Wednesday, February 14, 4:57 am EST. Not out of the woods yet… but, once again, overnight, Tuesday night, the metals have been having a decent outing, in the sense that prices are hanging right in there. Gold is up some and silver is, too. Nothing major, mind you, but showing just the kind of signs of good health that say… This is a Bull Market in the metals. It started with the bottom in December of ’15. That’s big-time, serious, major support. The next truly major support level was put into place in December of ’16. If all continues as it has of late, the December ’17 low looks to be the third and most recent major price support level… and, each one is higher than the previous one. This is what helps us to define this as a true Bull Market.
Next, and this is easily as important… The high after the Dec ’15 low, in July of ’16, is the highest of tops since the market turned bullish. The high after the Dec ’16 low, in Sept of ’17, is a lower high. That Sept high, however, is right where the rally out of the Dec ’17 low also just recently ended in the Jan., not 1 month ago… that formed a double-top; and is now a truly formidable resistance point, but by no means a Bull back-breaker!
The longer-term chart, that goes as far back as to include the Dec ’15 Bear-to-Bull Market turn, is one of a bullish wedge pattern. We have higher lows, followed by lower highs. It is coiling a little bit tighter with time. One of two more likely things are going to happen from here. I’m prognosticating, but there’s some good history, and a bit of technical chart-reading science to this: Either these markets continue upward, and breakthrough the double-top formed from the Sept ’17 / Jan.’18 highs, or it gets turned back from there once again, and this ‘spring’ will be compressed tighter, as it comes back down to challenge some support level, either the one just put in 2/7, 8+9, or back to the Dec ’17 low, to re-group and run at it again. But…
In any case, this is a Bull Market, and when it breaks up out and through the overhead resistance only a little bit higher, in the $128 / $129 area for GLD, there’s going to be some ‘fireworks’ as it lifts off with some authority. Traders the world over are watching for this triggering event to pile some positions on! I’m tellin’ ya!
(I’ll try to get one more in before I’m off-line for almost the next 2 entire weeks.)