Gold Remains Strong as Silver/XAU Project Selling into Early-Feb. Cycle Lows.
01/29/20 Weekly Re-Lay Alert – Gold, Silver, Platinum, Palladium, XAU & Jan./Mar. ’20 Cycles: “Convergence and divergence are often two key tools in technical and cyclical analysis. When multiple cycles or indicators converge and all argue for the same conclusion, it provides an additional technical tool that should override all others: Synergy.
Conversely, when related cycles or indicators are portending distinct results – it also reveals important clues. This instance involves similar cycles (a pair or trio of successive cycles in a particular market complex like metals) projecting dissimilar results.
In that case, the first cycle (Cycle #1) could produce the ultimate high in one metal, the penultimate high in another and even a [ante]penultimate** high in another.
(**…the high before the high before the ultimate high… or the high before the penultimate high… kinda like New Year’s Eve Eve.)
That divergence – when Cycle #2 and Cycle #3 produce new highs in some metals but lower highs in other ones – provides important clues and warning signs about what will likely follow the final peak. Often, it ushers in a more immediate and dynamic decline.
That is also what I frequently describe in various stock indexes when comparing them to a wooden roller coaster (the kind with multiple ‘cars’ in each ‘train’). In those cases, each car (or stock, or stock index) passes the summit at a different point in time.
And, in those cases, it is not until the final ‘car’ (stock/index) peaks and begins to reverse lower – that all the other ‘cars’ are liberated to enter a more accelerated decline… and to do that very quickly.
While stock indices are currently showing a little of this setup beginning in mid-Jan. (with a few possibly stretching that sequence into early-Feb.), it is the metals complex that could be producing a more significant divergence. That would only be the case, however, if price action (particularly the weekly trends) generate corroborating and validating signals in between.
What do I mean by that?
Monthly Cycles
2020 possesses at least three key cycles related to potential highs in Gold and related metals/indexes. The first is in Jan. ’20 and is primarily the convergence of weekly cycles – on Jan. 6 – 10, 2020.
The second is in March/April ’20 and is linked to a greater proportion of monthly cycles (with corresponding weekly cycles – like the 54 – 59 week cycle – used to hone the focus).
The third is in Sept./Oct. ’20 and is also expected to time a multi-month high.
With respect to the first two [reserved for subscribers]…
Silver’s peak was surrounded by a steady stream of topping/negative signals beginning with its weekly trend failing to turn up (as it peaked in accord with its weekly LHR indicator). Daily & weekly 21 MAC action quickly corroborated a reversal lower and the daily & weekly 21 MARCs pinpointed Jan. 27 as the time when bearish factors would intensify for Silver.
That was also when similar factors were forecast to trigger a second sharp drop in the XAU, projected to see a similar decline on Jan. 27/28 into early-Feb. as it did in early-Jan.
In that case, the XAU peaked a week before Gold & Silver (like a lead car in a rollercoaster train) – leading the topping process in metals just as it led the surge from its mid-Oct. ’19 low.
The XAU/gold stocks peaked on Dec. 31/Jan. 2.
Gold & Silver peaked on Jan. 8.
Copper & Platinum peaked on Jan. 16.
Palladium peaked on Jan. 23.
That is exactly the type of action described in the rollercoaster analogy and the type of divergent highs that reveal important clues for the immediate aftermath.
In this case, Silver & the XAU had the most bearish potential for the week of Jan. 27 – 31 (and Feb. 3 – 7), based on a myriad of indicators including the daily AND weekly 21 MARCs. It just took one more metal peaking…
Palladium was the final metal holding up into late-Jan. As soon as it peaked on Jan. 23 and triggered reversal signals on Jan. 24 & 27, the remaining supportive factor (for all the metals) evaporated.
What happened next?
The bottom dropped out (on a short-term basis) for Copper, Silver & the XAU.
So what does that mean for future cycles?
Platinum had a powerful convergence of weekly cycles, led by its 17 – 19 week Cycle Progression, forecasting a rally into Jan. ’20 and a 2 – 4 week (or longer) peak at that time. While setting that peak (Jan. 15/16), Platinum reinforced another convergence of weekly cycles in March ’20.
A peak in the first half of March ‘20 would already arrive 180 degrees (~6 months) from its early-Sept. ’19 peak and 270 degrees (~9 months) from its early-June ’19 low. It would now also fulfill a ~2-month/~60-degree low (mid-Nov.) – high (mid-Jan.) – (high; mid-Mar.) Cycle Progression – targeted for mid-March ’20.
(The intervening mid-Dec. high creates a corresponding & corroborating ~30-degree/day cycle that could be perpetuated in mid-Feb.)
As long as the weekly trends do not turn down in Gold & Platinum, they are still expected to set higher highs in March/April ’20. That is also possible in the XAU but remains a lower probability for Silver… That is why Silver was projected to see a second sell-off into early-Feb.
Silver has set an intermediate low every 9 weeks (~2 months) since Nov. ’18 and the next phase projects a low for Feb. 3 – 7… The XAU rebounded into Jan. 27, fulfilling daily cycles and the daily 21 High MAC setup as well as the daily LHR and weekly resistance while setting the stage for a likely drop into early-to-mid-Feb.
The early-Jan. peak reinforces the focus on [reserved for subscribers]…”
Gold, Silver & XAU are in corrective phases that could spur another round of selling in early-Feb. – when Silver & XAU should usher in intermediate low. Gold’s monthly LHR indicator continues to project overall rally into higher high in March 2020.
What Would Higher Highs in March Mean for Late-2020?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.