Mercury

The Dow is still holding bearish against the recent ATH top despite fresh ATHs from Nasdaq and S&P500. It is possible the latter has topped out last in this move on Friday. Looking at the Dow it looks like a possible ATH top has occurred, which could be either a medium term wave 3 or a long term wave 5 termination of the Bull. The former is more likely at this stage but you never know. There is decent NMD at this turning point and a plausible 1-5 wave count up from the pennant breakout. The subsequent move has broken through the lower line of the ascending channel. Looking at the 4H chart we can see the top and subsequent move more clearly. There was a small 1-5 up to compete this phase of the rally followed by a small 1-5 down and A-B-C retrace (brown 1-2 or A-B) and then backed up by a small 1-2 and then price broke the channel line and completed with a failed retest of the channel line. From a fundamentals perspective this could either be fear of lukewarm Fed action next Wednesday or actual lukewarm Fed action. Time will tell as usual. For now I remain tactically Short.

So gold is going up up up? PTJ says so (see previous post), many other big time traders have said so in various forums, end of the world doom mongers have been saying so for some time (gold at 5000, 6000, 10000!). This is agreed by those that say bitcoin will take over from gold as a safe haven, yeah not going to comment on that one but I wont be holding my breath... I agree with the PTJs of this world regarding gold and silver (although I am not sure Jim Rickards 10000 call is right) but markets do not move in waves and I don't yet see the stimulus that would propel precious metals (PMs) to these kind of levels. I have heard 2 credible fundamentals theories supporting a gold long term bull market as follows: The Fed turns the taps back on and we get a repeat of the 2009-2011 explosion in PMs and stocks and basically everything, USD drops. Of course other Central Banks (CBs) will not be standing by and letting the Fed have its cake on this as all out currency wars join trade wars on the agenda. Central banks not only revert to QE and ZIRP/NIRP but come up with new strategies to keep their economic plates spinning, which would initially cause a burst of risk on followed by exhaustion and collapse that would be a trigger precious metals rally. Basically the end of the financial world scenario. The overarching factor that many serious PM players seem to be pinning their reputations on is that economic catastrophe is coming no matter what the CBs do. There is a growing sentiment, still not main steam by any stretch of the imagination, that recession is just around the corner (not in 2+ years time). There is well commented on social and political unrest. Hell even all the talk of crypto currency bringing down the US Dollar is a factor, at least in terms of the zeitgeist. But are we there yet for Gold? I have mentioned this before but it may be timely to remind myself of the 3 factors I have heard some serious money managers call out that must be in place to support and drive a gold bull market as follows: Unsettling interest rates back drop - check Gold appreciating in all currencies - apparently we have this, I don't have the data but others who do say we have this now Gold out performing stocks (S&P500) - not sure we have this yet in a meaningful way You will notice that none of the 3 criteria include USD moves, actual political and social unrest, or actual stock market collapse. Clearly the latter 2 would in principle be positive for safe haven assets such as gold. The USD moves are neither here nor there as how gold performs vs all currencies is more important, regardless of whether you consider gold to be an asset or a currency. Under the above criteria we do appear to require stocks to top out to have all the pieces click into place (or at least to plateau and go sideways for an extended period, how likely is that given the nosebleed altitude of stocks?). But many are forecasting a stocks rally to infinity on the back of the Fed crashing rates to zero and others are calling for that scenario to drive gold up a la 2009-11. It's all rather confused really. Out of all of this I take 1 key thing - there doesn't appear to be any fundamentals case for Gold falling through the floor... Yeah forget about bitcoin taking over from gold... Maybe then it is just a case of waiting patiently for gold to go on a rampaging rally and not expecting it is imminent, why would it be? So let's ignore all this, news, Trump actions, received wisdom and so on and look at the only thing we can see, technicals based on price action. If I look again at the long term charts (monthly) I see a clear period of consolidation since about 2013 that has formed a head & shoulders pattern. The neckline is effectively the horizontal ice line resistance zone, circa 1440 (or at the recent high of you prefer). Price looks to have failed to break through this resistance at the time of writing. It is important to note that the move down from the 2011 highs is in an A-B-C form, there is really no case for a 1-5. The move terminated in the Fib 50% support zone off the 2011 highs, a classic retrace turning point, and on strong positive momentum divergence (PMD). After an A-B-C retrace comes a 1-5 motive wave in the dominant trend direction (i.e. another bull phase, that would carry beyond the previous ATH). Zooming in on the rally price action since the early 2016 turn at wave C we can see a clear 1-5 rally to wave 1 (purple) followed by an A-B-C to wave 2 (purple), which terminated at the Fib 76% and with a failed retest of the previous Bear channel line. We then had another 1-2 series (pink labels), which terminated with a pin bar rally off the long term supporting trend line (2 different possibilities coming together actually). This is where I first went Long. Finally we get the rally up to where price is currently sitting having knocked on the door of the long term ice line resistance but failed to break through, so far... Note the pennant retrace on this rally (weekly chart), which occurs exactly half way between the wave 2 (pink) turn and the potential wave 1 top out (blue). This is a classic from the chartists playbook. We can also see a good 1-5 structure to the whole rally (green labels) and a bearish pin bar at the wave 1 top, which is all highly suggestive that the rally has come to an end. Looking more closely at this recent rally on the daily chart we can see a potential ending diagonal encompassing the wave 1 (blue) top and all the price action since the wave 3 (green). The lower line price points are a little messy. There is very strong NMD at the wave 1 top. Finally, on the 1 hour chart, there appears to be a 1-5 bearish move down to wave 1 (brown) followed by a retrace to the Fib 50% in A-B-C form and another small 1-2 (blue) to follow up. Prognosis: While I am long term bullish, price action is offering strong bearish signals at this juncture. The set up looks to be a wave 1 top and turn, which should be followed by an A-B-C retrace. There are several candidates for the termination of such a retrace if it were to happen, I will await price action to decide on this. A break through the lower ending channel line and then subsequent ST support will confirm my medium term bearish bias. If you add to this high the net non commercial COT bullish readings as a contrarian indicator the whole thing screams Short to me, so I did. This is a tactical move as the real opportunity is to reenter Long trades on the termination of the retrace bearish move to hold for a long term bull market.

Traders positioning ahead of ECB rates announcement? How likely is it that Draghi will do anything just ahead of Lagarde taking over? If the markets have (big if) been pricing in a rate cut, or some other form of easing, then all Draghi has to do to send the Euro higher is do nothing. Most of the time he does nothing except talk... Technicals support USD bearish move (EURUSD bull).

Break lower in prog but still need a candle close below...

So far the wave 1 (Blue) has held as a potential turn and now I have a 1-5 rally followed by a deep retrace to the Fib76/78% and today a breakout of a short term channel on that retrace. Clearly a break through overhead resistance of the daily chart channel line and horizontal resistance level will be important to confirm this as a sustainable rally scenario. With USD possible at a bearish inflection point (see also EURUSD, which is lagging GBP - hence my EURGBP shorts are working well). If all of this plays out then the rally is on. Let's see...

Looks like the making of a turn to me now. Small 1-2 retrace completed overnight and followed up with a fast break lower. The exposure on my trades here is very low so the risk is worth it given the potential reward if we see a larger retrace to the lower channel line on the daily chart. First up though is another test of the 27050 support zone.

Looks like we got that ST support break, without any retrace action of note, which is encouraging. I would ideally want to see GBPUSD rally away and probably EURUSD as well, just not as strong, to be confident in this set up but so far so good.

Another small leg up this morning to hit and rebound back down off the daily chart Fib 78% (off the wave 1 - blue - 23 May high). Not a lot of resistance left above so I feel this one is critical. There is NMD on the daily (not yet confirmed with a turn) and hourly. I am looking for a break lower to give me confidence on this set up. EURUSD is at the Fib 88%, the final chance for a turn (other than a double bottom but I wouldn't bet on that) and GBPUSD may be in the process of a breakout to the upside. One to watch today.

Sell strength they say (or buy weakness if you want to trade against the USD). It certainly applied to any USD pair FX trade one might contemplate today but that is how you get in on a good move. On USD DX it certainly looks like a rocket on the launch pad BUT price is currently stopped at the resistance zone formed by the weekly chart channel breakout and retest prior. IF the market turns now, at the Fib 76/78% off the 23 May high, then a strong and fast bearish move is indicated. This could be consistent with a more extreme rate cut by the Fed than the markets are currently expecting, which would set the direction for the Fed rates on a ZIRP/NIRP trajectory.

The market did indeed show the retrace I was looking for and retested the daily channel breakout resistance zone twice more after the wave 1 (brown) turned back up. NMD accompanied the turn back down at the wave 2 (brown) conclusion and has since made its way down to key short term support. A break here brings up the next short term support but after that the Bear would be on, at least until another test of the weekly chart lower Triangle line. The retrace was complex, with a lot of A-B-C whipsaw action but if we do emerge through support into a wave 3 it should move quite fast I am heavily short this market and expecting a rally in GBPUSD to accompany the move.

@Foxy, looks like the market already answered your question. However there is still a scenario for the down side move I alluded to recently in that the whole of the move up since last Thursday could be a retrace A-B-C. The price action is different on SP500 and Nasdaq but still consistent with a retrace before a larger drop. This kind of pattern is something I have observed at many tops on stock indices. I am not calling an absolute top here as it is more likely to be a temporary move that sets up a final flourish but of course it could be the end... Given that the Dow topped out at CoB today at the Fib 88% this offered a very low exposure Short, which I couldn't resist. The price action just after than is encouraging, especially on the Nasdaq. I guess we should know soon enough whether we get the Bearish move or another higher high. Not sure I agree about this opening the door to the Bears for the Summer (well define Summer I guess) but if this is a turn down we can anticipate a few weeks perhaps, depends on price action and of course we have the Fed thing next week...

Is that the EURUSD (USD- DX) stop, turn and rally I was alluding to earlier? Price has hit and may be turning off the Fib 76/78%, which is also a prior channel breakout zone.

Chart of the historic SP500 to go with the previous post courtesy of macrotrends.net. One additional point that can be drawn out form this chart is in relation to a long held investment tenet that states buying and holding is a strategy for riding out recessions. This will have worked like a charm since 1934 perhaps, assuming you didn't get caught out retiring during a recession, but what about if a depression hits? The chart shows that the 1929 stock market crash took 3 years to bottom out, they are usually shorter lived these days, the Black Monday one only lasting 1 month! More pertinent is that it wasn't until 1954 that the index regained the 1929 levels, 25 years! Or basically a working lifetime. If you are in your 20s today then no sweat, you probably don't have much invested anyway. However if you are in your 40s-60s and a depression hits then buy and hold will not help you, your children may benefit, assuming we are talking investments and not pension funds...

Following on from the first post above to cover received wisdom #2 on Gold, that Gold rallies when stock markets crash and vice versa, I do not agree with this one for the following reasons: Just need to look at the charts for this one: Prior to 1934 the price of gold was fairly stable at between $20-22/oz despite the early 1920 depression (known as the forgotten depression) and the infamous 1929 crash and Great Depression. Price jumped up to the $35 mark in 1934 and pretty much stayed there until the 1973 abolishing of Bretton Woods. Note this jump happened after the Great Depression and price fluctuated little despite multiple recessions (the grey vertical bars on the chart mark recessions) in 1973 through to end 1974 there was a recession and stock market crash where the SP500 lost about 40%. This was consistent with a strong rally in Gold. However, as discussed in the previous post, the rally in Gold is largely attributed to the removal of the USD peg. Clearly the recession and stock market crash could have had some impact. A more likely explanation that the "at face value" one is connected to the 1973 oil shock. The back drop here was the OPEC oil embargo against nations supporting Israel in the Yom Kippur war. In addition, in September 1971, OPEC issued a joint communiqué stating that from then on, they would price oil in terms of a fixed amount of gold. All positive impacting factors on the price of Gold. In 1974 the crisis ended and Gold price dropped for a couple of years while stocks rallied but from 76-80 both rallied, however Gold rallied far harder and faster, appreciating more than 5X, but wait there was no recession and stocks were also rising, hmm... Then at the beginning of the 80s we got a recession, and another oil shock (79) and stocks fell a bit but not as badly as the early 70s and Gold also fell, hmm... There then ensued a 20 year stocks rally through to the end of 2000 and the first tech bubble burst, with the now minor blip of the Black Monday crash in 1987, and Gold went into retrace mode during this time period, giving up a little over half the gains since 1976. Fits stocks up,Gold down theory in the main. Then again this was the roaring 80s/90s when stocks and bonds were kings and all else was out of favour, including Oil and base metal commodities. And then we hit the noughties and while stocks go through a series of boom and busts (tech bubble and credit crunch) Gold goes parabolic (as do a lot of other commodities). Stocks now look a bit like they were in consolidation on a long term chart but at the time that would not have been the experience. Interestingly, during the meat of the credit crunch crash in stocks Gold also fell, this during what people now refer to as the "Great Recession". Anyone around during the later 80s/early 90s recession will tell you that compared to this the so-called Great Recession, wasn't really. Which brings up nicely to 2009 and the Bernanke Put. Central Banks go nutty bananas with policy and we get stocks turning and rallying while Gold, which had dropped off during the credit crunch, turned and put in the mega rally we saw top out in 2011. Again stocks and Gold moving up together. Since 2011 Gold, and many other precious metals and base metals and Oil have dropped significantly while stocks have continued up in the longest running bull phase, I think, ever. Now Gold and Silver are rallying again and stocks? Well remains to be seen. Currently they are not collapsing, although there are signs of recession. That's it really, except maybe for the notion, erroneous probably, that you should have 5-10% Gold in your portfolio as a hedge, which would suggest Gold is bought in proportion to stocks and other assets. The above shows why that is not necessarily a good thing, although given the performance of Gold since 1929 I would it is not a bad long term investment vehicle, at least since 1973. Conclusion: I think this one is even clearer than the USD to Gold relationship. There seems to be no material benefit in holding Gold during recessions or market crashes, except perhaps that as was the case in 1929, Gold at least held its value while stocks were crashing. In the credit crunch though this was not so much the case. Anyway, just as with the USD/Gold relationship situation I think both stocks and Gold are being driven by central bank policy rather at present rather than more intrinsic factors. Still Gold could be in for a boost if the proverbial does hit the fan in due course. For now though it seems to be more about what the Fed will do at the end of July and thereafter rather than anything else. So net I do not see any truth in the 2 received wisdom Gold drivers oft quoted. Rather I see Gold responding to the idea that there may be another phase of nutty bananas central bank policy in an attempt to stave off a massive monetary crisis (i.e. depressionary deflation). The believe that this is on the card is driving a surge in Gold and more latterly Silver, as investors position themselves to ride a wave that may be similar to the 2009-2011 rocket and this one would take us beyond previous highs to complete a 1-5 super cycle. Gold at 2500, Silver at 6500 anyone?

USD DX chart related to the previous post.

Over the years I have observed a lot of rationalising of market direction based on what I consider to be false or fussy logic. There are loads of them. For example, we had a ding-dong on the forum over the famous Santa Claus rally in the run up to Christmas 2018. In the case of a pre Christmas rally (define it? Not clear...) the stats showed that stock markets are more likely to rally into Christmas than not (I think it was something like 65% that someone posted, although the period seems to be movable). I take no issue with stats on this, my point at the time was simply that you can find other times of the year where the same stats (or better) hold without any specific justification and therefore I can't use the concept of a Santa Claus rally as a reason to trade Long stock. I took the opposite view then, based on my analytical method, and was proved right that time, well the thing about probabilities is that in order for the 65% stats to be true 35% of the time the Santa Claus rally doesn't happen. It falls into the "So What?" category for me but them I am not a short term trader so it is perhaps more relevant to day traders, fair enough. Another classic is the "sell in May and go away, don't come back til St. Ledger day", which is all about pre electronic, pre 24/7 trading when stock market makers all took long Summer holidays. Clearly this is no longer the case so that particular saying is surely defunct? Anyway these are just examples, I am not seeking to reopen the Santa Claus rally debate, we did that one to death in December 18. I am interested in discussing any and all other items of "received wisdom" that may or may not be true. This isn't just for fun, there is a serious point here. If retail traders are buying into certain received wisdom being espoused by multiple sources and not fact checking this then they are likely to make the wrong assessments and trade for the wrong reasons. This stuff falls into the Daniel Kahneman territory of thinking fast, thinking slow. It is all to easy to just follow the "rational" received wisdom because it kinda makes sense, at least superficially. So let's see if we can get some things straight! I will open with a classic, that is getting a particular airing these days, unsurprisingly. That is that Gold (and Silver) respond to USD and/or stock market moves. The received wisdom, as I understand it, is that: Gold/Silver are typically priced in USD and therefore if USD goes up then the value of Gold/Silver goes down (i.e. it is more expensive to buy Gold/Silver). Gold/Silver are safe havens in a time of market meltdown so when stocks in particular are falling investors switch to Gold and vice versa My opinion is that #1 does not hold true, even though at times it looks like it may do and that while #2 could be true, in the sense that precious metals could be seen as a safe haven in times of trouble, especially in times past when gold/silver was actually money, there is no clear relationship between this and stock bear markets. Lets look at #1 first (I'll look at #2 in a separate post), the following are the justifications I have for my opinion in contrary to the received wisdom: First of all the USD pricing of Gold is not global. If I buy gold in the UK I pay GBP for it. Who are the big buyers of gold right now? China and Russia and Switzerland holds a lot of gold. The Saudis appear to be buying up gold too. So while it was true in the past that the US held the lions share of physical gold (think Fort Knox and the reasoning behind Bretton Woods) this is no longer the case. Therefore it is more important to think of gold in multiple currencies. A lot of precious metals expert money managers say that for a Bull run in gold you need gold to be rising in all currencies (amongst other indicators). It seems we have this right now... Secondly, and related to the above point, in 1973 Richard Nixon removed the USD Gold standard that broke the 1944 Bretton Woods agreement, which had effectively made the USD the world reserve currency (at least among US WW2 allies) thereby replacing the gold standard. The US owned 3/4 of the worlds gold at that time so to effect this the USD had to be gold backed, or pegged to a set physical quantity of gold. When this was removed the price of gold shot up (see chart from macrotrends.net below) effectively breaking the pegging of Gold and USD. Lastly, and more importantly, the price charts do not support the assertion. Let's look at the data (USD DX chart in separate post due to size restrictions): From 1973-1980, after the decoupling, Gold rallied and USD dropped, which is what Nixon wanted From 1980-1985 this pattern reversed, so far the received wisdom is holding true... But then from 85-95 USD retraced the full length of the previous rally to double bottom while Gold went sideways. Hmm surely a weak dollar of that magnitude would produce a wild Gold rally if the received wisdom held true. Then from 1995- 2000/01 USD rallied again, not as hard as before but still significantly and Gold went down, slightly, well sideways again really. Maybe there was something else going on? Then the big one! From 2000/01 Gold entered a massive rally up to the ATH in 2011 (coincidental with many other commodities and precious metals). And the USD did indeed go down, but nowhere near as dramatically as before and no where near as dramatically as Gold went up. It is worth noting that the Greenspan Put was well and truly underway at this point. Could central banks monetary policy be the real underlying factor here..? 2011 - 2015/16: USD rises, gold falls, in line again? Currently Gold has been in consolidation but has broken out to the up side while USD remains at the top of its recent rally (i.e. not falling). The Gold/Silver breakout is not therefore as a result of USD weakness, although USD may yet fall. But surely it is not the other way around? That USD moves up and down in response to Gold? Nah! Conclusion: while there appear to be times that USD and Gold move in opposition to each other the relative strengths of the moves are not aligned. At a minimum this means that something else is going on either instead of or as well as the received wisdom relationship. One postulation is #2 above but I discount that (see analysis of #2 in the next post). The other big thing that was/is going on is central bank monetary policy. It started with the Greenspan Put and was continued by Bernanke and all Fed policy makers since. I believe it is this that under pins both the moves in USD and Gold, which is why there is a similarity to the moves (in inverse) but it is not consistent because of other market forces separate to each of these markets. The other factor of note is that the Fed is not the only central bank operating in this way, all of them are, including China. So this is a cross currency phenomenon, it is a Fiat currency issue globally rather than a USD issue. So it is central bank policy that moves Gold and Silver and not the USD in and of itself.

My view on Silver is similar to Gold, see my Gold/Silver in LT rally thread. I am seeing a small scale retrace that will likely retest the Silver key resistance breakout level (circa 1620). A rally away from this level will be strongly Bearish and we need to see a close above the key level for the week. There is a lot of over hanging resistance to get through before Silver is in clear air so this could take a few whipsaw turns to get going (alternatively it could cut through like a hot knife through butter. I am already Long from lower down and stop protected at BE so my strategy now is to enter a pyramiding phase. As I have mentioned before, Silver is likely to out perform Gold, if the 2011 rally is anything to go by, and Silver was lagging and retraced further than Gold down to 2015 so the upside here is much larger. On the watch out side, Silver is more volatile an spiky than Gold so large draw downs are to be expected. This one could easily spike down through that key support/resistance level before rallying away.

So Gold is breaking out of that long term resistance level (circa 1440) and the set up appears very Bullish, baring a significant break back below this level. It is a weekly chart level so a close above for the week is important, not that it couldn't break below and try again for a breakout at a later time of course. However for today at least I am looking for a short term retest of the breakout level, which we are currently getting. A bounce rally off this level will be important to set up a long term bull run that could run and run and run. On the 1H chart you can see the small retrace and I would like to see Stochastic touch down into over sold before I commit to any follow on rally. Alternatively wait for the rally/break back down resolution and go Long on a higher high. Ideally I would also like to see USD DX turn bearish again (or really EURUSD to turn and rally hard, which is a lead scenario for me - see my EURGBPUSD Triad post).

EURUSD has gone into reverse big time late last night and this morning, not sure how that will resolve itself yet but other pairs are holding steady so at present I would expect this to reverse again and rally hard but I am holding my positions stop protected at BE and waiting on the sidelines for a directional resolution. As a longer term trader I don't always have to be taking a trade, in fact that is a sure sign of over trading addiction to me. Still while all that (plus stock indices and Gold/Silver) sort themselves out I do have one market in active mode and that is EURGBP. Right now this pair, having turned at key resistance a couple of days ago and broken through the daily chart channel line (dark blue), has now retested this line twice and twice failed. In the last few hours the second failure has been followed up with a strong bearish bounce away from that resistance zone and the whole move looks like it is conforming to a 1-2 retrace move (note you can place the 1-2 - light blue - in several places). The retrace (1-2 brown) was shallow, which indicates the bearish move is strong, or does it? The moment of truth is approaching as price drops into a significant near term support one and there is an alternative EWT labeling (see second chart for alternate version), which is that a larger 1-2 retrace has yet to happen and when it does a deeper (more normal perhaps) retrace would ensue (maybe like 50%) for another retest of the resistance zone around the daily channel breakout point. In fact it is this alternative version that I am setting as my my most likely scenario and this would happen either if GBP eventually follows EUR down OR EUR reverses and rallies sharply. I am setting the latter as my most likely scenario on that front but either will work for me here. As I am Short from higher up I am ambivalent as to which scenario plays out but I will be interested to assess where this might go and to add to my Short positions.

A strong retrace did occur on USD DX, all the way to the Fib 76/78% but there it turned and has put in a smaller scale 1-2 down. Now seems set on making a lower low that the ST wave 1 (grey), which will bring up a test of the previous lows, a key ST support zone. There is an unclosed gap below this, which gives me encouragement that a new lower low to at least close this gap will occur and after than we will see but should be set fair for a period of USD Bearishness into the Fed rate decision. Chatter on that is for a 25BP cut but some are talking about a 50BP cut. The latter would surely send the USD lower and precious metals higher..? You never really know with these policy decisions, especially the heavily signaled ones but surely the task the Fed are seeking to achieve is to keep USD from getting into a massive rally as other Central Banks seem to be reopening their credit crunch saving policy tool kit (wasn't that all supposed to be over now that the economy has been saved... 🤣). I think Fed rate cuts (big ones) is the beginning of the end. Doubtless there will be the usual lunatic bullish response but the reality will start to sink in and I think sooner rather than later. Still that is not for now, for now I see a period of USD bearishness but when this ends, well look out across the patch!

Break of the daily chart lower channel line on the 1H chart and currently retesting. If the move I have outlined is to materialise then I would expect a drop from this retest to complete a close below the daily line. If this does occur I would expect this to be off further EURUSD and GBPUSD rallies with GBP being stronger in the rally.

EoD price action was Bearish and broke through that ST support level with other markets being more Bearish than the Dow (more to go for the Dow to catch up?). After a bit of consolidation bearishness has crept back in ahead of the US open. A break of the next ST support brings up the 27000 level but, depending on how the move goes, the market could go into another consolidation at the 27000 level and if this constitutes a Flag type formation then 26500 is a likely end to this phase. With no clear EWT or PMD I don't see the bearish move completing yet.

Silver remains buoyant today and is approaching a key resistance breakout point (circa 1625).

Gold broke lower and then reversed after a shallow 1-2 retrace then exploded with Silver back up through the small consolidation Triangle formation. These types of Triangle are not that reliable but a break and now possible failed retest with key resistance overhead is setting up nicely for a major breakout. Silver is also approaching a major breakout point, see my Silver Bullet Thread for more on that. If USD does break down lower and stocks fall then Gold/Silver major breakout could be on.