Charts Update

USERX

USERX is buying back 218-222 index today. From the current picture, it looks like some kind of a bottom is in. The crash of 2008 lasted 24 days while the current one stopped at day 19 and -44% compared to -48% in 2008. Looks good enough for me.
The next signal will be a 92-96 buy or 16-20 sell or 218-222 sell. The one we don't want to happen first if the bottom is in is a 218-222 sell. If the next signal is a 16-20 sell than the following 16-20 buy will be a true buy, therefore, it will provide quite a nice protection to prevent a 218-222 sell. Probably the most desirable scenario would be a slow rise into the 16-20 sell because an explosive rise into the 92-96 buy would open a possibility of a double sell 16-20 and 92-96.



GLD

Similarly to the 2008 crash, the GLD price made a slight secondary high before the real downturn started. The crash lasted 8 days, compared to 10 days in 2008.
Today GLD triggered a true 92-96 buy which will be accompanied with a 35-39 buy for a double buy. This is a mighty bullish pattern. The interesting detail is that it has been triggered on the 222nd day of the ongoing 218-222 buy signal (currently sitting on 24% profit).


HUI, XAU, GDX, GDXJ
All very similar setup as the USERX chart

HUI

XAU

GDX

GDXJ

XGD Australia

14 days ago XGD triggered a triple buy which marked the exact top and the start of the crash. The ensuing 35-39/92-96/218-222 triple sell marked the bottom and today the 218-222 crossed back to the buy territory. It is probably as bad a whipsaw as it gets but still, SKI signals marked important points with amazing precision.
The current setup is very ambiguous but also very potent. I marked some possible scenarios varying from a simple bull rise to a possible double sell that can lead to a possible triple buy. I suppose it is not a setup for faint-hearted traders. Bring it on.

SLV

SLV is still below the long term 218-222. There is a lot of catch up to do before it is going to look slightly promising.



S and P 500

SandP finally found some traction. I am waiting for the next 16-20 sell to mark the beginning of the next leg down.


TLT bonds

This is one perfectly aligned bullish setup. The long term uptrend emanating from November 2018 is still holding and it seems it has been confirmed again at the bottom of the crash period.


UUP dollar

UUP struggled to overcome the 2008 top since Oct 2019 but now it looks like the breakout is in place. It is on a double buy and looking strong.


Bitcoin

Bitcoin is in a bad shape on all fronts, all indices in bearish posture.


Inflation

Inflation expectation is picking up but needs to go above 200 days MAV to be in positive territory.



The interesting fact about these charts is that, again, dollar, gold and bonds look like behaving as safe havens all at the same time. I suppose something has to give in the end but the question is when and what? For me, the important fact is that if they keep showing strength all at the same time that means a rocket fuel for the price of gold in AUD which is super bullish for Aussie miners. Let's see what happens.

I am 70% long mostly physical gold and silver. I am trading miners but not keeping long term positions. Some of them started decreasing production due to the difficulties correlated with lockdown policies in place and that seems pretty dangerous to me. For example, NST announced operation difficulties today and ended up suffering a 15% drop in an otherwise pretty quiet day.
For my physical position, I do not keep stop loss, it is a long term investment.

Good luck to everyone,
Branko

Update on the 2020 market crash

10 days ago I presented the comparison between the 2008 crash and the current crash in gold stocks (USERX) and gold (GLD). It seemed that, if similarities between the two periods held, we were somewhere in the middle of the critical period and there were another 10 days of falling prices to endure.
Here we are 10 days later:

USERX

2008

2020

Since the last update, USERX fell another 14% and is now -44% down (-50% in 2008) from the peak. We are in the 21st day of the crash. The crash of 2008 lasted for 24 days. Out of 21 days so far we had 7 days where the drop was 5%+ (8 in 2008) and 4 of them were 10%+ (5 in 2008). 

The only index in play right now is the long term 218-222 and it is on the sell signal. If it buys back it might signal the bottom.

I am definitely expecting some kind of a bottom in the next few days, probably by the end of the week.

GLD

2008

2020

While USERX crash so far follows the 2008 crash pretty close it is a bit different for GLD. The price pattern is almost identical but the percentages are quite mild comparing to 12 years ago. It is the day 8 of the crash (10 in 2008) and GLD is down about 12% (21.5% in 2008). So far there were no 5%+/day falls (5 in 2008). If the pattern is analogous to the 2008 pattern the crash should have been over already. For the next two weeks, we should have a sideways move followed by a minor lower low. This possibility is corroborated with the 92-96 buy signal generated today which is on the path of trades but xxed. However, if GLD manages to stay above 138.27 for the next two days it will transform this buy signal into a full true bull buy.

I am at the moment 70% in, mostly physical gold and silver. Last week I have done a lot of short term trading but am looking to buy some positions back that I will stick to for a while

HUI, XAU, GDX and GDXJ

These indexes have not sold the long term 218-222 index. The exception is GDXJ which did sell. 

S and P 500

S and P lost 34% since the peak at 3386. Some kind of a low, at least short term, is approaching and we should probably pay attention to behaviour around the long term 881-885 index.

standard

 long indices

TLT bonds

TLT held on its double buy and seems like the bottom has been in place. The trend has been intact. 

UUP dollar

UUP has generated a double 35-39 and 92-96 buy signal, executed 2 days ago. It has happened in synch with breaking through the 2008 high which had been the most important resistance during the last 6 months. I suppose this is very bullish for the dollar. 

BITCOIN

After selling the 92-96 true bull signal Bitcoin is back in bearish constellation but so far that signal has marked the low. The price is up 19% since.

I am pretty relaxed with my position because I managed to avoid a huge drawdown by switching from shares to physical. I am slightly up on my gold position and down on my silver position but nothing to worry about. Also, short term trading in high volatility has been quite good for building additional cash that I want to deploy when the bottom is in. 

Good luck to everyone

Branko

13/03/2020 - USERX and GLD comparison to 2008 crash

Obviously, we are in a middle of a major market crash a la 2008. I think all technical systems including SKI are out of the window the same way they were in 2008. The only real thing that we can compare today's situation to is the 2008 crash itself. Before I start I think we should say that this is probably worst than in 2008 regarding mining companies because in 2008 the risk of temporarily closing a mine due to the virus spread was non-existent. Such a closure would probably be devastating to the share price of any company but also a great opportunity to acquire a quality share for a fraction of its real value.
I've analyzed the USERX price and the GLD price during the crash of 2008. I used the peak after the life run low as the starting point and the ensuing bottom as the final point.


USERX
The USERX  2008 crash lasted for about a month or 24 working days. The price fell from 13.74 to 7.08 or -48%. In that period it had 8 days falling 5% or more a day. Among those 4 days were 10%+ drops. It also had two of such days before the crash started (during the life run) and two after the bottom had been in place.
The current crash in USERX has been going on for 14 days. The drop so far is from 10.61 to 6.85 which makes it -35%. There were 5 days with 5%+ drops so far, two of them with 10%+ drop (or close). If we assume that the crash will be at least as bad as the 2008 crash the target is around 5.47 and we have about 10 more working days to go.
The chart pattern of both crashes are similar up to the point where the 2008 92-96 index sold which corresponds with our initial true bull sell back in December. After that, the 2008 price slowly deteriorated while the current one bought the 92-96 back sucking everyone in and then just suddenly collapsed.  There was no warning and the stop loss was so far away it made the losses extraordinary.

Both crashes had a significant SKI system aberration, the first one had a huge life run low drawdown never recorded before and the current one has an extraordinary true bull buy signal drawdown, also never recorded before.

After the 2008 bottom, the USERX started an ascent into the 2011 top at 22.11. That was 212% above the bottom but only 61% above the top of 13.74 which is not exactly great for anyone who managed to hold through the crash.

2008 crash

current

GLD
Starting from the same day 22.09.2008 (in order to analyze the crash period only) the GLD  2008 crash lasted for 37 working days but it was very mild compared to the USERX. The price fell from 89.18 to 70 or -21.5%. In that period it had 5 days falling around 5% in a day but these days were often offset with similar up days. The crash in gold lagged the crash in stocks for 14 days in which time it had made a slightly higher high. When the crash ensued it lasted exactly 10 days.
The current pattern is very similar, after the crash started in USERX 14 days ago gold was going sideways and it did make a slightly higher high three days ago. If we keep replicating the 2008 crash we could say that we are in the GLD crash mode, in day 3 of the crash. We are currently down 5.3%, from 156.09 to 147.79. There is 15% more to go to reach the 2008 crash size.

After the 2008 bottom, GLD started an ascent into the 2011 top at 184.59. That was 163% above the bottom and 107% above the top of 89.18. This is much better than the gold stocks did.

The SKI difference is that today the price is above the 92-96 index and in 2008 it was bellow. I don't know what to make of that.

2008

current

The analysis above is just pure observation, not the prediction but it does put the things in perspective, at least from the time point of view. We are probably halfway through the crash. I assume that fundamentals for gold are much better today and potential is much higher. I think that the gold stocks are at risk while the virus spread is active so, for now, I am mostly in physical gold.

Since I assume that all the technical stuff is useless and we are running on pure emotions I decided to ignore the 92-96 sell signal of today and buy some gold stocks. Actually, I bought a lot when they were down between 15% and 30% today. It is a short term buy and will sell on Monday if we gap up. No stop loss. If we keep going down I'll buy more especially on a huge down day like today, until fully invested. No more physical gold for now.

Interesting times!

Good luck to everyone!
Branko

Update on the XGD triple buy

Three days ago the Australian gold index generated a rare triple buy. So far the signal marked an exact high and it looks like it is going to sell by Friday to completely reverse the course of action. To stay alive on Friday it needs to close above 6958.5. The price is sitting at 6534 tonight, exactly at the trendline going back to the low of August 2018. I suspect tomorrow we could get a gap down and then the next support is at 6000, the up-trend line going back to low of Aug 2015. The final support is at 5100, the trendline going back to the low of Sep 2014. The 50% retracement fibo level for the whole bull from 2015 sits at 5170 and reaffirms the above mentioned main trendline. The 61.8% fibo is at 4331, that is the last line of support! If everything is going crumbling down these are the levels to watch. I just hope we don't open at 4000 next Monday :).
As I said the other day I knew the day will come during this bull market that I will want to sell everything. Today I am seriously thinking of selling all my miners and keep only physical gold, which is already 50% of my position. The market has spoken and if USERX sells the 92-96 my stops will be hit and I will be out till the next signal. Also, I am seriously thinking of acquiring and holding on some hard cold cash. I don't think we can trust our banks and that the markets will operate properly if the crash continues in this manner.

Good luck to everyone,

Branko

p.s. I'll update the other charts in the morning after the USA market close.

A very rare triple buy

I'll cut to the chase, the Australian gold index XGD is triggering a very rare and powerful triple buy signal today. It is happening while USA gold indices are buying the 35-39 index while on a true buy 92-96 signal. Also, on the traditional TA charts, the XGD is crossing its 50 day MAV, which corroborates the above. My stop loss is still USERX 92-96 sell signal.
The gold market has shown its wild nature jumping up and down 5-10-15% a day showing why it is so hard to ride the gold bull market. A week ago I was totally calm and happy being 100% long and far from my stop loss (92-96 sell) and then in literary 2 days my main holdings were down 25-30% and seemed like an inevitable stop loss will be hit. Since May 2019 when the gold bull started in Australia I have been between 50% and 100% long but since the day one, I have been telling to myself that before the real thing starts there will be a day I will want to sell everything. I have been doing this in order to prepare myself to be strong hand at the extreme moves up or down. In December 2019 I was ready to sell but I held on easily. On the 24th of Feb all my initial targets for the bull have been hit and I decided to trim 20% of my position and I did the same the next day. Then the meltdown started and instead of buying back, as planned, the brutal selling made me really feel an urge to sell everything. I was ready for 20% drawdown over a few weeks or so if needed but I sure wasn't ready it to be over in one day! I surrendered and sold another 30% at the bottom. This is normal for me and I learnt over the years that it happens. The good thing is I didn't sell everything and bought the 30% quickly back. I lost some money on this quick flip flop but it is nothing crucial it is just very annoying how one cannot go against his own nature.
Today in Australia we have a rare occasion to witness a super potent triple buy! It is almost inevitable and I will be buying my 40% long position back. This time most of it will be physical gold because I am not sure how sustainable mining operations will be in a pandemic environment that is unfolding all around the globe.


I'll start with Australian gold index XGD
XGD bull market started 6 months before the USERX, also, it has sold it 2 months before the USERX did and I hope that this triple buy is a harbinger of what is coming in the near future. The time is up and a strong move up or down is due very soon. I am 50% in physical gold and 50% in Australian gold shares (SLR, PRU and  RMS mainly, some risky small caps too).

USERX
USERX barely survived the panic sell-off at the end of Feb. It is not out of the woods yet and will need to go back above that 10.28, the peak of 2016, which is the significant technical level here.

HUI, XAU, GDX and GDXJ
These are all buying back or already have bought back their 35-39 index while on 92-96 buy signal. It is all bullish for now but considering kind of moves gold could do in the next few weeks I will certainly not fall asleep  at the wheel again.

GLD
GLD is at the new high and looks perfectly healthy. My position is now 50% physical gold and silver.

SLV
SLV is on a double sell and will need some significant effort to overcome the resistance. Considering that silver is normally lagging gold in the early stages of a bull rally it seems ok for now.

SandP 500
SandP has sold the 35-39 and broken traditional levels of support but the 92-96 is still holding. How long we will see.

SandP crash monitor chart
I have been monitoring this chart for a long time. It is supposed to signal when the S and P 500 goes into a crash mode. Check what happened the last two times when 36 months MAV was breached on the monthly chart. For now, we are fine, the critical level is 2774, after that watch out.

TRAN Transport index
This is one horrible looking chart. The price is back at the Jan 2019 level and all indices sold at the same time. Since the price never reached a new high the Dow Theory sell signal is now confirmed. The recession is around the corner.

Russell 2000
Russell is mainly American market companies and opposite to the mainstream media spin, it hasn't been doing so very well as it was propagated. The market never reached new highs and now has sold all the major indices. This is a chart in a bearish constellation.

TLT bonds
It seemed for a while that bonds and gold have decoupled but it was just temporary. They are in synch again and behave like a safe haven destination for capital.

UUP dollar
After finally selling its 92-96 bull two months ago UUP rallied to challenge the 92-96 index and the 2008 top again but failed. It is on the verge of dropping through the floor and giving up all support. If it doesn't rally very soon it seems pretty dangerous for dollar holders here.

Inflation
The recent meltdown was driven by the liquidity crunch. The inflation chart is still in bullish mode but it needs a turnaround to preserve it.

Bitcoin
Bitcoin has been on a true bull signal for a month. It hasn't gone anywhere for now but it looks promising.

I am long 60% and adding to a full 100% today. My stop loss is a USERX 92-96 index sell.

Good luck to everyone,
Branko