XAU Surging After Diverging (from HUI)
XAU Surging After Diverging (from HUI);
Expected 1 – 2 Week Rally Underway…
Gold & Silver Corroborate; Bottom Forming!
12/13/17 Weekly Re-Lay Alert – Transition Year Culminating:
“In January 2017, INSIIDE Track reiterated the big picture scenario that had 2017 expected to be a major transition year. In many respects, that has proven to be the case. In doing so, it corroborates the outlook for 2018 – and 2018 – 2021 – when this transition should shift into more definitive trends, moves & events.
One of the primary reasons for the 2017 distinction (as a transition year) was the 40-Year Cycle. In particular, it was the 40-Year Cycle of Currency Wars that prompted this conclusion.
That cycle has been detailed throughout the past decade and has timed major economic/currency battles on a consistent 40-year basis. Each time – since the 1770’s – this has included a conflict between paper (fiat) and hard currency (gold/silver).
On a multi-year basis, Gold was expected to see its first substantial advance (and subsequent decline) in 2016… The Golden Year. That was projected to signal a multi-year bottom in Gold. Following the fulfillment of that analysis, 2017 was projected to see the early stages of a larger-degree advance – with a series of diminishing rallies & pullbacks.
Following the multi-quarter ‘1’ wave advance & ‘2’ wave pullback of 2016, Gold was expected to see a multi-month ‘1’ wave advance & ‘2’ wave pullback – leading into a mid-2017 low. (Those lesser-degree waves would be the building blocks of a larger-degree ‘3’ or ‘C’ wave advance.)
That mid-2017 low was projected to lead to a multi-week ‘1’ wave advance & ‘2’ wave pullback – leading into a Sept. 2017 low (later adjusted to Oct. 2017 low).
And that sequence could even see a lesser-degree advance & pullback – all part & parcel of a bottoming sequence.** (All the while, Gold stocks – the XAU Index – signaled an early-year peak in early-Feb. 2017 and were not expected to set their next multi-quarter bottom until Nov. or Dec. 2017.)
Those lesser-degree ‘1-2’ & ‘1-2’ wave sequences were another manifestation of the transition period expected in 2017 – when Gold was expected to be building a base (but not moving substantially in either direction) for most of 2017.
(**Gold followed this general outline until early-Dec., when it broke below its previous low of early-Oct. That ushered in the assurance of a lower low, instead of a higher low, in relationship to the early-Oct. low. While violating that part of the 2017 outlook, Gold reinforced the expectation for a transition year in 2017.)
At the same time, the Dollar had been forecast – since 2014 & 2015 – to see an overall advance into late-2016/early-2017 before reversing lower. That was fulfilled with the early-2017 Dollar peak and ushered in a transition year, in 2017, when the Dollar would see an initial decline & ensuing bounce (a type of ‘1’ & ‘2’ wave to the downside).
The Dollar has adhered to that outlook and is expected to signal/confirm a ‘3’ or ‘c’ leg down in early-2018. That leg is still expected to last into 2Q 2018 (ideally May 2018) – when a bottom is more likely.
From a market correlation standpoint, that breakdown – when the Dollar confirms a ‘3’ or ‘c’ leg down – is when other markets (Gold & Silver, Stock Indices) are most likely to pay closer attention and potentially react to the Dollar’s movement. Until then, they are more likely to follow their own independent factors & fundamentals – with relatively little consideration of the Dollar’s value.
Commodities & Oil markets were also expected to go through a transition in 2017, seeing a secondary ‘1-2’ wave sequence expected to transition to a more bullish structure in 3Q 2017. All of that would be setting the stage for a steadily advancing bull market with its sights remaining on 2019 – when an accelerated rally is deemed most likely.
And Bonds & Notes (interest rates) were also expected to be transitioning in 2017, after peaking in sync with 80-year, 70-year & 40-year cycles in 2016.
The initial decline took place in 2016 and was expected to yield a 2017 ‘2’ wave rebound stretching into Sept. 2017. Following that, a lesser-degree ‘1-2’ wave decline & rebound – in Bonds & Notes – was/is expected to stretch into 2018.
Equity markets were also expected to be transitioning in 2017 – from a multi-year bull market into the initial stages of a new correction and sideways market. This has NOT yet occurred, which is another reason why price action needs to be the ultimate filter in validating these cyclic expectations.
Stock Indices have only been able to signal 2 – 4 week corrections and have not escalated those – leaving the underlying uptrend intact…
Gold & Silver rebounded after dropping into the first half of Dec. – the same time that Gold bottomed in 2015 & 2016. A low by/in mid-Dec. would perpetuate an annual/360-degree cycle and be in sync with weekly & monthly cycles in the XAU.
That potential was/is corroborated by diverse indicators including the weekly trend patterns, which often witness a spike low & subsequent multi-week bounce shortly after reversing down. The weekly HLS was also favoring a bottom around mid-Dec. Silver hit & held this level on Dec. 1 and Gold did the same on Dec. 8. Both of those tests project an ensuing 1 – 2 month low in the following weeks.
Gold dropped right to its weekly 21 Low MARC support… keeping the corresponding weekly 21 Low MAC heading higher…On a near-term basis, Gold & Silver could/should see a rebound into Dec. 15/18 – 30 & 60 degrees from the two previous highs (Nov. 17 & Oct. 16).
As for the bigger picture outlook, Gold & Silver remain in their monthly uptrends. At least in Gold, the mid-2017 low is still expected to hold and yield a new rally above the Sept. highs.
The XAU fulfilled its daily trend pattern by spiking to new lows and also fulfilled its 2 – 3 month outlook & 6 – 12 month outlook by dropping to new multi-month lows in Dec. 2017 – the latest phase of an 11 – 12 month low-low-low Cycle Progression. It dropped right to its weekly HLS at 75.77/XAU – the weekly extreme downside target for last week.
The recent low also created a 21 – 22 week high-low-(low) Cycle Progression originating from the early-Feb. intra-year peak. As stated in yesterday’s IT Update, the HUI (and GDX) spiked to a new low as the XAU held above its recent low – creating the kind of divergence that often precedes a 1 – 2 week rebound.
That was validated with today’s sharp rally – already taking the XAU above its weekly LHR (79.78). It needs a daily close above 80.66/XAU to turn the intra-month trend up and to project additional upside, beyond mid-month.”
Gold, Silver & XAU fulfilling multiple cycles, anticipating (at least) a 1 – 2 month bottom in this time frame (after Dec. 4, before Dec. 15 & ideally right around Dec. 8). XAU leading rebound after triggering a divergent buy signal on Dec. 12. Overall wave structure is constructive & could spur new multi-month advance.
See Weekly Re-Lay & INSIIDE Track for additional analysis and/or trading strategies.