 needed development. So until there is development for an alternative the two remaining scenarios are a strong favorite.
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I say that as combined probability vs all remaining possibilities. Here is a break down of the March crash to explain "development of price movements."
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WHAT IS A REGRESSION FRACTAL?
When you see those charts with all those lines. They are explaining what price is doing ON ALL POSSIBLE TIME FRAMES AS LIMITED BY BAR HISTORY. So context really does matter. The chart above is trying to illustrate that you can only get that 250 point move IN THAT SITUATION if the longer the trends weakened first.
The counter argument is this, and it's a terrible one: What about the massive move down after the massive spikes like 1980 and 2011? Well what about them? THEY HAPPENED AFTER MASSIVE SPIKES. In the March 2020 scenario you don't have that massive spike first so it the makes the question a terrible one. If you move 25% in the previous 3 weeks up, you CAN move 25% down in the following 2 weeks (staircase up, elevator down). Volatility works both ways.
When you see those charts with all those lines. They are explaining what price is doing ON ALL POSSIBLE TIME FRAMES AS LIMITED BY BAR HISTORY. So context really does matter. The chart above is trying to illustrate that you can only get that 250 point move IN THAT SITUATION if the longer the trends weakened first.
The counter argument is this, and it's a terrible one: What about the massive move down after the massive spikes like 1980 and 2011? Well what about them? THEY HAPPENED AFTER MASSIVE SPIKES. In the March 2020 scenario you don't have that massive spike first so it the makes the question a terrible one. If you move 25% in the previous 3 weeks up, you CAN move 25% down in the following 2 weeks (staircase up, elevator down). Volatility works both ways.
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HERE IS THE OUT LOOK FOR THE NEXT 9 TRADING DAYS
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84.80 TYPO.
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FORGOT TO SAY: IN 2011 THE LAST 20% CAME AGAINST A RISING DX. IN 1980 THE LAST 40% CAME AGAINST A RISING DX.
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SO TO SAY 2300 HERE WOULD ONLY BE 16% FOR XAUUSD. WITH BETTER TECHNICALS THAN 2011 HANDS DOWN.
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again same chart as above with minor corrections
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