Below is a 2 hour chart for the HUI that we’ve been following since the all important low from last November. This chart shows you all the Chartology from that November low which I’ve been viewing as a H&S consolidation pattern. So basically the whole correction has been a H&S consolidation pattern within the bear market decline. This is not a reversal pattern but a continuation pattern. After breaking out from the blue morphing rising wedge last week it now appears the HUI is building out a small red bear flag. As you can see the big neckline is fast approaching.

Many times in the past you have heard me mention that a line chart can often times gives you a quicker breakout signal vs a bar chart. Below is a daily line chart for the HUI which shows the price action is testing the neckline. That little red bear flag on the 2 hour chart above is sitting right on the neckline on this daily line chart below. All the indicators are negative with the 20 ema crossing below the 50 ema just recently. It’s possible that this 7 month consolidation phase maybe coming to an end. A good solid breakout through the neckline will confirm the next impulse move down.

In this Weekend Report I would like to show you some old charts, that we’ve not looked for the most part, in a long time. Some of the long term members may remember some of these charts that go all the way back to when we first opened our doors at Rambus Chartology. When you build long term weekly or monthly charts things change very slowly vs the minute charts. What you were thinking several years or longer ago can still be relative to today’s price action. It lets you know if what you were seeing in the charts back then was way off base or if what you were thinking back then was correct or at least fairly close to what the present day’s price action is showing. It forces you to be honest with yourself.

It’s impossible to catch every little twist and turn the markets make on the short term sharts but the long term view can stay consistant for many years. It’s human nature to try and catch every little wiggle the markets make but in reality the big money is made when you can catch the beginning of a major trend and hold on through thick and thin having the confidence in your charts or whatever trading system you’re using to keep you on the right side of the trend. With that said lets look at some old charts.

This first chart is a combo chart that has the $BPGDM on bottom and GDX on the top. The BPGDM measures the gold stocks that are on a buy signal using a point and figure. First lets look at the bottom right hand side of the chart that shows the BPGDM has been falling for the last several weeks. It topped out at 40 and is currently down to 26. This tells us fewer gold stocks are on buy signals vs two weeks ago which isn’t what you want to see in a strong impulse move up. The BPGDM also has a 5dma and an 8dma that gives short term buy and sell signals. When the price action of the BPGDM falls below the faster 5dma and then the 5dma falls below the 8dma you get a sell signal.

Another way I like to use the BPGDM is to look for a divergence when the GDX is close to making an important low. As you can see on the lower chart there can be a divergence where the BPGDM made a lower low back in 2012 while the GDX made a higher low. Just the opposite happened in late 2013 when the GDX made a lower low but the BPGDM made a higher low. It will be interesting to see what these two charts look like when this bear market is finally finished. It wouldn’t surprise me to see the GDX make a positive divergence to the BPGDM similar to what we seen back in 2012.

This next long term chart I built right after the bull market top to look for possible support zones during the bear market. The brown shaded areas are the important support zones I’m paying close attention as those were the highs made on the way up. When the tops of those brown shaded S&R zones were broken to the upside, during the bull market years, they were backtested before the new impulse move up began in earnest. Note the 3rd S&R zone that held initial support during the that last impulse move down in late June of 2013 at 1230. As you can see the price action penetrated that 3rd S&R zone by a little bit but it did hold support. The initial bounce took gold backup to the underside of the 2nd S&R zone at 1435 which held resistance and was the start of this nearly two year consolidation period we find ourselves in presently. What’s important to see is the series of lower lows and lower highs since gold topped out in September of 2011 vs the left side of the chart where gold made higher highs and higher lows during its bull market run.

Next I would like to draw your attention to the 10 month ema which did an outstanding job of holding support during the bull market years. It has done a very good job also during the bear market that started in 2011. Since the high at 1535 over two years ago gold has only manage to close above the 10 month ema just twice by a small margin but then quickly reversed back down the next month. The high for this month, May, was 1232 which is the underside of the brown shaded S&R zone number three and the 10 month ema. The 10 month ema now comes in at 1215 which is about 25 points higher from the close on Friday which was the end of the month so that last bar is now history.

One last note on the chart below which is showing the next brown shaded S&R #4 coming in between 985 and 1034 which maybe a place to look for a small consolidation pattern to develop. Then the potential ultimate low which would come in at the 5th S&R zone between 685 and 725 which could be just a quick spike. We’ll worry about that when the time comes.

Below is another long term chart for gold I first built once the bottom rail of the expanding rising wedge broke down in 2013. There were several things back then that caught my attention. The first thing I was looking for was a backtest to the underside of the bottom rail of the expanding rising wedge which we got. Once that was completed I began to look at the possibility of a H&S top as I was pretty confident that the bull market was over at that time. As you can see, so far, gold has formed a classic H&S top which I’ve been showing you on some other charts where the left shoulder and head form inside the wedge or flag and the right shoulder forms on the backtest to the bottom rail of that wedge or flag. There is another big piece of the puzzle for why I think the H&S top is valid. Again some of our longer term members may remember when I extended the neckline from the H&S consolidation pattern that formed at the 2008 crash low, labeled neckline extension rail on the chart below. Outside of that little spike in January of this year above the big neckline the neckline extension rail is still functioning as resistance. There is one more piece of beautiful Chartology that I’ve been showing you on this chart and that is the neckline from the 2008 crash low also shows the lows for the left and right shoulders during the 2008 H&S consolidation pattern and the exact same angle shows the tops for the left and right shoulders on the massive H&S top. They’re labeled Neckline symmetry rails.

There is one last important aspect of this potential massive H&S top. This H&S top measures out to the 2008 crash low at exactly 685 or about another 42.8% lower. Keep in mind we’ve been watching this pattern develop since 2013 which is going on close to two years now. Its been frustration because of all the sideways chopping action but nothing has or is broken. You’re probably getting tired of hearing me say, it is what it is until it isn’t. Some time in the future we’ll know the outcome but for the time being all we can do is wait and see what takes place over the short term. The very first thing we’ll need to see is gold making a new low for this bear market.

Lets take a quick look at silver that is showing a very big massive H&S top, similar to that of gold, which we’ve been follow for about the same amount of time. It to has some very nice symmetry as shown by the neckline symmetry rail. This potential H&S top has a price objective all the way down to the 6.25 area but there is a brown shaded support and resistance zone that comes in between 7.75 and 8.50 which will be my main price target. If silver can make it down to the brown shaded S&R zone that will be close enough for me. It’s a little hard to see on this chart but silver put in an unbalanced double top as its parabolic move ended in April of 2013.

This next chart I haven’t posted in probably a year and a half if not longer. This is a comparison chart where I compare the HUI and Gold. What this chart shows you is how they tend to breakout together even if one is stronger than the other or they have different chart patterns. The purple vertical dashed lines shows how they broke out of their respective chart patterns at the same time. Back when the HUI was forming its massive double H&S top I was showing gold was also building out a massive double H&S top. Note the green shaded area on the left hand side of the chart that shows the HUI building out a triangle consolidation pattern while gold was building a bullish rising wedge. Even though their chart patterns were different they still broke out at the same time. Also note there are three shoulders on the left side of the head for both the HUI and gold and three shoulders on the right side of their heads. The pink shaded area shows where each had a false breakout to the upside which I labeled as a bear trap once the price action traded below their NL #1. From there each broke below their respective neckline #2 and declined to that important late June low of 2013. From that low they have been chopping out their next consolidation pattern which will be 2 years old this June.

This next chart is a long term weekly look at the HUI to gold ratio chart which goes back a long time. I first showed you this chart back in early 2013 about the time the HUI was breaking below its massive H&S neckline. I remember speculating if we would see the all time low for this ratio at .13 come into play at some point. As you can see the all time low was hit. Now we have another important piece of Chartology we need to recognize. I have shown you many times in the past that when a stock approaches an important support or resistance line there are several ways it can break through that line. Many times a stock will form a consolidation pattern right on top of the trendline or it may break the trendline and form a pattern just below the trendline before it moves lower. Sometimes it can form a pattern on top of the trendling and one below before the impulse move begins. If you look down to the bottom right hand side of the chart you can see a possible H&S consolidation pattern forming with the neckline being tested from above right now. This is a perfect place for some type of consolidation pattern to form if this ratio is headed lower. I know it seems impossible for this ratio to go any lower but if the neckline and the 2000 low made at .13 give way I’m afraid that’s whats going to happen. So far the neckline is holding support.

Below is a long term combo chart that has the HUI to GOLD ratio chart on top and gold on the bottom which shows the HUI to GOLD ratio bull market actually topped out in December of 2003. What this means is, even though the HUI went on to make new all time highs, it never outperformed gold like it did during the initial thrust of the new bull market that began in 2000. This chart shows the clear devastation for those holding the precious metals stocks bought during the early part of the bull market and held on to this day. The ratio actually topped out in late 2003 with gold at 400. There is no way anyone could have known back then, the under performance of the HUI, of what was to take place during the next 11 years or so. The gold chart on the bottom tells the story.

This next ratio chart compares the HUI to Silver which I haven’t shown you in a long time. Again like the HUI to Gold ratio chart above the HUI topped out vs silver in 2003 also. Silver was a $6.00 at the time.

There is one more metal I would like to update you on that we’ve not looked at in some time and that is Platinum. Below is a daily chart that shows Platinum breaking out of the blue rectangle consolidation pattern back in early March of this year. It has made three backtests to the underside of the blue rectangle so far which is still holding resistance.

This long term weekly chart for Platinum shows the small red rectangle, which I showed you on the daily chart above, forming just below the bottom rail of a much bigger blue rectangle consolidation pattern. As I explained to you on the HUI to gold ratio chart that many times a small consolidation pattern will form above, below or right on and important trendline before the impulse move begins in earnest. Here is a perfect example of a small consolidation pattern forming just below an important trendline.

This last long term look at Platinum shows its bull market that began in 1999 and topped out in March of 2008 a full three years ahead of silver and gold. You can see Platinum’s bull market topped out with a double top formation which ended its bull market run. It looks like Platinum closed the month of May at a new multi year low going back to 2008 or so. It had a nice run but all good things must come to an end at some point.

The thing about building long term monthly charts is it shows you what your thinking was in the past when you look back from the  future. They’re like a time capsule with important bits of information about what you were thinking years in the past in some case. The most important thing is to know the direction of the major trend either up or down in which to trade. Trading against the major trend can be very difficult as I can attest to trading the Kamikaze stocks. We had our biggest profit when we shorted the PM stocks in December of 2012 and held on until August of 2013. Since that low the PM complex has been chopping around in a consolidation pattern, for the most part, going nowhere. I guess it’s the challenge in us that makes us think we can out trade the primary trend but in all actuality it’s very hard no matter what trading system you’re using. Going with the major trend will fix your mistakes in time which is just the opposite when you trade against the major trend. When you trade against the major trend and are wrong and don’t get out that’s when your problems really begin. Many a gold bug who held on against the bear market forces can relate to that last sentence. All the best…Rambus

Tonight I would like to show you some really big consolidation patterns in regards to some big cap tech stocks mainly the networking and semiconductors. I have shown you some of these big bases in the past but now I’m going to create a brand new portfolio based just on these big patterns. It definitely won’t be as exciting as  trading in and out all the time as the game plan will be to hold these stocks for a minimum of two years, no trading. This will be an investment portfolio based on these massive consolidation patterns. Big base or consolidation patterns equals big moves.

I’m seeing too many of these big bases breaking out and the stocks moving higher without our participation. This will be a low stress way to make some serious money if you have the discipline to hang on when there is a correction. Think if you had bought some of the better stocks back at the 2009 crash low and held on over these last six years or so. It’s much easier said than done. At any rate I’m going to show you some stocks that I think have a great future regardless of why the stock markets are going to crash and burn any day now. That’s is basically all we’ve heard since the 2009 crash low and here we are now with many stock market indexes making multi year highs.

For most folks I would think that they should have at least a minimum of 50% of their portfolio in some of the better long term stocks. With the stock markets consolidating for long periods of time this will keep you out of trouble trying to catch every twist and turn that is virtually impossible to trade.

The two areas I’m going to focus in on are the semiconductors and the networking areas as I believe they have some catching up to do compared to some other areas of the markets like the biotech and healthcare that have and are still a good place to park some capital.

Lets start by looking at the two indexes the $SOX semiconductor index and the $NWX networking index. I have shown you this long term monthly chart for the SOX several times in the past which is showing us one of those massive consolidation pattern, the 10 year bullish falling wedge. From a Chartology perspective it’s a pretty as it gets. Note the breakout from the black dashed horizontal support and resistance line about a year and a half ago with the backtest from the top which found support during the October low of last year and the quick bounce to the present. Also note the very last bar on the right hand side of the chart which shows the SOX hitting new multi year high this month.

I first showed you this long term monthly chart for the $NWX when it first broke out from that massive 12 year inverse H&S pattern. As you can see it has had a nice backtest to the neckline shortly after breaking out. One of the reasons I like this chart so much is because of the steep decline that occurred after the 2000 peak. There is a good chance we will see some nice reverse symmetry back up over the same area NWX declined after the 2000 top was put in.

I’ve shown you this long term monthly chart for the INDU which I call my, JAW OF LIFE CHART, which so many analysis are calling the JAWS OF DEATH. I have shown you this chart for close to a year and a half and it still just keeps on going up. Big pattern big move. We still have a few more days left of trading in May which may show the INDU making another brand new all time high. This is the reality which few want to accept. Note the spike low to the top rail during the October low last year at 16,000. Picture perfect.

The SPX shows a massive 13 year expanding flat top triangle that broke out in 2013 and hasn’t looked back.

Below is a long term monthly chart for the RUT 2000 which shows a massive 13 year black bullish expanding rising wedge. Note the breakout that created the blue expanding flat top triangle that formed right on top of the black rail of the expanding rising wedge. The backtest in October was pretty strong but looked where it closed the month, right at the top of the monthly bar. Note the last four bars on this monthly chart that shows the breakout and the backtest, this month, to the top blue rail. This is exactly what you want to see from the longer term perspective.

Below is a long term chart for the NDX 100 which is made up of the 100 biggest tech stocks. This chart shows it made a huge ten year triangle consolidation pattern before it broke out to the upside. As you can see it is closing in on its all time highs made back in 2000.

Even some of the European stock markets are getting into the act. Below is a long term monthly chart for the DAX that shows its big 13 year triangle consolidation pattern. Note how the top blue rail held support during the October correction last year.

The FTSE is now just breaking out of a massive 15 rectangle consolidation pattern. Note the smaller red consolidation pattern that has formed just below the top rail of the 15 year rectangle. This is usually a very bullish setup.

Below is a monthly chart for $DRG, pharmaceutical index, that shows it created a massive 12 year bullish falling wedge. As this index is further along in its impulse move vs some of the tech indexes we’ve looked at earlier you can begin to see how the big bullish falling wedge is showing up between the lower impulse move up and the new impulse move up that started at the last reversal point in the blue falling wedge. Think of this chart as a template for some of the indexes we looked at above that are just breaking out of their massive consolidation patterns.

Right now I have about 20 semiconductor and networking stocks that have similar massive consolidation patterns that are and have been in breakout mode for sometime now. I plan on showing you some of these stocks over the next several days that I will put into a new long term portfolio that WILL NOT BE TRADED. This portfolio will be a buy and hold portfolio. With this portfolio I’m going to let the markets work for us and not the other way around. Sit tight and be right. All the best …Rambus

In this Weekend Report I would like to look at the longer term weekly and monthly charts for some of the precious metals stocks. Every time we get a small rally the gold bugs come out of the woodwork trying to explain why this time is different. At some point in time things will be different but I don’t believe that time is now. By focusing in on the longer term charts we can get a better feel for where some of these PM stocks are relative to where they’ve been especially the 2008 crash low which is a milestone since the 2000 bull market began for the PM complex. Even the bear market bottom in 2000 comes into play for some of the weaker precious metals stock, think South African miners.

For most of the PM stocks their correction began late last year in November. Many have been just chopping sideways in a trading range going basically nowhere. A good example of this sideways trading range is a weekly look at ABX. For the last three weeks this big cap PM stock has been hitting the top rail of a potential rectangle consolidation pattern. You can see the top rail is forming just below the bottom of the bearish rising wedge. Also note how much lower ABX is trading vs the 2008 low.

This long term monthly chart shows how ABX is doing a ping pong move between the 2000 low and bottom of the rising wedge. This chart also shows you some nice reverse symmetry when ABX broke off of that massive H&S top.

It’s has been a long time since I showed you this long term monthly chart for ABX where I extended the neckline to the right side of the chart from that massive H&S base that launched the bull market for ABX. That neckline is called a neckline extension rail as shown by the blue arrows.

After completing its H&S top in 2011 AEM has been in a pretty tight falling wedge creating 6 reversal points so far with a possible 7th underway. Again note how the neckline extension rail caught the backtest from the H&S top.

The long term monthly chart for AEM shows the blue falling wedge with the red bear flag being backtested right now. You can see AEM’s huge base that launched its bull market. The blue arrows measures each half of the impulse move up with the right shoulder triangle being the halfway pattern.

Below is a weekly chart for AGQ which is a long etf for silver. It’s been a long time since I posted this chart but from a Chartology perspective it has some really nice chart patterns with the biggest one being the possible H&S top. It’s bull market top was a strongly slanted H&S top.

The weekly chart for ASA shows it built out a 15 month blue rectangle consolidation pattern after breaking down from its big H&S topping pattern. Since the November low from last year it has been chopping out a sideways trading range in red. You can see there was a strong backtest to the bottom rail of the blue rectangle which in cases like this I will wait and see if the center dashed line can hold resistance. So far ASA has been unable to penetrate the blue dashed center line and is now trading back inside the smaller red trading range.

The long term monthly chart for ASA shows it built out a triple bottom to launch its bull market. ASA created a beautiful 10 year uptrend channel that broke down once the H&S top was completed. ASA is also doing a ping pong move between the 2008 low and the bottom rail of the red rectangle.

The monthly chart for AU shows it built out a double H&S top to end its bull market after building out an inverse H&S bottom to start its bull market. AU has been chopping wildly after testing its 2008 and 2000 lows. If it closes the month of May right where its at now it will again be below the 2000 low which tells us that anyone who bought this stock in the last 15 years is pretty much underwater unless they bought on the initial penetration of the 2000 low and even there some are holding loosing positions. This chart shows you just how hard it is to play a counter trend rally in a bear market.

AUY built out several topping patterns to end its bull market. The weekly chart shows the 7 point bearish rising wedge complete with a breakout and backtest. From there it went on to form the blue bearish falling wedge and is now backtesting the red bear flag from below just above the 2008 crash low.

The monthly chart shows a pretty H&S top that reversed its bull market.

The monthly chart for BVN shows it built out a H&S top with a nice reverse symmetry move down toward the 2008 crash low which has been holding support so far going all the way back to 2003.

The monthly chart for CDE shows it built out a double top to reverse its bull market run. The double bottom trendline caught the backtest which ended up being the head of a multiple H&S top. Notice how each neckline was backtested from below once the breakout occurred. This stock is also testing its 2008 crash low.

The weekly chart for ELD.To shows its beautiful H&S top with a nice clean breakout and backtest. Since the breakout from the massive H&S top it has been forming a blue triangle that now has completed six reversal points and is sitting on the bottom rail. A break of the bottom blue rail would most likely lead to a move down to the 2008 low.

The monthly chart for ELD.To shows some nice Chartology as its bull market formed a massive bearish rising wedge. I’ve shown you many times in the past how a wedge of flag can form a H&S pattern. Here you can see the left shoulder and head were formed inside the rising wedge with the right shoulder being formed on the backtest from below.

The weekly chart for EXK shows its massive H&S top but has held up better than most PM stocks. Even thou it has held up better it still has a long ways to go to reach its price objective which would be the 2008 crash low around .70 or so.

The weekly chart for FCX shows it has broken down from a massive triangle pattern and has just completed a backtest to the underside.

I can make a case for an unbalanced H&S top on the monthly look at FCX. Here you can see it has backtested the neckline. The neckline symmetry rail also shows us the height for the right shoulders. There really isn’t much in the way of support until the 2008 crash low is hit so its very possible that we’ll see some reverse symmetry down once the impulse move gets underway, red arrows.

We’ve been looking at this weekly chart for FNV for several years now and that bottom rail of the rising wedge is still holding resistance. This stock may also be building out an unbalanced H&S top. We won’t know the answer to that question until the neckline is broken to the downside.

This first monthly chart for FNV shows a possible 5 point triangle reversal pattern in play if the bottom rail is broken to the downside. You can see it cracked the bottom rail back in March of this year but managed to claw its way back above the bottom rail negating the breakout for now.

Below is another monthly chart for FNV which shows you how I think it may play out. As it has been one of the stronger PM stocks I can see it creating a very larger trading range or rectangle. FNV has been trading between the top rail and the center dashed line for over a year now. A break of the center dashed line would most likely lead to a move down to the bottom trendline around the 31 area where I would most likely back up the truck.

I’m going to end the Weekend Report right here for the time being as you get the general feeling of why I haven’t been a buyer of PM stocks yet. That point is coming but I think we still have one more leg down to complete this bear market. I hope everyone had a great three day weekend. All the best…Rambus

Below is a combo chart that has gold on top and silver on the bottom. This chart goes back to the bull market top for both gold and silver and the bear market that ensued. Silver topped out in April of 2013 with gold topping out in September of the same year. Their first bear market consolidation patterns were rectangles and both broke down at the same time. From that initial low in June of 2013 they both started to form consolidation patterns and that’s where they parted ways. Silver built out a 15 month 6 point triangle consolidation pattern before it broke down. The bottom rail of the 6 point triangle consolidation pattern has held resistance for nine months or so. The first thing that would get me excited about silver would be if it could take out the apex of the blue triangle above 18.65. Below the apex bearish and above bullish.

As you can see gold is trading almost dead center in the middle of it’s massive 6 point falling wedge. A break of the top rail would be the first thing I would need to see to get bullish on gold.

One last note on this chart below. The vertical dashed lines shows the price action of the two precious metals when the RSI gets over 70. It’s not a perfect gauge but if you see these two trading above their respective RSI above 70 it’s time to watch things very close. If you see the RSI make a double top above 70 get out of Dodge and if you see the RSI get above 80 head for the hills.

Below is a daily chart that shows gold’s most important moving averages. At one point this week gold traded as high as 1232 closing at 1205. At the high this past week gold was trading above 3 of the 4 moving averages but by the close of trading today it’s only trading above one of the moving averages the 50 dma which comes in at 1194. So all the ground gained during the early part of the week was given back by the end of the week.

I would like to update you on gold’s downtrend channel we’ve been following for quite some time now. This week gold came within about 17 points of hitting the 65 wma and the top rail of the downtrend channel. A linear scale chart shows gold did indeed hit the top rail. So far everything is on schedule for gold to break the bottom rail in late June or early July. It is what it is until it isn’t.

I’ve posted this next weekly chart several times in the past for gold that shows every consolidation pattern that formed during gold’s bull market years right up to the present day. I was looking at this chart today at the different sizes of consolidation patterns that have formed since 2000. There is only one other consolidation pattern, that has taken as long as our current bearish falling wedge to developed, and that was the bullish rising wedge that formed back in 2004 and 2005 labeled #1. I put a red rectangle around the blue bullish rising wedge from 2004 and 2005 to measure the width and height or time and price and added it to our current falling wedge. As you can see they’re almost identical in both time and price.

If you look real close at the blue bullish rising wedge #1 you can see a very clean breakout with an nice clean backtest and then the impulse move up began. Also note the little green triangle that formed in the middle of that impulse move up that ended at the beginning of the red triangle. Perfect Chartology. Just for the hell of it, because both wedges are almost exactly the same in time and price, I measured the impulse move from the breakout point on the blue rising wedge #1 to the top of the red triangle. I took that measurement and added to where the breakout may occur on our current bearish falling wedge to see what the price objective be. It turns out to be about 735 which is the low end of where I would expect the final low to come in.

One last thing about this long term weekly look at gold. Notice the thin black rectangles that are exactly the same size numbered one thru five. They show the height for those individual impulse moves. Will we see a similar sized move down if we ever get the next impulse move going?  Sometimes the truth is stranger than fiction. I hope everyone has a great three day weekend. All the best…Rambus

The first chart I would like to show you tonight is the long term monthly chart for the US Dollar I showed you a week or two ago. It was coming into contact with the top rail of a massive 30 year falling wedge at 93.50. I also drew in a neckline extension rail taken from the H&S top that formed back in 2000 which came in at 92. I put the little brown box to show you where I was hoping to find support. So far the top rail is doing its thing by reversing its role to what had been resistance to now support once it was broken to the upside. This is a critical test taking place right here which so far the US dollar bulls are winning.

The next chart for the US Dollar is the old fractal chart which shows you the breakout from the massive base last year and the impulse move that followed. After a big move like that a stock needs to consolidate for a period of time to work off the overbought condition. If the initial low is in, as shown by the chart above, then we should have at least a top and bottom for the next consolidation pattern to trade between as shown by the two red horizontal trendlines. There is no way to know what type of consolidation pattern the dollar may build out but this is a perfect place for some type of consolidation pattern develop. This means we should now see a rally up toward the old high and at least one more decline after that to get our minimum of four reversal points. Just playing with the potential red trading range, if I measure from the breakout point of the massive base #2 to the recent high and take that measurement and add it to the breakout point of the top red rail, it would give us a price objective back up to the 2000 high around the 120 area. This is just speculation on my part because we don’t know if the top red rail will be a horizontal trendline giving us a rectangle or if it will slope down a bit giving us a triangle. Either way if this area proves out to be a consolidation zone the old high in 2000 at 120 should come back into play.

Below is a combo chart that has gold on top and the US dollar on the bottom. If the dollar is going to consolidate this recent rally phase how will that affect the price of gold? As you can see gold is basically trading closer to the lower end of its support line while the dollar has some room to run to the upside before it reaches to the top red rail of its new trading range. Will the dollar rally force gold below its support line? It will be interesting to see how this plays out over the coming weeks and months. This chart below gave me my first good clue that the US dollar’s bear market was coming to an end. You can see the big divergence that occurred in 2011, vertical dashed purple line, to the dollar bottom in 2008 which was much higher. Gold started its near parabolic rise in 2008 when the US dollar was making its bear market low. Gold finally topped out in September 2011 with the US dollar making a higher low vs the 2008 low. That was a huge divergence, purple arrows.

Below is a weekly combo chart for the US dollar and gold that shows the US dollar almost retraced 38% of its breakout rally. Gold shows you why this correction has been so painful as it’s now trying to put in its 7th reversal point to the upside which is just wearing everyone down, bulls and bears alike. As you can see gold is trading right in the center of it’s falling wedge, in the middle of no man’s land.

I know some of you are wondering if the stock markets can rally with the US dollar rallying also. Below is another combo chart that has the US dollar on top and the SPX on the bottom. This combo chart shows the price action from the 1995 to the 2000 secular bull market top for both the dollar and the SPX. So the answer to that question is yes.

Now I would like to show you a daily chart for the XEU that has been in counter trend rally mode since the March low as the US dollar has been correcting. This chart shows that the XEU has been carving out a bearish  expanding rising wedge which it just started its fourth reversal point down. If the XEU is topping then the US dollar is bottoming which I showed you on the charts above. This is a big deal as it will most likely have a negative impact on commodities in general.

Lets now look at the GNX commodities index which had a massive decline similar to what the XEU chart above looked like. Putting 2 and 2 together it looks like the GNX is also building out an expanding rising wedge formation. Just like the XEU chart above it’s starting its 4th reversal point down. Keep in mind the pattern won’t be complete until the bottom rail is hit. As you can see it has failed to reach the 38% retrace of its big decline which will probably fool a lot of folks looking for a minimum 38% retrace by just coming up shy.

Next lets look at a few charts for the HUI I haven’t shown you in awhile. Some of you may remember this weekly chart for the HUI that I showed late last year when the price action was approaching the outer black dashed trendline. If you recall we went short up there and I said to hang on for dear life as it was going to be a bumpy ride. I had no idea it was going to be this bumpy of a ride. As you can see the HUI came all the way back down to the old low at 150 where I thought it would finally break through after testing it twice already but here we are again testing the top black dashed outside trendline again. I can make a case that the HUI is building out another triangle just below the one above. I’ve been showing you a H&S consolidation pattern on the GDM but either one will work. The pink shaded area still shows the time and price objective for the bottom if it comes to fruition.

Below is the same setup using the H&S pattern as the consolidation pattern.

Below is a long term weekly chart that shows all the blue consolidation patterns that formed during the bull market years on the left side of the chart. Notice how when the blue triangles broke out during the bull market years the HUI wasted little time in rallying up to the next high. Looking at the right hand side of the chart you can see the bear market decline. Where I made a mistake was thinking that when the blue triangle broke down that the next impulse move down would take place right then and there after maybe a quick backtest just like the blue triangle consolidation patterns during the bull market. There is still no doubt that this bear market is still progressing.

There is another piece of the puzzle I’m still trying to figure out. Normally when you have a nice clean consolidation pattern like the blue triangle on the chart above you get the breakout with a possible backtest and then the impulse move down. This hasn’t happened. Normally when there is a failed move out of a consolidation pattern it tells you that the consolidation pattern is either going to morph into a bigger pattern or another consolidation pattern will form just below like we have right now. Many times you can then put those two patterns together to create a bigger consolidation pattern. The other possible scenario is that there will be a trendline that separates the two consolidation patterns with one on top and one below. There is a chart pattern called fanlines. Normally after the third fanline is broken to the downside the pattern is complete. Below is a monthly chart for the HUI that has three fanlines starting at the 2000 low. Note how fanline #3 separates our two triangles. Normally you will see a backtest to the underside of the above fanline before the price action breaks down. That is what the possible red triangle is doing.

A weekly line chart showing the fanlines.

Lets look at one last chart for the HUI which is a long term monthly look that shows you a completely different possibility. If you recall the HUI built out a H&S top back in 2008 and we got the major impulse move down followed by a near vertical move up. That move ended at the head of the massive H&S top we watched develop before it broke down. What we have are two H&S tops separated by a pretty strong move between them. WHAT IF, the HUI is building out a massive double top formation reversing the 11 year bull market. If I start the double bottom trendline from the 2008 crash low and extend it all the way to the right side of the chart, putting it between the two consolidation patterns, it makes sense. Will it play out I don’t know but it’s a possibility. Time to get this posted. All the best…Rambus

Below is a ratio chart we looked at a few weeks ago that compares the $TNX:GLD in black overlaid on top of GLD in red. This chart shows you the inverse correlation between the ratio and GLD. When the ratio in black is rising the GLD is generally falling and vice versa. If you look to the right hand side of the chart you can see the ratio, in black, just put in a double top and is starting to decline while GLD in red is now rising giving us the inverse look. The green shaded areas shows the complete inversion of the two where one tops out while the other bottoms out. The pink shaded areas shows where the two crossed paths on their way to a complete inversion. The blue shaded areas shows where the two started to do a complete inversion but stopped short when they met in the middle and then reversed direction. That brings us up to our current situation which shows the black ratio topping out with a double top and GLD bottoming on the last green shaded area on the right hand side of the chart. Now the question becomes will the two just touch somewhere in the middle of the chart and then reverse direction, blue shaded areas or will we get a complete inversion where they both will transverse the chart from top to bottom. With the double top in place on the black ratio chart it looks like the GLD is going to have a chance at a rally phase. How big GLD’s rally will be will depends on what happens when they meet in the middle of the chart. If they do a complete inversion then GLD should have a pretty decent rally on its hands. If they both touch in the middle and then reverse direction then GLD’s rally will be fairly short lived.

There is a daily chart for GLD that I’ve not shown you yet that is a blue 5 point triangle reversal pattern that has formed at our most recent low in March.To get a price objective in a situation like this I take the measurement form the width of the blue triangle and add it to te breakout point of the blue triangle to get a measured move price objective. This would give gold a price objective up to the 124.50 area at the previous high and the apex of the big blue triangle. I will show you on the following chart why the 124.50 area is important.

The top rail of the almost 2 year falling wedge comes in at you guessed it 124.50. GLD is now beginning its 7th reversal point to the upside. If it reaches the top rail that could very well be a big inflection point where GLD could go either way. If it breaks up through the top rail with some strength GLD will have completed 7 reversal points making this 2 year falling wedge a reversal pattern to the upside instead of a consolidation patten to the downside. So now we wait and see what GLD gives us to work with over the next important several day. Have a great Weekend and all the best ….Rambus

The One Year Returns are Booked (May 13 2014 to May 13 2015)

Final Tally : Up 49% .

You can review all the trades here by clicking on “Closed Trades”

http://rambus1.com/?page_id=23371

This Portfolio is presently mostly in cash

The Portfolio uses Long and Short 3X ETFs representing a wide variety of Market

Sectors  (Excluding Precious Metals)

While Rambus Chartology is Primarily a PM site , we all know how difficult this sector

has  been to trade for the last 2 years .

The General Market Trades are a welcomed addition for those interested in trading

outside the PM Complex .

Let’s see what Year two will bring .

Fullgoldcrown (Scribe)

A first time for everything. This week was the first time I ever went to basically cash before the jobs report was released. It’s still too early to know yet  if this was a right or wrong decision depending on what the stock markets do next week. I thought I’d give it a shot as these job reports always seem to catch you leaning the wrong way especially in a sideways trading range. Today was no exception. Many times a big rally on a Friday will lead to some follow through on Monday and then we get turn around Tuesday. At any rate we have a lot of cash on the sidelines that can be put to work when the time is right.

The first chart I would like to show you tonight is a long term daily chart for gold that shows the four most important moving averages. As of the close today gold is trading below all the moving averages. As you can see they did an excellent job of holding support during the bull market years from 2008 to the top in 2011. Since the bear market really got going in April of 20013 the 300 dma has done a good job of holding resistance except for couple of little overshoots. The 300 dma will be one of the things I’ll be watching very closely when gold finally turns around.

It’s been awhile since I last showed you this weekly chart for gold that encompasses its bear market with the 65 week moving average. So far gold has produced a parallel downtrend channel with the six point blue rectangle at the top of the chart and our current falling wedge that just keeps on building out but within the confines of the top and bottom rails of the 3 1/2 year bear market. Our current falling wedge will be two years in the making come late June of this year which is the longest consolidation pattern in the bull and bear markets that started in 2000 or so.

Note the speed and magnitude of the impulse move down once the 6 point blue rectangle finished building out. There was one last little counter trend move the bulls put in just before the bottom fell out in April of 2013. This chart also shows the two different measuring techniques I use to measure an impulse move once a consolidation pattern is completed. The blue arrows shows the impulse method which measures each leg down that are the same in price and time, black rectangles. The other method shows the breakout to breakout method where I measure from the breakout point of the blue rectangle down to the first reversal point in the falling wedge. I take that measurement and add it to the breakout point of the falling wedge, which hasn’t occurred yet, to get a price objective. Many times these two different measurements will be fairly close price wise. In this case both measuring techniques gives us a price objective down to 850 sometime in October of this year.

If you look real close you can see two red rectangles that measures each impulse move down in time and price. Gold can break the bottom rail of the falling wedge, in the middle of July, and still have time to reach its price objective of 850 in October of this year. So if gold is on track to reach its time and price objective, in October of this year, we will need to see gold trading toward the bottom rail of the falling wedge, around the 1120 area, come the middle of July at the latest.

One last note on this weekly chart. In order for me to get really bullish the first thing I will need to see is gold trading above its 65 week moving average. The second thing I need to see is gold trading above the top rail of the black downtrend channel and the third thing is to see gold trading above the top rail of the blue falling wedge. If gold can do that then so be it and I’ll become a bull again. All the best…Rambus