This chart of gold shows you the reason we bought our last shares for the UGLD Kamikaze trade this morning. Keep in mind it doesn’t shows today’s price action. There is the 300 dma that comes in at 1677. The H&S top price objective comes in around the 1660 area that also coincides with center of the big rectangle. The center of a rectangle sometimes acts as support on the last decline before the breakout. That is showing you strength as the last reversal within the rectangle fails to make it all the way back down to the bottom rail. I thought we might make it down to the 1650 area before we found support but today’s action is suggesting the bottom may now be in place. We shall see in the next few days.

I haven’t posted this chart of the XAU in awhile. Its shows the neckline symmetry rail helping support the bottom of the red bull flag. If this low can hold this stock along with the other precious metals stock indexes will all be forming an inverse H&S bottom. These inverse H&S bottoms, if completed, will have a price objective back up to their all time highs.

In this weekend report I want to take a good hard look at the US Dollar as its so critical to so many different areas of the markets. Generally speaking, if the dollar is rising then gold and the precious metals stocks are falling. Also if the dollar is consolidating so is the precious metals complex which seems to be the case for the last several months. Alot of precious metals complex investors are starting to become disillusioned with this latest rally in gold and precious metals stocks. This is exactly what corrections or consolidation periods are designed to do. These periods call into question the reasoning why you bought in the first place. Generally, by the time the correction is about over many have thrown in the towel just when they should be holding or adding to their positions.

Many are calling a bottom in the US Dollar right now that I think is a little premature at this time. The first chart I would like to show you is just a simple daily look that shows the 200 dma and the Fibonacci retracement levels since the top made back in August of this year. As you can see on the chart below there is a confluence of resistance points that come together right here. First the 200 dma was hit last Friday which coincides with a Fibonacci 38% retracement of the decline off the August high. The brown shaded area is what I call a Support and Resistance zone. When the price action is trading above the S&R zone it acts as support and when the price moves below, it reverses it’s role and acts as resistance. As you can see we are now just touching the bottom portion of this zone. The top of the S&R zone would come in at the 50% retracement. Until that is broken to the upside the US Dollar is in a confirmed downtrend IMHO.

This next chart of the US Dollar is basically the same chart above but I have added some chart patterns so you can see the different patterns that have formed over the last year. Some of the longer term subscribers may remember the blue 6 point triangle that formed back in the winter months of this year. If you recall at one point it broke below the bottom blue trendline that everyone was saying the breakout was complete. I told you not to give up on the blue triangle yet as it could still be a consolidation pattern to the upside, based at the time, on the internal structure that was still in the process of morphing, that was creating the 6th reversal point. As you can see on the chart below the 6th reversal point in fact did hold and a big rally ensued. You can see a second, blue smaller triangle formed, that looked as pretty as any triangle can look. It broke out just as expected but then something strange happened. It failed to launch. You can see it made 3 attempts to really breakout but each time it failed. This is always a very big clue that something is wrong and the appropriate action needed to be taken. As it turned out the US dollar made an unbalanced double top. Note the small red bearish falling flag that formed at about the halfway point in the decline that suggested the dollar had further to fall. One last note. The red circle shows the 50 dma crossing below the 200 dma signaling a sell signal. Also there are only 3 reversal points that have formed since the bottom in September. We need one more to complete a possible bear flag.

With this next daily chart lets look at a longer timeframe that highlights the brown shaded Support and Resistance zone. As you can see on the chart below the price action off of the September low is now running into a resistance zone that was previously support. If the price action stalls out somewhere around the brown S&R zone this would be the area for a right shoulder to form. Its to early to say for sure but the potential for a very large H&S top would signal much higher prices of the precious metals complex.

The next chart is a weekly look that shows an inverse H&S bottom that I was following for some time back in 2011. It looked very positive at the time and I had no reason to doubt that it would be successful. Whenever you have an important trendline its always important to see how the price action behaves. There can be some good clues as to the validity of an important trendline by the way the price action breaks out and backtests. As you can see the breakout of NL 1 was followed by a fairly strong backtest. The backtest eventually held and the rally began. Symmetry to the left side of the chart showed me where to add a second neckline. The price action broke out above NL2 which said everything was on track. You can see about 5 weeks after the breakout from NL #2 there was a nice clean backtest that still suggested everything was a go. As I’ve shown you on the daily charts above the rally was aborted with the formation of the unbalanced double top reversal pattern. This brings us up to the point of this weekly chart below. We know that NL #2 was hot by the way the breakout and backtest played out but after the failure to launch the price action broke below giving us another clue a top was in place. As you can see we are now trading right up to the underside of NL #2 which should now act as resistance.

This next chart for the US Dollar is a mechanical system that has been around for sometime. Its basically pretty simple. At the top of the chart is the ROC, rate of change indicator, that has a black dashed horizontal trendline that runs through the zero area. The other part of this system uses a 10 week moving average. When the 10 wma turns up or down you get a buy or sell signal. At that point you want to see the ROC trade above the zero line for confirmation. The green vertical lines shows the ROC trading above the zero line. If you look to the far right side of the chart I have place a red circle that shows the ROC indicator is still trading below the zero line and is still on a sell signal.

Next lets take a look at the EURO that has an inverse relationship with the US dollar. As you can see on the chart below the EURO topped out in the springtime of 2011 and then started it’s major downtrend that came to an end in August of this year. The top rail of the downtrend channel was broken to the upside in September which was a very bullish signal. I would now like you to focus in on the two green circles I’ve placed on the chart below. Note the black dashed horizontal rails that show you how support and resistance works. The basic principal of technical analysis is being able to read support and resistance areas. On the left side of the chart the green circle shows the little red bull flag that formed right on top of the black dashed rail. That is usually a very bullish setup as you can see. Now look to the right side of the chart where the green circle shows a very similar setup. The test of the black dashed rail comes in at 127.50. That should be the bottom of the red bull flag.

The last chart I would like to show you is the very long term look at the US dollar. Several months ago it looked like the dollar might be breaking out of it’s long term blue downtrend channel. As I have shown you on the charts above everything was looking good for the dollar to rally until that unbalanced double top came into play that reversed the uptrend to down. You can see that unbalanced double top formed just above the blue downtrend rail but once it was complete the decline took the price action back below the top blue rail signaling a false breakout at this time. That top blue trendline should now be back to its role as resistance.

The US dollar is now entering an inflection point. It will either rally strongly and break through all the overhead resistance points that I have shown you on the charts above or it will slowly turn over and continue it’s decline off the unbalanced double top that was made back in the summer months. There is never a dull moment in the markets as there is always something brewing if one knows where to look. All the best…Rambus

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EDITOR’S NOTE :
Rambus Chartology is Primarily a Goldbug TA Site where you can watch Rambus follow the markets on a daily basis and learn a great deal of Hands on Chartology from Rambus Tutorials and Question and Answeres .
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 .
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
To Follow Rambus Unique Unbiased Chart Work and participate in a Chartology Form with questions and answeres and learn the Art and Science and Mindset of a Pro Trader please Join us by subscribing monthly for $29.99 at
www.rambus1.com
We have many subscribers from all over the world who are glad they did as they enjoy the many daily updates and commentaries provided at this exciting new site
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
http://rambus1.com/?p=5651
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
See you at the Rambus Chartology
www.rambus1.com

Just a quick update so you can see the 4th reversal point is now starting to stand out. Keep in mind the bull flag won’t be complete until the top rail is broken out to the upside preferable on heavy volume or a nice long bar. I will post some stocks for the model portfolio tonight as the Wednesday Stock Report. We now have a few stocks that are breaking ahead of the PM stock indexes.

To View any post  on a separate page click on  the Title of the post .

To Return to the main page after reading the post click on “Rambus Chartology for Subscribers” at the Top…

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FOR NEW MEMBERS WHO WANT TO KNOW ABOUT RAMBUS TRADING

Rambus Has several portfolios Listed on the Sidebar. They are updated  ..some regularly and some less so.However  If they are on the sidebar the trade is Active.

1…The Kamikazi Portfolio ( 2X Leveraged Positions on the Precious Metals Complex)

Before considering these trades, read the Post “Kamikazi Traders Report Here First”

2….The General Market Leveraged Portfolio .Leveraged 3X ETFs in many US Market Sectors.

3…Precious Metals Stock Trades

To View the present positions in Each of these Portfolios scroll down the sidebar

and you will see the 3 Headings

Click on the Stocks under these Headings to see the History of the Trade ….and Positions.

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One More Important Post to Explain Rambus Trading Style and Rationale (must be logged in to the Chartology Forum to read this)

http://forum.rambus1.com/?p=45911

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Now is a good time to review the many evolving features of the site :

1..Search Feature

….Just type in a Stock Symbol or word in the Search Box on the Top Bar (beside your “handle”)
….a list of all the pertinent posts will appear

2..Automatic E mail notification of a Rambus Post

….Near the Top of the right sidebar
….click on the Blue “Profile” Button
…..under “Notification Settings” choose your format (most prefer html)
…..under “Subscribed Categories” check off “Select All”

….Now you will immediately know when a new Update is Posted !

3..SIDEBAR CATEGORIES :

…HIGHLIGHT CHARTS…Important Posts to keep an eye on

…LAST 100….The last 100 posts on the site in chronological order
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…SITE INFORMATION (Includes symbols used in Rambus Charts and other general info)
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…MEMBERS FORUM (Requires separate log in…same ID and Password as the main site)

…Click on the “Forum Protocol” to see how to use the site and features

http://forum.rambus1.com/?p=27206
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…START HERE (GET AQUAINTED TO WHO WE ARE AND HOW WE HAPPENED AS WELL AS WHAT WE ARE ABOUT)
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REVERSE SYMMETRY TRILOGY
Rambus work showing how markets often go down just the way they went up
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THE WIZARD OF RAMBUS : Rambus greatest Hits over the years and interesting calls
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…TIMELESS TUTORIALS…HIGHLY RECOMMENDED READER FOR SERIOUS STUDENTS
Chartology 101 tidbits…go Here to learn how to apply Chartology for your own uses
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…BIG PICTURE……….Long Term Charts
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PM SITE LINKS…reciprocation PM sites
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OH and remember you click then click again ..on any chart and it will Grow for better visability

Any comments or questions with respect to these features please email me at

gmag@live.ca

Enjoy

Fullgoldcrown (Gary)

for

Audept (Todd) and

Rambus (Dave)

Tonight is a good time to look what has been happening this week in regards to the risk on trades and  the precious metals complex. Lets start with the US dollar that is still chopping in a fairly tight trading range. Its already had 2 false breakouts to the downside, blue dashed rails, and is currently attempting to touch the top blue rail. The top blue rail price comes in around 80.40 which should be critical resistance. The other scenario I see could be that the US dollar is putting in a 3 point double bottom reversal pattern. The top blue rail is most important right now. If the dollar fails at point #4 and starts to decline the the bear flag is the most likely pattern. On the other hand if the dollar breaks above the top blue rail that will change the game entirely as that would confirm a double bottom is in place. So we wait and watch the price action for further developments. Note the 50 dma has crossed below the 200 dma offering a sell signal.

Oil looks like it has put in a H&S top which isn’t good for the risk on trade. The head portion is an unbalanced double top. The breakout occurred yesterday with some follow through today. Watch the backtest to the neckline at 88 for confirmation of the breakout.

The gasoline chart also has a H&S top in place.

Next lets look at the CCI commodities index that appears to be breaking out to the downside from a 5 point triangle reversal pattern today.

KOL is a coal etf that shows a huge H&S top pattern in place. Notice how the price action, on the backtest has failed for almost 6 months now. It really needs to close above the neckline to negate the H&S top pattern.

Lets now look at a couple of precious metals that don’t get a whole lot of attention but are important to follow for the overall big picture. Up until yesterday  we could only speculate if PAL’s H&S top was a valid pattern.

Platinum has a double top in place now.

Gold has a H&S top in place that broke to the downside on Monday. I have to be perfectly frank right here. The placement of the recent H&S top, at the top rail of the big rectangle, is not a good sign. Gold has now completed it’s 5th reversal point which now throws it back into a rectangle reversal pattern for the time being. Gold is currently embarking on it’s 6th reversal point which is an even number if it touches the bottom rail. That would put this big rectangle into a consolidation pattern to the downside. All is not lost yet. Alot of times when you have a nice symmetrical rectangle like gold is showing, the last reversal point will come in at the center of the rectangle, blue dashed horizontal rail, at 1660. The H&S top has a price objective down to 1660 so we have to keep an open mind in here.

Lets take a look at the 60 minute chart of the HUI that shows it breaking below the horizontal rail today. We are now entering the pain area I’ve been telling you about. We now have a  lower low in place. Today’s price action stopped right on the parallel trendline made off the top rail. Now 487 becomes key resistance that needs to be overcome for the HUI to move higher.

The next chart is a daily look that shows a potential 5 point bearish falling wedge. I’ve tweaked it just a tad to get the 5 reversal points. Today could be a breakout day. I want to keep everything in perspective right here. You can see the brown shaded area that has done a good job of showing support and resistance. Below its resistance and above its support. Its critical that the HUI stays above the 460 area. That area is our line in the sand. As long as the HUI stays above the brown shaded area we will hold our model portfolio stocks. We were lucky enough to buy most of the portfolio stocks below the brown shaded area that gives us a little more leeway. For the investors that bought above the brown shaded area the pain is getting stronger as each day passes.

This next weekly chart really puts the 460 number into perspective. As you can see the support and resistance rail has done a masterful job of showing support and resistance going all the way back to the 2008 H&S top.

I want to leave you tonight with two big long term patterns for the HUI. One is bearish and one is bullish. Keep in mind neither one is complete yet. If you’ve followed my work over the years you know I can change direction if the charts are telling me to. You may recall I was pretty bearish when the HUI broke below the neckline which was the right call. But as soon as things started to turn around I didn’t waste anytime getting back to the long side. Now we are approaching another critical area that will tell us which side of the market to be on.

The bearish chart I want to show you is a potential very large H&S top. I’ve added a neckline symmetry rail that is a parallel neckline taken off the left shoulder top. This can often times give you a place to look for a right shoulder high if indeed a H&S pattern is forming. As you can see the HUI has started to reverse right at the neckline symmetry rail at the right shoulder top. This chart also shows you why the 460 double bottom hump is so critical to hold.

The last chart I want to leave you with is a bullish look that could have big implication going forward if it plays out. This chart pattern is a bullish rising wedge halfway pattern to the upside. Again you can see how important the 460 area is as shown by the support and resistance rail. If the HUI can find support there it will be on its way to the top blue rail. A break of the top blue rail will send the precious metals stocks into orbit.

So there you have it. The 460 area is the most important line in the sand for the HUI. Everything basically hinges on what happens there. If it can hold then we should see much higher prices. I think we will initially see a bounce off the 460 rail. From there we will just have to see how it trades and then act accordingly. I’m sorry for the late post but there was alot to cover tonight. All the best …Rambus

……………………………..

EDITOR’S NOTE :
Rambus Chartology is Primarily a Goldbug TA Site where you can watch Rambus follow the markets on a daily basis and learn a great deal of Hands on Chartology from Rambus Tutorials and Question and Answeres .
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 .
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
To Follow Rambus Unique Unbiased Chart Work and participate in a Chartology Form with questions and answeres and learn the Art and Science and Mindset of a Pro Trader please Join us by subscribing monthly for $29.99 at
www.rambus1.com
We have many subscribers from all over the world who are glad they did as they enjoy the many daily updates and commentaries provided at this exciting new site
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
http://rambus1.com/?p=5651
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
See you at the Rambus Chartology

www.rambus1.com

Below is a daily chart for gold that is showing a small H&S top pattern that I recognized last night after going over many charts for gold. This pattern is forming just under the top horizontal rail of the big rectangle. I was looking for a small consolidation pattern just under the top rail but it now looks like a H&S top is in place. This H&S top has a price objective down to the 1660 area that is the center of the rectangle. Yesterday’s price action was the tell by the way gold backtested the neckline from below and then sold off. This is the reason we sold our Kamikaze trades this morning. We also had some nice profits that I didn’t want to see evaporate away if gold does trade down the the 1660 area.  Raising some cash in here looks like the prudent thing to do for the Kamikaze trades.

Just a quick update that shows GLD approaching the bottom rail of the downtrend channel and the 38% fib retrace. The 300 dma comes in at 163.12.

Just a quick update on the UUP 60 minute chart that broke below the bottom rail of the bear flag this morning. Its possible we could get a backtest to the underside of the bottom rail at 21.75.

Daily chart.

Weekly chart.