In this report I would like to show you some important stock markets from around the world that have broken out of triangle consolidation patterns and are in rally mode. You must clear your mind of all previously conceived notions that the world is coming to an end. At least for the foreseeable future, maybe six months to a year, most of the stock markets around the world are going to rally.

We here at Rambus Chartology have been throwing this idea around for sometime now about investing in the European Stock markets, but seeing that we are primarily a precious metals site we hesitated to present this view. As you well know the precious metals stocks have been one of the weakest performing sectors to put ones hard earned money into and try to make a decent profit. We finally decided that we should put the Model Portfolio to work in what are some of the stronger stock markets around the world. As I said earlier you have to look at the following charts with an open mind to grasp the significance of what is taking place outside our borders. With that said lets look at some etf’s from around the world.

Lets start with the VEU that is a world etf minus the US stock markets. This etf gives you a good look at what the world stock markets are doing without the US stock markets coloring the rally as the US markets have been one of the strongest stocks markets since the 2009 crash. As you can see the VEU broke out of a beautiful symmetrical triangle, had a nice backtest to the top blue rail and has started it’s next leg up.

Lets take a look at the emerging markets and see how they have been performing. I have been watching this ten point diamond consolidation pattern for a very long time. Until it finally broke up and through the top blue rail I couldn’t be sure which way it would finally move. My question was answered about 8 weeks ago when it finally finished the backtesting process and started to rally. I took this weekly chart back 7 years so you could see the big H&S topping patterns and the crash that ensued once they were completed. As you can see we are not that far off now from it’s all time highs around the 50 area. Whats important to understand, when you look at these charts, is that most of them you will see have been in at least a one year consolidation pattern and some even longer. My goal is to catch the impulse moves out of these consolidation pattern because that is where the real money will be made. Big consolidation patterns are for traders and breakouts are for the intermediate to longer term in investors.

This next chart, $EUR Top 100 index that focuses in on the European stocks markets that shows it broke out of a very nice ascending triangle and finished it’s backtest last week. This index is just now breaking out and looks like it has a decent move ahead regardless of what the news headlines are telling us.

Before we move on to some of the etf’s I will recommend I want to show you a few ratio charts that compare gold and the HUI to some of the etf’s shown above. These chart will show you which is the stronger place to put ones capital to work which is what investing is all about. Regardless of all the news headlines, charts don’t lie. They encompass everything about the stock from the fundamentals, to the bullish case, to the bearish case and whatever else one wants to through into the mix. All the information is in the chart patterns. Its the interpretation of the charts is where the problems lies for most chartists as everyone has there own methodology in which to unlock the secrets of a chart.

First lets compare the VEU world stock market etf to gold to see which one is more bullish at this time. After breaking out of a beautiful 7 point triangle reversal pattern the VEU encounter the next overhead resistance rail that was the extended top blue rail of the huge blue triangle formed back in 2009 to 2011. Note the nice gap of that top resistance rail. That lets us know that rail is hot and will most likely hold support if it’s tested from the topside now. This chart tells us the world stock markets are now outperforming gold.

Now lets compare the VEU to the HUI and see what it looks like. Folks this chart should make you stand up and take notice. After completing the blue 5 point bullish falling wedge in late summer of 2011 this ratio chart has been outperforming the HUI. Now I want to focus your attention to the right side of the chart where you can see this ratio has just broken out of a red  bullish rising flag formation. As long as this ratio is rising the world stock markets are outperforming the HUI. One must ask themselves a serious question right here. Should I remain in the big cap precious metals stocks because of principal or should I take advantage of the big divergence taking place right now with this ratio chart in favor of the world stock markets. Only you can answer that question.

Lets now compare the European top 100 index, $EUR, to the price of gold and see how it looks. When the price action is rising the EUR is outperforming gold. As you can see on the chart below this ratio has been consolidating for quite sometime now in a rising flag formation. Its testing the top blue rail as we speak so a breakout can occur at anytime.

This next chart compares the $EUR to the HUI. Its now testing the brown shaded support and resistance zone that goes all the way back to highs made back in 2009 and 2010. With just a little more strength this ratio is going to hit a five year high. As you can see on the chart below the EUR 100 index has been outperforming the HUI since the fall of 2011. What is that saying about the HUI, that can’t even outperform the European stock markets, that have been in the headlines for a long time now on how bad things are over there?

Lets now compare gold to the EEM, emerging markets and see which one is showing some strength in here. This ratio made a huge double bottom with the first bottom being made in 2009 and the second bottom forming in October of 2011. This ratio chart is also showing a very nice red triangle reversal pattern that has broken out to the topside about 6 weeks ago. I will be watching with great interest on how this ratio interacts with the double bottom trendline which is still above the current price. Right now the EEM is outperforming gold over the last six weeks.

Now for the last chart for this part 1 report lets look at the EEM to the HUI ratio that is showing the emerging markets are now breaking out compared to the HUI. Four weeks ago this ratio broke above the double bottom hump with a nice breakout gap. Six weeks ago it broke out of the red bull flag pattern. You now have to go all the way back to 2008 to find a higher price for this ratio. Its very possible we could see a backtest to the double bottom trendline at 1.00 before this ratio moves higher buy no guarantee.

What these ratio chart are showing us is that there is some very significant outperformance by basically the rest of the world stock markets. This is a big deal IMHO as its telling us that investors are seeing better value in most of the world stock markets. They are taking money that normally would be going into the precious metals complex and putting it to work else where for a better return on their money as the ratio charts above are showing. We can listen to all the news stories on how bad the world economies are and how the precious metals complex is going to save us all. In the end that might very well be the case but for right now, at this moment, I believe there are better investments to be made to grow ones capital. I will have part 2 tomorrow and show you some of the individual stock market etf’s that I think will do very well over the next 6 months to a year. Until tomorrow…All the best….Rambus.

Its been a while since I last updated the GDXJ junior gold stock index. Of all the precious metals stock indexes this index has the nicest looking bearish falling wedge pattern which has been trading below the bottom red rail for 6 days in a row now. Also the blue 5 point triangle reversal pattern is the cleanest of all the PM stock indexes to.

Lets now look at an 18 month daily chart that puts the above patterns into perspective. If you recall when the double bottom was complete and the price action broke above the double bottom hump it looked like, at the time, that we were well on our way to a nice big rally for the precious metals stocks. You can see the nice breakout and backtest to the double bottom trendline or the support and resistance rail, S&R rail, that showed everything was a go. After a week or so of rally the GDXJ began to correct, top of blue 5 point triangle reversal pattern. Even at that point everything still looked good as it was about time for a small correction. As the correction wore on the GDXJ couldn’t make any higher highs inside the blue triangle but the bottom blue rail held as support. Still this was a fairly normal correction. Then the breakout to the downside hit with a vengeance and in just 2 days the bottom rail of the blue triangle and the S&R rail were broken to the downside. That was a key technical failure and when we got our little backtest to the underside of the S&R rail that is where I put the model portfolio back into cash. I hated to do it but the breakdown left me no choice. Now what we have is a bearish setup with one pattern above the S&R rail and one below.

Next lets look at the weekly chart that is showing just how weak this junior index is. You can see our two pattern from the chart above, the blue triangle and the red falling wedge. We are not that far above the all time lows that formed back in May of this year.

Normally when the precious metals stocks are in strong uptrends one likes to see the juniors outperforming the big caps as that suggests money is flowing freely and investors want to to take more risks so they bid up the juniors. Below is a ratio chart that compares the GDXJ to the GDX that is showing the junior mining companies are now rolling over to the downside after hitting resistance at the brown shaded area. This is not a healthy sign if you own the precious metals stocks.

Thanks for those kind words Fully.

When we opened the doors to the Rambus Chartology site a little over a year ago we were as green as the grass grows. We didn’t know what to expect or what kind of problems we may encounter along the way. All we knew was that we wanted to create a website that would compete with best  websites out there. We have come along way from day one as the hits to Rambus Chartology has increased dramatically over the course of the year.

We are working on adding some new features that should help with the registration process as our growing pains now warrants the need to do that.

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There is alot of behind the scenes work that goes on each day that nobody really sees and that is the way it should be. Your experience here should be full of information that is easy to find.

First, I would like to thank my editor Sir Fullgoldcrown who has done a masterful job of keeping our site updated and easy to follow. Without his input things would go downhill pretty fast. He has a great sense of humor that keeps us all in high spirits.

Next, I would like to thank audept who actually created our website from scratch using his vast knowledge of computers and how the internet works. He is constantly doing updates and things behind the scenes to make our site faster and safe.

Next my wife whom some of you have communicated with about your pay pal accounts that were having some trouble. She also understands the amount of time I spend each and everyday analyzing charts so I can paint a picture for you on what the markets are telling me. Without these three energetic people Rambus Chartology would not exist. So I thank you from the bottom of my heart for all your hard, behind the scenes work, that keeps our website up and going at full speed.

Lastly I want to thank each and every subscriber who has paid with your hard earned money in hopes of making it grow. I just want you to know that I will always have your best interest foremost in the front of my mind. I will always tell you what the charts are telling me even if its not what you want to hear.

I would like to wish everyone a Merry Christmas and a healthy and prosperous 2013….All the best…Rambus

I just want to Say Thank you for your Incredible work as of late. Your Market Guidence has been Invaluable

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Merry Christmas and Best Wishes for a Prosperous New Year to all Chartologists from around the Globe

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Fully (Editor)

In tonight’s report I would like to show you some charts from different areas of the markets that might shed some light on what is happening with the precious metals complex. The last three weeks or so have been a little complicated with the dollar showing weakness along with the precious metals and their stocks.

Normally when you see a weak US dollar that is generally a good time to be long gold and silver. This has been anything but the case so far over the last three weeks. Below is a daily chart of the UUP dollar etf, that shows the somewhat complex topping pattern made back in the summer months of this year. If you recall we went long the model portfolio stocks at the end of July and the first part of August that led to some nice gains as the dollar was falling. The dollar then bottomed out in September and October with a nice little double bottom formation.

That started the correction for the PM complex that looked like that’s all it would be, just a correction in a new uptrend. I did a post when the UUP put in the island reversal saying at the time, that this would be good for the precious metals complex and to expect the next leg up to begin anytime.This is the point where the market threw us a curve ball that took a week or so to finally figure this time ” WAS DIFFERENT” at least over the near term.

With the decline off the island reversal, to our most recent low today, one would have thought the precious metals were back in rally mode but that was not the case.Today the UUP hit the previous lows made back in September and October as the precious metals complex is probing lower lows.

We are now at a place where we could see some type of bounce in the UUP that I’ll be watching very carefully along with the precious metals complex to see if this divergence continues to defy the normal expectations between the dollar and the precious metals complex.

Lets take a quick look at the euro that is showing a possible inverse H&S bottom. We can expect a backtest to the neckline now down to the 130.60 area where we will see if the euro rally is for real. If the euro can bounce there the US dollar will continue to be weak. How that affects the precious metals complex is still up in the air until we see the normal expectations come back in play again.

Lets now look at the combo chart that I’ve been showing you that shows the HUI, gold and silver. I first showed you this combo chart when gold finally broke below the bottom red trendline in the brown shaded area. As you can see the HUI actually broke down way before gold and silver as shown by the purple dashed vertical line. Now however, after silver being the strongest of the three, its now leading the way lower while the HUI has been holding up the best. The bottom line is all three are in confirmed downtrends at the moment.

There is something taking place that alot of investors in the US are missing and that is a world wide stock market rally that has been in place for the last several months or so. I know its hard to believe, with all the negative press about the European economies being in the dumps, that they could be rallying. The first chart is the EUR, European top 100 etf that shows a nice big triangle that has broken out and just completed a backtest.

Remember all the negative press on Spain? At the height of negativity is when this index was putting in a double bottom. This week it has broken out of a little bull flag and looks set to go higher in the near term.

Italy was another basket case but has been showing considerable strength since the summer double bottom.

This next etf shows the emerging markets breaking out of a two year triangle with a backtest already completed.

This next etf, VEU shows the world stock markets minus the US markets that could influence the chart as the US markets have been some of the strongest stock markets in the world.

What these charts are telling us is that at least for the intermediate term the world looks like it’s not going to go to hell in a hand basket right away. So is this the cause for the weakness in the precious metals complex? Money is flowing into the world stock markets instead of the precious metals. Also as long as the world stock markets stay strong will that put pressure on the PM complex regardless of which way the dollar moves? For the time being this is how I”m going to  view the intermarket relationship with the US dollar and the precious metals complex until something changes. All the best…Rambus

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Most Members are Staunch Goldbugs who have seen Rambus in action from the 2007 to 2008 period at www.goldtent.org and now Here at Rambus Chartology since early 2012 .

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To review his Work and incredible calls from the 2007-2008 period click on the top right sidebar in the “Wizard of Rambus” ….”What If !!” Post
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As you will see Rambus (Dave) has prepared us for this difficult period by being one of the only ones to see and warn about the incredibly debilitating PM smackdown as early as Jan 2 2012 …click on the” HUI Diamond in the Rough” Post in the “Wizard of Rambus” top right
More Recently Rambus called a Bottom in HUI in this post…and has had subscribers on board for a Powerful Run to the Upside
rambus1.com/?p=5651

folloewd again by his timely bearish call in this SLV Update which had us on the sidelines and or short

rambus1.com/?p=8876

BUT
What is he seeing Now ?
You will find Rambus to be a calm humble down home country tutor with an incredible repitoir of all the TA based protocols tempered with his own one of a kind style…simply put…He wants to keep his subscribers on the right side of these crazy volitile and downright dangerous markets
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For some of you its Late and for Some its Early…but whatever time zone you live in

Stand by your computor for tonites eagerly awaited “Wednesday Report”

Trust me it is Worth The Wait !

Fully

We can now add AG to the other precious metals stocks that have broken down from their topping patterns. This morning AG gapped below the bottom rail of a 5 point diamond top pattern that has been forming for several months now. The chart below shows you exactly how a breakout looks. Note the breakout gap and the long bar that shows today’s price action. Its still early in the day but you can see the volume bar at the bottom of the chart where I put a red arrow that will probably be much bigger by the end of the day. Its possible that AG does a backtest to the bottom blue rail before the move down begins in earnest. No guarantee  tho. Again another surprise to the downside for a precious metals stock which isn’t indicative of a bull market.