UPDATES ON GOLD and the BROAD STOCK MARKET (3:00 pm EDST)
Gold prices are now challenging our labeling of an old long-term 23-year in gold about to take a strong corrective decline to its final bottom (due later this year or next year). As I've been discussing in my recent blogs on gold (please refer to those for more detail), gold is either about to end an old 23-year cycle with a strong corrective drop or it has already ended its old 23-year cycle and started a new one with the "double-bottom" lows of $1616 and $1617 on Sept. 28, 2022 and Nov. 3, 2022, respectively. The difference between these two cycle labelings (old or new) is important. If gold is still in an old cycle, we expect a very bearish drop in price to begin anytime now as the cycle moves to its final bottom (which could go as low as $1000 by late this year or into next year). Alternatively, if gold started a new 23-year last year, the cycle would be VERY young and VERY bullish, and prices would be pointed up for many more years.
Looking at a three year chart of gold prices, one can clearly see a "TRIPLE-TOP" now forming in this metal, with the two previous tops being $2070 in Aug. 2020 and $2066 in March 2022. Today gold broke through resistance at $2000 and reached $2024. It is closing above $2000 (around $2020). This break above $2000 is a bullish sign; HOWEVER, there are reasons to think a reversal and downturn are imminent:
1) Triple-tops can be very bearish signals of an impending plunge in prices.
2) A sub-cycle correction is now due in gold's current medium-term cycle.
3) There is a potential "pivot point" for gold prices Monday - Wednesday this week, so gold could turn down in this time frame.
I think I'm going to raise the stop loss for my short position in gold to a break above $2070 and hold this short position for now. I am trying to avoid being "whip-sawed" out of our short trade, but traders who are more risk adverse may want to cover their short position on this close above $2000.
The broad stock market is correcting down a bit today as all three indices are encountering resistance in "congestion zones" close to their February highs (33,000 - 34,000 in the DOW, 4,000 - 4,200 in the S&P 500, and 11,500 - 12,270 in the NASDAQ). As I mentioned in my previous blog, there could also be some more "headwind" to a rally coming up later this week and then all through next week. We should remain alert and nimble and ready to sell our long position in this market if a significant top or correction appears imminent. In the meantime, we will continue to hold that long position.
Gold prices are now challenging our labeling of an old long-term 23-year in gold about to take a strong corrective decline to its final bottom (due later this year or next year). As I've been discussing in my recent blogs on gold (please refer to those for more detail), gold is either about to end an old 23-year cycle with a strong corrective drop or it has already ended its old 23-year cycle and started a new one with the "double-bottom" lows of $1616 and $1617 on Sept. 28, 2022 and Nov. 3, 2022, respectively. The difference between these two cycle labelings (old or new) is important. If gold is still in an old cycle, we expect a very bearish drop in price to begin anytime now as the cycle moves to its final bottom (which could go as low as $1000 by late this year or into next year). Alternatively, if gold started a new 23-year last year, the cycle would be VERY young and VERY bullish, and prices would be pointed up for many more years.
Looking at a three year chart of gold prices, one can clearly see a "TRIPLE-TOP" now forming in this metal, with the two previous tops being $2070 in Aug. 2020 and $2066 in March 2022. Today gold broke through resistance at $2000 and reached $2024. It is closing above $2000 (around $2020). This break above $2000 is a bullish sign; HOWEVER, there are reasons to think a reversal and downturn are imminent:
1) Triple-tops can be very bearish signals of an impending plunge in prices.
2) A sub-cycle correction is now due in gold's current medium-term cycle.
3) There is a potential "pivot point" for gold prices Monday - Wednesday this week, so gold could turn down in this time frame.
I think I'm going to raise the stop loss for my short position in gold to a break above $2070 and hold this short position for now. I am trying to avoid being "whip-sawed" out of our short trade, but traders who are more risk adverse may want to cover their short position on this close above $2000.
The broad stock market is correcting down a bit today as all three indices are encountering resistance in "congestion zones" close to their February highs (33,000 - 34,000 in the DOW, 4,000 - 4,200 in the S&P 500, and 11,500 - 12,270 in the NASDAQ). As I mentioned in my previous blog, there could also be some more "headwind" to a rally coming up later this week and then all through next week. We should remain alert and nimble and ready to sell our long position in this market if a significant top or correction appears imminent. In the meantime, we will continue to hold that long position.
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