Below is a 2 hour chart we’ve been following since the bear flag broke to the downside. With yesterday’s and today’s price action I can see a possible 6 point blue Diamond consolidation pattern forming with the breakout today. A backtest would come in around the 101.60 area. I’m also looking at the Diamond as a halfway pattern to the downside as the second leg down from the double top at the bear flag high. Keep in mind the shorter term charts you use the bigger the chance they can morph into something bigger.

Below is the 2 hour chart which is showing the possible right shoulder forming as part of the reverse symmetry from the left side of the chart. A backtest to the small H&S neckline would come in around the 392.45 area. That backtest could be forming a second small right shoulder. With the fed news today we could see some wild price action for a half hour or so before things settle down.

Below is the daily chart for the GDX which shows you what reverse symmetry would look like in a perfect world, black arrows.

I wanted to wait until the end of trading today to update the INDU. It was a very interesting day in the INDU. Below is the daily chart we’ve been following which shows the potential H&S bottom. After the INDU bounced off the lower neckline symmetry line today it’s now showing a possible bull flag forming as the right shoulder. I haven’t had time to update the annotations yet but you can see how the bottom blue rail now slopes down slightly which is now parallel with reversal points one and three of the top blue trendline.

Below is another daily chart we’ve been following very closely which shows the rounded top. Note how today’s price action stopped right on that important support and resistance line around the 17,100 area. So far nothing is broken on this chart from a Chartology perspective.

Below is the down to up volume chart which shows us when there is some capitulation taking place. Note the last two red arrows on the right side of the chart which shows some mild capitulation at both of the two recent lows.

I know it’s not a popular idea to be bullish on the stock markets with the possible rate hike coming this week but the weekly chart for the INDU is still showing a beautiful H&S consolidation pattern with price action testing the neckline symmetry line today. We now have a nice clean line in the sand at today’s low at 17,138. Keep in mind this possible H&S consolidation pattern is pretty big with a price objective over 20,000 or so.

Below is a daily chart for the UUP which shows a possible H&S consolidation pattern forming that I touched on last night with the US dollar. As you can see it’s testing the 200 dma and the neckline symmetry line as a possible area of support.

Here is the daily chart which shows the combo blue falling wedge and the possible H&S consolidation pattern. Again either pattern would have a bullish outcome if the UUP can breakout above the March highs.

The weekly look.

First I would like to apologize for not having any posts on Friday as I had a previous commitment made several weeks ago. I told Fullgoldcrown Thursday night, of all the days to miss work it would have to be Friday. That’s one of the reasons I exited the stock market trades as I know how volatile these 3 X etf’s can be and with the numbers coming out Friday morning I wanted to play it safe right or wrong.

All in all we had some pretty interesting price action in the stock markets on Friday that was very positive. Lets start by looking at the INDU which I’ve been showing a H&S consolidation pattern forming. Thursday’s the price action closed below the 200 dma which is another reason I exited the stock market trades but Friday’s rally closed the day just below of the neckline and back above the 200 dma. What I find interesting is Thursday’s low was a reverse symmetry low taken from the left shoulder’s higher low on the far left hand side of the chart that matches the higher right shoulder low on the right side of the chart, Friday’s price action. We now have two neckline symmetry lines. The neckline symmetry lines are just parallel lines taken from the big neckline that sometimes shows us where to look for the lows for the right shoulders. So at this point the reverse symmetry is as pretty as it gets as shown by the S’s.

The volatile choppiness over the last 3 weeks or so, since the INDU first made contact with the neckline, looks like a triangle formation which I would view as a halfway pattern to the upside. Below is the exact same chart as the one above but this one has the blue triangle on it that is creating the right shoulder. So when we look at the Chartology since the August low we can see a double bottom with the small blue bullish rising wedge and now the potential bigger blue triangle forming the right shoulder. This is all bullish price action in which the INDU has made higher lows and higher highs except for the top rail of the blue triangle which has a slightly lower high at this point. To confirm the H&S bottom or the blue triangle consolidation pattern is in place the INDU will have to breakout above 17,900 area. This is a fairly large H&S consolidation pattern that stretches back over six months to June, so I would expect a rally of intermediate term proportions at least up to the 20,000 area as a minimum.

One more thing before we leave the daily charts for the INDU. I’m sure most of you have heard the expression “shaking the bush, used in the markets. It refers to a sharp decline which shakes everyone off the bush, the markets turns right around and rallies backup leaving most in disbelief. It only took three trading days to shake the bush once the blue bearish falling flag gave way to reach the August low. How many calls have you heard or read that this is the beginning of a new bear market in the stock markets?

Some of you may remember this daily epiphany or moment of clarity chart I posted back in October of this year the day before the INDU broke out above the rounded top trendline in the Wednesday Report. What I was trying to show you at the time was how nice and clean the breakouts and backtests were. Note the breakout above the double bottom hump and clean backtest. Then there was the breakout of the big black dashed support and resistance line also with a clean backtest as shown by the red circle. Since the breakout above the rounded top trendline the INDU made one more attempt to backtest the big support and resistance line around the 17,100 area. The latest price action shows the potential blue triangle consolidation pattern that is building out.

The next chart for the INDU is a weekly look that shows the 2007 H&S top, the 2009 H&S bottom and how our current H&S consolidation pattern fits into the big picture. What’s interesting is that all three H&S patterns are close to being the same height. Our current H&S consolidation pattern is actually the tallest of the three. I don’t know how many of you remember the 2011 correction, which was pretty scary at the time, but we just experienced the same thing in 2015.

Below is another weekly chart which shows how support and resistance works as shown by the black dashed horizontal lines. This chart also shows our potential H&S consolidation pattern more clearly.

This first monthly chart for the INDU shows its bull market that started in 2009 as a parallel uptrend channel. You can see there was a crack of the bottom trendline in August of this year, shaking the bush, which has been corrected.

I wasn’t going to show you this long term monthly chart for the INDU but it’s part of the very big picture so here it is again, THE JAWS OF LIFE. The top rail of the bullish expanding triangle was originally broken to the upside two years ago in November of 2013. It now has had three successful backtests to the top rail with the August low cracking the top rail but not breaking it. Again shaking the bush?

Most investors have their own set of indicators they like to use to gauge the health of the stock markets. This first indicator chart I have shown you many times that measures the down to up volume or capitulation volume when I’m looking for a low. The red vertical dashed lines shows a modest amount of capitulation while the black dashed vertical lines shows a more pronounced amount of capitulation volume. Note the number of black arrows that were made during our latest bottom. There was alot of capitulation taking place which suggested to me that a healthy bottom maybe forming. Note the last small amount of capitulation that took place in November of this year as shown by the red dashed vertical line that marked the latest low. What I find interesting is that with the big drop on Thursday of this past week, there was very little capitulation volume taking place which I’m reading as those that wanted to sell have already done so. So is the path of least resistance now to the upside.

This next chart measures the number of stock in the $NDX that are trading above their 50 day moving average. Basically it shows when the number of stocks is trading below the yellow shaded area you have a sell signal. When the index trades back above the yellow shaded area you have a buy signal. As long as the number of stocks in the NDX stays above the bottom of the yellow shaded area this index remains on a buy signal. So far we’ve had three touches to the top of the yellow shaded buy and sell zone which remains on a buy signal.

The next indicator chart shows the broader measure of health in the stock markets by using the $NYAR200 which shows the number of stocks trading above their 200 day moving average. The SPX is on top and the $NYA200 is below. Everyone has their own interpretation on how to use an indicator chart like this. For me I like to use when looking for an important bottom and nothing else. First note the bear market low in 2008 and 2009 which formed a double bottom on both charts. Here the indicator chart shows a positive divergence as the SPX made a lower low and the indicator chart made a higher low. Then again at the important low in 2011 where the indicator chart made a positive divergence to the SPX. Now on to our most recent low which shows no divergences but a double bottoms on both charts. Many are looking at this as weakness for the stock markets as the SPX is trading near its all time highs while the indicator chart is still way below its highs. What I see when I look at this chart is that the stock markets have had a small correction while the indicator chart has had a major correction which now leaves plenty of room for the stock market to rally before they become overbought again as shown by the other two double bottoms.

Below is a monthly look at the same two charts. Here the brown shaded area shows where general support comes into play. Normally during a run of the mill correction the indicator chart will drop down to the brown shaded general support zone. When we see a bigger correction the price action on the indicator chart will drop below the general support zone. When it does that you know you have a strong correction taking place, vertical yellow shaded areas. Generally I like to see the indicator chart trade back above the brown shaded general support zone for confirmation the correction is over. As with the daily indicator chart I like to look for divergences at the lows. If you recall we had a big correction in October of 2014 which looked like the end of the bull market was near but the stock markets rallied sharply out of that low. Now look at the indicator chart and our most recent correction into the August low. Here you can see the indicator chart at the top traded well below its October low of 2014 while the SPX made a higher low, positive divergence. I could be wrong but this chart tells me the SPX has a full tank of gas and can now rally up to new all time highs. One last note on the chart below. The reason why I only use this chart for finding important lows is because the stock markets can stay overbought for a very long time as shown by the indicator chart at the top.

Lets change gears now and look at the US dollar which had a big move last week. Below is the original daily chart I’ve been showing you which shows the blue falling wedge as the main consolidation pattern. You can see the red rising flag that formed right at the top of the March highs that broke to the downside which I was thinking would breakout topside. It ended up with 5 reversal points so it’s now a bearish rising flag. The US dollar still could be in backtest mode to the top blue rail of the falling wedge which would come into play at the 96.50 area. That area would also be the top of the blue rectangle which should show strong support.

Many times when I see a failure like the chart above is showing I start to look for the original pattern to morph into a bigger pattern. The longer term daily chart below shows a potential large H&S consolidation pattern that maybe forming. The reason I think this could be a possibility is because of all the tops that come into play at the 97.50 area which should produce some strong support. We also have the 200 day moving average coming in at the 97.50 area as well which should help with support.  The bearish scenario would be if the US dollar breaks down to all the previous lows at the bottom of the trading range which would then create a rectangle type of consolidation pattern.

The longer time frame one uses the less damage seems to be done to the overall chart pattern.

Below is the very long term monthly candlestick chart for the US dollar which is showing the major breakout of the massive base. At this point the US dollar is showing us a black candlestick which isn’t what I want to see during a strong impulse move up, see all the white candlesticks on the breakout move above the massive base. The month is still very young yet so the last candlestick can still end up being white. If we do close the month of December with a black candlestick it will tell us the consolidation pattern is still building out.

The very long term 30 year monthly chart for the US dollar shows the current price action as just a backtest to the top rail of the blue falling wedge and nothing more at this point in time. This is similar to the backtest to the top rail of the blue bullish rising wedge in the late 1990’s.

Below is a long term monthly chart for the $XEU which is showing it has broken down from a blue bear flag and is finding some support on the bottom dashed center line of a possible bear market downtrend channel. As the US dollar is looking for support on the top rail of its blue falling wedge the euro is looking for a backtest to the underside of its blue bear flag.

Looking at the long term daily chart for oil we can see it’s building out a combo blue falling wedge/H&S consolidation pattern. So far the backtest to the neckline has held resistance.

Below is a slightly different look at oil on the long term daily chart which is still bearish.

Below is a daily chart for $NATGAS which is showing it has broken down from a H&S consolidation pattern with a possible backtest to the 2.22 area.

This next chart is a combo chart which shows the CDNX, HUI, GOLD and SILVER. This chart has no chart patterns on it just pure price action. I did put a support and resistance line at the low made back in November of 2014. I don’t want to discourage anyone from taking any positions in the precious metals complex. That is not the point of this chart. This chart is merely to show you the price action and how close the PM complex is to its lows. Is the bear market over? Only time will tell.

Below is a daily line chart for gold we’ve been following which is showing the rally last Friday took the price action back up to the daily closing price at the late July low at 1085 or so. This is the very first obstacle gold will need to over come to show the bulls are back in charge.

This last chart for tonight is a combo chart I posted a week or two ago which shows the big picture for the HUI and gold. As you can see the bulls and the bears have been at each other for the last 2 1/2 years with the bears having a slight advantage as both the HUI and gold have falling patterns in place. How many more reversal points will we see before these consolidation patterns are finished building out?

I have many more charts that I will show you this week in regards to the stock markets and the PM complex. There is alot of interesting price action taking place in both sectors of the markets. These chart should bring you up to speed for now. All the best…Rambus

The Key Principle of this market analysing discipline we call Chartology : What makes the markets go up and down and sideways is investor’s and trader’s emotions.

From the little guy trading on his laptop to some big hedge fund manager that has an office full of people telling him what to do. The sum total of everyone’s psychology and conviction is what creates the many different chart patterns we are constantly searching for. Take for example the principle of  Reverse Symmetry , how a stock goes up is often how it comes back down. Something one needs to look for when you’re analyzing a chart for the purpose of discerning the next probable move . It doesn’t make any difference what time frame you’re looking at either. This is the reason, when you have a parabolic rise in a stock, you’ll see a very similar decline which many times is faster than when it went up.  The reason for this is because the stock  spent very little time consolidating the impulse move , only taking the time to form very small consolidation patterns which don’t have the staying power of a big consolidation pattern. There is nothing to offer support once the reversal takes place.The conviction (psychology again) of the market players is not there .

The weekly chart below shows you some nice reverse symmetry on the combo chart that has the HUI on top and Gold on the bottom. Don’t pay any attention to the top chart, CDNX:Gold ratio chart. The two lower charts for the HUI and Gold are what I want to focus in on.

What do I really mean by Reverse Symmetry? First lets look at the HUI’s massive H&S top and the price action above big neckline #2. Think of the massive H&S top on a piece of paper on your desk. Then think of the bull market highs for both the HUI and Gold as the center of your piece of paper, black dashed vertical line. Next grab the right hand side of your piece of paper and fold it to the left side of the chart using the bull market highs, black dashed vertical line, as the center of your piece of paper. You can see how the right shoulder lays right on top of the left shoulder. There is your reverse symmetry.

Another good example of some reverse symmetry is on the lower half of the weekly gold chart starting at reversal point #6 on the bullish rising wedge on the left hand side of the chart and the #1 reversal point on the bearish falling wedge on the right side of the chart. Note the left side of the chart has a bullish rising wedge and the right side of the chart shows a bearish falling wedge, reverse symmetry.

This combo chart also has some very telling price action on it. Note where the HUI’s current price action is relative to its 2008 crash low. The HUI is trading well below that very important low. Now look at where Gold’s current price action is trading relative to its 2008 crash low. It’s trading way above its 2008 crash low which tells us the HUI is much much weaker than Gold. The only relative strength I see for the HUI is that it’s trading just above its bottom trendline while gold is trading right on its bottom trendline. Don’t make the mistake of thinking that if gold breaks down from here the HUI is not going to suffer. Gold is actually leading the HUI now by a small margin so if it breaks down the HUI won’t be far behind.

If one is bullish on the HUI the first thing you will need to watch for is for the price action to break back above the blue falling dashed trendline that is showing the tops for reversal points 4, 6 and 8. If the HUI can do that then the 2008 crash low comes into play as the next area of overhead resistance around 150 or so. Gold is ever so close to breaking below the 2 1/2 year bottom rail of its bearish falling wedge. I don’t think anyone is looking at these very large consolidation patterns on the HUI and Gold, and what the consequences are if they break below their respective 2 1/2 year bottom trendlines. It has been a relentless bear market making lower highs and lower lows especially during the 2 1/2 year blue consolidation patterns. The only thing that is missing is the capitulation phase which finally takes out those that have been hoping every low was the start of the next bull market. One can only imagine the pain and fragility that must be felt by those still holding losing positions for over four years now. The last 2 1/2 years has lulled many into thinking things have to get better in this beaten down sector. Everyone who has bought an ounce of gold since the bull market high in September of 2011 and still holding has a losing position as of the close today.  As a matter of fact everyone who has bought an ounce of gold at any time in the last 6 years has a losing position . Maybe this is the bear market bottom which will prove them right but I will have to see more evidence before this bear market is over for me.

This next chart will give us the next important clue that the impulse move that began at the fourth reversal point in gold’s blue bear flag, about six weeks or so ago, has finished up with its first small red consolidation pattern and is beginning the next leg down for Gold and up for the US dollar. I know its hard to believe but this impulse move down for gold is already six weeks in the making. One never knows how a move will ultimately play out but I have shown you a countless number of chart which shows these very small red consolidation patterns, that slope in the same direction of the prevailing trend, usually show up in fast moving markets. We are as close as we can get to starting next important move for these two stocks.

Below is the long term daily combo chart we’ve been following on the stock markets in which I was showing you reverse symmetry taking place after the double bottoms were formed, red arrows. As you can see its not a perfect science but more of an art thing. It’s just another tool we can put into our Chartology toolbox. Have a great weekend. All the best…Rambus

About a month or so ago I started posting regularly on the possible inflection point I was seeing in regards to the deflationary trend that has been on going since 2011. As you know stocks move from a reversal or consolidation pattern in an impulse move which is much different than a sideways chopping action of a reversal or consolidation pattern. Impulse moves are the stored up energy that is released once a reversal or consolidation pattern is finished doing its job. About four weeks ago it looked like the most recent consolidation phase was coming to an end which would then leave the door opened to an impulse move.

At the first writing of the possible inflection point the US dollar was still trading within the confines of its possible bullish falling wedge which I viewed as a consolidation pattern to the upside. Shortly after that first post on the possible inflection point the US dollar broke out of its bullish falling wedge and is now approaching its previous high just above 100 or so. The US dollar is the key driver for this deflationary spiral that has been in place for over four years now with no light at the end of the tunnel for the commodities complex yet.

You’re probably getting tired of all the post on the US dollar but this is where the truth lies in regards to the falling commodities complex. Without a rising US dollar the deflationary scenario would not have a chance of playing out. Some of the more important commodities have now started their next impulse move lower which could very well be the capitulation phase where the baby is thrown out with the bathwater. If this is the beginning of the capitulation phase it should be relentless in nature whereby investors just throw up their hands in disgust and exit their positions at any price.

The first chart of many tonight is a short term one year daily chart for the US dollar that shows the bullish falling wedge in detail. The breakout was just a tad on the sloppy side but the top rail of the blue rectangle, that formed out toward the apex, held support which has led to the current move higher. As you can see the price action is approaching the high made back in March of this year which the US dollar will need to take out to confirm then next impulse move higher is truly underway.  So far so good.

The longer term two year daily chart for the US dollar shows the previous impulse move up out of the five point blue rectangle reversal pattern in 2014. That impulse move created three smaller red consolidation patterns which is what one likes to see during a strong impulse move.

Below is a daily line chart which shows the previous impulse move up with a nice clean breakout and backtest of the bullish falling wedge. Again you can see the three smaller blue consolidation patterns that formed in that strong impulse move up.

This next chart is a 30 year monthly bar chart I showed you many times once the top rail of the blue bullish falling wedge was broken to the upside. This chart is a very important to understanding the longer time view. Note the breakout and backtest to the top rail of the 30 year bullish falling wedge which shows the small red bullish falling wedge which is the same falling wedge we just looked at on the daily charts above. Pieces of the puzzle.

This next chart is a weekly combo chart which has the US dollar on top and gold on the bottom. Note how close the US dollar is to testing its recent high while gold is testing its recent low. If the US dollar is getting ready to breakout to a new high then it stands to reason that gold will break to new lows as the inverse correlation comes into play.

If the US dollar can close out the month of November right where it’s now it will be at a 13 year high on the long term monthly line chart and a new high for its bull market.

Lets look at one last chart of the US dollar which is the monthly candlestick chart. This chart clearly shows that when the US dollar is in a strong impulse move up it will produce a string of white candlesticks and when it’s in a strong impulse move down it will form a string of black candlesticks. The previous impulse move up created nine white monthly candlesticks in a row.

If the US dollar is breaking out of a bullish falling wedge then there is a good chance that the $XEU is breaking out of a similar pattern only in the opposite direction. The long term monthly chart for the $XEU shows this to be true.

The long term monthly chart for the $XEU shows a different pattern that has the same implications as the chart above if it breaks below the black dashed down slopping trendline which would be showing us this latest impulse move down is just halfway finished.

If the US dollar is showing strength in here then we should see some weakness in some of the commodities indexes. The daily chart for the $CRB index shows it has broken down out of the blue bearish rising wedge complete with a backtest.

The monthly chart for the $CRB index shows it has broken down below the brown shaded S&R zone with a backtest to the underside currently testing its bear market lows.

The very long term 60 year quarterly chart for the $CRB index now shows how close it’s to breaking below the brown shaded support and resistance zone going all the way back to the early 1970’s. That’s pretty incredible when put it  into perspective.

After breaking out from a five point black triangle reversal pattern as its bear market top the $GNX has created one consolidation pattern below the next showing us its bear market is still intact.

The DBC is probably the most actively traded commodities index to track. It too buillt out a black 5 point triangle reversal pattern as its bear market top. After breaking below the 2008 crash low the DBC then built out the red rectangle just below that very important support zone which has recently broken out to the downside making new all time lows.

Lets now look at the most important commodity on the planet the $WTIC, oil index. The daily chart below shows a possible blue bearish falling wedge / H&S consolidation pattern forming. Last week oil was backtesting the neckline of a small H&S top that is forming the possible right shoulder.

Below is a daily chart for oil which shows the possible stand along H&S consolidation pattern.

If you recall I used this daily chart for oil to take our first short position when the price action rallied up into the top rail of the falling wedge and the bottom blue rail of the bearish rising wedge.

Below is a weekly chart which is showing us two wedges. There is the smaller blue bearish rising wedge forming inside of the possible very large black  bearish falling wedge.

The 20 year monthly chart for oil shows how the larger falling wedge fits into the bigger picture as a possible halfway pattern to the downside within a possible downtrend channel.

Natural Gas is another commodity that has taken it on the chin recently. The weekly chart shows a multi H&S topping pattern with a recent breakdown of the third neckline and a backtest to the underside last week.

The 10 year chart for natural gas shows a H&S top with a huge breakout black candlestick signaling the H&S top was completed. You can see how the red Diamond pattern is forming as a possible halfway pattern.

The very long term 25 year monthly chart for $NATGAS shows how the smaller H&S top, on the weekly chart above, fits into the big picture. As you can see it’s just part of a massive topping pattern that actually topped out in 2005 or so.

Next lets look at several more important commodity charts that gives us a feel for how long this deflationary episode may play out at a minimum. The long term weekly chart for copper shows a massive seven point blue triangle reversal pattern that is the head portion of an even bigger H&S top. The backtest to the neckline formed the small red triangle consolidation pattern which just broke down two weeks ago. It looks like the next impulse move down has begun.

The 20 year monthly chart for copper shows how the breakout from the six year H&S top is really just getting underway to the downside after completing the backtest.

The 40 year quarterly chart for copper shows us a possible low on top of the massive black flat top triangle around the 1.47 area. As this is a quarterly chart you can see there is still some considerable time left for the 1.47 price objective to be reached.

The monthly chart for KOL, coal etf, shows it has really declined sharply since topping out in 2011 with a huge H&S top. It’s now trading below its 2008 crash low.

There are a couple of long term charts I would like to show you that relate to the commodities being in a weakened state. The monthly chart for BHP shows it’s in a well entrenched impulse move down.

RIO looks like it’s finishing up with the breakout and backtesting process of a massive H&S top formation. During the bull market years it formed a parabolic uptrend which came to an abrupt halt leading into the 2008 crash lows.

POT is another stock that looks like it’s completing a massive H&S top that has broken below its neckline.

X in the steel area shows it’s closing in on its 2003 low.

I’ve been positing this long term chart for FCX since the second right shoulder was building out on the unbalanced H&S top.

The last chart for tonight will be a long term monthly chart for gold which formed a bearish expanding rising wedge formation as its bull market. We still have another week of trading yet but you can see the last bar on this chart is currently making an ever so slightly new low for this bear market.

What these charts suggest to me is that there is still plenty of room to move lower in the commodities complex before we see a significant turn around. Nothing goes straight up or down but as many of the charts above show most have massive topping patterns followed by downside breakouts that are in some cases just getting started. Going forward is going to be interesting to say the least. All the best…Rambus

Tonight I would like to update some of the charts on the possible inflection point we looked at about three weeks or so ago. That possible inflection point is still gaining momentum to the downside as the deflationary environment still looks good to go. No market goes straight up or down so one needs to expect some turbulence along the way.

In order for the deflationary theme to play out we will need to see a strong US dollar which will affect the commodities complex and other important currencies of the world. Below is a closeup view for the US dollar that now shows the bullish falling wedge in breakout mode with one backtest to the top rail so far.

The long term daily chart for the US dollar shows its last impulse move that began in the summer of 2014 and ended in March of this year. You can see the smaller red consolidation patterns that formed during that huge impulse move up. The big blue bullish falling wedge I’m looking at as a halfway pattern separating the first  impulse move up from the second impulse move up.

If the US dollar can close the month of November on a strong note and complete a big white candle that would be a very good step in the right direction.

This last chart for the US dollar is another very long term monthly chart that puts the blue bullish falling wedge in perspective as it’s now showing a breakout, something we didn’t have on the first inflection point report.

This next chart is a combo chart that I believe I only showed you once before back in 2014. This combo chart has the $USD:$XJY ratio on top and gold on the bottom. What this chart tells us is that when the US dollar is out performing the $XJY gold is generally weak. As you can see the ratio chart on top is just now hitting a brand new high while gold on the bottom is almost hitting a new low for its bear market on a monthly closing basis. The two red arrows shows where the ratio chart and gold came together in 2011 which was the start of the bear market for gold.

Next lets look at a daily chart for the $XEU which is the biggest component in the US dollar and how the euro goes the US dollar should show an inverse look. If the US dollar is breaking out of a consolidation pattern to the upside then the euro is most likely breaking down from a similar pattern.

The long term monthly chart for the euro shows it breaking down from the blue bear flag that is sitting right on a possible mid line of a big downtrend channel. As you can see there are no touches on the bottom black rail. Many times a channel like this will double if the bottom rail is broken.

There is another long term monthly chart for the euro which shows a totally different topping pattern but is just as valid as the one above. We’ve looked at this massive H&S topping pattern in the past as one of the possibilities for a weak euro and strong US dollar. As you can see the price objective for that massive H&S top is all the way down to the 2001 low around the 82 area.

Lets now focus out attention on a couple of commodities indexes as they have been working their way lower since the last time we looked at them. The daily chart for the $CRB index shows it built out the blue bearish rising wedge complete with a breakout and backtest.

The next chart for the $CRB index is a weekly chart that has some really nice Chartology on it. Recently I just showed you the last couple of years or so but last week I started to look at the history and every time I went back a year all the old annotations came to life. For those folks that like to study measured moves and look at halfway patterns this chart has it all.

This first monthly chart we looked at a month or so ago but nothing positive has happened for the $CRB index. Just the contrary. It has been getting weaker and is building out another black candlestick and is trading at multi year lows.

You may remember this 60 year quarterly chart for the CRB index that is now trading at the low end of the brown shaded support and resistance zone. If the brown shaded S&R zone fails to hold there is little in the way of support until the 1970’s low comes into focus. It’s possible we could see a dramatic fall in this index leading the deflationary scenario.

Another commodities index I follow is the DBC commodities tracking index that has also broken down from a blue bearish rising wedge with clean breakout and backtest.

The monthly chart for the DBC index shows it formed a red rectangle just below the 2008 crash low trendline and is continuing to make new all time lows.

The long term daily chart for another commodities index I follow shows how entrenched it’s in its bear market recently breaking out of the red bearish rising wedge.

Lets look at one last commodities index the $GYX, industrial metals index, which topped out in 2011 along with just about every other commodity and then formed a four and a half bearish falling channel. This week it’s attempting to break below the bottom rail of the red rectangle that is forming just below the bottom rail of the falling channel.

Next lets look at the most important commodity on the planet, oil. Since its big impulse move down from last year the $WTIC has been chopping out a  potential bearish falling wedge, that like the US dollar, I would view as a halfway pattern to the downside. As you can see it’s working on its all important fourth reversal point.

There is another possible consolidation pattern for oil and that is the H&S consolidation pattern. You can see the height for the right shoulder is in line with the neckline symmetry line. The breakout from the blue rising wedge was accompanied by the backtest which may also be the right shoulder for the much smaller H&S pattern that is forming the right shoulder. Oil closed today right on the small neckline. One step at a time. If the small H&S neckline gives way then we’ll look for a test of the much bigger H&S neckline. If either pattern, the bearish falling wedge or H&S consolidation pattern completes, it will have a negative impact for oil.

The long term look at oil shows where the real danger lies. Below is a 20 year daily chart for oil which shows its parabolic rise back in 2007 and its even steeper decline into the 2009 crash low. This chart shows you how the potential bearish falling wedge fits into the big picture as shown on the right hand side of the chart.

This next chart for oil is the history chart which goes all the way back to the early 1980’s. For over 20 years oil traded between ten on the bottom and 40 or so on the top. Then in 2004 oil finally broke out above that 20 year resistance zone and all that pent up energy was released and oil went on a parabolic run to $147. As you can see oil actually came down faster than it went up and found support right where you would have expected it to show up, the top of the 20 year trading range at 40 or so.  Note how the blue falling wedge is forming right on that very important brown shaded S&R zone at 40.

The last chart for oil is the log scale history chart which shows the 20 year lower channel actually doubled in size when the price action broke above the 40 area. It actually was a massive double bottom. You can compare this chart to the long term quarterly chart of the CRB index I showed you earlier.  There is a striking resemblance of what is possible.

I know it’s getting late but there is one more important commodity I need to show you to complete the big picture. Below is a weekly chart for copper which is breaking down from a small red triangle this week. That small red triangle is forming just below a very large neckline which is usually a bearish setup.

The 20 year monthly chart for copper shows a massive H&S topping pattern with the head being the seven point blue triangle reversal pattern. Like oil and the CRB index there really isn’t much in the way of support below the neckline which copper has already broken below and backtested. This is a good area to see some nice reverse symmetry to the downside.

This last chart for tonight is the very long term quarterly chart for copper which shows it formed a 24 year triangle that broke to the upside in 2005 and reached it percentage move at 3.81 or so. At this point the 1.47 area looks like the first place to look for some important support to show up. Note the blue bullish rising wedge that formed right at the top of the big triangle just before it broke out and ran to its all time highs. Is oil’s falling wedge, I showed you earlier, setting up a similar situation but only in reverse.

So the inflection point continues to take hold with most of the important commodities now breaking down out of some very large chart patterns. This also includes the precious metals complex as well. We have the big picture to follow that is so important in understanding what maybe lying just ahead of us. All the best…Rambus

PS: Below is a long term monthly chart for gold which is showing it’s testing a very important neckline symmetry rail right now.

Rambus has always first and foremost focused on Precious Metals and Particularly PM Mining Stocks . When we opened this website in November 2011 Rambus was hoping to help guide PM enthusiasts on a continuing Bull Market run but alas …our timing was BAD . It has been 4 Looong Years and Rambus has been forced to be a Bear pretty much all through this period . He most certainly is NOT at PM Perma Bear as many outside the site think . Its just that we opened Rambus Chartology at the beginning of the most brutal PM Bear Market in History . And it is still very much alive .

Many members continue to be PM Mining Stock Addicted and are dreaming of the day when we finally bottom and can buy their favorite Miners at the most distressed prices in history and ride them up to wild riches in the next PM bull leg . Many have been buying already only to be frustrated again and again. Many are still holding devastated stocks from the glory days .

Now…a ray of hope…Sir Spock at the Chartology Forum has created the Spock Matrix Precious Metals Portfolio . His research has lead him to what he believes are the 25 most worthy PM Stocks to watch based on his Personal experience as a Mining Industry Analyst . Financier  and Player for many years .

The list has just been published at the Chartology Forum .

Only Rambus Chartology Members have access to this work

To see it log in to the Forum and click this link .

http://rambus1forum.com/index.php/2015/11/08/spock-trading-gold-and-silver-miners/

Presently All 25 stocks are on a sell signal based on Spock’s proprietary technical screening process which he has developed over the last 6 months and has been employing with great success (up 27% in 6 months) as applied to his original Spock Trading Universe which he publishes daily at the Forum .

Thank you Sir Spock

All for one and One for all

Fullgoldcrown