Gold And GDX Intermediate Cycle Update

December 14, 2017

As you know, for Gold and the PM complex, I have been expecting a 5-6 month Intermediate Cycle Low (ICL) in the December timeframe and the Fed’s FMOC meeting seems to provide the catalyst on a number of occasions.

While more evidence is needed to confirm Gold’s 5-6 month Intermediate Cycle Low (ICL) is behind us, I did add three Mining stock positions today for a total of 5 positions moving forward.

A word of warning here is that markets love to retest major lows in the form of a “W” where sometime the 2nd low is higher and sometimes a dreaded undercut low. Because of the possibility of an undercut my stops are “manual” at this point as I don’t intend to lose my position unless I choose to.

For charts on the PM sector, please see today’s Trade Alert.

Both Gold and GDX had failed Trading Cycles this week and the failed TC in Gold signals it will be seeking out and Intermediate Cycle Low (ICL). We are now near the 5 month mark since the last ICL and while it is possible that we will see one more failed TC over the next month, this is not my expectation. based on my post below from last week. Next Wednesday is the FMOC meeting on interest rates and that may well be the catalyst for finding the next ICL as Gold has found major lows the last 4 times the Fed has raised rates.

https://surfcity.co/2017/12/03/gold-intermediate-cycle-update-14/

My 3rd and 4th charts are close up daily’s that show last week action and my short term cycle counts. My last four charts show you the latest COT reports and you can see that the Commercials have started to cover their short positions. While I do not consider COTs to be a timing tool in and of themselves, I do like to see a correlation develop when I am expecting an ICL

 

 

 

 

*********  

Surf City is a pseudonym for a 60-year-old retired Information Technology Executive and Software start-up Entrepreneur living near the beach in California.   He has been an active investor and trader since the mid-1980s. Analytical by nature, his sound investments over the years allowed him to retire at a relatively early age of 55. In addition to the standard Technical Analysis tools of Edwards and Magee, Surf is a disciple of Walter Bressert’s Cycle Methodology and Stan Weinstein’s Stage 4 Market analysis.  Surf combines these skills to develop his unique “Cycle Price Channels.”  Some call them “Surf’s ForkCycles.

Seventy-five percent of all gold in circulation has been extracted since 1910