Metals

August 23, 2017 Jonathan Ravel

TPP gave a rec to buy GLD on 7/11 just after the YP hold, and I haven't seen any reason to sell yet. Here I'd like to point out that GDX has spent the last 5 trading days above its 2HP (ie above all pivots) which has been fairly rare this year.

In addition, SLV (not something I always track) has recently lifted back above its YP and held yesterday. SLV is a bit weaker, still under 2HP and Q3P and a falling D200MA, but may join the others above all pivots. SLV looks interesting here, and although I don't like to fight a falling D200MA, there have been several days of selling from this level and no downward motion. This could squeeze higher.

With DJT threatening shut-down, bonds are the less likely safe haven. Aside from sectors like utilities, institutions concerned about stock valuations can buy volatility, metals or raise cash should their funds allow that.

GLD, GDX and SLV below.

DXY, GLD and GDX

July 30, 2017 Jonathan Ravel

August and September tend to be the weaker months for stocks. August 2015 also seems recently in memory, and while January 2016 drop was about the same, the August decline was sharper, with most damage from highs occurring in just 5 trading days.

But with everyone anticipating seasonal weakness, I don't think this year will be as severe. This may or may not be correct, and at some point stocks will have another drop of 5% or more, but my guess is that August and September are more stable for stocks. A correction could be in time, not price, with a choppy range bound period.

But $DXY is falling off a cliff and GLD is perking up, and so in addition to oil which is suddenly showing long term strength for the first time in months, I am wondering about a $DXY melt down and GLD melt up as the next near term best move. Let's look at all 3 charts. DXY first.

DXY Q
First support not until 91 area with 38% Fib, 20MA and 100MA.

DXY M
38% fib from higher anchor is nearly 92. Rising 50MA is currently 91.55 and will be higher as August opens. If that goes, however, 88 area with monthly 200MA and 50% beckons. RSI sliding below 50 also points to more chance of reaching 30 area.

DXY W
Red lines at various weekly close and price lows of past 2 years. Rising W200MA currently 92.13 seems like it will test.

DXY W pivots (long term)
Possible support at 2HS1 92.79, and if that goes then 90 is next long term support.

DXY D
Daily chart with pivots and MAs. Arrows show bounce attempts or lack thereof. Blue shows 5 day bounce to JunP. That was the best! Otherwise red arrows show where support crumbled without any attempt at bounce at all!

Bottom line - DXY while weekly and daily RSIs are fully oversold, this is in meltdown mode. Currency trends tend to persist more than stocks and with every Trump antic selling seems to increase. Watching 2HS1 and weekly 200MA but the way it is moving $DXY could semi-crash through 2015-16 lows. This would set the stage for major melt up in GLD!

GLD Q
Falling 20MA resistance for 3 of last 5 bars, but note last bar weak selling and currently lifting from rising 10MA. If that 20MA clears there is a lot of room to upside.

GLD M
Congestion for the last several months between falling M50 and rising M20 seems to be resolving to upside.

GLD W
From below all weekly MAs just 3 weeks ago to above all. 6th time since 2016 trying to clear weekly 200MA, and 4th time this year. It could fail again but chances are just as good we see upper weekly BB or higher.

GLD W
2HR1 to YR1 target 124-126 is not unreasonable! YP and 2HP just had liftoff so why not?

GLD D
Above all pivots and likely to open above the AugP. Already above 61% Fib. MACD cross 7/18 did not correspond with pivot or MA buy, but above Q3P on 7/21. But here late and RSI getting up there but I am thinking stage set here for melt up above the prior highs. Also note huge buying from D400 thick brown ie monthly 20MA (and yet monthly 20MA still looks like resistance on that timeframe). 7/11 20% portfolio long nice pick if i do say so, but if this is going higher and suddenly GLD above all pivots with USA mains below AugPs (could happen). there is room to increase.

GDX
Has been weaker than GLD technically for much of the year, with 3 breaks of YP although no downside follow through. GLD had just 1 break. Also, GLD well above D200MA 3 separate times and GDX barely above and even still touching on Friday 7/28. GDX has not met condition of above all pivots & MAs for much of this year - however, any higher and it will do it!

GLD and GDX

April 6, 2016 Jonathan Ravel

There is a method to this... checking GLD and GDX after currency review.

If you search the tags on gold you'll see TPP all over this move from mid January with the move above the 1HP on GLD, and further recommended adding units above the YP. But since then it has been choppy and I have been fooled by move above and below the YR1 / 1HR1 level. Ie, take profits on gains, add back, take again. The last weekly post recommended a position reduction if we saw selling from YR1 (ie inability to maintain gains on 3/29) which we did.

The last weekly bar on GLD suggests drop to me, ie, small blue bar under major resistance. But reclaiming the YR1 would be bullish. Really we only see 1 buying (ie up) bar above that level otherwise red. If you bought down 1/25 week that is still an OK long term hold, but the buys the next week are the question here.

GLD D as of yesterday looked like it may try again to clear YR1 but today dropping back down again. This will be the first month since December that GLD is below its monthly pivot. I think more likely move is down to Q2P first near 114.

GDX also just under YR1 / 1HR1 combo.

But doing better on its AprP so far. These are obviously correlated but they don't have to move together all the time. Last year there was a big drop in GDX while GLD barely moved. Still, due to volatility of GDX, it is better to have GLD on your side for direction.

GLD and GDX

March 30, 2016 Jonathan Ravel

Like the currency charts today I will do long term levels, then quarterly and monthly charts.

GLD W chart fading back under YR1 again. This would be very negative for a full GLD/GDX position. We are still 3 trading days from close but concerned about re-balancing / profit taking in the new Q. Anything close below the YR1 level again would be a reduce.

Here's the daily chart with the same long term levels. We do not want to see the YR1 act as resistance today after jumping above yesterday. But above is OK to hold.

Note: current GCJ contract YR1 level is 1230, so that can be factored into this decision too.

GLD Q chart still in downtrend really, below a falling 20MA.

But M chart turning above a flat-ish 20MA. After one fake-out bar 2015 Jan, this is the best move in years simply going by this measure of above / below the monthly 20MA.

GDX below the YR1 but willing to give room if GLD / GCJ holds.

GDX Q chart also still in severe downtrend but the small red bar 2015 Q4 (ie no more selling) was part of the tell for the bounce here. Also helps to be back above the 2008 low.

Above a still falling 20MA that should be in process of flattening out. First time in years above the M 20MA though.

GLD and GDX

March 23, 2016 Jonathan Ravel

These got whacked today. Too bad, I thought stocks may consolidate this week but didn't think that would correspond with a big drop in GLD. FOMC chatter. Anyway, yesterday GLD was comfortably above YR1 and today gapped under the level. If you had full positions then the decision here is to reduce taking gain today or use the MarP as a rough stop area and see what happens.

The other thing to factor in is the DXY yearly pivot; see the recent currency post. Point being DXY above YP would be additional pressure on GLD and GDX.

GLD W chart 1 week up bar above levels, 2 weeks red bars, this one looking like break although 2.5 more trading days left before close.

And there is the MarP smaller orange dots which still can be support.

GDX W looked like it might clear the YR1, but fading under this week.

GDX yesterday looked fine above YR1, today down but not so bad. Well above the MarP.

GLD and GDX

March 16, 2016 Jonathan Ravel

Search on GLD tag or look through featured posts and you'll see I started sounding quite bullish on gold in late January, and even suggested an add if it traded above its YP (which happened in early Feb). In the last weekly strategy sum, I mentioned to keep an eye on the YR1s. Of course GDX is an extra juicy way to play gold although the correlations don't always line up exactly.

Now, whether this is the start of another epic run like the 2000s into 2011 remains to be seen. If you got in early then easier to give those positions some room. Gains on the adds in early February are what are at stake, if still holding those.

GLD and GDX have held up quite well despite a big stock rally, so if stocks fail at big yearly levels (TBD) then perhaps they will get another run.

Sum
I don't have a firm conclusion at this point. GLD exceeded its YR1 and just now dropping below. GDX has had 2 days of high volume selling exactly from its YR1, but so far holding up fairly well. But both remain above all pivots and have nice upward sloping D20 and D50 MAs. If GLD stays above its YR1 then it is a much easier long term hold. Even though GDX has had selling from that level, if GLD stays firm then that should help GDX as well and then I would think to hold above all pivots.

GLD W would be better to hold the YR1 as support, but right now breaking, somewhat bearish especially on weekly close. Of course all could change after 2:00 today, but this is what it looks like now.

Here's the daily chart so that still quite healthy above all pivots; GLD did far better than TLT maintaining gains through the stock rebound. You could make a case for holding above the monthly pivot and if that lasts, then seeing how the Q2 and AprPs look.

And here's the daily chart with all levels. You can see the attempt to jump above the YR1 has faded and now maybe turning into resistance. Keep in mind that virtually all asset classes had major turns on yearly levels already.

Here's a standard daily chart chart with simple moving averages (10, 20, 50, 200) and Bollinger bands. RSI is about in buy area near 50 and there is both lower BB and then eventually the D50 can be support soon. So I am not saying sell here; just watching what happens at the YR1s and then deciding whether best to reduce position or hold.

GDX was structurally weaker so far has stopped right on its YR1 / 1HR1 combo. That said, maintaining most gains so far.

Daily view with all levels. Large high volume selling bar at the YR1 / 1HR1 combo on 3/8 and again on 3/14. That said, still above all pivots. This is why it is often a good tactic to take some profits on a big level, and hold other positions as long as it remains above all pivots and/or above rising MAs lines.

Again on this view GDX just doesn't look too bad yet, only 1 slight close below a D20MA.

Bull vs Bear

March 12, 2016 Jonathan Ravel

On 1/7/2016 I wrote: "Is this a key low or is the bear for real? Bear for real below the 2016 YP at 4373." This was a simple statement but actually quite carefully considered as explained here.

Now some might say that didn't turn out, because SPX and INDU were down only -15% from 2015 high to 2016 low, and NDX about -18%. If you are using -20% then OK that didn't qualify. Although the weaker USA main indexes RTY and NYA did reach bear territory with -25% and -20% respectively.

Also consider by shifting conclusively bearish I emphasized the safe haven trades from there: TLT, GLD and perhaps some GDX. After 1/7, these had the chance for 11% upside in TLT, 19% upside in GLD, and 68% in GDX! Now you wouldn't have gotten these exactly because it is measuring a low made after 1/7 to the highs; but similarly, the stock indexes measure the drop from high to low.

Meanwhile after 1/6-7, SPX had about additional -9% down to the lows, INDU about same at -8.5%, and NDX a bigger drop after 1/7 (because that is when YP broke) at another -10% down. The more bearish vehicles as noted above were another -12% down on RTY and another -9.5% on NYA.

So despite SPX, NDX and INDU not reaching that 20% media headline number, this idea of playing the market more defensively worked quite well. Until 2/12 when oil bottomed on its YS1, INDU recovered its YS1 after a slight break (DIA and YM held) and RTY held YS2! I did recommend speculative buys on INDU and oil right on 2/12!

Since then I have recommended even more longs, but still wary of the rally with two quick short shuffles that were nixed the next day. Why? Because stock indexes were below 3 / 4 pivots and only recovered monthly levels, while still below yearly, half-year and quarterly pivots!

But now it may be time to shift tune. INDU / DIA / YM has been the pivot leader on the rally. This wasn't the case in the 2009-2015 bull market where it was the NDX. What I mean by this is SPX, NDX, and NYA all broke their YS1s, and RTY went all the way down to its YS2, but INDU broke YS1 fractionally as DIA & YM clearly held.

INDU was the first cash index to close above its FebP (fractionally on 2/17) with others still below, and likewise the first to close above a long term pivot on 3/4 above its 1HP, where the others hadn't done that yet. And really YM and DIA were the best tells last week, clearly holding major support before the big jump at the end of the week. On Friday both SPX and INDU leaped above all pivots on Friday, but with INDU the current leader the market call here is:

Bull alive and kicking above 17138 (the highest of the INDU pivots, the Q1P) and still more likely than bear with INDU above its YP at 17048.

TLT and GLD

March 10, 2016 Jonathan Ravel

TLT low near 1HP, jump above YP, tag of 1HR1, up to the high of year on 1HR2 / YR1 combo, now fade back to 1HR1. Got that? Just look at the bars and levels below.

But on the medium term levels we see a monthly pivot acting as resistance for the first time in a while this month.

So the recent range this month is long term support at 1HR1 127.87 vs medium term resistance at the MarP 130.84.

GLD started below its 1HP but jumped above later in January, then soared above its YP and very quickly reached its YR1 / 1HR2 combo. Unlike TLT, however, GLD cleared these and now may act as support.

GLD above Q1R2 and well above its MarP.

Here's a version with all levels. Better for YR1 and 1HR2 to act as support so that is 117.94 and 118.98 respectively. But if that goes it will still be above its MarP which could also try to hold.

TLT and GLD update

March 3, 2016 Jonathan Ravel

If following The Pivotal Perspective you avoided a lot of the damage in stocks, started buying back 1 day off the low; and made great gains in the safe havens. Since these were the only things in the universe above pivots they were screaming buys, and then even adds as they cleared YPs in later January (for TLT) and early February (for GLD).

Recently I was shuffling the add portions expecting a safe haven drop if stocks bounced further, which was right for TLT and not for GLD. Let's take a look.

Wait, you mean those red lines at the top were there before the move? YES. From the open on 1/4/2016 yearly resistance levels like all yearly pivots are fixed and in play. So 1HR2 at the tippy top, also resistance at YR1 red crosses; so now the big issue is if 1HR1 lower red dots holds as support especially on a weekly close. That level is 127.87.

Here's TLT D with med term levels. You can see TLT below the small orange dot from early March, that is the March pivot. TLT has been mostly above the monthly pivot (except a few days) from December. Maybe we will see the S1 area 126.33 which is just a bit lower than the 1HS1.

So, if in from early January I think at this point hold portion above this area, 126.33-127.87. Any recent reduction below the MarP could be put back on if stocks indexes fail their major pivot area and we want to rotate back to more defensive. But if stocks clear their YPs and hold as support, we will be reducing safe havens further.

GLD also lifted from 1HP then jumped above YP and was at its YR1 / 1HR2 at the next bar. 3 weeks pause under YR1 but no red yet - that's bullish. If YR1 can act as support then the door opens to 124 1HR3 and maybe YR2 near 134.

Here's GLD D with medium term levels. Unlike TLT, it is still well above MarP support and much easier to hold above that.

Lastly GLD D with all levels; there was some selling from YR1 but it has kept coming back. So far any reduction an error but we can see what happens.

Deutsche Bank vs The Pivotal Perspective

March 1, 2016 Jonathan Ravel

Continuing a series, the big banks vs The Pivotal Perspective. First in series here.

Deutsche Bank was recommending gold on 2/26.

Admittedly I had some shuffle last week, but I was more concerned with taking profits on the YR1 area (larger red crosses) especially if stocks continued to show some strength above their FebPs.

Here at The Pivotal Perspective we are buying key pivot status changes and looking to lock in gains at major resistance. Certainly we can hold if that clears and look for higher levels. But the DB buy after a 15% jump right at YR1 is quite frankly very late.

Monthly pivots

February 29, 2016 Jonathan Ravel

SPY, TLT and GLD monthly pivots only shown below with no other levels at all. Obviously this is not a standalone, but we can view this as a piece of the puzzle. Sometimes there is chop, sometimes crystal clear moves. We are looking for the latter while being alert for the former. Detailed comments for SPY:

2015
August - break, recovery, break, recovery, 3rd break was IT
September - started below, resistance several days, one recovery, next break tradable swing short
October - recovery on first trading day and off to races
November - exact low of month
December - started above, break, recovery, break and drop, slight recovery not clear, another drop, clear resistance 12/29

2016
January - opened below and slam
February - 1 day above, break and tradable short, then recovery and hold, bit higher. PS, the 2/11 low was on an S1 but for sake of clarity not showing the R / S levels on this chart.

With that in mind we will have March pivots in play starting Tuesday. If SPY opens above it can hold as support and go higher, or break for a short. Similar idea for all other asset classes (TLT, GLD, oil, currencies, etc). Worst case in this method is when it chops which is why best positioning takes into account the other levels, as well as some supplemental factors like pivots on VIX. Then those who prefer can add RSI, volume, etc.

Note TLT mostly above its monthly pivot for 3 months, with January and February of 2016 particularly strong. At some point we will see another test of the pivot.

GLD also completely above pivots for 2 months straight; but this was after a long period of being mostly below all pivots for quite some time.

TLT and GLD update

February 25, 2016 Jonathan Ravel

The Pivotal Perspective has been all over the safe haven rallies because it was crystal clear using this method that both were making positive moves from important levels as stocks rolled over. Summary posts are here for TLT and here for GLD.

Although I did say taking some gains from the more recent adds (TLT adds 1/25-28, then GLD adds 2/4-5) I encouraged to put them back on per bearish playbook. So we are in management phase of full positions on these. Now what?

TLT weekly chart with long term levels shows clear lift above 1HP, clear big high volume jumpabove YP, which acted as support from there; pause at 1HR1, tag of 1HR2 / YR1 area but maintaining pretty well. So the big issue is whether that's it for the year or if TLT will clear the YR1 and go for the 2015 highs or maybe higher. A simple long term strategy could be to hold above the 1HR1 near 128 that can act as support.

I don't like to see 2 smaller blue bars in an uptrend especially with wicks, but let's see how the bar closes and how stock indexes react to their FebPs from here.

Here's the daily chart with medium term levels. You can see the launch above the QP and JanP, then Q1R1 turned into support, Q1R2 turned into support, but still struggling at Q1R3. OK, maybe Q1R2 will continue to hold as support. Also, in a few trading days, we'll have the March pivot which will probably act as support. Per my bias I think this is a full hold but it will be much easier if stocks indexes reject their FebPs.

GLD was making an equally clear move a few weeks behind TLT. GLD did try to jump above HP & YP in 2015, but the difference at the time was that stock indexes were still above their YPs while this time they had crumbled. Knowing that is why I was really thinking the move was for real, in addition to seeing DXY weakness at the time.

GLD too has quickly reached its YR1 / 1HR1 combo. So again we have the same issue - is that it for the year? Or will those levels clear and hold as support? So far just a pause, no red and looking like it could clear - and would be an easy hold for higher targets.

Here's GLD D with medium term levels. Similar jump above Q1P, and was already above JanP at the time. No damage from Q1R1, a jump above that. Now it is consolidating under Q1R2 but not too much damage. 1 day rejection met with buying today. So I also think this is full hold and let's use March levels to held guide the position as well as keeping an eye on the big YR1 / 1HR1 combo.

If you added GDX for kick above its YP, that is doing fine and looks like it should test its YR1 / 1HR1 combo as well with even a Q1R3 nearby all 20.20 to 20.42.

4:25 EST update.

A much different look at the close on each. TLT small blue bar with rejection from a monthly resistance level.

GLD especially poked above but did not close above YR1, potentially bearish if any lower tomorrow.

Weekly strategy update

February 23, 2016 Jonathan Ravel

Judgment based on the close, but for now:

ES needs to hold 1925 its FebP. Anything below that would be first warning sign of trouble.

Also, yesterday I mentioned that it would be better for VIX to confirm strength by dropping under its QP of 19.27. So far that hasn't happened.

The point on both of these is that a bearish move back under SPY / ES FebPs, along with INDU / VTI would mean cut recent longs and add shorts. List of short possibilities means anything that stayed completely under its FebP without even tagging: QQQ IWM IBB XLF and possibly NKY / EWJ or DAX / EWG.

GLD - I may have erred on the partial take yesterday. To be clear, I pointed out gold in late January and that main portion I think is worth holding, but any adds after the YP clear on 2/3-4 were the judgment call. Above its WP 116.97 would be short term bullish; then if GLD clears its YR1 again then I think worth having a full position. To watch. I haven't talked much about GDX, mostly but not exactly correlated, then I mentioned yesterday that it was doing fine.

RSX, EWZ, EEM. These are fading a bit today along with the market, oil and $USD strength. EWZ in particular tagged FebR1 and now back under. As I type ACWI is dropping back under its FebP, so a close under that level would help point to taking some gains off the table on these quick squeeze ideas. EEM more tied to China and it hasn't done too much.

BTCUSD is pulling back from its FebR1. It would be better above, but if markets start to slide again, or trouble in China, then maybe BTCUSD will explode higher. Buy on 2/16 near 407 just cannot become a huge loss so i think worth giving it room.

Weekly strategy sum

February 20, 2016 Jonathan Ravel

If you are new to my methods you might want to read the last strategy sum and/or the recent review.

Last week I was expecting a bounce and that delivered. Per my view of the market and timing model, my bias is for breakdown in March but I have to respect the bullish action on long term levels last week. It is easily possible that indexes go higher and the simplest strategy is to watch the FebPs that are nearest in play on SPX / SPY / ES, INDU / DIA / YM, and NYA / VTI as posted here. I really don't have an opinion on direction for the coming week and will let the FebPs decide.

If the market shows strength then I might say reduce safe haven trades and add more longs (but only what is above a FebP); but if it shows weakness be ready to pounce by adding shorts or safe haven positions. A breakdown from here could be very fast and messy.

Based on oil, a breakdown looks more likely. But various VIX indexes are appearing more positive, and it is my experience that VIX if often correct. We'll see what happens. More specifically:

1. In 2016, following The Pivotal Perspective would have reduced then cut (or at least fully hedged) USA stock longs, possibly reversing short, early January 1/4-7, while buying TLT. TLT then added after clearing the YP, and probably took gains on a portion of that at the YR1 / 1HR1 rejection. Basically we are monitoring the TLT position and deciding whether to go back to full strength or continue to hold the portion. If you took USA index shorts, then the YS1 holds, turn alerts 1/20-22 and 2/12 along with the INDU buy were good cover areas.

2. Likewise, GLD was mentioned several times before the big jump, with an add 2/4-5. I think the first buy is definite hold but watch the YR1 area this week on the ETF and futures to decide on taking some profits or not. This move likely corresponds with main stock index decision at the FebPs. Also might be worth keeping DXY in mind here, as DXY is again testing its YP. A second break should help support the GLD idea.

3. If in the INDU / DIA speculative buy, then obviously we are watching the reaction from the FebPs. If that clears across the board we could add, but if rejection then cut and take the small gain. I don't want to get cute with the counter-trend. Best gains are made long above pivots and short below. If still in the emerging market longs from last week - RSX, EWZ, and EEM all mentioned as possible buys above FebPs - and of course they have to stay above FebPs to remain valid. Again let's not get too cute with counter-trend, as these have poked above a FebP and still below all the others, but I'd give them a bit more time to play out if the DXY breaks its YP again which was testing on Friday.

4. If in BTCUSD from 2/16 near 407, that is moving well. "Above all pivots" scores again.

5. If market is strong, then really INDU / DIA / YM appeared to be the leader for a couple days last week, but as of Friday came back to be about even with SPX / SPY / ES so either of those could be adds. Basically I would only buy what is above a FebP. If weak then there are plenty of choices for shorts - anything that hasn't tagged its FebP yet. So NDX / QQQ / NQ, RTY / IWM / TF, IBB, XLF.

6. Oil. On the CL1 contract, oil has been below all pivots since 11/4/2015. The recent lows were bang on 1HS1 on 1/20 and YS1 2/11-12. Something that has been down 75% in the last 2 years is going to be quite squeezy. So, if already in this position from last year then your judgment call. Major support levels were the perfect places to cover. You could also hold a portion until oil recovers a quarterly pivot.

7. If in emerging market shorts as suggested as portfolio hedges from last year - FXI EEM PIN RSX EWZ were all mentioned in November - probably you would be out at least some of these positions, most of which had huge gains. First, all except EWZ reached an 1HS1 or YS1 or both. Second, EEM, RSX and EWZ have been above their FebPs 3 times as DXY softens. FXI has been the weakest, remaining below all pivots since 11/25/2015 and so the best to hold at this point. PIN recovered its DecP towards the end of the year but again below all pivots from 1/6/16, at which point there were plenty of USA short choices as well, but also could be held as a short compared to the now relatively stronger EEM, RSX and EWZ.

Hold gold?

February 16, 2016 Jonathan Ravel

The Pivotal Perspective was all over the rally in gold. From my view you didn't have to think about it too much - an asset class that was below all pivots especially long term levels for much of the last few years was suddenly above 3/4 levels and bells were ringing. Here is a summary review post with links to the originals.

Also on 2/1: "If it rallies above the YP with a look of support, then add." Even if you bought the close of a massive rally bar, you were in at 112.32, although if buying that day above the YP then could have been as low as 109.75.

So like TLT, the question here is one of management. The original buys 1/25-29 are very easy to hold, but what about the add? As of last week GLD was above its YR1 - OK very overbought RSI, but not rejected from the pivot level. Now there is a gap down that could be rejection. Exits are trickier than entries but I think there are a couple reasons to hold it.

This move has been the best jump above long term levels since July 2012 and that was a high test attempt after a multi-year tremendous run. There was one attempt in 2014 that barely cleared the level and immediately faded; then another early rally in 2015 that lasted 3 weeks above the YP after tagging the 1HR1 for the high of the year. So this time *is different* compared to the last 2 years.

Long term moving averages like the monthly 20MA and daily 400MA point to a similar conclusion (charts not shown).

Granted, it would be easier if the $US fell back under its YP at 96.48. That said, faith in central banks is not the same as last year. Their maneuvers, instead of looking like backstopping the market, are growing more suspect. This could increase the support for gold. Last, Goldman Sachs has been 5 for 6 on its top trades of 2016 and they are calling for a short today. So maybe that is a hold :)

On the daily view, you can see the drop under YR1 thick red crosses 118.98, but let's look at levels that could act as support. FebR3 is at 114.53 which would also be a possible gap support. Even though FebR3 is a resistance level, it has convincingly cleared and the nearest medium term level that might be support.

Zooming into short term levels, GLD has been entirely above its weekly pivot since 1/20 to today - quite a run. One week holding the weekly S1 at 114 area would not be too bad. Let's see what happens.

Gold update

February 11, 2016 Jonathan Ravel

Prior gold posts:
1/27
"With 3 trading days left in the week, it is possible that gold is giving the best looking long term buy bar in about a year. Very simple: if the move is for real then gold stays above the 1HP and will then clear the YP." "Above that [1HP/Q1P combo] is bullish because now a market that was very beat up is suddenly above 3 pivots. Then the all important YP is not far and may test."

2/1
"Last week I noted on the blog that GLD might be putting one of the best weekly bars in quite some time." "Still, the [2/1] open at 107.54 is just a little over 2% above the 1HP which is not bad risk/reward for a long term position. If breaks on a weekly close then the position is closed. If it rallies above the YP with a look of support, then add."

2/4
"So the big question here is whether this is normal pullback to support on DXY and another failed breakout attempt in gold, or whether we are seeing a real long term trend change. I don't know, but I do know where to watch to answer this question. DXY YP 96.48 and GC G6 YP 1137 (just continue to update on rollovers)."

Now let's look and see what happened. GLD W below with long term pivots only. Clear lift above the 1HP the 1/25 week was the first tell. Active traders were buying there, long term investors looking at charts over the weekend could have been taking partial positions on the 2/1 open.

Here's the daily chart. Volume was picking up on the advance to the YP, a good sign. No rejection at all, next day above, then launch. Per notes above, full position. I think let this one run for a while :)

"1/20-22 Turn but not a buy call" looking good!

February 8, 2016 Jonathan Ravel

OK, the title sounds like horn-tooting and maybe so a little bit. But the main point of this post is to understand why i was making those calls 1/20-22 and what has played out since then, both in terms of money and aggravation saved and then perhaps more important, other opportunities.

First, on 1/20 blog post "Big turn?" indicated possibility of decent turn and what we needed to see.

1/22 post continued to point out all the yearly levels that had just held, along with oil.

At the very same time, I was saying not a big buy on 1/21.

Then clarified this seemingly contradictory view with a detailed post here on 1/22, "A turn but not a big buy."

Now, if you have a 1 week time-frame that is really short term swing trading which I am not addressing so much here. For that you'd want to be using daily, weekly, and some monthly pivots - and yes, the week of 1/25 SPY held its weekly pivot for the first time since the last week in 2015, so that was a decent buy for that kind of trading. But for those with longer term horizons, any buys 1/20-22 would likely be now under water.

But that wouldn't be the only cost! In fact, maybe you could take some small stop outs and it wouldn't be a big deal. If you are trying to catch bounces, the big S levels are where to do it. Although I think a better method is to swing trade the bounces when you get a good setup on the shorter term pivots (daily & weekly, sometimes monthly) and hold core positions aligned with longer term pivots (yearly, half-year, some quarterly).

The main point of this post is to point out what you would have missed if you focused on trying to catch the bounce in stocks - which at this point, is counter-trend move according to The Pivotal Perspective.

The charts below show why I focus on buying what is above pivots, and avoiding, shorting or hedging what is below pivots. If you focus on trying to buy support (S) levels, ie, what is below pivots, once in a while you pick a nice turn but you could just as easily have a year of headache. Stock indexes are below major pivots for the first time in years, as safe havens jump above. This situation may take several months to resolve, or longer!

Now for longer term short positions, yes, those yearly level holds were good places to take some profits or hedge a bounce. This is equivalent to taking some profits on big R (resistance) levels in an uptrend. That said, just tagging those levels is not an automatic all out - not by a long shot. Often you want to continue to hold some shorts if the index continues to trade below all pivots. I'll address this in a separate blog post soon and point out some examples.

So by trying to buy the stock bounce you missed entries that we might not see again on TLT, GLD and GDX all below.

1. You missed a chance to add TLT longs as TLT held its YP as support 1/20-28. Showing long term pivots only here.

2. You missed a chance to buy GLD as it cleared its 1HP for the second time this year on 1/25, and possibly adding above the YP on 2/4-5.

Even GDX got in gear with long term buys last week, first above 1HP on 2/3 then clearing YP on 2/5.

Gold follow up

February 1, 2016 Jonathan Ravel

Last week I noted on the blog that GLD might be putting one of the best weekly bars in quite some time. The weekly bar doesn't become official until close, because theoretically it could have jumped above a level and closed well under it keeping the downtrend intact. But that didn't happen, so let's check it out again.

If you are really interested in this idea, first I suggest checking out that prior post and check how $GLD looks in a strong uptrend like 2009-2011. It jumps above major pivots and or lifts from them as support, then runs. That isn't happening quite yet because it is still below the all important YP (orange crosses).

But it did clear the 1HP (orange dots) and that is potentially a big deal, because it has been below major pivots for so long. So what can happen from here?

1. Most bullish, continue to rally or pause just slightly at the YP, then rally from there.
2. Some bullish, rally up to YP, drop but still hold the HP, then in more time clear the YP.
3. Sideways, stay congested between the two major pivots for a while
4. Some bearish, give up the gains and break under the 1HP again.
5. Most bearish, quickly return to status of below all pivots.

Now let's turn to the daily chart for more information with the medium term quarterly and monthly pivots turned on as well.

Ah ha! Now we see the current FebP at 105.78. This means 3 pivots are in the 105 area: 1HP 105.22, Q1P also 105.22 and the Feb P. Easy hold above that support cluster at 105. Next would be to watch reaction at resistance at the YP. People putting money in the market might also want to check the futures, both GC1 continuous and current contracts, as occasionally the futures will often confirm or question a setup on the ETF GLD.

A long term investment strategy is to be partially long when an asset is above one of two long term pivots, fully long or leveraged when above both, and out, short or hedged when below both pivots measured from weekly close. On this basis, $GLD put in a partial buy as of 1/29 close. While a fund could do their transactions right there, an individual wanting to check charts once weekly on the weekend would likely be buying on the open today which due to the gap is higher than Friday. Still, the open at 107.54 is just a little over 2% above the 1HP which is not bad risk/reward for a long term position. If breaks on a weekly close then the position is closed. If it rallies above the YP with a look of support, then add.

Gold

January 27, 2016 Jonathan Ravel

As most market observers know, gold put in a phenomenal rally from 2002 to 2011. GC1 futures data shows about a 650% rally low to high. But since then a lot has been given back, about 50%. In this ever more digital age, will gold ever regain its luster? (Sorry.) Using pivots we don't have to guess. Let's look at the long term levels when gold was in a decent uptrend versus the last few years.

To make it simple I am showing only the YP (yearly pivot) and HPs (half-year pivots) without any support or resistance lines on the GLD weekly chart. As you can see 2009 to 2011 was all above pivots with each touch a perfect buy chance or hold.

Then something changed in 2012 and that was a break of both the HP and YP. It was able to recover, but then put in a lower high. The start of 2013 showed trouble from the start with a clear rejection of both the 1HP and YP. This is often (not always) a bearish sign in the market, and sure enough 2013 had a big drop.

Even if you thought bankers were destroying currency and wanted to own gold, pivots showed to be less allocated or better out of any asset that is below all pivots. If you restricted your buying attempts to weeks above a long term pivot, then 2013 in and out, 2014 and 2015 a few tries that would not have cost much.

There hasn't been any buy signal at all in more than a year, as GLD has been completely below long term pivots from February 2015 to recently.

GLD did close a bit above 1HP the first week of the year, but not with a look of support. Also, the futures failed so given the trend there were two reasons to wait. With 3 trading days left in the week, it is possible that gold is giving the best looking long term buy bar in about a year.

Very simple: if the move is for real then gold stays above the 1HP and will then clear the YP. If the YP smacks it down and it breaks the 1HP, then the trend is still down. It could stay congested between the YP and HP for a while, although that is a tight range which will break one way or the other at some point.

Now let's zoom into the daily chart with all pivots. Look at at the October bounce. If you bought 10/2 , the first day above a quarterly pivot in months, then you had a chance for gain or the worst case small loss when exiting early November. Note I am not even qualifying this as a long term buy, because GLD was not above a half year or yearly level at the time.

GLD has been above the JanP after being below monthly pivots for 2 months straight, and now this is the 2nd time above the 1HP / Q1P combo (hard to see because same level) at 105.22. Above that is bullish because now a market that was very beat up is suddenly above 3 pivots. Then the all important YP is not far and may test.

Big levels

January 23, 2016 Jonathan Ravel

The amount of indexes or ETFs that turned from long term levels - by this I mean yearly or half-year pivots - is rather amazing. These weeks are rare. The odds favor more on the bounce, but how far it gets we shall see - and use the shorter term pivots, especially the FebPs which will be in play in about a week - to gauge the strength. Of course all the levels below that broke and recovered by the weekly close will have to hold.

All charts weekly with year and half-year levels only (no quarterly or monthly). Listing comments first, then the charts. If you get confused to which is which, look for the light grey watermark of sorts identifying the index / ETF.

This post has gotten quite long, and I still didn't cover two categories - currencies and commodities namely, oil. I will do another post on that soon, but check the recent blog post on oil that pointed to the key level YS1 a day before the low!

USA mains stock indexes & ETFs
SPX / SPY / ES - all broke YS1s & 1HS1s, but recovered on close (hard to see 1HS1 on chart b/c so close to YS1)

NDX / QQQ / NQ - low on NDX near exact, QQQ disparate structure ie not on YS1, NQ more like ES

INDU / DIA - lows on YS1 & 1HS1 combo

RTY / IWM held YS2 / 1HS2 combo area. (Note: these two charts added on 1/27.)

NYA - recovered YS1, but still a fraction under 1HS1

USA additional stock indexes & ETFs
IBB - weaker bounce off YS1

SOXX - better move up from 1HS1. The Pivotal Perspective prefers SOXX over IBB here.

XLE - also YS1 low and recovery of 1HS1

XLF - I don't know what to make of pivots this year due to massive 8/24 spike, so not showing here

Safe havens & risk indicators
TYX - just slightly below its YP; recovery would put in back in congestion zone above YP but below 1HP; below YP remains bearish yield and bullish bonds.

TNX - rebounded from 1HS1

TLT - high on 1HR1 near exact

ZB - high on YR1 / 1HR1 combo, but could be pause and not rejection.

ZN - also high on YR1 / 1HR1 combo, but also perhaps pause and not rejection.

HYG - low on 1HS1

VIX - poked above, but did not close above, the YP for the last 2 weeks. decent reversal from the YP although some may point to closing below the low of last week as confirmation, which hasn't happened yet.