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In the course of recent days – especially in the precious metal field – so many things happened I might mention and comment on today. But if I did so I would have to expect you to read something… and all the same I could only outline a genuine madhouse. And who does really understand the reasons why things happen in madhouses?
Anyway, the final truth has to be looked for and found in the charts, or it’s got to be hidden there.
Timing: With Friday gold and silver left their respective monthly consolidation areas that had formed after the all-time highs in 2011. Concretely that means this: After months of consolidation in the uptrend, on Friday we experienced the very first day – day # 1 – of something completely new – a shift as it were. There were so many sell signals in the monthly and weekly charts, it was incredible. Many GUNNER24 Sell signals enabled us to see how strong and hefty this new downswing is currently accelerating!
It’s a shift that is beaming gold and silver into new – lower – dimensions. The shift is going to be described as a bear-market by many analysts. Forget about that bullshit. According to W.D. Gann gold and silver are going to keep in the uptrend as long as they hold out above 1200 and 23.70 respectively. It would take monthly closings below those marks to confirm the situation of the markets in a downtrend, in terms of price and time.
The actual shift is striking every solid precious-metal investor fully in his kidneys. That hurts, not only regarding the account or the assets. So don’t expect the pain to come to an end next week already. The next price targets are now about 1400 for gold and 23.70 for silver. At least for silver we schedule there another long-entry on monthly basis. But let’s go into gold first.
Charts: The monthly 1 Candle GUNNER24 Down is optically showing how the horizontal support was left at 1535 on Friday:
The lower line of the first square lasted 20 months. The actual April candle is likely to close below the 1535 horizontal support. Thus the upper line of the first double arc is activated as the next downtarget. It passes at 1405 for July 2013.
What might happen now? In this setup, within the next two weeks gold is going to meet its most important Support Gann Angle. This one is passing at 1450 in April. We’ll have to remember that! It’s the first of some important magnets in these price surroundings.
If this Gann Angle is broken on weekly closing base the upper line of the first double arc will be headed for very quickly. Such a break would make the down-forces accelerate more subsequently targeting the upper line of the first double arc as early as in May 2013 (at about 1395 in that case).
Technically the 1450 is a very strong support area being able to lead to a back-test of the 1535. The 1535 are providing strong resistance now. It’s strong enough, so it must/can make it chart-technically necessary to test it again before the next hefty downleg to 1400 follows.
Here’s the monthly upwards setup we use to assess and forecast the uptrend that’s been running since 2008. I just marked the different “sell-signals” for the month of April 2013 so we can see which Gann magnets have led so far to the constantly accelerating price decline in April. Starting point – where the pain began – was the horizontal resistance at 1604. The rebound began slowly, finally leading to the smashing of the entire 3rd support double arc on Friday. April is going to deliver an important Gann Angle sell-signal.
The important 2*1 Gann Angle is going to be broken on monthly base. It’s a new hefty monthly sell-signal. Reaching the 1*1 is the official next downtarget now, according to the Gann Angle trading rules. That may occur, but it doesn’t have to. The longterm uptrend in gold is strong, extremely strong. Actually we have to work on the assumption that the final low of this correction will be formed much higher than the 1180 at the 1*1 Gann Angle. See in the chart above both horizontal supports, at about 1400 or 1300 for instance.
It’s very crass yet that last week Goldman Sachs declared this monthly 1*1 Angle – to be precise then 1200$ - as to be the target of this correction
Please pay attention to the center of the just passed square, to the next important and strongest magnet below the price: 1448, next Gann magnet in the monthly time frame around the 1450. As mentioned already a hefty rebound from it is possible. Remember!
Last Sunday I indicated how the Battle Royal would take place at the upper line of the 4th, at 1592. Gold did reach the upper line of the 4th at 1590.60 last Tuesday. I was very positive that the battle would turn in favor of the bulls being “finally” prepared to be broken upwards the accursed 4th…
But the different “sell”- or acceleration-signals on weekly base sketched in the chart above clarify how severe the week ran out then. Merely on Friday the four lowermost magnets broke like matches. The three lowermost Gann Magnets (1501/1491/1481) broke in the last three trading hours after the USA proclaimed DEFCON 3. Once dashed to the ground you’ll be driven over the edge…
The next weekly down-magnet the Support Angle # 2, is going to be headed for now. It’s at 1440 for next week, and for the week after next it’s at 1445. Both price marks are approximately corresponding with the 61.80% Fibonacci Retracement of the whole upmove of July 2010 to the all-time high in September 2011.
So we can identify two important Gann Magnets in the monthly and one natural Fibonacci Retracement as well as one important weekly Gann Angle in the weekly time frame situated at 1440-1450. Technically that’s a very strong support permitting at least a counter-reaction maximally up to the horizontal support at 1535 that was broken on Friday. But if the 1450 breaks on weekly closing base in the course of the coming weeks – we should work on that assumption – the 1395-1405 will be the next important target in the monthly GUNNER24 Setups.
It was 03/03/2013 when we last had a look at monthly silver, see above. In the absolutely worst case – if the super-strong support horizontal at 26.14 really falls – silver should reach the 1*1 Gann Angle at 24.20 in June 2013 before the silver bull-market marks an important low from there, starting a new powerful upleg.
Till Friday 20:00 hours the 26.14 persisted remarkably well, in spite of the heavy gold decline. Then it fell far below this massive horizontal support, without any resistance. Now the weekly close at 25.76 is confirming with a 90% of probability the reaching of the last bull-market support, the reaching of the 1*1 Gann Angle:
This one is running at 23.70 for April 2013 . It can’t be ruled out that silver is willing to head for it as early as this month. If the 1*1 is not worked off in April 2013 it will be during the next 2-3 months… It seems that gold will fight with the 1400-1380 when silver meets the 1*1 at 23.70!
According to the GUNNER24 and the W.D. Gann rules we’ll trade silver on the long-side as long as it is situated in the bullish half of the monthly 21 Candle GUNNER24 Up Setup. The original trend is much more likely to be continued than to break…!
Buy-limit MIT (marked if touched) is at 23.70$, monthly position, no stop loss. The order will be valid till the last trading day of April. Uptarget is for the moment the new reaching of the 2nd double arc (possible back-test) at 27.50.
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US Stock markets, S&P 500 - up to where on earth is it going?
Whereas for the precious metals all the dams are bursting, the Dow and the S&P 500 achieved again to mark new all-time highs. In a madhouse just everything is possible… Nevertheless, after a high flight always follows a fall. In the US markets we’ve been short on weekly base since the middle of March 2013: 1462 and 14500 respectively. Please pay also attention about this to our trades on our different performance sites:
http://www.gunner24.com/trading-performance-us-stock-markets/
The correspondent weekly setup signaled these short-engagements according to their resistances. But frequently the signals in the weekly time frame are overruled by the monthly time frame:
For many years we have forecast the monthly time frame in the S&P 500 with the first initial up impulse already that lasts three months, beginning at the absolute low of 2009. After the 3rd double arc had been taken upwards in January 2013, after a back-test during several months, in the monthly time frame the upwards target is the lower line of the 4th double arc. Whereas the weekly GUNNER24 Up Setup in the S&P 500 – as explained – forecast an interim correction, these weekly sell signals did not concern the monthly time frame at all. On the contrary: The actual April low is situated exactly on the 2*1 Gann Angle. It’s a strong April support at 1536!
From the 1536 and the 2*1 Gann Angle the market newly rebounded upwards. The 2*1 Angle was broken upwards in March 2013, you see, with the successful test in April 2013 at 1536 mutating to be a strong monthly support that is now setting the actual gradient angle of the uptrend in price and time. The weekly sell signal was overruled by the monthly behavior.
The next hurdle in the monthly time frame is the natural horizontal resistance at 1595 now. That’s where the center of the just passed squares is. But the 1595 are likely to represent only a resistance again that is supposed to lead barely to a stop or a small consolidation on daily base.
For I just observed something interesting, you see. Adding up the very first upleg that started in March 2009 at 666.79 and topped in April 2010 at 1219.80 with the important low of October 2011 we’ll get exactly 1627.78 index points as a possible target of the actual wave.
1219.80 – 666.79 = 553.01
553.01 + 1074.77 = 1627.78
And now comes the point. The natural resistance of the lower line of the 4th double arc is running exactly at 1628 for April 2013!!!
So the strongest upmagnet for this month is situated at 1628. After such a powerful up-wave it’s really offering itself that the market finally wants to top now being willing to rebound unambiguously from the strongest and most important monthly resistance. Into the bargain enter the seasonality aspects. The keyword is: “Sell in May and go away…”
Monthly 4th double arcs use to tend to force the markets into a new trend or often into a temporally prolonged or in terms of price into an extended and severe correction.
We’ll go short at 1627 MIT (market if touched), monthly position. I expect at least 1460 as the low of the pending correction and perhaps even 1345 as the main target of the imminent correction.
Be prepared!
Eduard Altmann
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