DAG daily update  9-26-12. Sold today at 12.54.

DAG daily update 9-22-12. Moving sell/stop down to 12.68 on close. If DAG closes below 12.68 we are out.

DAG weekly update 9-22-12

DAG weekly update 9-22-12. Another view of the weekly chart.

Update 9-20-12

DAG is approaching it’s sell/stop at 12.99. The original pattern started out as a triangle that has now morphed into a horizontal trading range or rectangle. You can see on the chart below our buy point was on the breakout gap from the smaller triangle. The top rail of the triangle was the red dashed trendline. DAG is now trading back at the bottom of the trading range just a few points from our sell/stop. This pattern could still be a consolidation where prices breakout to the upside. The weekly chart looks more encouraging. First the daily chart.

You can see on the weekly chart that the price action is now testing the black dashed support and resistance rail. This would actually be the best lowest risk entry point if one wasn’t already in. I’m personally going to wait one more day and see what happens tomorrow around the support and resistance rail. You can use the existing sell/stop at 12.99 if you prefer. There are many other places to put your capital to work if you get stopped out. I will let you know when I actually sell my position if it happens.

The last several weeks have really changed the look of the HUI and the precious metals complex in general. In this report I would like to examine the HUI going back to the October 2008 bottom to the present. Its hard to believe the HUI topped out almost exactly one year ago at a price close to 640. This almost one year decline is the second largest correction since the bull market began back in late 2000. This correction was totally different from the one made in 2008. The 2008 correction was more of a crash whereas our most recent one year correction was a more controlled move lower. Either way you look at it a correction is a correction and there is nothing fun about them.

As the weekly chart below shows the 2008 correction was a crash – panic move lower,  with many  big long bars. It only took about 7 months to complete the move from top to bottom that totaled about 370 points. Our latest correction started in September of 2011 at 640 and it looks like the bottom was put in in July of this year at 370 for a loss of 270 points. It almost felt worse because the time factor was much longer even though the decline was 100 points less than the 2008 event. Anyway,  the job of corrections is to produce pain either by a panic move or by a long drawn affair that wears most investors out. The most interesting feature on the chart below is the down sloping black dashed support and resistance rail that is over 4 1/2 years long starting at the 2008 H&S top. This S&R rail is a perfect example of how a trendline  can divide the price action between support and resistance. The red arrows shows it acting as resistance and once it was broken to the upside the green arrows shows how it reversed its role and held support. It reversed its role once again in March of this year when it closed below the S&R rail again. This told us to be on the defensive again. The red arrow, in July of this year at 465, shows how the S&R rail again was back to playing its role as resistance which led to the second bottom which now we can label as a Double Bottom reversal pattern. If you look at the last two bars on the right side of the chart you will clearly see how important the last two weeks of price action as been. Two major resistance rail were taken out two weeks ago that has changed the total complexions of the one year down trend. The HUI now has a double bottom in place. It has traded above the support and resistance rail and is now trading above the blue downtrend rail of the bull flag. Most importantly it’s making a higher high something it hasn’t done since the bull market peak at 640 made a year ago.

The next chart is a daily line chart that shows the big H&S top that reversed the big rally off the 2008 crash low at 150. That H&S top was very large and showed some awesome symmetry between the left and right shoulders. No matter how bullish one maybe on the precious metals stocks when you see such a beautiful H&S top reversal pattern you better pay attention. I’ve extend the neckline to the right side of the chart so you can see how it still influenced the price action all the way up to last week. Below is negative and above is positive. Last week’s  price action was extremely bullish as the HUI is now trading back above the neckline.One last note on the chart below is the H&S top basically hit it’s price objective at 370 which was the minimum price target.

Next I want to start showing you some shorter term charts that have some important  patterns that are harder to see on the longer term look. As we look at smaller and smaller time frames we can fine tune what is happening in more detail. There is alot of information on this next chart that shows the one year black downtrend channel, five point bearish falling wedge and the double bottom reversal pattern. The chart below shows the  red circle where  the confluence of four resistance rail all come together at one point. The market speaks to you when you see how it interacts where all the important trendlines come together. The red circle shows you a bullish setup that is called an end around the apex move. It shows why 465 has been our key resistance level as all the important trendlines converged at one location and now the price action is trading well above resistance.

This next chart shows the 5 point bearish falling wedge and how beautifully the price action has behaved based on the top and bottom blue trendlines. You can see how cleanly the price action bounces between the top and bottom blue rails of the 5 point bearish falling wedge telling us that both rails were hot and would come back into play further down the road. After the HUI broke below the bottom blue rail back in March of this year, red rectangle, it wasted little time in declining to the first bottom of the the double bottom reversal pattern at 370 or so. From the May low at 370 the counter trend rally took prices all the way back up to the underside of the 5 point bearish falling wedge which had reversed it’s role from support to now resistance at 465. The bottom blue rail held resistance and the next decline began to the second bottom was underway. There was nothing on this chart, at the time of the backtest to the bottom blue rail, that showed any reason to be bullish. The HUI then began an eighty point decline off the 465 resistance point to 385 which would be the second bottom of the double bottom reversal pattern to the upside. This was the moment of truth for the HUI. Either it finds support at the previous bottom at 375 or it breaks down to new lows creating a much bigger correction. The second bottom held about 10 points higher than the first bottom which was showing some resilience if the face of all the negative news that was coming out at the time. The red circle shows how cleanly the price action was as the HUI worked its way higher taking out the overhead resistance rails. The price action in the red circle shows how the HUI hit the bottom blue rail again and bounced off in a 5 day decline. It then rallied up to test it again where this time the decline only lasted 3 days. What was happening was the bears were running out of ammunition and the bulls were getting stronger. Note the single bar that traded between the top and bottom rails of the 5 point bearish falling wedge. That was the last bar to trade below the top blue rail as it was still acting as resistance. The next day the HUI gaped above the top blue rail telling us the bears were exhausted and had very little fight left in them. There was a small 4 day backtest to what had been a resistance rail and now had reversed it’s role and fond support from the topside. After the backtest was complete and the bulls wasted little time moving price higher.

Next lets focus in on the double bottom and show in detail how beautiful the price action has been regarding symmetry. You have heard me talk about reverse symmetry in the past that means how you came down, in our recent case, is how you will reverse back up. What happens on the way down will have a direct impact with how the stock will move back up. I’ve add two green circles, one on the left side of the chart where the HUI was declining and one on the right side of the chart where the HUI is rallying. The brown horizontal support and resistance zone shows the double bottom hump at 465. That brown horizontal support and resistance has a direct influence on how the HUI broke below in a 4 point sequence breakout shown with black dashed arrows on the left side of the chart. Now focus your attention to the green circle on the right side of the chart. We have the same 4 point breakout sequence in play only this time its to the upside that completed the double bottom reversal pattern. After the backtest to point number 4 the bulls have had a field day as the bears are retreating looking for a place to setup their next area of resistance to stem the bulls attack. The double bottom measures to about the 550 area so we may find some bears there.

I want to show you one more chart that shows the double bottom and the reverse symmetry that is playing out to the upside. The double bottom has a price objective to the 550 area that also coincides with two previous highs that were made in March on the way down. I think we will see some type of reaction at the 550 area where the bears had some control creating a small double top.This will also help relieve some of the overbought condition that is starting to build. From that point we will just have to see how things play out over the short term.

As the charts above are showing the HUI is putting on the strongest rally since topping out last September. I can’t stress how important it is that the price action is now trading above most of the overhead resistance rails which is reversing the downtrend to an uptrend. A one year downtrend has now been reverse to an uptrend that could last one to two years. So far the price action has been absolutely stunning from my perspective. Let me throw in one more chart that is show the precious metals stocks are getting ready to start outperforming the metal. The HUI to Gold ratio chart also has double bottom in place. When the price action is rising the PM stocks are out performing gold. As you can see on the chart below the breakout occurred last week and now the precious metals stocks maybe in control for a while which is what I would like to see.

Alot of positive things have been happening in the PM complex that has been a long time coming. I really believe we are seeing the early stages of a true impulse leg up that is going to last possibly several years before this run burns itself out. I have been working on several long term chart patterns that I will show you when they have a little more time to develop. Suffice to say they could be very bullish for the precious metals stocks. 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 this 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 subscribers on board for a Powerful Run to the Upside

http://rambus1.com/?p=5651

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
…………………….

Just a quick update on the HUI that finished the backtest Wednesday morning just above 465. This completed the point #4 backtest to the now important support zone 465. Then once it traded above point #3 that created another new higher high suggesting the HUI is now headed up to the double bottom price objective which I will discuss this weekend.

I just have to say the symmetry on the HUI and many other stocks for that matter are as beautiful as you will ever see. In charting there are two aspects that help you make a decision. There is the technical look with trendlines and indicators which is the science part and then there is the art aspect of charting which lets you know when you are looking at something beautiful without all the trendlines or indicators on the chart. All the beauty and symmetry is there on the charts for all to see. Its my job to try and understand and show you, with my trendlines and squiggles, what the chart is saying. One has to be a good listener to understand what some of these charts are telling us. Right now the HUI is telling us everything is OK.

Just a quick update on the HUI that is in the backtesting process. Below is a chart I showed you several days ago with the four point breakout sequence in play. This morning the price action just slightly tested the very top portion of the support zone before reversing back up. We are in reversal point #4. Symmetry suggests we might even trade sideways for another week in a similar fashion to the green circle on the left side of the chart. Not necessary though. A move above point #3 would be needed to resume the impulse leg higher.

After a strong month of August the HUI looks ready for a small correction back down to the most recent breakout area around the 460 to 465, brown area on chart below. I have add two green circles that show where the reverse symmetry is now located. I have also labeled the breakout sequence one thru four. The four point breakout sequence goes like this. Lets start with the green circle on the left side of the chart. The number 1 represents the first reversal point after finding some support on the decline. Next you get a small counter trend rally that is point number 2. When that little rally fails prices then fall below point number 1 to point number 3. Point number 4  then makes one last small rally attempt that stalls out at the bottom of point number 1 which in now resistance. The black arrows shows how the 4 point breakout system works.

Now I want to focus your attention, on the chart above, to the green circle on the right side of the chart. I’ve labeled the four point breakout sequence that is showing the exact same breakout sequence as the left green circle only this time it is up instead of down. We should now be in the point four decline to the breakout area at 460 to 465 which would be the top of point number one. I don’t know if any of you can see how beautiful the symmetry is on this chart but from my perspective its as pretty as it gets. We will buy another stock or two when the price action gets back down to the brown horizontal area that should now act as support.

Let me Say Thanks a TON

You nailed the Bottom as close as can be 1 month ago in this Weekend Report

(after keeping us cautious throught this long drawn out Consolidation / Correction)

http://rambus1.com/?p=5651

The Kamikaze Trades have been Spectacular

I have been getting emails from some who are up 50 to 60% in their trading portfolios in a month !

This Chartology Stuff is really Something

Very Happy to be a Part of it

Fully

…………………

PS : Subscribers…If you havent visited the Chartology Forum you are missing some good charts and discussions

The Link is on the right sidebar ..near the top

Same ID and Password as the main site should get you in….bring your requests and questions…or just read the back and forth

If password doesnt work e me at gmag@live.ca

Fully

Tonight I would like to show you a stock from the model portfolio and how I plan to keep it updated for easy reference. For the last month, since we reopened the model portfolio, my focus has been on finding some good quality stocks with bullish chart patterns in which we can invest. There are literally 100’s to look at which takes alot of time to analyze. Right now we have a pretty full portfolio that will keep us busy for awhile. This is by no means the end of looking for better precious metals stocks when they show up or tweaking the model portfolio when need be. For right now its important for me to bring the model portfolio up to date so we can have easy access, at a minutes notice, if one chooses to look at a certain stock.

The first chart I would like to show you is a daily chart for AUNFF that I know several members follow very close. When you look at the model portfolio this analysis is what I want you to see with all the other stocks. I plan to keep an indepth look from daily, weekly to monthly if need be. There will be a green arrow on either a daily or weekly  charts that will point to where we bought in on price and date.

Lets look at a daily charts for AUNFF that shows a loose rectangle formation that has been in place since February of this year. As you will see with the weekly look this loose rectangle is just a small part of a larger formation.

This next chart is a weekly look that shows how the rectangle, from the chart above, fits so well within the bigger blue ascending triangle. The green arrow points to the date and price we bought in at. Note the false breakdown from the blue triangle that ended up being the last reversal point in the red rectangle. AUNFF is also trading right at the top of the blue triangle where anything can happen at anytime now.

Lets look at another weekly chart for the Canadian symbol for Aurcana, AUN.V. This chart shows good symmetry on both the left and right side of the chart. You can see two very heavy black dashed horizontal trendlines that defines the top and bottom of the two blue consolidation patterns, the bearish expanding falling wedge on the left side of the ascending triangle on the right side. Putting all the pieces of the puzzle together you can also see the potential for a huge inverse H&S base.

The monthly chart shows our very well defined blue triangle that is made up of two smaller consolidations patterns, the first is the red triangle and the other is our current red rectangle. Those two red patterns are creating the bigger blue ascending triangle which I’m labeling as a high level consolidation pattern.

This is how I’m going to do every stock in the model portfolio plus the kamikaze trades. I will keep them updated on a weekly basis with the daily charts needing the most updating. The weekly and monthly charts change much more slowly. I will still be posting each day when something interesting is happening with our precious metals stocks but my main focus over the next week will be to get the model portfolio 100% updated. Thanks for your patience as I think it will well be worth the effort for everyone concerned. All the best…Rambus

Just a quick update that shows a daily line chart for SLV. I know alot of chartists don’t like to use line charts but I find they add a different dimension to a chart. Double bottoms and tops tend to show up very well with line charts as they takeout some of the noise that a bar chart can produce. Also some other chart patterns like H&S and triangles can show a more clean chart pattern sometimes, that is why I find it useful to look at both. When you look at the daily line chart below notice the price action that takes place once a chart pattern is complete. On a line chart you will generally see a nice smooth line when the rally or decline begins letting you know the chart patterns was in fact a valid pattern.  Also notice how the fight between the bulls and the bears takes place within each consolidation pattern by the choppiness within the confines of the pattern. Then the pressure is released and to the victor goes the spoils.

I have been working on getting the charts for the model portfolio and the other trades we have listed on the sidebar brought up to date. Most of the changes will take place on the daily charts as the weekly and monthly charts don’t change much over a month or so. I will try to post something interesting each day but my main focus for the very near term is to get the model portfolio updated so everyone can see what is taking place. Thanks Rambus

In this weekend report I would like to focus in on some of the longer term weekly and monthly charts for gold but would like to start off with just one daily chart. Last week was probably the most important week for gold in quite sometime as it finally took out the top black rail of the possible triangle consolidation pattern. There is alot going on where I’ve added a red circle to show you how critical that area is going forward. The first thing to note is the breakout from the blue triangle that has given gold the energy to finally break through the top black rail of the much bigger triangle consolidation pattern plus the 300 day moving average. You can see how once the top black rail was broken to the upside it reversed it’s role and held support last week. This was a very encouraging event IMHO. Most important is Friday’s price action that produced a nice long bar. So now gold has experienced a breakout and a backtest this week. It would be nice to now see some decent follow through to the upside and leave the breakout area behind.

The next chart is a six month time cycle chart that has been very effective over the last several years, especially since the big rally out of the 2008 crash low. The latest six month time cycle came in just a tad earlier than what has been the case lately but its still looking good in here. When I experiment with a time cycle chart I not only look at the price but also the indicators that can give one a good confirmation that the cycle is indeed relevant. For instance notice the RSI indicator at the top of the chart and the slo stoch at the bottom of the chart. They usually turn on a dime when the six month time cycle hits. The MACD is alittle different in that it’s the last indicator to confirm the six month cycle as it usually crosses over several weeks later. One last note on time cycles. Sometimes they will invert meaning, in our current case where the six month time cycle is bottoming, sometimes they will invert and instead of making a bottom they will make a top. Note the two inverted 6 month time cycles that hit back in 2008 and 2009 that showed highs instead of bottoms.

This next weekly chart shows the most critical test for gold right now. I’ve shown you this chart in the past where the price of gold broke below the bottom black rail of the uptrend channel made off the 2008 low. As you can see that bottom black trendline has been acting as resistance since it was broken. Gold is now testing it from below so we should know very shortly how much energy that bottom rail has left. Also note gold is now trading above the 65 week moving average which is a healthy sign.

This next chart for gold is a long term monthly chart with a 10 month moving average that has done a very good job of holding the major uptrend intact. The only two times it has failed to do so was the 2008 crash and our most recent correction. On the monthly chart below I just want to show you how support and resistance really works even on large time scales. Again, the main psychology on why support and resistance works is very easy to understand. I’ve labeled the tops that were made on the way up with a horizontal black dashed rail or brown area if the tops were just a little ragged. The reasoning behind how this monthly gold chart is showing support on declines is because the investors who bought at these previous tops, black dashed rails, are still ahead of the game even though prices have fallen. So the psychology is “I’m still ahead and and can stand the pain, so they don’t sell. The buyers come back in and up prices go. Now if the price of gold were to penetrate any of the previous tops by a fair margin the psychology would be, ” if I can only get out even I will sell on any strength.” Then everything changes as what was support now turns into resistance as investors want to limit their loses and pain.

The next chart I would like to show you is another monthly look that is a candlestick chart. The reason I’m showing you this chart is so you can get a good feel for when an impulse leg up is in full swing. When a good bull move is underway you will start to see alot of white candles in a row. Then when you see one or two black candles in a row, within the impulse leg up, it usually suggests a small correction is taking place and you will be able to see it on a daily chart. This technique also works very well on weekly charts. Note the last three candlesticks are white while gold is trying to breakout from the blue triangle.

Let me just throw in this weekly chart for SLV  that shows a better example of how a really good impulse leg up shows a string of white candles that lets you know you are in a strong bull move.

Finally, the long term look at gold wouldn’t be complete without looking at my favorite chart of the yellow metal going all the way back to the 1980 high. There is a massive 25 year inverse H&S base that finally broke out in September of 2007. When everything crashed in 2008 gold found support just where one would expect, at the massive neckline. From that backtest to the 25 year neckline gold went on to rally nearly 1200 points before topping out last year at 1920.

From this longer term perspective gold still looks remarkable strong after being in a bull market all these many years. Finding key support and resistance zones, as the monthly chart above shows, gives one a place to look for support and a place to add to your portfolio. Gold’s most recent high at 1920 will most likely come into play as support once its taken out to the upside. From my perspective, and the last several weeks of price action, gold is in the best technical shape I’ve seen in quite sometime. We just need to see some follow through to the upside now showing us many white candles on the monthly and weekly charts.  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 this 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
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
…………………….