Quick Update

I sold my trading positions on Thursday before the Easter holidays in the expectation that we will have a week or two of a correction.  For most of the gold indices, Monday 13th after the holiday was a big up day into the 16-20 sell execution day. The rest of the week prices rolled over and the Friday finally was a nice down day. The general market didn't stop at the 16-20 sell and made a new high by the end of the week. I think the rally in the GM was all news related and the GM is going to follow the gold soon. The question is how much of a correction is in the cards for the gold market and how much for the GMs. Looking at the crash of 2008 my expectation is for the gold market to decouple from the GM in the weeks to come. Back in 2008, they decoupled after this next bottom that we expect in the near future.


USERX
Unlike in 2008, the USERX recovery from the crash bottom took the V shape form. The price shot straight through the 16-20 sell and went up to buy a 92-96 echo. The process took 15 days while in 2008 it took 5 months for the buy to realise. The current action is how impulse legs look like in bull markets. The only thing that is now missing is a quick sell and a rebuy for a true bull. For this to happen the correction shouldn't be too deep and too long because after a deep correction it would be difficult to catch up with the rising 92-96 echo. The most bullish pattern would be to finish the V bottom recovery by price rising back above the 35-39 echo at around 9.54 and stay there for a while before attacking the high at 10.61.
If this doesn't happen the next viable scenario is more in line with the 2008 crash. The price gets pushed down with the GM correction deeper than most traders expect (a touch of 218-222?) and the next signal is a 35-39 buy like in 2008. After that, a slow rise would ensue until the 92-96 buy at around 9.5-10.0 by the end of June-July.
I am not seriously considering the possibility of another meltdown. We'll see how smart is that.

GLD
GLD is on a true bull signal, it took out the recent high, it is above 50mav and 200mav and above the uptrend line. That is bullish, very bullish.
The target for the correction is a touch of 35-39 at around 154.00 but is not necessary. In cash gold terms that would be around $1630.00. On the upside, the target is the all-time high at 184.

HUI
HUI's chart looks like what I would like to see the USERX chart to look like in a week time. It has completed the V shape recovery and is now on the brink of breaking the pre-crash high. If it does this the next target is the 2016 high at 286.05. There is quite strong support underneath represented by the 35-39 echo and the uptrend line.

XAU
XAU looks more like the HUI than like the USERX. The difference is, if it clears the recent high it will also break the 2016 high and enter the acceleration zone with the next target at 140.94, the 2013 breakdown level.

GDX
Same as the XAU. If it breaks out the next target is 39.08

GDXJ
GDXJ setup is more similar to USERX than GDX. Next targets are 52.5 (2016 top) and 69.48 respectively (2013 breakdown).

XGD - Australian gold index
XGD bought the 92-96 for a potential bull market. The most probable next signal is a 35-39 buy which would make a double buy with the existing 92-96. Keeping the price above 7000ish will buy the 35-39 in the next 5 days.

SLV
SLV is lagging and that is normal in the beginning of a bull market. If the gold run continues we should expect silver to catch up in a pretty spectacular fashion.

S and P 500
S and P sold the 16-20 and bough 218-222 echo. The 16-20 didn't stop the rally but the 218-222 might. I actually expect this to happen. If it doesn't $2950.00 should be a very firm resistance and at that level I will establish a short position.

TLT
TLT is in a bullish constellation and ready to breakout.

UUP
UUP is still stuck in the no mans land. After triple whipsaw, it seemed like it has broken out last week but again it turned down and almost sold the 9 days old true bull signal. The sale has been missed by 1 day but the price is still really tightly squeezed in between the uptrend + 92-96 echo and the 2008 high + 16-20 echo. This chart should solve the inflation-deflation argument for the foreseeable future.

BTC - bitcoin
Some positive development here but nothing major. BTC bought the 35-39 but that buy is xxed. The good thing is that a drawdown would buy the 16-20 for a true buy so there is some support entering the picture.

Inflation
Inflation is still not showing up in the chart of inflation expectations. For now, there is no evidence to support the gold rally in this chart.

I am 70% long mostly physical gold and silver looking to start buying position in gold stocks. No stop loss on my physical.

Good luck to all,
Branko