imagesSubmitted by Morris Hubbartt:

I see the dollar soon beginning a decline akin to a snowball tumbling off a cliff of gold.
Note the bullish long-tailed candlesticks on the gold and silver charts. Last Friday’s jobs report created an exciting hammer candle formation, and it came on climactic volume.


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US Dollar Collapse Chart

morris1

 

  •  I projected that the dollar would consolidate for about 3 weeks, and then a collapse would begin.  The primary downtrend likely resumed on Jan 10, 2013.  The catalyst appears to be Mario Draghi’s comments about a recovery in Europe.

 

  •  Technically, the 80.50 area is critical, as the dollar can’t seem to stay above there for any substantial amount of time.

 

  •  The oscillators show no negative divergences; this indicates sideways trading is likely, with an upward bias, for a few more days. After that, I see the dollar beginning a decline akin to a snowball tumbling off a cliff of gold.

 

Stock Market Alert Chart

morris2

  • This chart shows the percentage of NYSE stocks that are trading above their 50 day moving average.  It suggests the dollar could pullback by 10%, or more.

 

  • No indicator is perfect, and if you note the blue vertical line on the chart, you’ll soon one example of this one going awry.  Technically, I think the Dow is capable of making it to 14,000 before collapsing.

Gold Hammer Time Chart 

morris3

 

  •  Note the bullish long-tailed candlesticks on this chart. Last Friday’s jobs report created an exciting hammer candle formation, and it came on climactic volume.

 

  •  While this action is quite encouraging, even more long tails could occur over the next few trading days, creating more volatility.
  •  Note the action of the CCI, RSI, and Stochastics.  The powerful bullish divergence of key technical indicators is suggesting that the coming rally could “rock your world!”

 

GDX Early Dawn Chart

morris3

  • As with gold, there are positive indicators of an impending rally in the gold stocks sector.

 

  • Note the Aroon indicator that I’ve highlighted on this chart.  In Sanskrit, “Aroon” means “Dawn’s Early Light”.  Since GDX began correcting from $55 area, the Aroon indicator has moved steadily higher.

 

  • This key indicator of trends is not just predicting a small bounce, but a very meaningful rally.  In the coming weeks, I’ll continue to watch the Aroon, for further signs of progress!

 

GDX Bull Divergence Chart

morris5

 

  • The “outrageous” bull divergence being displayed by the Accumulation/ Distribution indicator suggests that we are probably on the cusp of a huge leg higher, for the entire gold stocks sector.

 

  • Note the trending action of RSI, CCI, CMF, and the Stokes, which and I’ve highlighted in blue color.  Are they suggesting an upside trending move is beginning in gold stocks?  I think so!

 

GDXJ Versus Gold Chart

morris6

 

  • This is a ratio chart that compares the price of GDXJ to gold bullion. Although there is ongoing volatility in junior gold stocks, there is also now ongoing outperformance!

 

  • Note the beautiful buy signal in play on the Stokes indicator at the bottom of the chart.  GDXJ, and most individual junior gold stocks, seem poised to perform very well in 2013.

 

Silver Bull In The Box Chart

morris7

 

  • As good as gold looks here, silver looks even better. The hammer candlestick that appeared last Friday, is very similar to the one that I highlighted on the gold chart.

 

  • Over the last several trading sessions, volume has picked up nicely.

 

  • Silver looks a bit like a “Jack In The Box”, coiling between $29.24 and $31.53.  Note the fabulous action of all 4 technical indicators on this chart.

 

  • Perhaps you should view silver like a “Bull In The Box”, ready to charge out and gore the bears!

 

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  1. I’m Just Not A Chart Guy and Especially When They Make A Remark Such As This:
    No indicator is perfect, and if you note the blue vertical line on the chart, you’ll soon one example of this one going awry.
    I wonder why? Could it be Called Manipulation? Lol
     
     

    • Completely agree.  Charts are worthless in this environment.

      http://www.zerohedge.com/news/2013-01-11/tom-demark-sell-world-and-soon-us

      Because there are still some traders who adhere to such old normal traditions as charting and technical analysis (because apparently the FOMC committee sits down each month and observes Ichimoku clouds, RSI indicators and Bollinger bands), it is probably notable that one of the most respected chartists, Steve Cohen’s favorite technician Tom DeMark, is now uniformly bearish on virtually all markets around the world which have triggered a sell signal in his studies, and is about to drop the axe on the US as well where a “Daily 13″ signal is imminent. The caveat, of course, is that in a world in which fundamentals haven’t mattered in years, why should technicals?

    • http://www.businessweek.com/investing/insights/blog/archives/2008/08/technical_analysis_useless.html

      While we cannot rule out the possibility that technical analysis compliments other market timing techniques or that trading rules we do not test are profitable, we do show that over 5,000 trading rules do not add value beyond what may be expected by chance when used in isolation.
       
      They keep close track of volume and price movements, which means they know where the money is flowing and how enthusiastic buyers are or how pessimistic sellers are. That helps give real insight into the shifting moods and strategies of the investing community. But it’s a way of looking back, not forward.

      http://www.priceactionlab.com/Blog/2011/12/trading-based-on-classical-chart-patterns-is-modern-alchemy/

      When traders study chart patterns they are never sure of the final outcome. Specifically it cannot be known in advance whether a chart pattern is a continuation or a reversal pattern. This can only be known on hindsight. Furthermore, the phenomena observed, i.e. the geometric formations on charts due to price action and subsequent prices moves, are not reproducible in a laboratory and thus the outcomes cannot be verified.
      Chart pattern analysis can be elusive when the conclusions reached are based on a mixture of technical and fundamental factors that may influence future price direction. It can even become a dangerous practice when it is used selectively to provide support to conscious or subconscious beliefs about the future direction of prices.  Of course, there are also those that have devoted time and effort to turn it into an empirical science by analyzing thousands of charts and formations but along the way they have implanted their own rules and often their results are not reproducible due to the idiosyncrasies of their analysis, which are not disclosed or even understood.
      It almost never makes sense to state that a certain pattern is a bullish or bearish formation without any other details. Knowing that, the “founders” of technical analysis invented the trick of confirmation. This trick says essentially that a certain pattern is bullish until proven so, a circular definition. This circularity is often the cause of losses for beginner traders who underestimate the value of timing positions. Specifically, by the time most chart patterns are confirmed, a good part of the profit has already been realized by those who, by their own actions, cause the formation of the patterns in the first place, unintentionally or even intentionally, leaving the rest to fight volatility. Thus, the concept of confirmation does not make any sense but only to those who underestimate the value of timing of markets.
       

    • Here is one of the greatest chart analyst in the world.

      http://www.youtube.com/watch?v=OaIjm70uyDQ

      Old numbnuts Greg actually mentioned a technical term called “gravestone Doji.”   For all you non believers of  technical analysis, here is the definition of a gravestone Doji.
       

       

      Definition of ‘Gravestone Doji’
      A type of candlestick pattern that is formed when the opening and closing price of the underlying asset are equal and occur at the low of the day. The long upper shadow suggests that the day’s buying buying pressure was countered by the sellers and that the forces of supply and demand are nearing a balance. This pattern is commonly used to suggest that the direction of the trend maybe be nearing a major turning point.

      Read more: http://www.investopedia.com/terms/g/gravestone-doji.asp#ixzz2Ht2n0SZR
       
      This shit is straight up comical.  You really couldn’t make this up if you tried.  The sad part is that people believe these con-artist and their witchcraft they are selling.  Once again, charts are worthless in this manipulated environment. 

    • The bank$ter$ LOVE Chart-HeadZ Like our dear Friend Morris Hubbart! 
      But one of these he will be right, U Betcha! At least he is a Silver Bull! lol

  2. Problem with these chart guys is that they forget about the rest of the world.  Currency strength is all relative to other currencies.  It’s not a fixed scale.  Japan has elected a new government and they are going to PRINT.  That will drive their people and pension funds out of the yen and into dollars and euros and gold.  Charts don’t reflect that.

    The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of 6 foreign currencies.

    It is a weighted average of the dollar’s value compared only with

    Euro (EUR)
    Japanese yen (JPY)
    Pound sterling (GBP)
    Canadian dollar (CAD)
    Swedish krona (SEK)
    Swiss franc (CHF)

    USDX goes up when the US dollar gains “strength” (value) when compared to other currencies.

    If the Japanese yen goes down, then the U.S. dollar goes up.
     
     

  3. In a dollar collapse like that , what many clowns do not get is one thing. If it is not made locally , you are either not getting it , or you will pay dearly for it . The way silver stackers cry about even teeny amounts over spot. It will be epic comedy when I tell them you want coffee ?  In the midwest ?  That will 48 ounces of AU per pound .
    Why the crying ? If it is antibiotics or pepper or birth control stuff it would be a lot more than that ).
     

    • Chesyre, we’ve all seen 100 posts like yours which basically states you can’t eat gold or silver.  For starters, buying something like antibiotics with a finite lifetime is a dumb investment strategy.
      Even if there was an epic crash (I don’t believe there will be!) items like coffee might have a very short term interruption but would quickly appear back on the store shelves.  If you would study some ‘history’ you might find out your strategy has significant flaws based on ‘reality’. History and Reality: Two scary words for someone that thinks they will be saved by a 5 gallon can of Folger’s coffee.
       
       
       

    • Chesyre.  You are right, its a good idea to have some preps.  This site is full of preppers.  Doc kind of assumes that before you go all in on silver and gold that you have already done the other basic prepping stuff.  Or, at least have started it. My opinion is that cash needs to be on the preppers list.  When Poopoo first flys cash will still be king.  Then as time goes on cash will then die, and silver will replace cash as the new king.  King Silver!  Even the stupid sheeple will eventually worship this new King!!!  Anyone that can better try and get a monster box of silver and have that in their preps before this Goat F##K goes down.

    • Never said you can’t eat silver , more you can’t gurantee purchasing power.  Just too crap all over your plans go read some guy mcphereson , you have about 17 years to left to spend your stack of any size ). 

    • Chesyre, sometimes you must go by the known 2,000+ year history of the developed world and what has happened before.  Sure there might be a few time specific episodes where something like antibiotics is scare and you’re willing to pay anything to save a life but those will be very limited.  Factories and coffee manufacturers will still need to get their product to market.  The infrastructure and factories won’t implode because of a currency crisis or hyperinflation it just creates problems and delays.  Oil will still get pumped, hydro-electric dams will still produce electricity and rain will still fall from the sky to water crops.  
      Your scenario is extreme and if correct then silver would be worth $10,000 or $100,000 an ounce.  Not gonna happen in our lifetimes!!  We’ll be lucky to get $200 which is still an unbelievable return for the stackers and people which own mining stocks.
       
      The sun will still shine no matter what happens with the messy monetary system.  Considering the mischief and greed things have a way of righting themselves.

  4. Like Mark Grant said, you can have all the good facts and make the correct assumptions and then some jackass like Bernanke, Abe or Draghi does something incredible stupid, trying to save the world, and everything goes to heck in a handbasket.   That lasts about 3 weeks and then we have another disaster that requires these super genius dorks to invent another miracle to save the day.  One day these FIAT Houdinis are going to run out of rabbits and hats.  I will be watching with anticipattion, just like when Harry had to extricate himself from the water tank.  This time around the magician will end up seriously drowned.

  5. Technical indicators are a good way to get ahead of the investment crowd. Lots of you here think they are worthless but they have worked for me for years until 2008 (I always use fundamentals as a basis, though). In this manipulated market, however, I’ve thrown tech indicators out the window. 
    When I was playing oil futures in the 90′s, every sneeze from a shiekh or mullah caused a rise in the price of oil. Today, the whole region is on fire and the markets respond with a drop in oil prices. Insane. Our unelected geniuses at the FED announce QE3 and QE4 which pollutes the economy with a unsanitized $85b per month and Gold is smacked for $100 and silver is smacked six days in a row
    90 year-old judges and imbeciles at the CFTC can claim there is no manipulation, but I know better-just look at the market drivers and correlate the price movements. Even my 12 year-old has noticed. 
    So, for now technical indicators are useless for PMs. When true price discovery returns, I believe the indicators will begin again to give an edge to traders, if the market survives the coming scandal (do you think only PMs are being manipulated?).

    • Well, Brain, I was in a quandry much the same as you about Oil vs. gas prices, but my son was employed by Helliburton for most of 2011/2012 and it gives a different slant on Gasoline Prices. Seems that the US is closing in on a “Net-Exporter” status in OIL PRODUCTS due to the Shale Oil Deposits we are currently exploiting. In light of this, certain moves by the Obama administration make a sort of “sense” if you add the spin that they want to increase taxes AHEAD of the coming “recovery” if it ever happens… 
      I believe that they believe this stratagy will work, but I believe that it will not likely work, unless they can hold off a $dollar$ collapse in the process… Go Figure! 
       
      Tagged: @brainpowerinuse

      Not presuming to “correct” you, just trying to shed some light. Makes sense in the current picture, these and other “facts” that one can learn from an Oil Man

    • That’s how I do it, Mary. Stack all the time and work a little paper in my IRA. When I figure out how to create an IRA where *I* hold the metals I will likely get completely out of the paper game (it’s for suckers). Until then, I’ll just keep skinning a little every month.
      I meet with an accountant next week. I’m sure between us, we can figure it out…
      Keep stacking.

    • +1UP for @MaryB
      Fancy meeting you here… LOL! 
       
      Hey Mary, Scored a 995TSFG for $59 under MSRP @ my LGS!!! 
      It’s a real Deal! But prices are returning to reality for these gems, it seems. 
      See Ya Here, or @ HPFF! 
      Liked your pic links…

    •  

      Without wanting to hijack this, I also enjoy your posts AGXIIK. Thanks.
      RGR, I’m also with you on your views of silver being stronger than FOFOA, Sinclair et al give it credit. But we’re all in the right place – PHYSICAL.
      Enough hijacking :)
      I have been unable to see who’s been online for a while now due to the problems the Doc has had, but glad to be back seeing who’s around.

       

    • @Jccjktj:
      We have our own little section here, we’re OK as long as we don’t try and take over the whole airplane, IMO!
      FOFOA is like 99% good stuff, but he seems to really short Silver as a viable monetary metal, discounts or totally ignores the historical and CONSTITUTIONAL relevance, and biggest of all, seems to doubt it’s profit potential! A good lie has 95% truth, but a “really good lie” seems to have 99% truth! I am perplexed that such an intelligent appearing person can be so blind, or so deceitful in such an obvious way, that a “noob” (to PMs) such as myself can so easily de-bunk his apparent stand on Silver.
       
      I Subscribe to his GOLD ONLY stand if you factor in the disappearing Silver Supply, which will drive Silver way above Gold, much like Platinum used to be… But he poo-pooed that also! The only thing that makes sense is that he is so heavily invested in SILVER also, and trying to couch his position in the white PM even further, that he sees fit to denigrate our Favorite Investment!  Strange Set of Beliefs, to be sure… AND, I hesitate to further explore his writings, just to reconcile what “he might believe” about Silver, because he so blatantly dismisses it. Who cares if he has BLINDERS or an AGENDA, he is obviously off base. IMO! lol 

    • @undeRGRound: I really enjoy SD, enlightened thoughts, even if we are (obviously) all pro the metals, I think we have a balanced view of where things are. I also struggle with FOFOA on his lack of interest in silver. I am also fairly new to this – I saw the light 3 years ago. I know most here have probably been aware of silver in single digits (I wish!).
      There are things I struggle with and different views pull me one way and another. However I believe silver has a huge roll to play and it’s value is vastly understated.
      I believe it’s dual roles of monetary and industrial metal are actually a hidden strength. It has properties that mean it will always be in demand and the fact that it has been used and not stored will draw it to a price level beyond what people currently understand.
      I have always found the current levels of gold, silver, platinum and palladium curious – Gold $1600, Platinum $1540, Palladium $730 and Silver $27.35. I’m surely not the only one who sees an ‘Odd One Out’!!!
      As such I don’t see an eventual $500 or more price of silver unrealistic.
      But I do find FOFOA’s work very interesting. I have been reading FOA too. I think Sinclair is worth listening to also.
      I still think Silver is a Giffen Good. And it’s value will rise and stay high, this volatility tag is BS. It’s manipulated that way. When the paper facade is exposed there will be no turning back.
      At the end of the day. Precious metals are such for good reason – they are scarce, difficult to find, mine and purify, and extremely important in their uses. As stores of value they are on a level of their own. Divisability, Non perishing etc.
      And the day will come when they truly shine. So the important point right now is Stack the physical in your own possession. It’s that simple.
      That is why we are all here – right?

    • @undeRGRround: LMAO!
      It’s good to be back visually, rather than in the shadows!
      If only my name was Elliot, it would be perfect :)
      You can get philosophical anytime RGR :)

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