Gold Trading: Could Stock Market Drop Spur Next Metal Rally; Aug. ’19 Remains Decisive Time! Key Stocks Trigger Multi-Week Sell Signals…
07/20/19 Weekly Re-Lay: “Stock Indices spiked higher into mid-month and then reversed lower, coming on the heels of related (proxy) sell signals in NFLX on July 11/12. At the same time, the DJTA & Russell 2000 continued to vacillate in their weekly 21 High MACs – as those channels flatten and prepare to reverse lower.
That increases the likelihood for a multi-week, ‘c’ wave decline in those indices even as the DJIA, SP 500 & NQ-100 enter the time when an initial multi-week decline becomes more likely…
Stock Indices rallied into mid-month, peaking on July 15 and reversing lower. That fulfilled intra-month uptrends and related daily & weekly cycles, ushering in a new correction. The Nasdaq 100 tested and held monthly resistance, while rallying into mid-month, the textbook scenario for an intra-month uptrend and its culmination.
The ESU & NQU contracts generated weekly 2 Close Reversal sell signals, reinforcing these potential peaks. In the case of the S+P, that is likely to spur a quick drop to ~2920.0/ESU – where the latest two weekly HLSlevels converge with the ascending weekly 21 High MAC.
Other indexes have also seen pivotal action with the Transports spiking higher into July 16 and fulfilling a 19 – 22 day low-low-low-(high) Cycle Progression (that projects a subsequent daily peak in early-August). Both the Transports and Russell 2000 continue to trace out weekly 21 MAC action that is indicative of a ‘b’ wave peak and start of ‘c’ wave decline. Proxy stocks gave early signals…
NFLX provided a convincing sell signal on July 11 (~379.5) after perpetuating a 9-week/~2-month low-high-high-(high) Cycle Progression. Once again (as it has done repeatedly since mid-2018), NFLX was acting as the canary in the coal mine – signaling the onset of a precarious period between mid-July and late-Aug.
It reinforced that sell signal on July 15 and then elevated it on the July 19 weekly close.
Weekly & monthly index cycles project a multi-month low in late-Aug. (possibly Sept. ’19 in some indexes) with the majority of selling expected in the weeks immediately preceding that cycle low (similar to Dec. ’18 and related to the sell-off of Aug. 2015). In the DJIA, that would also fulfill an 11 – 12 week high (Oct. ’18) – low (Dec ’18) – low (Mar ’19) – low (Jun ’19) – (low; Aug 19 – 30) Cycle Progression.
Gold & Silver resumed their advances in line with their daily & weekly trend patterns and Gold’s weekly HLS indicator. After a two-week period of consolidation, metals were primed for a new rally to multi-month and multi-year highs.
They have just completed the day and week with the greatest synergy of cycles projecting a peak. It is also in the midst of the month with the greatest synergy of monthly cycles projecting a peak.
Since late-2018, the focus has been on July 2019 for a decisive multi-month peak (as part of a series of ascending highs leading into/through 2020).
After its Sept. 2011 peak, Gold plunged into Dec. ’11 and set a low that held for over a year. Once that was broken, Gold dropped into June ’13 – 18 months later – and set another 12 – 15 month low.
19 months after that, Gold set a subsequent high that would hold for 12 – 15 months – in Jan. ‘15. That was followed by successive highs, at 18-month intervals, in July ’16 and Jan. ’18. That ~18-month low-low-high-high-high Cycle Progression forecast the next (higher) peak for July 2019.
Since the Nov. ’18 lows, Gold & Silver have moved in a ~7-week rhythm that was discussed throughout 2Q ‘19 (including larger-magnitude moves of 14 & 21 weeks). The latest phase was in May 24 – 28 and produced a breakout higher in Gold after Silver & the XAU set interim lows at the beginning of the week. The most recent phase portended another high on July 15 – 22.
Honing that to a more specific time, Gold had the latest phase of a 6 trading-day short-term cycle (and the midpoint of the overriding 12 trading-day cycle) on July 19. That cycle is also an 8 calendar-day low (6/17) – high (6/25) – high (7/03) – high (7/11) – high (July 19) Cycle Progression.
Silver concurred with an 18 – 19 trading-day low (3/07/19) – low (4/04/19) – low (5/02/19) – low (5/28/19) – high (6/21/19) – high (July 17 – 19, ’19) Cycle Progression – fulfilled with the July 19 high.
Silver retested its late-Feb. high and could not give a weekly close above it, so some selling could materialize in the near term.
While this convergence of cycles has a higher potential for a 1 – 2 month peak, Gold & Silver are steadily confirming the outlook for a ~2-year bull market from late-2018 into late-2020 and are fulfilling expectations for each high to hold for shorter and shorter periods of time as that uptrend becomes more entrenched and more convincing.
So, price action needs to be the ultimate filter!
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The XAU remains the most bullish and is reinforcing its underlying strength and the cyclic potential to extend this rally into Aug. ’19. It pulled back to begin July, dropping precisely to support at 80.50 – 80.76/XAU where an intra-month bottom was projected. That allowed it to surge above 88.19, fulfilling the other intra-month objective and turning the monthly 21 MAC up.
In doing so, it also fulfilled two larger-magnitude objectives. First, it reached the 2 – 4 week upside target for this latest rally at ~91.00/XAU – where the monthly Raw SPR and Intra-month PLLR converge with other targets & resistance.
Second, on a larger-scale basis, it fulfilled the primary upside objective for a rally into July/Aug. ’19 – a retest of its Sept. ’17 & Jan. ’18 highs (92.95 – 93.38/XAU). That resistance would help determine when the XAU was most likely to reach its 1 – 2 year upside target (from the Sept. ’18 low) at ~110.00 (see March & April 2019 INSIIDE Tracks for related analysis).
As explained back then, a key determining factor would be whether the XAU was above or below ~90.00 in August ’19. Now that it has attacked this 6 – 12 month objective, the first thing the XAU needs to do – in order to hasten its rally to ~110.00 – is to give a weekly close above 93.35. It would not be surprising, however, to see some reactive selling materialize after this initial test of that level.”
Gold retests high and holds, extending multi-week consolidation in sync with monthly cycles. New 1 – 2 week correction likely before entering August ’19 cycles – when culminating surges are expected. Successive peaks expected to hold for shorter periods of time. Silver, Platinum & XAU concur, with rallies projected to last into/through Aug. ’19. XAU monthly trend signal is also crucial, with focus on Aug. 30.
Would a Stock Sell-off – into late-August ‘19 – Spur New Gold Rally?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.