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Welcome back to the first issue after the summer break.
In the course of another deflationary down-wave, the precious metals incl. precious-metal stocks have newly gathered enormous pace. Consolidation patterns were left downwards these days while some important supports broke. We have to keep on gearing for these markets being to be tackled only from the short-side in the medium term. “Sell the rallies”, remains the trading strategy till October 2015!
Today, predominantly I’d like to go into the impacts and consequences of the last dam breaks in gold and the gold miners. These most recent developments help us to refine/adjust respectively to confirm the bear market lows according to price and time that we have worked out so far in our issues:
In memory and for looking up constantly the previously worked out bear market low terms/spaces inclusive the appropriate analyses:
Annoying Gold – issue 05/10/2015 – the expected bear market low is timed on October 2015, give + 1 to 2 months. The bear low is supposed to reach the 1000$. Important interim targets: 1130$ (worked off on Friday), 1100$ and 1035$.
Gold miners – the piece in the puzzle – issue 03/29/2015 – the probable bear market low in the HUI, the NYSE Arca Gold BUGS Index, is terminated to June through October 2015. The bear market low is most likely to be marked within the 100-105 point range. With a 20% of probability, the bottom will be between 66 and 72 index points.
Platinum targets 748$ now – issue 03/01/2015 – the expected bear market low is supposed to be achieved at the latest till March 2016, give minus 1, 2 months.
Crude Oil outlook 2015 – issue 01/25/2015 – the calculated bear market low should technically be brought in during 4Q/2015, with less probability at the latest in 1Q/2016.
Biting November heart-shot to oil, copper, silver – issue 11/30/2014 – Copper is expected to bottom in Nov/Dec 2015 and silver is likely to be bottoming out in late summer/fall 2015.
Let’s start today with the gold miners: The NYSE Arca Gold BUGS Index, better known as HUI, comprises the stocks of international gold manufacturers. The weighting of the index occurs according to the market capitalization picturing the value development of the gold stocks listed in the New York Stock Exchange, NYSE Amex and NASDAQ.
In the free GUNNER24 Forecasts „Gold miners – the piece in the puzzle“ – issue 03/29/2015 I committed myself to the 100-105 index points to be reached compellingly at the Downtarget Angle, namely some day between June and October 2015:
Then it was highly likely that gold stocks will follow further their yearly main resistance at least till July 2015, which is the 5th double arc within ruling 20 Candle GUNNER24 Down Setup starting at final year 2000-bear lows. Above you see the chart section with the 5th double arc main resistance as presented on 03/29/2015 within the free GUNNER24 Forecasts. The complete overlay of the 20 Candle GUNNER24 Up Setup with the monthly resistance of the 5th double arc, functioning since 2011, is also found in free GUNNER24 Forecasts 03/29/2015.
Well, this double arc resistance is still pressing the HUI lower and lower! Below now the current state of HUI in proportion to the 5th double arc main resistance:
Now, the HUI is trading within the lines of the 5th double arc resistance obviously being pressed down more and more, stronger and stronger by this arc resistance. June lost a GUNNER24 Support Diagonal finally = new sell signal besides closing narrowly (149.74) below the “round” 150 magnet. June 2015 was clearly a downtrend month with its high at opening and low near closing. The loss of the “round” 150 mark and the new sell signal in the monthly chart now finally activated achieving the next lower and extremely important Gann Magnet = 100. The 100 will be reached within this bear!
The downwards influence of the 5th double arc to the index – I’m committing myself definitely – is going to continue at least until October 2015. The likely final bear low cannot come in before that month.
==> The current July candle is taking action now exactly at the end of the important monthly 20 candle up setup. Thereby and since the factor time is signaling/determining so, July may bring a downwards exhaustion. Hence, if July still reaches/works off the 100, the first important tradable bear low of the HUI will be brought in there – possibly. In succession – if July really works off the 100 – a rebound up to the upper line of the 5th (130-135) will be likely to start before from there another hefty sell-off wave should begin, bottoming out then below the 100-July lows (95 or so). For this most probable scenario, watch the purple forecast.
==> If July is not able to reach the 105-100 bouncing the market from anywhere above the 105-100 upwards, likewise just the upper line of the 5th will be headed for, afterwards it will go down into the October-2015 low till the 95 will be reached.
==> Only a weekly close below the 95 will activate the 66-72 area for the bear low.
==> If only just one week between August and mid-October 2015 closes below the 95, the 66-71 will be the final bear low are. Timeline for such a low will be then the last October or first November 2015 trading week.
A monthly close above the 5th double arc would be the sign that the bear will have bottomed finally having started a new multi-month upwards trend!
On Friday, gold attained new bear market lows reaching 1129.30 at the lows. It closed the week at 1132.30. If the 1130 support line falls finally – some huge strategic buy orders due to the Nov 2014 lows are lying there – it will go very fast into the next interim downtarget, the 1100$. I think for as early as July, the 1100$ are on working-off list of the FED continues squeezing down the precious metals wherever possible.
Above, you see – just for polishing up – my forecast at the moment of my last gold analysis, effective 05/10/2015:
==> From the 1187, gold was expected to fall into the 1*2 SupportAngle = 1035! The round 1000$ mark is not only important round W.D. Gann venue for gold, but at the same time extremely important GUNNER24 Support Magnet for the metal. That’s where the first square line support in the monthly GUNNER24 Up Setup takes course, starting at the low of the month of November 2008. As you know, the absolute bear low of the year 2008 was attained in October.
For me, it’s simply just logical that gold will reach and work off the round 1000$ at the latest in November, even more likely in October this year, reaching its 7 year low then and there and turning upwards from there:
If the 1000$ magnet does not succeed in being worked off until that period, then may God have mercy upon all the bulls. For: If gold turns upwards before (for instance from the 1050-1070) in order to test back subsequently the resistance of the 3rd double arc at about 1250-1350 within 2016, gold would have to keep on declining from this price level deeply into the year 2017 for working off the 2008 lows then, sometime in 2018. = 680$ is the minimum downtarget for this option. For this, watch the red-dotted-arrow scenario.
So, being permanent bulls, let’s hope that gold is now going to be able to test back the 1000$ successfully in order to start in succession a new bull market being supposed then to go higher than 2000$!
Well, let’s go now to the indeed compellingly necessary backtest of the round 1000$! Please, just focus to the breakout of the first square. It succeeded in September/October of the year 2009:
In my memo, for the only time at the monthly low of October 2009, the final breakout over the round 1000$ was tested back. From the chart-technical point of view, this is not a serious test of such an important mark/magnet. Actually, it was but a joke.
In chart-technical terms, breakouts have always got to be tested back to confirm them finally as successful. I think, logic requires the very first serious backtest of the 1000$ to occur now. If it does not during this strongly deflationary downtrend, when will it be expected to anyway?? Hmm! A serious backtest of the round 1000$ is simply compelling now, in my opinion!!
The round 1000$ is also a GUNNER24 Support Horizontal. Horizontals are valid respectively important forever. Thereby, eternally the 1000$ will have relevance for the gold price: If the 1000$ test happens as early as this year it will be good for all the bulls, because in that case a new bull market may start. After all, we have to work on the assumption that a very first test is always crowned with success. Yet if the 1000$ test does not occur before next year or the year after next, if it delays or if the 1000$ is headed for twice or even thrice, so keeping on convolving in the downtrend, the 1000$ will be likely to fall some day in the future…
Now to timing and pricing of the probable bear market lows:
Crucial importance for the development/forming of the lows is certainly in the 2nd double arc.
The lower line of the 2nd double arc intersected the time-axis at the year high 2015. Thereby, automatically the last important time line is lying there. At this important time line, at the attained year high 2015, the important 1*1 Gann Angle was tested back negatively at 1307.80 in January 2015. See the red arrow. Since then, gold has been falling again.
Currently, the Support Angle 1 (at 1138) is about to give up. I think, gold is already on its direct way towards the Support Angle 2. This one takes its course at 1095 for July 2015 and at 1100 for August. I suppose, not before reaching this angle, gold should be allowed to start a rebound of at least 2-4 weeks being able to test back the 1155…
Since the 1*1 Gann Angle was first broken in September 2014 being tested back negatively at the 2015 highs, sometime the 1*2 Support Angle will have to be reached. ==> Reaching the 1*2 Support Angle is the minimum downtarget for this bear market!
As gold has been falling since the mentioned important time line from then on being subject to the entire 2nd double arc in terms of time, this condition is supposed to last at least until the upper line of the 2nd double arc expires according to time!
==> The upper line of the 2nd double arc intersects the time axis in October 2015!
==> The 1*2 Support Angle takes its course at 1035 for October 2015. Thus, we have worked out the minimum price target of this bear.
==> As however worked out above, working off the 1000$ till October 2015 is much, much more logical as the final bear low target…! The 1000$ is only 35$ below the 1*2 Support Angle after all, thereby they can be worked off in a very short time within a downwards exhaustion!
==> In unison, gold as well as the gold miners have now the October 2015 as their time target for the bear low probably the last trading week in October 2015, give +1 week for the bear lows.
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Be prepared!
Eduard Altmann
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