Gold Hatred and a Long-Winded TA Screed

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We are operating to parameters on a would-be gold sector bottoming process, which has been a year+ long grind (‘grind is good’ as it absolutely ruins peoples’ nerves over time) and which by the way, everyone sees now as either a final bottom or a consolidation before the final and spirit destroying wipe out, depending on their Team’s hopes and aspirations (bull or bear).

About a year ago NFTRH projected two possibilities (within the context that it was only in the realm of potential) and they were a ‘W’ bottom or failing that (it promptly failed) an Inverted Head & Shoulders on the HUI. Today a new pattern has joined the IH&S and it is a Symmetrical Triangle, which would be a consolidation before the final crash.

Now the IH&S is seen by every jockey with a chart and it is obvious as it matures in preparation for a bullish breakout or a failure. Yes dear gold bugs, ‘would-be’ patterns do fail and HUI has failed to get above its neckline. But I also sense a growing belief that the Sym-Tri is firmly entrenched now as well, again, depending on the viewer’s ‘team’.

Silver became way over bought and way over loved nominally and in relation to gold into a July top. One-way bullish gurus were in control and the two way momentum wise guys flipped from DUST and JDST reco’s to NUGT and whatever the hell the hyper long ETF is for the juniors. It is hard to believe that was only 2 months ago.

Well yesterday I got an email from a reader who is a former Newmont engineering contractor, disgruntled Barrick investor and massively bearish player with a target for gold at $600/oz. I trust that with his confidence and convictions, he won’t mind that I reference him.

He also linked some analysis out there that you’ve probably seen with the themes being that the final big plunge in the miners is still to come off the current consolidation and another stating that both gold and oil are about to tank badly (NFTRH has by the way, been charting the break down in oil for some time now). This article makes the mistake of tying gold and oil together, as so many (wrongly) tend to do.

Anyway, more targets from my email buddy: USD to 85 (NFTRH has been bullish the USD for months now, and until recently felt pretty lonely in that regard) and the S&P 500 to 2200 (our target is actually 2192).

Back on the precious metals, we have followed their progress as they were dangerously over loved during the most recent geopolitical hype (when will the majority of people learn?… trick question; they won’t and that’s what makes the market great) and now we are following the progress of that dangerous condition’s unwinding. This has not coincidentally come in concert with Commitments of Traders data that had short-term bearish implications.

CoT is slightly improving, as is public opinion (it got over bullish on a short-term basis). I have no clue about whether the pattern on HUI is an IH&S (reversal) or Sym-Tri (continuation), whether silver is going to hold major support a 4th time (my preference was 3, with no need for a 4th try) or whether gold is going to break down from its little Sym-Tri or hold it and break upward in accordance with its big Sym-Tri. Here is what I am not… a guru, crystal ball gazer or alarmist headline maker. Here is what I am… a boring parameters adjuster with no need to get people on a ‘team’, but with a need to ferret out macro fundamentals every step of the way.

Look folks, here is the truth. A chartist can make a chart serve her views with just a simple choice of pattern or measurement tool. For instance, if I wanted to froth you up on silver I could use this linear scale chart and show you that if you just hang in there a little longer, the bottom will finally be in (the Andrews Fork says so!).


I have never used the above Andrews Fork on silver’s big picture because the lateral support zone is the arbiter. I recall jockeys using log charts to justify the HUI trend line support a couple hundred points before its 2013 bottom. Anyway, here’s the real linear view of silver.


Oh wait! There is an even better fork there!! Check that, please disregard chart #1 and go full bull right this minute! To show you the wide range of what people think they can predict by charts, the red fork above is actually projected from the same points as those on the first chart. Okay, so sweep that one under the rug and put in a new one. Ha ha ha…

Here’s the reality; silver is going to hold the support shelf from 2007 to 2010 and lead gold with an implication that it may never even see a test of its compelling support at 1000!


Here’s another reality; silver is going to fail to assume leadership and it will lead gold down to its support shelf (and Triangle measurement) at around 1000!

Anyway, I hope you see the silliness of it all. Human egos, pretense and outright stupidity all on display if you look closely enough. Not talking about you dear gold Über Bear reader, talking about TA’s who make grand statements. However my furry friend, your team is now populated by a much louder group of players and our overly simple plan has all along been to wait out the process of culling the manic bulls and cultivating the roaring bears. Your email and a plethora of bearish TA showing up are, taken at face value, bullish to me.

Beyond that I don’t actually know what is going to happen on the big picture. Neither does anyone else.