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Daily commentary

DAILY COMMENTARY

Daily commentary with Al Korelin.

Quest update

Still hanging on despite a wild whipsawing metals market. Quest up a little over 700% to $2244.

WARNING SIGNS AGAIN

This is what I published to the premium website this morning.

The more I look at this the more concerned I am becoming. It's only natural to see day traders take profits after a huge momentum push like we saw on Wednesday. Usually a market will trade sideways for a day or two after that kind of move. But that kind of momentum doesn't just get reversed immediately. Not in a natural freely traded market. It certainly hasn't in the stock market.

The heavy volume selling in miners yesterday wasn't in my opinion short term traders taking profits, and now this morning sellers are again trying to drive gold back below that critical $1350 support zone.

My opinion has been that the unnatural selling over the last three weeks was an attempt to drive gold down to $1000 by players trying to lower the starting point before the bubble phase begins. However after Wednesday's rocket launch I think those players threw in the towel and probably realized that they were going to have to be satisfied with this leg starting at $1179.

So at this point I don't think this has anything to do with trying to lower the starting point before the bubble. This appears to have other motives. I'm now prepared to entertain the idea that this manipulation could be coming from much bigger sources in the Fed or government.

Now this may just be options related and everything will resume going up next week. But I'm going to again heed the warning signs and exit all my positions and stand aside as the market isn't acting naturally and I'm afraid the manipulation is going to resume, and they appear to have pockets deep enough to break even a rally as powerful as the one we saw out of the FOMC meeting.

If gold can be held down around $1350 or lower by the close it will again damage the weekly chart and mostly erase the constructive work that had been down on Wednesday.

At that point I will be back on the sidelines waiting for the weekly swing to be erased by a move above $1417 before I want to risk entering these shark invested waters again.

Sept. 18 morning update

The following is what I sent out to subscribers this morning.

"The miners have refused to follow gold to new lows this morning. In my opinion this is a pretty good indication that the daily cycle low is imminent. Either on the FOMC announcement this afternoon or maybe tomorrow.

If gold were to deliver a $40-$50 rally today that would be a strong sign that the bull is going to overwhelm the manipulation.

We will have to wait and see what happens, but if it does surge hard on the FOMC statement back up to the $1350 resistance zone that would be an incredibly bullish start on day one of a new cycle.

If that were to happen the odds would be good that gold would break through resistance and break the manipulation. Brave traders could re-enter LEAP’s if this occurs this afternoon.

I think this scenario requires gold to rally immediately upon the statement. No sell off and reversal. This needs to be a rocket launch right after the announcement. There needs to be no doubt the market is reversing 180 degrees."

Gary

FOLLOW UP COMMENTARY

Round table discussion.

DAILY COMMENTARY

Daily commentary with Al Korelin.

DAMAGED WEEKLY CHARTS

As I mentioned in my last post there is a disturbing possibility that gold's intermediate cycle has topped, and done so in a left translated manner. For clarification, left translated cycles often lead to lower lows. In this case if gold did top on week 9 and the intermediate cycle is now in decline, then the odds are high we are going to see the June low of $1179 tested and broken before the next intermediate bottom. 

Whenever I'm not sure about direction the first thing I do is go to the weekly charts. You can see in the three charts below that the Thursday premarket hit did serious damage to the entire sector.

Just based on those three charts the sector is screaming that an intermediate top has formed. At the very least I think one has to wait until these three weekly charts are repaired before risking further long exposure to the sector. Keep in mind I'm not recommending selling short, the daily cycle is due to bounce soon, probably on the FOMC statement. But there is a strong possibility that bounce will be a fake out to drawn in another round of buyers only to reverse and head back down again.

I continue to think this is a high stakes game where big money insiders are trying to lower the starting point before the bubble phase of the gold bull begins. As I've noted before if one can artificially lower the beginning of the bubble phase to let's say $1000 instead of where it naturally occurred last summer at $1550, then the profit potential once the bubble phase begins is dramatically magnified.

I'm convinced the force behind this is trying to drive gold back down to the prior C-wave top at $1030 before reversing course and riding the bubble phase of gold into a top somewhere above $5000. It remains to be seen if they will accomplish their goal, but they did succeed in forcing gold back below the critical $1350 support level on Thursday's premarket hit.

At this point the bulls are back on the defensive. They have to at the very least recover that $1350 level before they have any chance at repairing those weekly charts.

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Quest Update

So far so good. We're still hanging in and haven't taken the account back to 0. After closing the most recent trade the quest portfolio is up a little over 400% and now worth $1606.

I'm afraid gold may have formed an intermediate top and if so this is going to make it much harder for the Quest portfolio to perform and much easier to miss a trade and risk taking the account down to 0. I'm going to have to wait patiently and pick my trades carefully from now on. The odds of even reaching $10,000 in the next 6 months will be greatly diminished if the intermediate gold cycle has topped.

AND IT BEGINS

As I was afraid would happen, gold suffered an overnight hit that drove it back below the $1350 support zone. The drop occurred in the span of one minute so it's pretty obvious this was a planned attack with the intent of taking out that support zone in the thin overnight market when there would not be any buyers to defend the against the attack.

This has also broken the intermediate trend line which should take out all the technical traders as few will want to buy a broken trend line.

At this point I think we need to align our goals with those of the manipulators. This doesn't mean selling short, but it does mean delaying gratification until the manipulation has accomplished its goal. That goal, I'm almost certain, is to setup the trade of the century. By lowering the starting point before the bubble phase of the bull market begins this manipulation is creating more and more profit potential once it ends and the bubble phase begins.

Yes, this entire debacle has stolen a load of money from those depending on freely traded markets. But this is also going to setup the conditions to make back all of those losses and many multiples more during the bubble phase of the bull. Instead of fighting the manipulation we just need to accept that it is happening and why it's happening. Wait patiently until it's done, and then get positioned to profit from it right along with the forces that have orchestrated this charade.

At this point I doubt we will get a cycle bottom until the FOMC meeting next Wednesday and maybe not until OEX next Friday. The bounce out of the daily cycle low I expect will fail to reclaim that $1350 resistance zone and gold will head back down to test $1179. At that point I think we can safely assume we will see another one of these overnight attacks to break that support. This will probably trigger a waterfall collapse back down to the prior C-wave top around $1030ish.

That's the point where we will back up the truck as that is the logical level for shorts to cover and longs to enter in preparation for a final bottom and the beginning of the bubble phase.

So at this point I'm ready to cheer for the criminals running this scam because I know they are not only setting up the trade of the century for themselves, but I'm planning on taking advantage of it myself. Now we just have to be patient and wait for setup to develop.

I signaled an exit into strength last Tuesday and got subscribers out of the way of this attack. We are now sitting on the sidelines waiting for the manipulation to run its course and preparing to enter long once it has.

The $10 one week trial subscription is still available for anyone who is interested in trying the nightly premium report. There are still plenty of opportunities in the meantime while we wait for this to run its course.

DAILY COMMENTARY

Daily commentary with Al Korelin

IS THE MANIPULATION IN THE METALS ABOUT TO BEGIN AGAIN?

The answer to the question above unfortunately is maybe. There are definitely warning signs springing up.

The first sign of trouble popped up last week when the miners generated a key reversal on huge volume, and on a day when gold was actually positive. Something about that day smells very fishy to me. It looks like big-money traders had advance notice that a false breakout to new highs was going to be manufactured to give insiders an exit after a two-month 40% rally. The high volume follow through the following day confirms that something is not right.

Looking at the weekly chart only confirms my suspicion. The last week of August was the highest volume week in GDX's history. When that kind of volume appears at the top of a two-month rally, after a 40% gain, there's a good chance its signaling smart money just snuck out the back door. We should only see this kind of volume at the bottom of a serious decline, not the top of a two-month rally unless something is wrong.

Another warning sign is the potential topping candle on the weekly charts of $GOLD followed by an indecision candlestick this week.

I'm starting to get quite nervous that this intermediate cycle topped on week nine and the bear raid is about to continue.

As most of you know I'm not a big conspiracy buff. Other than short-term stuff around options expiration, pretty much all of the pullbacks in this bull market can be explained away as normal corrective moves that happen in all bull markets. Unfortunately, this has not been the case since last December. Nothing about the decline after the QE 4 announcement has been natural. 

First off, the intermediate cycle length was stretched ridiculously far, which would never occur during a down trend. During down trends intermediate cycles shrink, not stretch. 

Secondly, sentiment extremes which would normally generate bear market rallies had no affect during this decline. The lack of any significant counter trend moves to relieve selling pressure during this bear market are another sign in my opinion that this was not a natural move.

And finally, the repeated massive volume take downs in the overnight and pre-market hours to push gold below significant technical levels thereby triggering stop loss orders would never occur if traders were trying to maximize profits. That 400 ton dump in the pre-market on April 12th to run the stops below $1523 was so far from a natural market event it's not even questionable that it constituted blatant manipulation.

There's no doubt in my mind that big-money knows gold is going to enter the bubble stage of this bull market sometime soon. What started out probably as an attempt to create a selling panic so Germany could get their physical bullion back, has now turned into a high-stakes game of let's see how far we can lower the starting point before the bubble phase begins.

I have noted before the difference in profit potential if the starting point of the bubble phase could be artificially lowered. I'm convinced that if allowed to trade freely the next leg up in the gold bull market began last summer as all assets started to respond to QE 3& 4. That rally had a starting point at about $1550. Assuming a minimum secular bull market top of at least $5000, the profit potential from that move beginning at $1550 is about 200%. However, if the starting point could be artificially lowered to $1000, the profit potential jumps to 400%.

Considering the warning signs from the mining stocks last week and this week, I'm starting to get extremely concerned that the bear raid is about to resume. The first goal will be to take gold back down to test this summer's $1179 bottom. If that bottom can be broken (and if gold gets anywhere near that level I think we can automatically assume we're going to see another massive contract dump in the overnight market to make sure it does get broken), gold will collapse in another waterfall decline that drops it all the way back to the prior C-wave top at $1030.

The next week or two are going to be dangerous in my opinion. If the bears can get some downside traction, traders need to get out of the way, get back to cash, and prepare to jump on board the bull at $1000 which I believe is probably the ultimate goal of this manipulation event that has been going on all year.

I advised subscribers to exit on Tuesday morning into strength based on these warning signals. We are now in wait and see mode in case the manipulation resumes. If it does, then we want to stay on the sidelines until the big-money is finished jerking the sector around, and we want to re-board the train at the bottom along with the insiders who have manufactured this whole criminal process.

I invite you to consider a $10 trial one week subscription to my daily and weekend reports. The topics covered (with charts) include analysis of the precious metals, miners, stock market, currencies, bonds, the Fed, sentiment and cycles.

DAILY COMMENTARY

Daily commentary with Al Korelin

DAILY COMMENTARY

Daily commentary with Al Korelin