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Welcome
to the Apex
Having
presented the following chart a few weeks ago made me
believe that the price of gold was ready for a big move up
after having broken out and pulling back to the apex of
the pink triangle in the beginning of February. The price
started to thrust from $400 to about $413, but crashed to
$395. After the $400 price mark was holding again as
strong support, the price rose for more than one week to
$430. A few days later the price crashed within hours from
$418 to $395, again shocking many gold investors and
analysts. Many are interpreting this price crash as a
double top, sideways movement, correction, or even the
beginning of a correction. Some are also feeling confirmed
at the moment having warned of a massive correction weeks
and months before.
The
following charts are to show that the recent price crash
was not a correction, or the beginning of a correction, but
the end of triangular times and the beginning of an
explosive thrust.
I
came to the conclusion that chart technique and
especially triangular price formations are an instrument
of the ESF, PPT, and AGC, or to put it differently:
Triangles are the result of intervention against a rising
gold price. If there is gold price interaction, then the
question arises if they have been successful in the past
years and how one could “see” it. If you want to see
it with your own eyes you have to be in the same room or
derive the manipulative input from the output, namely the
price itself.
I
have been showing perfectly shaped chart patterns on which
there seems to be no sign of price interaction; since the
price of gold has been moving correctly and clean within
the boundaries of triangles. This is only half true.
In
triangular times, the price pauses for a while to decide
whether the prior up- or downswing is to be continued or
to reverse. The duration of this consolidation time is the
objective and the result of an interference by the AGC. The
longer this consolidation period requires, the more
successful the intervention. Yet it seems natural that an
AGC also wants and tries to break the upward trend of gold
and initiate a correction with some shocking selling
pressure that crashes the price of gold impressively. In
the past, they have not been successful to stop the bull
market, but in my eyes they have succeeded in slowing
the process down, which seems to be more their realistic
objective rather than trying to enforce a trend change with
all means. A fundamentally correct and healthy bull market
cycle can NOT be stopped; "In the long-term, nothing
and nobody is stronger than the market!" They must
know about this fact. At least every gold investor should
believe in it, otherwise there would be no reason to
invest money in a market that is not allowed to move up
drastically. So, if the bull market in gold is
"unstoppable" in the long-term (and/or maybe
even desired at some point of time!), why should there be
intervention? Because it's all about TIMING. With the help
of triangular price formations it is possible (and easy)
to slow the process down. The true fear of an AGC is the
price of gold going ballistic showing the world that
something is wrong in (and with) the financial system. If
gold was rising from $250 to more than $1000 in the last 4
years, the media and public would be concerned why such an
obvious boom is occurring in golds. The fiat-story would
unfold slowly but surely. But if gold goes slowly from
$250 to $400 pausing in between with high volatility,
people would be more adverse in investing in gold and watch
it critically next to all the “dangerous prejudices”
gold is (still) facing:
For
example:
“The
danger of a central bank selling hundreds of tonnes into
the market once that the price
crashes for long.”
Recall that one can only sell when there is already a
buyer. One can not dump thousands of kilos gold into the
market and make the price crash, just like it is not
possible to go into the goldmarket and buy thousand of
kilos without influencing the price!
“Gold
is a “dead metal” which does not yield.”
Theoretically this is true in the long-term of a
fiat-money-system. Practically, gold is the best money
around these days! “Money” is everything I can make
(more) money with – and I can make a lot of money these
days with gold (i.e. as an underlying), even though the
gold price looks to us Europeans in Euro terms rather
toppy. For example: If gold bullion rises 1%, appropriate
gold stocks rise by 5-8%.
“The
Gold-bull is only a USD-bear which could be over any time.
The rise in gold was only because the USD was so weak.”
In
fact, if the gold price in USD starts to rise soon, it
shall rise faster than most currencies as well. The USD is
not the only price determinant; there are hundreds. It is
true that since the end of 2001 the USD has been the
dominant price influencer, but it should be clear that
this is not the only influencer that can take on the
dominance (from 2000 to 2001 the popular stock markets
were dominantly correlated negatively with gold; since
then it was the negative correlation with the Dollar that
was the major price determinant; some other potential
leaders: the oil price; economic depression; political
instability; wars; real inflation or deflation; public
confidence in fiat versus real money changes, and their
desire to find some “good money” out of which they can
“make (more) money;” central banks to hold on to their
gold reserves, get back loaned-out gold and/or pile up
their stocks in prudent anticipation/speculation that gold
might become an important role in the assets of countries
again; …).
The
main objective is to keep central banks, institutional
& private investors, hedge-, momentum-, growth-,…-Funds
as well as the masses out of the goldmarket, because it is
very, very, very tight. The true problems/worries are
“only” some few drops of the mass liquidity that is
out there in the financial system (thanks to the exponentially
rising tide of new fiat-money since 1971) to flow into the
tight and therefore HOT goldmarket. The market is as hot
as a volcanic stone that even some few drops of liquidity
falling on it would result in a loud (price) “explosion”
with quite some (dark) fog around it making the financial
system (and therefore the economic system and therefore
the entire system) to cough with tearing eyes.
What
would the media say then? What would the people think?
They might go into the internet and search for
"gold," and then see all the many sound
arguments of the gold-community and what else is wrong
with today's (monetary) system (“Its all about money”;
gold is the ultimate money; its
all about Gold!). If the masses are to see a strongly
rising gold price, by nature they would be curious in
getting to know why (because the Tech-Bubble of the 1990s
confirmed another time that most people are so desperate
with the fiat-money they are working for that they want to
make “better money” at the stock markets – a first
sign of the people getting tired of the “Its all about
money”-system. The standard of living is already sinking
drastically; the money everybody is working for is
of lesser value.
A
sharply rising gold price is a potentiall danger to the
system, which in turn legitimates to cap the price and
slowing the process down (i.e. giving time to people &
institutions like Welteke & Rothschild to get out of
the noose). Until now, the AGC had been very successful.
Some
people in the gold community see chart technique to be not
appropriate for the goldmarkets because the price will go
ballistic one time and no chart indicator could have
forecasted this strong rise or even tell the true price
objective, and therefore potentially give sell-signals
way too early or too late. This is true (until gold
starts to go ballistic).
Another
reason for me still using chart technique is the
assumption, that the AGC must use some sort of technique
to hold the price down. I believe that triangles are the
perfect modus operandi in winning time and slowing the gold boom down.
Please be aware that this is pure speculation and
subjective interpretations of stock market prices and it
is not possible to present proof – another great weapon
(or shield) of the AGC.
Every
rapid price rise pauses at certain price marks before
continuing the rise. Take the following chart of the
silver price as an example. In October 2003 the price
started to rise strongly. During the rise from $4.70 to
$8.40 there were at least 3 triangular price patterns. If
such a small(!) “natural triangle” appears, it is the
objective of the AGC to expand this triangle as far as
possible. (The reason why the silver triangles have not
been extended by the AGC is that silver was on an
“unstoppable thrust” making it “not economic” for
the AGC to cap the price).
The
first chart at the beginning showed, that the price of
gold was to thrust out of the pink triangle in the middle
of February 2004. This did not happen. Instead the price
crashed heavily from $418 to $395. Because the price
crashed within minutes and hours because of single(!)
selling activities (and therefore not many sellings making
it a true (slow) correction) made me believe watching
intradays everyday that this was an AGC-Attack, because on
that day for example gold was chart-technically meant to
rise sharply and strongly in a thrust. Typical for the
gold bull market, the price did not continue to fall (and
therefore convince investors to sell and/or not to buy).
Instead it found support right after the quick sell-off
and started to rise again to the upper leg of the triangle
as can be seen on the next chart:
Even though
the price of gold was ready to thrust in the middle of
February, this selling pressure forced gold to build this
red triangle. The selling was successful until the
beginning of March at $394. From there on, the price shot
unstoppable above $400. This behavior shows how much bull
gold bullion really is. It was not possible to start a
downward trend with the help of initial price rigging.
This is because gold is always building up bullish
triangular price formations which are completed with an
explosive thrust. Same with the chart above. The price
rigging was successful until the price was close to the
apex of the triangle, broke out to $405, pulled back to
the apex and started to thrust “unstoppable” to $420
and $430. At this price level is a natural resistance zone
at which the AGC was again capable to interact. Let me
make clear, that it seems “not economic” to stop the
goldprice from rising in a phase of strong upward
momentum. Too much munitions would be needed. Instead,
they are waiting for these natural consolidation phases at
certain price marks and extend the duration. One
“great” feature of triangles is, that the trading
volume diminishes until the apex is touched and the market
is forced to decide in which direction the price shall
move. So the objective is to interact at the end of a
triangle, because it is way more effective.
The
same happened last week when gold crashed fast from $423
to $396. Gold was about to take $430 as support and move
on to $455 and $480. The longer the triangle is extended,
the more nervous investors are becoming and start selling
and stop buying. The more investors have sold and the more
potential investors have been discouraged of entering, the
weaker the "unstoppable" rise will be. The
impressive(!) price crash from last week shocked
many. More, the thrust had been postponed. The job was
done. The result of their inroad pressure is the following
triangular price formation which had been prolonged to the
maximum now with all the prolonging characteristics of
triangles (more than 4 waves within the legs, breakout and
pullback – recall that a triangle can complete with a
thrust anytime after the 4th wave is over):
The
above Chart now shows, that the price crash was nothing
else than a pullback to the apex. The apex of the red
triangle of the other chart was at $396 as well. The
difference is time: 15th March until 15th April = 4 weeks
won! With the help of only 2 big interventions the thrust
was being postponed by 1 month!
I
believe that the above triangle is the "last
possible" triangle, meaning that it is not possible
anymore to extend it. The following chart shows why:
The
chart also shows that there had been 3 major price
marks at which the gold price was consolidating and
therefore pausing within a triangle: $325, $375 and $430.
Like Puplava, Sinclair, Murphy, Butler, Ackerman, Field,
Lips, Siebholz and Bocker, I do believe that the price of
gold naturally would not have paused that long at these
price marks and would have broken these strong resistances
faster. But with the help of astute and elaborate selling
actions at the right time forced gold to extend the waves
within the triangle.
Take
the first triangle as an example: In June 2002 gold was
bouncing off the $325 price mark (blue #1). Because this
is an important price mark, gold was naturally going down
to #2 before rising to #3 again (typical short
consolidation triangle like in the silver chart from
above). Now these 3 waves are a small triangle and a
triangle has ideally 4 waves. So the third wave was going
to the $325 again, before turning down in wave 4 again.
This last 4th wave was crucial and a definite
signal for the AGC. If the price stops at the blue line,
then the impulse movement would start (breakout to the
upside), which is "not economic" to stop. So
they saw this and interfered at the end of wave 3 and sold
heavily (and as well hoped that this would initiate an
impulse movement to the downside followed by many). Wave 4
breached the lower leg. The selling was not that effective
because gold was rising again sharply and tried to break
the upper red leg. The market has won, because it took
these prices as a bargain and started to buy confidently.
The next selling was more effective pushing gold down
heavily and some days later not letting gold above the
lower (blue) line. Because the breakout was always being
sold off, the price of gold was moving within the
boundaries of the shown triangle (upper leg=red; lower
leg=green).
The
consecutive green power uptrend line represents the
“Line of Default” or “Manipulation to the Max” or
to put it even more positive “The `long-term´ Market
Line” (because “in the long-term nothing and nobody is
stronger than the market). Every time the price within the
triangle comes closer to this line, it is more impossible
to stop gold from thrusting/discharging, because the
triangle had been extended to the maximum.
I
believe that the first triangle would have broken the $325
price mark after the 4th wave was completed
within the natural (blue) triangle and therefore only
after 2 months of consolidation. Instead, with the help of
timely and precise capping pressure the breakout was
prolonged to 6 months. When the price of gold reached the
green line, the triangle was extended to the max and
because the market wanted to go up, it was "not
economic" to hold the price down and it started to
rise strongly and unstoppable to the next resistance price
at $375 at which point the AGC was again able to influence
the market. Again, a triangle built up and extended the
breakout to 7 months. The breakout ("break #2) was
pushing slowly but surely above $380 and after having
taken $380 as support, the price exploded to $430, which
was the next resistance and consolidation price mark to
step in. Again, we are at the green power uptrend line at
the very moment and about to break this resistance zone
with the help of a prolonged and therefore compressed
triangular price formation which needs to unload the
pressure in a thrust.
At
the same time we are at the apex of a year long gold price
triangle:
Silver
(and many other commodities and triangles I have presented
so far at FSO) already showed us how heavily and explosive
a thrust out of year long triangle can be. The silver
chart from above showed a base triangle that built up for
quite some time before thrusting to the upside from $4.70
to $8.40. Let me state again, that it seems "not
economic" to suppress a price in an upward movement.
It is more effective to push the price into a year-long
triangle with artificial (but working) boundaries and save
some time. The price of silver skyrocketed the last months
and many are wondering if this price explosion was not a
bit unusual and unhealthy since gold was only rising
insignificantly. Chart-technically speaking, this price
development was very normal and healthy, because it was
the thrust out of a massive 15-year long triangle. This
triangle was building up to take $9.90 as strong support
for the long run. After support is taken, the initial
upward swing continues.
Chart
source:
www.sharelynx.com
The
CRB-Index is already thrusting out of a 23-year long
triangle since the end of 2002. In previous contributions
for Financial
Sense I
have shown major commodities that are already rising
sharply out of massive triangular cycles. That a thrust
can shoot above the first marked resistance price of a
triangle (i.e. 330 of the second triangle in 1981) shows
the first triangle of the CRB Index which started to
thrust after the USA started to become
“Rich-and-Nix-on” ("nix" = German for
"nothing") on the 15th of August
1971.
Chart
source:
www.sharelynx.com
A
shorter timeframed chart of the CRB shows, that since the
beginning of the 1980s, the CRB-Index had been moving
within triangular boundaries until the very end of the
last millennium. A sustainable breakout occurred as well
as a pullback to the apex in 2002. Since then, the CRB is
exploding in a thrust (again). See my first contribution
of the "Weekly Chart Thoughts" for FSO in the
archive-section to see that the price of gold as well had
been moving within the legs of a triangle since its price
explosion of the 1980s. These long-term triangles make me
believe that this new gold bull is way more stronger and
has much more pressure to unload than anytime before. The
fundamental framework confirms a potential explosive
thrust way above old highs for gold and all its other
handy peers.
The
following charts are to show that we have reached crucial
times and are on the edge. The title of my previous
article was "Gold
is now breaking free…". The breakout
was indeed successful; gold rose unstoppable day after day
from $400 to $430. Then, suddenly the breakout stopped and
turned into a pullback. Not every triangle requires a
pullback to the apex before finally being ready to thrust
(but about 60% do!). Right now we are at the apex - again.
A massive thrust everywhere in golds is about to occur
(recall that a thrust can also go to the downside).
The
HUI-Index
Chart
source:
www.sharelynx.com
Chart
source:
www.sharelynx.com
Chart
source:
www.sharelynx.com
Chart
source:
www.sharelynx.com
Chart
source:
www.sharelynx.com
Chart
source:
www.sharelynx.com
The
XAU-Index
Chart source:
www.sharelynx.com
Chart
source:
www.sharelynx.com
Chart
source:
www.sharelynx.com
The
USD-Index
On
March 23, I showed this chart of the USD, with a small
triangle (green) which was breaching the lower leg and
thus sending a sell signal.
This
next chart shows how the small green triangle was
successfully prolonged and even managed to thrust to the
upside.
What
makes me believe that the recent 2 thrusts are fake and
artificial is the fashion the USD is trading and behaving
intraday. The USD does not act and look bullish at all,
rather cramped and under against-the-trend buying pressure
(see intraday charts later).
The
following 2 charts are to show the long-term picture for
the USD. Whether the first or second USD-chart-annotations
are correct or not, is not that important. The conclusion
shall be: The USD is “at the edge,” too. And ready for
a sharp impulse movement.
Chart
source:
www.sharelynx.com
The
above chart shows the USD since the beginning of the 1980s
being captured in a triangle. It is not clear which are
the definite legs, but after having bounced off the 85
support zone and now pulling back to the direction of
middle (lower red) leg at about 91-94. The third lower leg
lies at around 95 depending when to be touched. Since
rebounding from the 85 price mark the last 4th
within the triangle was completed. The 5th wave
(impulse movement) can occur anytime and the recent try to
go upside might turn out to be only a try. A pullback to
the apex after a breakout is not always necessary.
The
next chart shows the USD within 2 possible triangular
scenarios which are yet not confirmed.
Chart
source:
www.sharelynx.com
The
following "short-term“ chart of the USD Index shows
that a massive Head & Shoulder price formation with a
triple top has established during the last 8 years. If the
neckline is drawn correctly, the USD is up for a
“classical pullback” to the neckline to confirm the
downward movement “a last time” if it does not hold.
The neckline lies somewhere between 90 and 94 index
points.
Take
the next few intraday charts of the USD-Index as
summarizing examples. I have been following the USD
movement closely and posted such charts with commentary
regularly during the day at the following internet site"
USD-Index:
Friday 2nd April - Tuesday 6th April
USD
=
Bear
à
extreme
weak thrusts:
So,
the USD Index thrusted to the upside at exactly 90 points
after heavy trading confirmed the apex of the (red)
triangle. The thrust turned out to be a fake because the
USD crashed fast beneath the 90 support.
On
Monday the USD found support at 89.4 and started to rise
without correction confidently towards the 90 resistance
and broke it rather easily. Gold is at its apex at the
moment, trading a bit beneath it at $398 at the moment.
The
question is: When will the Dollar start going down the 90
again, so that gold can start to thrust?
I
don't know, but maybe gold at some point will rise despite
a stable or even rising Dollar.
A
clue when the Dollar upswing is to end might give other
major currencies:
The
Euro-Index still looks bullish. The last triangle was
building up for about 1 year and in November 2003 the Euro
managed to break out after 4 waves. The breakout was
touching strong resistance in December and started to pull
back to the apex in the middle of February. It looks like
the pullback is not over yet and needs to touch the apex
at 117-119. After having done so, the Euro Index might be
ready for the thrust to the upside.
The
gold price in Euro looks bullish as well. The triangle is
about to be completed in a thrust. The recent rise might
turn out to be a breakout which will hold over the upper
leg for the first time. The pullback does not necessarily
have to be exactly at the apex, rather the upper leg. Just
like the Euro-Index, the Euro-goldprice had tested strong
resistance with the recent breakout. This was a first test
of significance. The thrust shall make it clear.
Please
click the link at the bottom of the page to see other
major currencies and where they might be heading the next
few hours before one can count on a start for gold.
Chart source:
www.sharelynx.com
Chart
source:
www.sharelynx.com
HAPPY
TRADING, GO GOLD & GATA!!!
Feel
free to send me your comments and how you feel about all
the triangles.
HAPPY
TRADING, GO GOLD & GATA!! |
