Is gold breaking out?

This week I tried to refresh my long term views of the major gold indices. Based on the 2008 crash analogy I think that the first and the worst part of the ongoing crash has concluded. We should now enter a weak period that should end in decoupling of the gold market and the general market, gold to new highs GM to new lows. Secondary lows should be formed in the next two-four weeks.

USERX
USERX crossed the 16-20 index to trigger a sell signal. This was my preferred price action in the last week blog because it puts the USERX in a quite comfortable position. Underneath the current price, there is the 16-20 index and 218-222 index that should represent strong support. On the other side, there are 35-39 and 92-96 indices with possible buy signals. These possible buys represent a resistance but can be overcome in time and change into true bull setups. I personally would prefer some weakness this coming week to prepare for a sustainable advance to overhead resistance.

Let's revisit the long term traditional TA chart of USERX to see how this recent action fits into a wider context. In my blog from 13th Oct 2019, I showed the weekly USERX chart and suggested that in the long term it is painting a gigantic shallow pan formation and the breakout from the 2013 breakdown level would be marked with the rise over 10.28. I also stated that my initial target for the ongoing bull would be to hit/touch that level. Fast forward 6 months and what can we see? The price did rise to breach 10.28 and then expressly, in three weeks, broke down all the way back to the long term major support at 6.00 but that level held, the same like it did 8 times in the last 7 years. In the next three weeks, the price had risen back above 8.12 which I consider a bullish development. 50 and 21 week MAV are still above and will serve as resistance but more likely to break than the 7.8-8.1 area which, given the last 7 years history and the recent action, will serve as a very firm support. USERX still needs to go over 10.28 to enter a clear bull territory.
Based on this chart I would like to see the test of 7.8-8.12 area before the further rise continues.

Let's show USERX long term SKI as well. The 218-222 index clearly acted as a support in a similar fashion that the 881-885 did in the 2008 crash. Based on this action it is fair to say that for now, the 218-222 is the border between the bull and the bear territory.
One more thing is visible from this chart. The top was marked with the 881-885 sell signal so breaking above this index is crucial for the bull case. The 218-222 is rising support and the 881-885 is falling resistance, they cross in the middle of May and by that time we will have the verdict regarding the character of this market. Notice how the 660-664 is currently at 7.80 level and will serve as support reinforcing the bull case. The 660-664 gives support at the same level as the above weekly chart, therefore, corroborating the weekly chart analysis.

GLD
GLD is on a true bull signal, it executed its sell 16-20 signal and closed above the recent high. This is the breakout scenario from my last blog. Too much of a correction here is not desirable because it could cause a double sell with the 35-39 index. Even if that happens there is still a very good chance that it all leads to an immediate double buy which would be super bullish especially because it is all happening above the uptrend line, above the 2013 breakdown level and above the recent high while on a true bull signal.  This chart looks really bullish.

Let's also have a look at the GLD long term traditional TA chart. Similar to USERX the GLD is exhibiting a shallow pan formation that started at the 2013 breakdown at around 148. In February this year, the price had pushed up through the 2013 breakdown level but then, during the crash, fell back bellow, tested the 50-week mav and then rose above it again and closed at the new high for the year. The price wasn't this high since April 2013. I see this as a very positive development. I wouldn't be surprised to see the gold price at 1820.00 very soon. The first line of support on this chart is 150.95.

On the long term SKI chart, the GLD price is far above any of the long term indices. Even the crash didn't bring it close to any of them. The trend is clear and tested.

UUP
As I said last time the UUP chart is one exhibiting multiple whipsaws and very hard to interpret in the recent six months. Since last week the price weakened again and is now sitting below 2008 high again which proved to be a very significant level. UUP is on the true bull buy signal but it could easily sell if the price keeps weakening. The good news is the price is boxed in between the 92-96 index and the 2008 top and the new trend will reveal itself very soon. I think this chart will solve the inflation-deflation argument.

TLT
TLT is in an uptrend and clearly bullish.

XGD Australia
Australian gold index executed its 16-20 sell signal and is close to buying the 92-96. The 92-96 buy would be xxed but a quick dip bellow 6400 in the next week or two would create an instant sell and set up the stage for a true bull buy.
It has been more than 2 years that the Australian gold index is a leading indicator for the USA market so it would be really nice to see this 92-95 index buy happening. Currently, I am out of the stocks in my trading position but if this bull buy happens I will buy a full position.

HUI
HUI executed the 16-20 sell signal and is about to buy an xxed out 92-96. The 92-96 buy could transform into a true bull market if the price dipped below 220 for a quick sell and rebuy.

XAU
Same as HUI

GDX
Same as HUI

GDXJ
GDXJ needs to show more strength before it would be able to buy the 92-96. It sold the 16-20 today. I do not like this relative weakness of the GDXJ compared to the GDX. In the early stages of a gold bull market, junior miners should lead not lag. I suppose this is due to the liquidity crunch which affects explorers more than established producers.

SLV
SLV is lagging gold but it is normal in the early stages of a bull market in gold.

S and P 500
S and P executed its 16-20 sell signal. Probably it is time to go short on this one.

Bitcoin
There is a long way to go before we can say anything positive about this chart

At the close of the day before the holidays I sold all my gold shares that I acquired in the week before and now owe only gold and silver again. I am 70% long and will wait for weakness or for a clear breakout to repurchase my position again.
For my physical position, I do not keep stop loss, it is a long term investment.

Good luck to everyone.

Branko