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Can Gold Be Trusted?
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Can Gold Be Trusted?

by The MoleJuly 13, 2017

As you know I have been tracking gold again recently for a variety of reasons. Its close correlation with movements in the USD/JPY are worth noting but it’s also exhibiting price behavior indicative of a possible low. So the obvious questions that needs to be addressed is whether or not a medium term low in gold may have been reached and if it makes sense to start accumulating long positions.

2017-07-13_gold_LT

And right off the gate I’m seeing a few problems. For one we do have a touch of the lower 100-day SMA and the formation of a spike low, but that Bollinger has absolutely zero value as it hasn’t been touched in a very long time. And even if the BB does represent genuine support – well, it’s starting to dip lower now and that greatly diminishes its technical value as it may just start leading price lower.

Further, gold is currently attempting to revert above a NLSL it breached a few sessions ago but thus far has failed to overcome it. And finally the weekly panel shows slice through what was supposed to be a support diagonal. Sure, this could just be a fake out move lower and I cannot rule that out. But with the 100-week SMA above us it’s equally possible that the current drive higher may just turn into a last kiss goodbye before she falls into the abyss.

2017-07-13_gold_usdjpy

And then there is this of course: the USD/JPY correlation which I’m plotting here relative to gold. As you can see the USD/JPY has been dropping (inverted blue line) but gold has suspiciously lagged behind. But let’s be objective – I may be completely off here and it’s possible that gold will catch up with the USD/JPY soon. So what we should be watching is what the USD/JPY does next. If it continues to drop (and thus rise on this inverted chart) then it will probably provide sufficient lift to keep the gold bears at bay. If it should start rising (and thus fall on this chart) then I would not want to be holding long positions in either gold or silver.

2017-07-13_USDCAD_watch

The USD/CAD has made it on my watch list today as it looks like sellers are reaching exhaustion and it may form at least an intermediate low. What irks me however is the weekly panel. The lower BB is starting to drop (and again has not been touched in ages) and there’s basically not technical support we could hang our hats on. So let’s keep watching this one for the next few days and then decide if it’s worth a small exploratory long position.

Campaign Updates

2017-07-13_AUDUSD_update

The AUD/USD has exploded and fortunately not in our faces. Who would have guessed that this one would turn into a 4R winner in less than a week? This will go quite some ways in hedging the small fortune I’m losing living in Europe while the Dollar is being manhandled by Mrs. Yellen. Anyway, my target range has been reached and I’m all out – if you’re still holding this one then you may want to do the same.

2017-07-13_copper_update

Copper on the move – we got lucky there and our trailing stop got almost tickled yesterday. I’m now moving it higher by a few ticks just below that recent spike low. I think this one has runner written all over it! Good times :-)

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About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • Mark Shinnick

    Well, still long TZA and awaiting some bit lower miners.

  • OzarkHillBilly

    Watching the FAZmobile myself, as a possible getaway vehicle, if it isn’t driven off a cliff, for the umpteenth time (of course that can be fun as well if properly prepared). Right now I think financials are partially in stall mode because of upcoming earnings, which may also be the boost needed to get the major indices to new highs. I’m still just waiting at this point.

  • OJuice

    I can’t trust /GC here. Putting it in the same category as /CL. Need more context as its showing some bi-polar behavior.

  • Mark Shinnick

    Ok, volatility nearing bounceable support.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    i’d lookup the 200 day bollinger as longer terms can help. no charts today. this ocean breeze is awesome!. 3 years is much too long to be away. -GG

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    once bitten..

  • BobbyLow

    Good stuff Mole. I’ve been tracking Gold and have also been watching the recent correlation between Gold and Long Term Bonds /ZB. Gold looks like it is getting closer to a buy but it’s not quite there yet by my lens. (Of course different time frames will offer different choices).

    I’m still on the short side via a small position in DGLD but I’ll flip it as soon as more evidence appears to favor the long side. One possibility is for Gold to run up prior to the next Fed Announcement on July 26th but in the mean time, we’ll see what price says. . .

  • Mark Shinnick

    Yes, long time.

  • Tomcat

    Once again we happen to be on the opposite side of Copper. I need some luck.

  • Yoda

    I have a lottery ticket in a long GDXJ right now, but I agree with you, gold stinks for the moment.
    I’d be much more comfortable with a long position after a flush below GC 1190.

  • Mark Shinnick

    Closed TZA, reached objective.

  • http://evilspeculator.com Sir Mole III

    Thanks Bobby – clearly when it all comes down to it the underlying force that drives it all is the Dollar. And that one continues to point down unfortunately. As I’ve been saying here for years, all that talk about the Fed hiking was complete horsewash and went out of the window the second some of the Fed’s economic measures started twitching. There will be no real interest rate hike in this decade and probably beyond. And the long term impact of that is clearly visible with home prices pushing way beyond inflated valuations during the original credit bubble. There will come the day when gold will be the buying opportunity of a lifetime but I don’t think that day is near yet.

  • http://evilspeculator.com Sir Mole III

    Aren’t you supposed to be on vacation?

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    bpgdm at 17. worth a shot. still..

  • Julie

    USO previous thread to watch strong support 9.26 Today 2nd test of 9.26 (actual 9.27) USO going up into it’s upper bol band and 34 ema.As stated previously watching USO on the 30 min chart. Goes below 9.26 and stays below for 30 min ….. I will blast it south

    Also watching CAT Yesterday a gravestone doji on a breakout.Support at 108.28 and daily 5 ema at 108.27 a break below and imo a nice short

    BAC yesterday took 1/2 off short current stop 24.70 target 24.00

    XLF A cup with handle pattern ?

    GOLD there was a three drives to the top pattern that completed in 1st week June
    JULIE

  • http://evilspeculator.com Sir Mole III

    See my latest tweet guys – the Russell 2000 is starting to trade on the CME as #RTY come Monday. Wohooo!!!

  • http://evilspeculator.com Sir Mole III
  • Julie

    MOLE Sorry Chief I need help with that Admission Do Not Know How and neither does my husband. Not of the computer generation . Will learn as this weekend our daughter will be home and will show me how. Will get it down Thanks Mole
    JULIE

  • BTrader

    its already trading since Monday.

  • OJuice

    The low volatility grind up from the open yesterday has shades of good times grind up. Breaking the <12 hr reversal patterns from the last 3 weeks. Purely observation.

  • ZigZag

    Volume is really low tho – apparently the /tf still trades ICE through sep 18 – all that low volume has to be split till then.

  • Mark Shinnick

    Yeah, stealing in slo motion scenes like this are sort of hypnotic.

  • ridingwaves
  • Mark Shinnick

    ..actually he was sleeping…and woke himself up. :)

  • Julie

    Next week OPEX … Usually bullish bias … Bulls SPX up thru 2454 resistance ,, My targets (1) 2463 – 2470 (2) 2485 where it will intersect with the upper trend line connecting the highs of April 26 – June 2 Our daughter is coming home this weekend and will show me how to post charts . I am sorry as my computer skills are limited.
    JULIE

  • ridingwaves

    http://stockcharts.com/h-sc/ui

    playing around with it won’t kill ya…..

  • Mark Shinnick

    Beats looking at/trading by smartphone :)

  • Mark Shinnick

    Bot sqqq, very tight.

  • Mark Shinnick

    ….moving up the stop, tight reign on this one.

  • Julie

    30 min chart a oositive divergence MACD 5,34,5 and currently above it’s signal line Would like to see a bullish candle closing above 30 min 8 ema. Check out the Daily Chart OBV NICE
    JULIE

  • Mark Shinnick

    Are you a buyer?

  • Julie

    SQQQ Not yet Go to http://www.stockta.com Support at 29.42 and 28.76 Getting close Also 60 min MACD 5,34,5 flattening and about to cross above it’s signal line 60 min 8 ema approx 29.95
    JULIE

  • http://evilspeculator.com Sir Mole III

    I posted a link for you a few days ago – check out jingproject.com.

  • Mark Shinnick

    Look into figuring out your own numbers, maybe never relying on someone else’s. Its your birthright as a trader. Raising stop again.

  • http://evilspeculator.com Sir Mole III

    See if I travel the market drops – if the GG travels the market goes up!

  • Julie

    Present 30 min candle looks like it will close above it.s 30 min 8 ema
    JULIE

  • Mark Shinnick

    Ok, so you use a time filter. Miners nearing predicted re-buy range.

  • ridingwaves
  • Julie

    29.95 (60 min 8 ema) and 30.12 are important. 30.12 will be above two trend lines and a minor resistance
    JULIE

  • Julie

    Ozark Billy On a previous thread you commented on $BKX Checkout BAC and BKX as BKX mirrors BAC I use BKX for confirmation when trading BAC
    JULIE

  • Acquired Assets

    NDX still has those head and shoulders I posted a couple of days ago. We are now just below the 61.8% retrace of the previous drop. In a market not as manipulated as equities (is there one) I would be fully short here. Unfortunately, for the last 8 years the big boys have delighted in setting up head and shoulders bear traps and then going to top tick the high and break the pattern. So a real decent chance we head up to 5910 for OPEX, putting in the B Wave of an ABC 4th Wave on the Naz. C Wave would take us to 5410 or 5270 (38.2 and 50% retrace of Wave 3).

    To be noted – WSJ said today that Draghi is likely to announce ECB tapering at Jackson Hole in August. Markets largely ignoring for now, but that won’t last

  • OzarkHillBilly

    You’re right, they are eerily similar. I’m guessing that’s what happens when you become a mega bank. The stocks you’ve mentioned recently should all be good candidates, provided the timing is right. Perhaps my best single stock short ever was CAT back when the previous bubble popped. But I typically prefer to work with the indices and their various derivatives for the time being.

  • Julie

    Something I would like to mention …. Those of you that trade SPX I always look at $XII (stockcharts.com) Why ? $XII is not traded and therefore not subject to shenagins and manipulation, $XII is the institutional index and I use SPY for volume
    JULIE

  • BobbyLow

    Jing should work. You also might want to try the Snip It Tool that’s probably already on your computer. Click on search at the bottom of your screen and type in snip it. Snip it should appear and give you the capability to capture and save whatever is on your screen.

  • Mark Shinnick

    Got a little tna, tight. Flat sqqq. Long miners a bit earlier.

  • ridingwaves

    just went to FEDEX, was spotting a low float bio symbol before and actually had the trade lined up to buy….decided to wait until I get back…

    too late….shot up 20% while gone for an hour…..moral of story, set the buy and stop and go to fedex….

    some nasty profit taking on some bio symbols that I own, overbought and ran too away from the 100sma

  • Julie

    TNA Candle addition yesterday and today WOW ! Some real movement
    JULIE

  • OJuice

    C, JPM, WFC all reporting pre-market tomorrow. Someone may have already mentioned this.

  • Mark Shinnick

    Yeah…if this thing decides to rock-n-roll could be better than the real thing…for a while anyway. :)

  • Julie

    Todays bounce 6 cents above the daily 21 ema @ 55.63 The low today 55 69. I prefer exp fib mov averages to the standard 20 – 50 etc I substitute 55 ema for 50
    JULIE

  • ridingwaves
  • Julie

    Mark TNA Daily chart 6 months insert the 144 ema … 144 is a fib number
    JULIE

  • Mark Shinnick

    Rode some yesterday at Santa Monica next to a fast undertow, ocean is so blessed.

  • Mark Shinnick

    You are suggesting a lighting rocket move.

  • OzarkHillBilly

    In case any of you naughty boys and girls are trading the ultra ETF’s, take note that some are splitting and reverse splitting next week.

    http://www.proshares.com/news/2017-6-27.html

  • Julie

    No The 144 ema as a support level on pullbacks
    JULIE

  • Mark Shinnick

    The might help give more context to the present range.

  • Julie

    Thanks OzarkHillyBilly
    JULIE

  • Julie

    UNP the big dog for the rails is triangulating . A good established lower uptrend line from end of March. A pullback to the uptrend line may buy
    JULIE

  • Julie

    GLD Oversold Daily MACD 5,34,5 turning up IMO needs a bullish close above 115.82 on this bounce
    JULIE

  • Julie

    My bad 115.93 not 115.82
    JULIE

  • Yoda

    When I saw the +4 signal on the zero yesterday, I thought this bull move is real and dips should be bought. In the past, strong kick-off zero signals such as the one of yesterday were indicative of a new bull rocket move. Whilst recency bias makes me siding with the bulls, I can’t stop wondering whether this is a giant bull trap for the following reasons:
    – Next week is opex and vix is already scraping the bottom. If Mrs. Market, as usual, does its best to drown option holders, there is so much put options against the tape that can be rendered useless. Downside protection does not appear to be very popular right now. But then again, markets are unpredictable.
    – we haven’t seen yet a strong advancing/decline candle on the daily. Usually those indicate the start of a bull move
    https://uploads.disquscdn.com/images/d91018f584fb0d6e6d97b2d0eeb64fc0d23747a3fe7da99a16c3657bdc7a01f2.png
    – when we hit the recent low at ES 2402, I didn’t notice any capitulation of the bulls (no + divergence on the hourly zero, skew:vix not in bottom territory, Gartman indicating that he is now short the market)
    https://uploads.disquscdn.com/images/6bee2d03e1d9dd7b0a0b772cc3ea034f964be88da2ce3fc973922482ea3c8295.png
    – ES volume profile above current price is tiny

    In short, I expect the high to be breached but I wonder where is the juice to allow for the tape to keep pushing much higher.

  • Julie

    CAT No short yet. KO I like at 43.82 support matching the lower boundary of my Ichimoku Cloud
    JULIE

  • Julie

    Again my Ichimoku Cloud parameters are 8,21,55 in lieu of the standard 9,26,52
    JULIE

  • OzarkHillBilly

    I know what you’re saying. Being devil’s advocate, I’d bet a whole $2 that “they” keep it pumped through monthly OPEX and bank earnings, then let whatever happen. And in reality, I’m not even willing to bet $2 right now.

  • OJuice

    Good points. It is the middle of summer so it doesn’t have to be a new bull move to make new highs. Can just be a continuation of the consolidation we have since the beginning of June, with an upward bias for a couple weeks.

  • Julie

    OzarkHillBilly SPY current Max Pain is 243
    JULIE

  • Yoda

    Personally I am not keen to get overexposed before OPEX. I’d rather pass on the roller-coaster and wait for good entry opportunities on way oversold products. Right now I only have funny money at play, with very wide stops.

  • Julie

    Riding Waves In a post below you mentioned a bio stock Do you follow EXAS? Currently EXAS up into 39 resistance from 1st week June. I would like to see more up volume …. Might be worth a play on a pullback 35.32 — 35.92
    JULIE

  • Yoda

    Seasonality is indeed not in favor of a strong bull move in indices from the second half of July. I believe a clusterfuck of whipsaws for the next few weeks is a strong possibility.
    http://charts.equityclock.com/dow-jones-industrial-average-futures-dj-seasonal-chart
    http://charts.equityclock.com/nasdaq-100-futures-nd-seasonal-chart
    http://charts.equityclock.com/e-mini-sp-500-futures-es-seasonal-chart

    Take those seasonality charts with a grain of salt though

  • ridingwaves

    lets see if the banks throw a hiccup or party, FIRE bullishness was a big catalyst for bull move….that and tax plan that hasn’t appeared…..
    a touch of all time highs and drop would be quite interesting on sell side….buyers might be harder to find up here….

    summer volumes though make it hard to short along with earnings season

  • https://scottphillipstrading.com/trade-setup Scott Phillips

    Seasonality is a very very weak but real phenomenon. We talking 52:48 type edges.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • https://scottphillipstrading.com/trade-setup Scott Phillips

    I’m short from way higher, with 3/4 position banked and trailing a stop. Will flip to long if it breaks daily high.

    Objectively it’s a down trend which has weakened into a channel. Mole is right, there is squeeze potential here. Looking at the last few candles there is too much buying pressure to be entirely comfortable with a short position.

    https://uploads.disquscdn.com/images/899d4b6b61ae2307f6ffde92cc5e8f631b4f83bad63771d132998e9935fa5b93.png

  • https://scottphillipstrading.com/trade-setup Scott Phillips
  • OzarkHillBilly

    I’ve been dusting off some of my old links, and since I’ve been curious about the big banks lately, I revisited Chris Whalen’s site.

    Timely article: https://www.theinstitutionalriskanalyst.com/single-post/2017/07/13/Q2-2017-Bank-Earnings-Outlook

  • Tomcat

    It popped enough for me to make some coin, now time to re-establish the position…slowly