The US Dollar Looks Good (On Paper)

 A funny thing happened while gold was on its merry way to $2,000.

 It dumped.

 Which is a convenient way of saying the powers-that-be are still a force to be reckoned with.

 This latest setback in precious metals means that - believe it or not - the S&P 500 has actually out-performed physical gold since March, 2009.

  

 

SPY vs Gold

 Where gold stocks are concerned, it's close enough to equal to call the comparison between SPY and GDX, "on par."

SPY vs GDX

 GDX was rescued by a trend line on Friday, but the bearish wedge that's almost three years in the making is staring gold bulls straight in the face. When the assault started on gold stocks in 2008, never once did the GDX venture this far outside the Bollinger Bands.

GDX

 The comparisons between SPY and the GDX have to be given serious consideration here. When the markets initially topped in 2007, the GDX ignored the warning signs as precious metals bulls - convinced the world as we know it was doomed - continued to drive up the prices of gold stocks. Five months later, gold stocks topped, and when the dust settled, the GDX had lost more, on a percentage basis, than the S&P 500. A lot more.

 And here we are ........

 Not quite four years later, but the comparisons are ominous. The S&P 500 topped almost five months ago and gold bugs once again didn't heed the warning signs .... and we've just suffered through a similar drop in gold stocks vs what took place in 2008.

SPY vs GDX Five Year Weekly

 What's that mean, exactly?

 It means that since March of 2008, anyone invested in GDX has made no headway .... Friday's close was within pennies of the highs reached in 2008.

 Well, "no headway" isn't exactly correct .....

 You see, if you had bought GDX at the top in 2008 (and many a fool did), you'd have done so when the US dollar was at historical lows. So, if you've hung on through all of this, you can actually thank the US currency because your GDX would have made absolutely no gain except for the recent rise in the dollar.

 Go figure.

GDX and the US Dollar

Always perform your own due diligence. These are only my opinions.

Markets Recover

Always perform your own due diligence. These are only my opinions.

Week Begins with Huge Gap Down

 We would likely have to go back quite a while to find the last time the Futures gapped down 16.50 points to start the day's proceedings. It looks as though the dollar, precious metals and the markets are going to combine to create a whirlwind of reckless directional movement over the next while.

Always perform your own due diligence. These are only my opinions.

The US Dollar Extends its Middle Finger

 As strange as it may seem to gold bulls and the anti-dollar brigade, there is the possibility we just got one big, "SCREW YOU!" from the US Dollar.

 It's too early to tell, really, as this isn't the first time the dollar has confronted us with an ostentatious display of force over the past thirty months. Still, it may be a good time for bulls to fall back, regroup, and dig some trenches.

 Volatility bombs will surely fly in the coming months.

 Those fortunate enough to have sat out during the "trading wars" from three years ago are going to get a lesson in patience and perseverance.  

Always perform your own due diligence. These are only my opinions.

GDX

 The pattern posted for the GDX on September 6th remains valid, though anyone continuing to hold should be cognizant of what's been happening with the US dollar and the adverse effects this could have not only on the overall strength of the stock market, but also gold stocks. The GDX has risen substantially from the lows it printed in early August and it may not be a bad idea to lock in some profits.

 The GDX continues to out-perform the markets-at-large; nevertheless, the GDX can still look great against the S&P 500 even if both fall further from here. All that's required is that the GDX falls less. That may be a moral victory, but it won't be a financially profitable decision if such an event takes place.

Always perform your own due diligence. These are only my opinions.

The S&P 500

 The S&P Futures managed to rebound slightly after spending the majority of the day on a steep downward trajectory. The reversal did manage to set up a bullish impulse leg on the five minute chart, but with the way the markets are trading (volatility courtesy of your friendly neighbourhood HFT programmers) anything is possible. 

 Aside from a reversal at the pattern's midpoint on the five minute chart, a trend line from the August 9th lows on both the SPY and SPX also provided some timely support.

 The Spiders will need more than a bullish impulse leg on the five minute chart to regain positive momentum. The daily chart is threatening the midpoint on the daily pattern ... still well above the $111.25 outlined as "P," but coupled with a bearish flag, the bulls have a lot of work ahead of them to get the S&P 500 back on track. Any serious breach of the midpoint will likely be followed by another wave of selling.

Always perform your own due diligence. These are only my opinions.

Copper

 Copper is weakening and close to breaking down outside a bearish flag.

 While gold managed to break well above an upper trend line, copper failed at that point and is once again making its way back to the lower line of a bearish wedge.



Always perform your own due diligence. These are only my opinions.

Crashing Wall Street's Party

 Every now and again world events transpire (call it what you will) that send most methods of technical analysis back to the drawing board.

 
 How does the US Dollar rise over a two day period when the markets have risen? This generally gets catagorized into the TA's many caveats as the good old "exception-to-the-rule" clause ... or as we like to say:

 
 Always perform your own due diligence.

 
 We now live in a world where bad news is good and good news is bad. The spin doctors (something we commoner day traders are forced to deal with on an almost daily basis) have seen to it with each and every shift in the market place.

 Yesterday, for example, one might have thought the markets were finally (finally!) on their descending journey to hell, especially when considering the gap down "the boyz" magically performed Monday evening on the futures markets. The bulls who trade on margin may have been scared out of their collective drawers yesterday morning and covered, only to find there was a "do over" in progress as the day wore on.

 Alternatively, those bears looking to climb aboard the "short-the-market" train were handed a similar result and the bottom line was this:

 Wall Street 10, Traders 0.

 It was a route! The Boyz of Wall Street, fully equipped with their emotionless, algorythm trading programs (not to forget a little insider help from the powers-that-be ...... who are we kidding?) saw to that.

 Well, kids ...... chalk it up to, "Takin' care of business."

 We may not be invited to Wall Street's disgustingly lavish events, but we can always crash their parties.





 Always perform your own due diligence. These are only my opinions.

GDX September 6th

 The GDX slightly surpassed its midpoint on Friday (yellow coordinates). It could mark a potential turning point (reversal), though it remains healthy with two reachable targets. The overnight stock market futures had a fairly significant gap down to start the week's first session and it remains to be seen how this will affect gold stocks.

 Physical gold hit a new high in the overnight session and then tumbled close to $60 before recovering and is trading slightly higher than Friday's close as of 6:11 am EST.

Always perform your own due diligence. These are only my opinions.

Gold, Gold Stocks and the S&P500

Always perform your own due diligence. These are only my opinions.

GDXJ

 Is it finally time for gold juniors to recapture the interest of investors and speculators?

 Aside from the fact we just hit a pattern top on GDXJ, the answer seems to be a resounding, "Yes!" 

GDXJ

 GDXJ has finally started to out-perform the Venture.



 There's still some work left to do.

 

 Trend lines can ward off even the most bullish of bulls, and there are two standing in the way of GDXJ.

 There are also ruthless, manipulating Wall Street hedge funds looking to take advantage of those who are feint of heart.

 It will quite likely be the vultures on Wall Street buying up gold and gold stocks eventually.  

 Before they do, they'll want to scare as many people off as possible.

 They'll tell you it's nothing personal and strictly business, of course.

 That's what Wall Street does. 

 Bully people with other people's money, much of which comes from the American tax payer.

 Always perform your own due diligence. These are only my opinions.

When Small Patterns Fail

 Sometimes, breaking down a chart into smaller time frames provides clues to the daily direction. When patterns - no matter how small - fail to complete, it is often a sign we are in for a reversal.

 Admittedly, I missed this today until after-the-fact.

 First off, we had a nasty pre-market dump, found a bottom and reversed, as we so often do. The first bullish pattern of the day exceeded its target (green box).

 The second pattern (red box), however, fell slightly short of its intended target (it actually took two cracks at the "D"), and this set the table for the bears.

 Click on chart to expand 

Always perform your own due diligence. These are only my opinions.

The Market's Version of the Chicken and the Egg

 While the Nasdaq futures broke out to a pattern high yesterday, the ES futures failed in their mission to go along for the ride and confirm the latest version of, "The Running of the Bulls."

 Twice over the last two days the target was there for the taking and twice the ES couldn't move higher, despite what the Nasdaq had done. In fact, the ES minis couldn't even overtake the midpoint of a smaller pattern.

 Click on charts to expand

ES Futures (Ancillary Pattern)

Nasdaq Futures



ES Futures (Main Pattern)

 Generally, the S&P 500 has taken precedence over the Nasdaq. In this case, however, it would seem the Nasdaq front-ran the bank-laden S&P and left it confused and bedraggled.

 Faith in the US banking system is wavering.

 Is it any wonder we've opened a new argument about which came first?



Always perform your own due diligence. These are only my opinions.