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Precious Metals Were Ripe for a Pullback

Scorpio

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#1
Precious Metals Were Ripe for a Pullback

September 6, 2019 Gary Precious Metals Comments Off on Precious Metals Were Ripe for a Pullback

If you hear one peep out of the gold community about a precious metals “take down”, “attack” or any other such aggressive or war-like language you will then be hearing some old fashioned and promotional gold bug orthodoxy. Fortunately, a casual look around the Bug-o-Sphere does not yield too many obvious conspiracy theorists or importantly, cheerleaders.
Indeed, it seems that all too many bugs expected this correction in gold, silver and the miners. That is a good thing because when the real top comes these ladies are going to be out front and greed will be running rampant (quite possibly against a negative fundamental or valuation backdrop as in 2008).

Instead, everybody it seems knew about the high risk Commitments of Traders situation for gold and silver. The CoT is not a timer, but for weeks now it had been a condition that’s been in place for a correction. It’s not a “take down”, it’s a condition of too much speculation that had to be addressed. Now it is. Other CoT data available here.


As the CoT, Hulbert’s HGNSI and the extreme overbought readings first in the gold price, but then dynamically in the silver price and the miners gathered to form a high risk situation, the time to take some profits was over the last couple of weeks, not now. Gold oriented newsletters appear to have jerked over bullish with the latest headfake rise in the gold price.

Now is the time for prepared players to be thinking like buyers once again. Personally, it’s been a while (May-June) since I’ve had similar thoughts. The initial price target for gold has been the mid to high 1500s and folks, gold is not only not obligated to go any higher in the near-term, it shouldn’t go higher unless it would create a more dangerous blow off type situation.
In line with other markers shown above, it’s a very normal point for a pullback from an extreme overbought situation. Early in the precious metals rally we noted it was a “launch”, not a blow off as some gold perma-bears were calling it. But now we’ve likely had a mini blow off of the launch phase, if that makes any sense.

After gold crossed its bull/bear line at 1378 back in June, silver stored up all that energy and went nearly vertical over the last 1.5 months. It took out the NFTRH ‘best’ target for the move, which was in the 18.60s. I had no sooner noted that I was wrong on the exact target when on the weekly candle I turned out to be right again. Funny how these things work.

Bottom Line
Gold, silver and the miners needed a pullback from extremely overbought readings. Just as bear market rallies can be pretty intense, so too can bull market pullbacks. That is not to say the precious metals are in a major bull market. For several valid reasons that assertion is far from proven. So for now we’ll let the ladies above do the cheering and go about carrying a rational narrative forward (to be continued in this weekend’s NFTRH 567).
Our conservative targets for HUI are significantly higher even in the event that the sector is not in a major bull. I like that; manage conservatively (which had us fully prepared for this week’s pullback) but also be ready to capitalize.
This weekend we begin the work of plotting pullback buy levels in the miners and the metals. But we also keep open minds with respect to how over done the sector became amid the media-stoked fears of the trade war, the inverted yield curve (a non-issue in the short-term) and other such things that investors and the public have been jittery about. Why, there is even a positive economic glimmer in play as illustrated earlier today. In 2003 to 2007 the gold sector played well with an inflationary economic up cycle. That could be in play again. But only weekly work will confirm or deny that and other cases.
Subscribe to NFTRH Premium (monthly at USD $35.00 or a discounted yearly at USD $365.00) for an in-depth weekly market report, interim market updates and NFTRH+ chart and trade setup ideas. You can also keep up to date with actionable public content at NFTRH.com by using the email form on the right sidebar and get even more by joining our free eLetter. Follow via Twitter @NFTRHgt or StockTwits.

https://nftrh.com/2019/09/06/precious-metals-were-ripe-for-a-pullback/
 

d-lod

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#2
Precious Metals Were Ripe for a Pullback

September 6, 2019 Gary Precious Metals Comments Off on Precious Metals Were Ripe for a Pullback

If you hear one peep out of the gold community about a precious metals “take down”, “attack” or any other such aggressive or war-like language you will then be hearing some old fashioned and promotional gold bug orthodoxy. Fortunately, a casual look around the Bug-o-Sphere does not yield too many obvious conspiracy theorists or importantly, cheerleaders.
Indeed, it seems that all too many bugs expected this correction in gold, silver and the miners. That is a good thing because when the real top comes these ladies are going to be out front and greed will be running rampant (quite possibly against a negative fundamental or valuation backdrop as in 2008).

Instead, everybody it seems knew about the high risk Commitments of Traders situation for gold and silver. The CoT is not a timer, but for weeks now it had been a condition that’s been in place for a correction. It’s not a “take down”, it’s a condition of too much speculation that had to be addressed. Now it is. Other CoT data available here.


As the CoT, Hulbert’s HGNSI and the extreme overbought readings first in the gold price, but then dynamically in the silver price and the miners gathered to form a high risk situation, the time to take some profits was over the last couple of weeks, not now. Gold oriented newsletters appear to have jerked over bullish with the latest headfake rise in the gold price.

Now is the time for prepared players to be thinking like buyers once again. Personally, it’s been a while (May-June) since I’ve had similar thoughts. The initial price target for gold has been the mid to high 1500s and folks, gold is not only not obligated to go any higher in the near-term, it shouldn’t go higher unless it would create a more dangerous blow off type situation.
In line with other markers shown above, it’s a very normal point for a pullback from an extreme overbought situation. Early in the precious metals rally we noted it was a “launch”, not a blow off as some gold perma-bears were calling it. But now we’ve likely had a mini blow off of the launch phase, if that makes any sense.

After gold crossed its bull/bear line at 1378 back in June, silver stored up all that energy and went nearly vertical over the last 1.5 months. It took out the NFTRH ‘best’ target for the move, which was in the 18.60s. I had no sooner noted that I was wrong on the exact target when on the weekly candle I turned out to be right again. Funny how these things work.

Bottom Line
Gold, silver and the miners needed a pullback from extremely overbought readings. Just as bear market rallies can be pretty intense, so too can bull market pullbacks. That is not to say the precious metals are in a major bull market. For several valid reasons that assertion is far from proven. So for now we’ll let the ladies above do the cheering and go about carrying a rational narrative forward (to be continued in this weekend’s NFTRH 567).
Our conservative targets for HUI are significantly higher even in the event that the sector is not in a major bull. I like that; manage conservatively (which had us fully prepared for this week’s pullback) but also be ready to capitalize.
This weekend we begin the work of plotting pullback buy levels in the miners and the metals. But we also keep open minds with respect to how over done the sector became amid the media-stoked fears of the trade war, the inverted yield curve (a non-issue in the short-term) and other such things that investors and the public have been jittery about. Why, there is even a positive economic glimmer in play as illustrated earlier today. In 2003 to 2007 the gold sector played well with an inflationary economic up cycle. That could be in play again. But only weekly work will confirm or deny that and other cases.
Subscribe to NFTRH Premium (monthly at USD $35.00 or a discounted yearly at USD $365.00) for an in-depth weekly market report, interim market updates and NFTRH+ chart and trade setup ideas. You can also keep up to date with actionable public content at NFTRH.com by using the email form on the right sidebar and get even more by joining our free eLetter. Follow via Twitter @NFTRHgt or StockTwits.

https://nftrh.com/2019/09/06/precious-metals-were-ripe-for-a-pullback/


The rise was very fast and steep and hence the correction will follow in similar way...........................
 

spinalcracker

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#3
How many types of bull markets are there besides a major bull market , which the author says we are not In?.....

Major and minor?....

The next 7 years will be interesting indeed.
 

gliddenralston

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#4
silver was beat down to death for 7 plus years...it goes up for a month or two...so yea it was due for another beating!!
 

the_shootist

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#6
How many types of bull markets are there besides a major bull market , which the author says we are not In?.....

Major and minor?....

The next 7 years will be interesting indeed.
After looking at the historical price of silver I'm scratching my head wondering why everyone expects it to go to $100 or more. Other than one example of an entity trying to corner the market on silver, which caused it to go to $50/oz but it crashed pretty hard fairly quickly after that. A silver dollar used to buy ~4 gallons of gas. Today the silver content of a silver dollar will buy....wait for it....~4 gallons of gas. I'm not sure what data supports a price explosion of silver to >$100 If it does get to $100/oz we'll have a lot more to worry about than how much gas a silver dollar will buy
 

spinalcracker

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#7
Good time to stack.....

How long will this pullback last?....

Time to buy , regardless of falling knives , the dollar cost average is a good friend...

I think I will buy some silver today..
 

gliddenralston

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#8
How come stocks, land, vehicles ect can go to the moon but if silver goes up a few dollars the world will end?
 

gliddenralston

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#10
You guys need a pull back so ya can stack some silver, what the heck ya been doing the last 8 years?
 

Ebie

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#12
"That is not to say the precious metals are in a major bull market. For several valid reasons that assertion is far from proven. "
My comment: POG bottomed in 2013...
 

d-lod

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#13
"That is not to say the precious metals are in a major bull market. For several valid reasons that assertion is far from proven. "
My comment: POG bottomed in 2013...

as long as, there is abnormal currency printing, there is deceit, terrorism, abnormal inequality,,,,,,,,,,,,,,pm will be in bull phase.