Morris Hubbartt: Gold & Silver Double Bottoms

double_bottomSubmitted by Morris Hubbartt:

In the case of gold, the consolidation has gone on now for nearly a year and a half. The larger the base is, the greater the rise out of it.
There are actually two triangles in place, and gold has just staged a near-perfect pullback to the top of one of them.

Note the trade signals on the chart.  Silver has a double bottom pattern very similar to the one I showed you on the gold chart, and $29.15 is the necklineA move over the neckline should produce a rise to $30.43, and begin a trending move to the $40 area!

 

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Dow Cloud Nine Chart

 

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  • The stock market has continued higher.  On Tuesday, I issued my largest profit taking signal to date, at 14,260. Technically, the market needs a correction. The longer the rally goes without one, the greater the risk of a substantial decline, or even a crash.

 

  • My view is we will get the correction.  It will likely happen sooner rather than later. Key technicals are not confirming the recent high for the move.

 

  • The action of the RSI oscillator is concerning.One indicator that is flashing what could be called a “screaming” sell signal, is the CCI.  There is a spike to the 250 level, in play now.

 

  • The bottom line is that there is a red technical sky for Dow sailors!

 

Gold COT Signals Chart

 

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  • The “smart money” commercial traders are coming back to gold, in a big way.  This chart from www.sentimentrader.com shows a key breakout in their position, to the upside.

 

  • That breakout means the commercial traders may be moving to a much more bullish stance, for quite a long period of time.

 

  • There is arguably a head and shoulders bottom pattern on the COT position of the commercial group, and I’ll be discussing that ultra-bullish situation, in a video report to subscribers this week-end.

 

Gold Dual Triangle Chart

 

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  • With strong buying support from commercial traders, and a bullish “dual triangle” technical formation, this market is set for a strong performance. A symmetrical triangle is usually formed during a consolidation period.

 

  • In the case of gold, the consolidation has gone on now for nearly a year and a half. The larger the base is, the greater the rise out of it.

 

  • There are actually two triangles in place, and gold has just staged a near-perfect pullback to the top of one of them.

 

Gold Double Bottom Chart

 

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  • The gold market is under some pressure, but it always makes sense to be prepared to buy lower than where it feels most comfortable.

 

  • The volume patterns are very encouraging. If the uptrend is ready to begin, volume patterns will continue to improve, too.

 

  • There is a small double bottom pattern in play.  Note the sharp rise in volume on the first bottom, and the dull trading on the second one.

 

  • That’s classic double bottoming action!

 

HUI Pain & Gain Chart

 

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  • The gold stocks sector is under much more selling pressure than bullion is, due to what appears to be sizable hedge fund forced liquidation.  Also, central banks buy bullion for their reserves, not gold stocks.

 

  • A worst case scenario would probably put the HUI in the 250-300 area.  Investors could use tools like DUST-nyse, to hedge up to 20% of their gold stock portfolios.  That’s the position I’m carrying.

 

  • If the sell-off continues, profits can be booked on the hedge position, and used to buy the highest quality mining shares. This long term chart also shows where gold stocks have the potential to trade in the next few years, which is substantially higher.

 

  • The other thing that is necessary to survive and thrive in this market, is cash.  For maximum comfort, I like to keep cash levels in my gold stocks portfolio near 20%.

 

  • I believe that gold bullion is on the verge of moving higher, and that should eliminate most of the bearish technical set-ups that are currently on many gold stock charts!

 

GDXJ Seventeen To Start Chart

 

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  • On Wednesday, GDXJ just missed getting a “fuel cell” buy signal.  Having said that, volume is constructive.
  • Chart damage has been done on the price chart, but GDXJ looks poised to make a quick move towards resistance, in the $17 area.

 

  • At these low prices, a small dollar price change can be a big percentage move for investors.

 

  • It’s important to be able to buy even a small amount of your favourite junior stocks, when sentiment is this overdone on the downside.

 

GDXJ Microscope Chart

 

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  • This 60 minute chart provides a closer look at what GDXJ is doing right now.  An upside breakout is in play, and volume is supportive of the breakout.

 

  • It’s important that GDXJ stays above that black dotted trend line.  Traders who like to gamble could place a stoploss under $14.95, but my recommendation is to take a smaller position, without using a stoploss.

 

  • The world is going to need a lot more gold and silver, as Asia grows.  It is the junior mining companies that will find it!

 

SIVR (Silver Proxy ETF) Double Bottom Chart

 

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  • Silver is a great asset, especially for investors looking for a little more action than is available in the gold market.  Gold is my largest holding, but silver is a big one, too.

 

  • Note the trade signals on the chart.  Silver has a double bottom pattern very similar to the one I showed you on the gold chart, and $29.15 is the neckline.  A move over the neckline should produce a rise to $30.43, and begin a trending move to the $40 area!

 

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Comments

  1. Greeting All, is it just me or does the contributor of this topic understand that we are in full scale manipulation and all the geometric patterns in the world dont amount to diddley squat much less predict price accretion. TPTB are dealing in paper and shorting millions of ounces at a whim to benefit their agenda and pockets. To paraphrase those great and immortal words by giants of intellect ” the manipulation will end when it is no longer possible to manipulate”

  2. I truly want this guy to be right this time.  Ok, I’ll play along!!!!  We are at the bottom!!!!!  In fact, a double bottom!!!!  Lets see if we get some gains next week.  I am taking my skeptical hat off for 5 minutes.

  3. It has taken decades to develop this massive ‘Paper-Gold’ market. The Marketplace is losing faith in this paper market. It is backed by nothing. The, controlling paper, price will continue to decline despite all the charts and graphs you post. We are in a unique place in history. You can buy physical Gold for, what will be construed as, the greatest discount in all of history. One day you won’t be able to buy it at any dollar price (think offering wheelbarrows full of cash in a Black Market). Gold trading will halt worldwide when the physical is the strongest hands. These can be your hands. It will be revalued so countries can trade in Oil – where oil producing nations will ONLY accept Gold not paper. Without Oil a country’s economy deteriorates rapidly. Governments are broke – what is their only asset? Expect the revaluation to be an amount no western minds can imagine. The other metals won’t take part in this. The revaluation is the only hope. No one wants a 60-100 years Deflationary Depression OR the complete destruction of paper currency.
    As Blondie has said: “As an unencumbered physical asset, gold is the single objective reference point from which the relative value of all else can be ascertained.
    Even Sinclair is coming around: “Gold is the only tool that is able to balance the balance sheets of the offending deficit spending central banks. There is no other tool. Therefore, the tool (gold) will be used. Just as QE was the only tool to feign sovereigns as financially sound, gold is the only tool to bail them (central banks) out in the end. It’s simply a fact, a reality, and it cannot be denied.
    What does this mean to you? Partially in-line with Jim Willie and Rob Kirby that holding physical Gold (but, divergently, not Silver… nor miners, nor any paper precious metals, nor paper currency) will not simply be the best investment of a lifetime… but of all time.
    Best to all…

  4. All this constant ‘bottom-calling’ in PM’s lately sounds a lot like the the real-estate folks repeatedly calling a bottom in housing prices.  History doesn’t change.  It rhymes instead.
     
    Oh, and great photograph there – no butts about it!

    • @Mammoth I’m one real estate Broker who has not called a bottom in the real estate market. Just wait for all the Foreclosures that the Banksters are holding back coming on the market. You Ain’t Seen Nothing Yet. Lol

  5. I think real estate always depends on the market you are dealing with.  I just checked on foreclosures down here in my area.  In my province there are none available this month.  Imagine that? None.  You can drive around all you want and you will rarely if ever see a for sale sign on a property.  There just isn’t much available where I live.

    • There are foreclosures in Ontario, and in one of the strongest appearing markets.  Just gotta know where to look or be lucky.

    • @Pollokeeper, Yep, where I live the housing market sucked before 2008 and if you drive around here you don’t see much difference, many houses for sale, but probably not more than in 2007. It is a buyers market, but there are no buyers. So location is the key.

    • I think it is a good idea to buy only what you need right now.  Or, just to rent.  I have been looking for a small lot with a shack on it.  People want twice what a property is worth where I live.  They are just not motivated to sell.  I have noticed that foreclosures sell very quickly in my area.  It is very important not to over pay right in front of a possible economic collapse.  That may mean not owning anything at all.  

  6. How many charts do we have to put up with? They have zero use in this paper controlled market.

    • yes, putting up with charts, you’re right, your life is very difficult.
      why if someone from a thousand years ago saw how you live, they’d say, why, that mary, she has to put up with all those charts, how can she live like that!

  7. Oh that’s what all financial experts were keep saying since the crash of silver’s price in 2011. Silver will go back to 40$ to 50$ per ounce. Also, remember that silver went below 30$ per ounce three time since 2011. Although, gold didn’t go below 1500$ per ounce for more than two years.

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