VT, here is an alternate scenario, FWIW.
Gann turning points have worked pretty well the past few months (Gann turns are: 2/8 to 10, 3/21 to 24, 5/3 to 7, 6/20 to 24, 8/3 to 8, 9/21 to 24, 11/8 to 11, and 12/21 to 24). If you look at this chart:
quotes.ino.com
... you can see the 2/8 and 3/21 turns were on the money as major turns. The 5/3 turn was present but muted, and was overwhelmed. Hence, we may not see highs in POG until 6/20!
The 6/20-24 Gann turn is roughly coincident with the full moon on the 25th, and options expiration on the 22nd. A Friday-Monday whammy in the stock market around that time could send POG up quite a bit.
Further to this point, a look at my favorite canary (you know it - MDG), shows it bumping the top of a channel, and if we break through that means MDG heads to 22. How do I read these "channels"? Draw parallel lines through these points on the chart below:
lows of mid-july to mid-Sept
lows of mid-Oct to mid-Nov AND highs of early Feb and today
lows of Jan 1 to mid-Feb
lows of mid-Mar to mid-May
bigcharts.marketwatch.com
Also, note that in the past 15 years, there tends to be a spike in the POG around 20 June:
spectrumcommodities.com
and volatility in the POG is not spiking as in previous tops in POG:
sharelynx.net
In sum, I see a convergence of factors saying today may well be a false top, like we saw around May 5, and with a little help from the falling dollar and DOW, POG could run to $350 and the XAU could hit 98 before we see the wave 4 pull-back.
By the way, I would assume that POG hitting stride around 21 June will mean gold stocks peak a week +/- before that. I would expect gold stocks to tank with general equities if we see a crash-like event.
Still cautious here, but not picking up all my marbles just yet.
Crusty |
