Gold Inverse Parabola Bounce

MH2The Federal Reserve chairman recently talked about reducing QE.  The bond market was looking a little toppy before he spoke, but now it looks like a huge bear market may be startingThe technical indicators on this chart are showing major sell signals. This type of situation doesn’t happen very often, and if the technical continue to deteriorate, a bond market recovery may not occur unless the Fed actually increases QE.   The head & shoulders top formation is signaling a decline is coming, to the lower channel.  Note the head & shoulders top pattern.  The target is about 130.
An institutional loss of confidence in the world’s largest market appears to be gaining a lot of momentum.

The gold market is certainly washed out, and hopefully ready to move higher.  Price bounces from downward parabolic moves (inverse parabolas) tend to be dramatic.
Once gold breaks free from the grip of this powerful inverse parabola, I am projecting a violent move to the $1580 area

Silver Buffs Generic Add2

 
Submitted by Morris Hubbartt:

US T-Bond Breakdown Chart

 

MH1

 

  • The Federal Reserve chairman recently talked about reducing QE.  The bond market was looking a little toppy before he spoke, but now it looks like a huge bear market may be starting.

 

  • The technical indicators on this chart are showing major sell signals. This type of situation doesn’t happen very often, and if the technical continue to deteriorate, a bond market recovery may not occur unless the Fed actually increases QE.

 

  • The head & shoulders top formation is signaling a decline is coming, to the lower channel.  Note the head & shoulders top pattern.  The target is about 130.

 

  • An institutional loss of confidence in the world’s largest market appears to be gaining a lot of momentum.

 

Gold Inverse Parabola Bounce Chart

 

MH2

 

  • Note the downward parabolic action identified on this chart. This type of meltdown usually ends with a sharp reversal day.

 

  • Something like that occurred last Friday, but I want to see more volume.

 

  • The gold market is certainly washed out, and hopefully ready to move higher.  Price bounces from downward parabolic moves (inverse parabolas) tend to be dramatic.

 

  • Once gold breaks free from the grip of this powerful inverse parabola, I am projecting a violent move to the $1580 area.  From there, unfortunately, new lows could occur, before a brand new bull phase gets underway.

 

HUI Versus S&P 500 Big Picture Chart

 

MH3

 

  • This chart shows monthly data for gold stocks and the S&P 500.

 

  • Gold stocks have taken it on the chin this year, but the stock market continues to tread water over the much longer term.

 

  • Note that the stock market has similar candlesticks to those of the 2000 top.  In the big picture, the S&P 500 is massively overbought.

 

  • My recommendation is to exit the general stock market and buy gold stocks.

HUI (Gold Stock Index) Tuxedo Tails Chart

 

MH4

 

  • This ratio chart shows the performance of gold stocks against gold.

 

  • Price movements in these stocks tend be extreme at the end of declines.

 

  • Long tail candlesticks often mark the end of such bearish trends.  Gold stocks are hopefully getting dressed in long-tailed tuxedos now, preparing for a great new bull market!

 

GDX Fuel Cell Volume Chart

 

MH5

 

  • One of my most reliable indicators is the “Fuel Cell Indicator” (FCI).  The FCI is triggered after a long decline comes to an end, with explosive upside volume.

 

  • That is exactly what occurred last Friday.

 

  • FCI signals from similar levels in the past have been followed by solid moves to the upside.

 

  • My intermediate term target for GDX is $31.

 

Silver Developing Wedge Chart

 

MH6

 

  • An enormous bullish wedge pattern may be forming on this weekly chart.

 

  • I am optimistic that this pattern will fully develop, because there is substantial support at the current price level.

 

  • I am projecting an intermediate term bounce to $25 from here.

 

  • I like silver more than gold at this point in time.  If the economy declines and QE is increased, silver should follow gold to the upside.  If the economy really improves, industrial demand for silver should increase.  Focus on the silver stocks, and on physical metal that you hold outside the banking system!

 

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Comments

  1. Sure feels good adding at 2010 prices! 

  2. I feel sorry for the people (if any) who sign up for Hubbartt’s newsletter. I wish silverdoctors held a higher standard of content than this since it gives ugly credibility and only robs the people who need good advice the most. “Listen to all”… sure, but this flies in the face of “restoring your financial health”

    • I 100% agree.  I don’t post much anymore on this site.  It’s almost like clockwork.  There is a script going on.  Every Saturday you get this BS link to this guy Hubbart.  Credibility works both ways.  You consistently link works by people who have been wrong every time , then you have no credibility yourself.  The content is so predictable.  This site is just mailing it in.  I’m sorry but a spade is a spade.  For god’s sake, challenge your audience!  Push the limits and expand your mind.  Once again, we get these worthless charts.  These charts have as much relevance as the information we get from our governments.   The alternative media is getting as bad as FOX news, ABC, CNN and the rest of them.  I don’t care if you are wrong on some of your calls.  Nothing wrong with that in these economical times but linking your site with these clowns, come on!  I would hope you think better of yourself.  Just because they are bullish on the metals doesn’t mean they have been right.    Bring on more Mannarino’s video links and interviews if you don’t care about credibility.  Why has this site not linked his BS lately?  It’s almost that this site and many others don’t care anymore about content.  Whatever it takes to get hits.  Geez, this is the same model as the MSM takes.  
       

    • Well said
      “*coined*”

  3. I’m not convinced that these charts give any indications of gold price movements of an upward cant.   The events that will push gold and silver upwards are physical, not charts and paper. When miners can’t extract precious metals at a profit, when supplies are non-existent, when we have to wait 2-3 months for delivery and premiums are 50% of paper prices, that tells me that physical prices will go up.
    Before then, a crash in stock equities will bring metals down more than a notch or two.  When the world is liquidating assets, they will liquidate precious metals right along with everything else.  When entire countries are forced to give up their gold, like Cyprus when it was threatened with total default, the price of precious metals could take hit. If Portugal crashes, oil goes up $25 a barrel, Syria explodes outside its borders, we probably won’t see much relief in precious metal prices in spite of these events. The Fed, ECB and BOJ are scared to death of the reality of higher PM prices because that would completely repudiate their attempts to spend and print themselves out of global bankruptcy. It won’t work in the long run but these people will die trying and take a lot of people along with them. Precious metals tell the truth but that voice is and must be stifled by TPTB
    We are seeing huge PM price drops well in advance of a stock market crash looming on the horizon because of this. The PMprice drops were not manipulated down in 2008.  PM prices crashed along with Lehman and the half dozen TBTF banks.  My real concern is that metal price drops are not done yet. There could be more opportunities to buy on the cheap. But the worldwide financial and economic conditions could get much worse in the interim.

    • “The events that will push gold and silver upwards are physical”
      How come when I ever mention this fact, some people attack me?     It has to be physical demand that pushes the prices higher, if there is plenty of available silver at $20 oz, the physical demand is still lacking.  
      Should lower silver investories cause higher prices?   Maybe, maybe not.  What were the silver inventories at $49?   Higher than today, where were the complaints?

    • “these people will die trying” that could be arranged early if people would wake up

    • “The events that will push gold and silver upwards are physical, not charts and paper.”
       
      True, which is not to say that it is only physical events that push down the PM prices.
       
      “When miners can’t extract precious metals at a profit, when supplies are non-existent, when we have to wait 2-3 months for delivery and premiums are 50% of paper prices, that tells me that physical prices will go up.”

       
      Yes, they will have to go up whenever demand exceeds supply.  On a world-wide basis, we are already entering that sort of supply pinch.  Indians are switching from gold to silver… for now, anyway, because they can charge it on their credit cards and pay it off monthly.  China is also importing more silver these days.  Silver mines are not producing as much silver these days and for multiple reasons.  There will be a very obvious supply crunch at some point if things continue along the current path.
       
      “Before then, a crash in stock equities will bring metals down more than a notch or two.  When the world is liquidating assets, they will liquidate precious metals right along with everything else.”
       
      It is often the case that PMs are liquidated before other things because they tend not to have as large a loss as many paper investments.  Those who MUST sell to hedge or cover their shorts sell PMs because they are readily sold and they can get their money quickly.  Speed matters in many cases, so that which is most liquid tends to sell 1st.
       
      “When entire countries are forced to give up their gold, like Cyprus when it was threatened with total default, the price of precious metals could take hit.”
       
      I’d like to see this line of thought fleshed out.  Cyprus does not seem a good example, although I do understand what you are saying here.  Italy, for example, has a significant gold hoard, something along the lines of 2400 tons, IIRC.  The 12 or so tons of gold in Cyprus is minuscule but perhaps its sale is a “psychological event” of some sort?
       
      “The Fed, ECB and BOJ are scared to death of the reality of higher PM prices because that would completely repudiate their attempts to spend and print themselves out of global bankruptcy.”
       
      And yet, some VERY smart economists have said for many years that a nation can neither tax nor print itself to prosperity.  Apparently, that view is neither popular at the major central banks nor in the G8 capitals.  This is unfortunate, because history WILL prove… again… that this is true.  Somehow, though, we keep coming up with a crowd of people in charge of banking and politics who simply MUST hit their thumbs with hammers yet again, just in case it might not hurt this time.  We can rather safely assume that it will.  :-/
       
       

  4. India has turned to importing 940 tons of Silver due to the tariffs and purchasing penalties placed on Gold. There are several conflicting forces at work. The false GDP and Non Farm payrolls, inflationary trend and total government distrust among others. There is no reason to write long dissertations about The Treasuries or what bounces Gold and Silver will make. The huge purchases of both going on will disembark any notions that Gold and Silver are bearish it the long term. As I have stated IMO it will be two, maybe three years, possibly sooner that all Fiat currencies will show their ass and economies will be totally disrupted.

  5. Even if they were truthful, why would the market CARE about US GDP and NFPR data?
    We’re talking about a net gold exporting country, with 50 million on food stamps, on a total of 300 milljone (5% of the world, and largely clueless even to the color off the metal).
    Who in the US invests/consumes gold, really? Utterly irrelevant nation when it comes to gold.

    All one big puppet show. Where central bankers, bankers, and traders, act like they care. Forged data, falsely reported on, and illegally front run and responded to by traders.  Please don’t even go into these things to lend them any credibility.

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