PM Complex Inching Closer to a Resolution

Today, in the PM complex, we got a little more confirmation the bears are still in control of the short term. There are several potential bullish chart patterns that have to be negated to really confirm the PM complex is going much lower than what most think is possible. I’m getting flashbacks to when the 2011 H&S top formed and no one wanted to believe it.

Sir Fullgoldcrown put together a post about the 2011 H&S top, which was just on the verge of breaking the neckline, highlighting some of my comments and a list of comments from some well-known analysts, which gave every reason in the book on why this very symmetrical H&S top wasn’t authentic and would fail and the bull market had much further to run.

Fullgoldcrown

What Do YOU See ? February 15 2013

“Beauty is In the Eye of the Beholder” ..English Proverb

Rambus comments first.

Tonight, I want to show you a long-term monthly chart for the HUI. It seems there is a lot of disbelief that, if an H&S pattern is too big, it somehow makes it invalid or not to be trusted. I’m curious how that rumor ever got started? Nothing could be further from the truth, IMHO.

Below is a monthly chart of the HUI that shows a massive 6-year inverse, complex H&S base, that launched the bull market for the precious metals stocks back in 2000. There is a certain beauty that 6-year H&S base has that most wouldn’t recognize. If you look on each side of the Head, you will see two chart patterns, one large blue formation and one small red formation. They are positioned just the opposite on each side of the Head. This doesn’t change the time component, as the left and right shoulders measure out very close to each other. At the very top of the chart, you can see what that big 6-year H&S base measured to. As you can see, it measured up to 690, which was just a tad higher than the actual all-time high.

The Chartology of the entire chart is one of beauty and symmetry, which some will see and others won’t. They say beauty is in the eye of the beholder. What do you see?

Fullgoldcrown:

Its Friday Nite February 22 2013 . The week that just passed was Devestating for gold bulls and featured what seems to be a capitulatory crash in all things PM . Searching the Web for some Hope , This Gold Permabull has found it . Amongst the wreckage of dreams and portfolios, bullish bottom callers abound. The following well seasoned and respected analysts again join in a chorus called
“THE BOTTOM is In”

Just Initials …to protect the guilty 🙂

1 A H : Gold Capitulation
2 Dave N : Mandatory rebound to at least Gold 1610 Imminent
3 T D S: We’re Headed Dramatically Higher; To Levels Few Can Even Consider
4 Jeb H : Keep Your Head When Investing In Precious Metals
5 B M : Capitulation
6 M H : Gold Bear Trap Is Sprung
7 Gold and Silver Worlds :Gold & Silver Prices Drop Into Severely Oversold Area
8 CEO Technician :Huge Buying Opportunity Setting Up in Gold
9 (Deleted) : Time to Buy Precious Metals Now
10 W Y : Carving a Reversed Head and Shoulders Instead
11 J N :A Golden Opportunity With Miners
12 Ch V : Gold & Silver Nearing MAJOR Long-Term Support
13 T C : Major Top In Stocks & Major Bottom In Gold
14 D L :The Current Currency Crisis will Ultimately
Lead to Higher Gold Prices
15 P R :”Summing up, support lines are in play for two out of three of this article’s gold charts and it’s likely that a local bottom has indeed formed. Additionally, RSI levels indicate an oversold situation. The outlook for gold from here is bullish”

As a Staunch Permagoldbug of some 20 years…I have seen the lean times (pre 2001) (2008) and the Fast Times (Gold 1900)…and I really really hope and pray these esteemed Gold Analysts are right !
Many of them however have been calling for a Bottom for quite some time
They cite : Extremes in Bearish Sentiment , Extremes in Commitment of Traders , Extremes in Momentum Indicators , Extremes in Fundamentals , Fractals , Cycles , Elliot Waves and a host of other reasons that I desperately want to believe !
However there is that one lonely nagging voice in the wilderness calling…”Its all in the Chartology”

And this time I am not going to shoot that messenger as I did in 2008 !

Rambus always tells his subscribers :
The only Rule in the PM Markets is “There are No Rules”
So anything is possible
Perhaps this will turn out to be a Bear Trap
If So , I know that Rambus (Dave from the Ozark Mountains in Arkansas)
will be able to spot it in the Charts and turn on a dime and go long
But For Now…The Charts are Shouting “Breakdown in the Precious Metals Stocks !”
And We Better believe what we see !

HERE IS HOW THE HUI WENT AFTER THAT TOO BIG TO FAIL POST WAS MADE…

Back to the present.

Let’s start with the daily combo chart, which has the GDX on top, with the BPGDM on the bottom. As the BPGDM continues to move lower, so is the GDX, making a new lower low today.

BTCUSD still hasn’t shown its hand yet, as the price action is bouncing between the possible double-top trendline and the top of the blue rectangle. If the top rail of the blue triangle fails to hold support, this chart shows a good example of how we could see reverse symmetry down to the bottom of the rectangle, because of the vertical one-day rally.

This daily line chart shows the small double top, which is still being backtested. The first thing we need to see for any H&S top is for the left shoulder high to be negated to the downside, which would then set up where to draw the neckline.

If you follow the neckline from the very large H&S bottom, starting from the left side of the chart to the present, you can see how it has reversed its role several times, from support to resistance and back to support again, labeled neckline extension line.

Today, the CDNX cracked the neckline of its strongly slanted, unbalanced, double H&S top. The multi-year double inverse H&S bottom was more symmetrical, as shown by its neckline symmetry line, which showed the lows for the left and right shoulders. The current H&S top is just a different variation.

Even after today’s decline, the bottom trendline of the August morphing falling wedge held support today, with another lower low now in place.

This next daily combo chart shows the original blue falling wedge and the strong rally out of reversal point 2 low, up to reversal point 3, where that micro H&S top formed on the 15-minute chart above. If the small blue falling flag, now in most cases, manages to trade above the top trendline, that would put the top black trendline into play as the next important area for resistance. Keep in mind that this potential expanding falling wedge is still building out, which could end up being very bullish if the bottom trendline is reached, where the potential 4th reversal point is located.

Next is the exact same chart, showing the H&S top at reversal point #3, instead of the blue falling flags. Again, you can see today’s bar made a new lower low, confirming the impulse move down. At some point, we’re likely to see some type of small consolidation pattern start to form within this leg lower.

Up next is the strongly slanted, unbalanced, double H&S top, which is not only a fractal to the strongly slanted, unbalanced, double inverse H&S bottom, but is also a fractal on the much larger weekly chart, which is much larger. This impulse move is currently in the sweet spot vs. the rally out of the inverse H&S bottom. How the price action went up is how it’s coming back down over the same area.

If you didn’t know this was a weekly chart, you couldn’t tell the difference between the strongly slanted, unbalanced, double H&S top above on the daily chart, which took about two months to form, vs. this weekly chart, which is now about a year and counting. The price action has now been trading below its red 30-week EMA for several weeks, which is not what you want to see if the PM complex was in a stronger position. This week SLV is breaking below NL2 with SILJ now testing its NL2.

This daily chart shows the exact same strongly slanted, unbalanced, double H&S top as the weekly chart above is showing. From this daily chart perspective, all the indexes are trading below their red 200-day SMA, which is not encouraging if one is a bull.

On Monday and Tuesday, gold continued to backtest its neckline around the 1425 area, but unlike the PM stock indexes above, it didn’t make a new lower low yet.

The longer term daily line chart shows the last two measured moves into the 2026 all time high.

What’s difficult when you spot an H&S top early on is you have to wait for confirmation when the neckline breaks, which can feel like an eternity. The wait continues.

This next chart for gold is the long-term monthly chart we’ve been following for many years, which shows its 2000 parallel secular bull market uptrend channel. The rally out of the 2000 low to the 2011 high formed four blue consolidation patterns, which created the parabolic rally.

The recent rally began at the 2022 low, which formed another parabolic rally into the all-time high earlier this year. Note how closely gold followed the red 20-month EMA in both of its parabolic rallies. The 2000 to 2011 rally took eleven years to complete, but the 2022 rally only took about four years to complete, which is pretty remarkable. As you can see, the 2022 rally stalled out just shy of reaching the top trend line of the parallel secular bull market uptrend channel. Gold is also still respecting its red 20-month EMA, which is a plus for the bulls.

Silver has clearly broken out from its small H&S top, which formed just below the top trendline of its January 2026 falling wedge. It’s going to be very interesting to see how silver reacts to the bottom trendline of the 2026 falling wedge, which could be in the mid-40s.

And then we have this longer-term daily chart, with the log scale bar chart on top and the linear scale line chart below. Today, both charts show a breakout below the neckline. Also, the neckline symmetry line gave us an area to watch for the possible right shoulder high on both the bar and line charts. Now we’ll see if we get a backtest from below and that it holds as resistance.

This long-term monthly chart for silver shows its 2002 parallel secular bull market uptrend channel. Unlike gold, which failed to reach its top trendline, silver hit the top trendline, forming a massive monthly reversal bar, which was a major warning shot across the bow at the time.

It’s been a while since we last looked at this long-term monthly chart, which goes all the way back to the 1980 all-time high. This chart also shows you another example of a fractal but on a massive scale.

When silver collapsed after its 1980 high, it formed that nearly 20-year inverse H&S bottom, complete with the double head, which also created a double bottom. Note how the breakout above the double bottom trendline formed the armpit for the inverse H&S bottom, with the backtest to the double bottom trendline forming the right shoulder low. Also note where the 2008 crash found support, on the backtest to the neckline.

From the 2011 high, silver formed a smaller fractal to the 20-year double-headed bottom. Again, note the double bottom, which formed both heads for the H&S bottom, with the breakout above and backtest to the double bottom trendline forming the right shoulder low. The breakout above the 2011 neckline launched silver on its parabolic rally into its 2026 all-time high.

There is a very important test coming up. In 1980 and 2011, silver topped out at 50, and now the price action has declined to the mid-50s. Is that massive cup-and-handle horizontal line at 50 going to hold support?

A quick update on the TNX. In the Weekend Report, we looked at the divergence taking place on this daily chart with the RSI, with today’s price action showing a possible outside reversal bar.

We also looked at this weekly chart, which was showing a weekly reversal bar, which is still in play as long as the price action doesn’t close above the high of the weekly reversal bar.

Next up is the daily combo chart for the US dollar on top, with the GDX on the bottom. I went back to the drawing board and found this possible uptrend channel on the US dollar, with the recent rally out of the 5th reversal point low getting very close to the top trendline. As the US dollar went nearly vertical, you can see the GDX formed its blue downtrend channel inversely to the US dollar.

Then we have this longer-term daily chart, which shows the possible 2022 falling wedge, with the inverse H&S bottom forming at the most recent low, complete with a breakout. Now we’ll see if the backtest to the neckline holds support for confirmation.

This weekly combo chart has the US dollar on top, followed by gold, silver, with the GDX on the bottom. The US dollar is now in its 3rd week of breaking out above its neckline, with gold and silver closing below their neckline this week, with the GDX not too far behind. This is the moment of truth we’ve been waiting for. Are the backtests going to hold?

Since StockCharts began posting live updates for gold, silver, US dollar, and WTIC, I haven’t paid much attention to the UUP, but after looking at it today, it’s showing a pretty symmetrical double H&S bottom, but is now in need of a possible backtest to the neckline. There is no law that says it must, but that’s usually the case. Note the blue 5-point bullish rising wedge reversal pattern, which formed in 2023, and the backtests that came several months later, which held beautifully.

As you know, we were following the July expanding triangle as the dominant chart pattern for much of its existence. This weekly chart below has the XDE euro on top, with the US dollar below. This week, the XDE is breaking out from its blue expanding triangle, with the US dollar strongly testing the top trendline, with both patterns set up to be reversal patterns if the backtest holds.

Next is the longer-term daily chart, which shows the H&S top on the XDE, with the US dollar showing its inverse H&S bottom, with the GDX, gold and silver on the bottom. From this perspective, all the necklines have been breached except for the GDX, with silver showing the most relative weakness. Now we’ll see how the possible backtests hold.

The XME, metals and mining etf, has been locked in the downtrend channel for all of 2026. What’s a little unsettling is that the last reversal point high fell way short of reaching the top trend line which shows weakness. There are also several large cap PM stocks in this index.

This last chart for tonight is the weekly chart for the US stock markets I post with each report, which shows the still-in-place 2021 rising wedge in most cases. There is some deterioration under the surface, but as long as the 30-week EMA holds support, the breakout remains in place.

The PM complex is now in that area where there is a possible inflection point, where there can still be a bullish outcome, but in the very short term, the bears are still in charge. The PM complex is getting oversold, so don’t be surprised to see a small countertrend rally, which could start the formation of a consolidation pattern that could take three weeks or longer to complete. For the time being, cash is still king in the PM complex.

All the best… Rambus

PS: The long term monthly candlestick charts for the energy complex.

Rambus Chartology

Moving forward

PM Complex Inching Closer to a Resolution