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

The first chart I want to show is the divergence chart that compares the HUI to the SPX. You can see the divergence is taking place over the last 3 weeks or so, yellow vertical zone. Today the SPX is up and the HUI is down. If the Dow rallies up to the 12,650 area, that I showed on the last post, we could see some weakness in the HUI and at that point is where things will get interesting for the HUI and PM stocks in general. If the negative correlation continues to play out and the stock markets top out over the next few days or so the PM stocks maybe bottoming out. Its something I’ve been watching very close.

The next chart is a daily bar chart that shows a 5 point bearish falling wedge that had a beautiful backtest yesterday to the bottom rail. This tells us the bottom blue rail is hot and to pay close attention on how the price action interacts with it.

The next chart is a weekly look that shows the big H&S top pattern with the backtest to the neckline yesterday at 465. That’s a million dollar neckline. If the HUI can ever trade above it, that would be showing much strength that would suggest a strong move up for the PM stocks. On the other hand as long as it holds resistance the PM stocks will not be able to rally any higher than this current move higher. I also put on a possible trading range if the HUI stalls out right here, between neckline # 1 and neckline #2.

I want to show you one more chart that is a monthly look. Its easy to see how the neckline is working as support and resistance. Above it has acted as support and below it has acted as resistance so far.

The bottom line is how is the HUI going to act if the Dow tops out at 12,650? Will it rally up and break through the neckline? How long will the negative divergence last? We’re definitely at a critical area right here where anything can happen quickly.

I’ve been working on the PM stocks and if the HUI can take out the neckline to the upside I’ll be ready to post a model portfolio. So lets see what happens over the next day or two and take it from there.

All the precious metals stock indexes are starting to reach into there respective resistance zones from the big H&S top patterns. The HUI touched the lower end of resistance at 465 this morning. The top end of the resistance zone comes in around the 480 area.

GDX is also approaching its neckline around the 49 area.

The XAU is approaching it’s resistance area in the 172 area, brown zone on chart below.

If this precious metals stocks rally is for real then these critically important resistance rails will be taken out to the upside. For right now, sitting on the sideline and observing the price action, seems like the prudent thing to do. You can call this area an inflection point as this area will determine the next move for the precious metals stocks. If it fails then we go back down and if the PM stocks show some serious strength in here and break back above the resistance rails that would be very positive. There is nothing wrong with having a big cash position at this juncture to deploy when we get alittle more clarity.

A World of H & S Tops Part 2….Rambus latest work including where the PM Indices fit in all this

As Posted below will remain for Subscribers only

THIS IS WHAT WE SIGNED UP FOR IMHO

Stunning !

Enjoy your exclusive look at this fascinating work and its implications ….

In this weekend report I want to expanding on the Wednesday Stock Report that dealt with many of the global stock markets that have H&S tops that are in play right now. The global stock markets are telling us something is very wrong and we should pay close attention to what they are saying. In part 2 of this report I want to focus in on some other areas that are showing a contraction taking place such as oil, and many different commodities that are breaking down right now. Putting all of these different categories together is painting a deflationary picture on a worldwide scale.

Lets start with oil that is a very good indicator of market strength for the most part. The stock markets and oil generally rise and fall together. Its only when oil goes on a parabolic run does it affect the stock markets, like in 2008. When the economy is strong demand for oil is strong and when the economy is weakening the demand side of the equation is falling. So oil is a good gauge for economic strength or weakness.

Long term oi chart in log and linear scale.

Below is a another look that shows our H&S top pattern zeroing in on the neckline. A break of the neckline will send the price of oil all the way down the low 40’s at a minimum. This would suggest a very slow global economy.

The next chart is a chart for gasoline, the GASO. As you can see below it has been falling like a rock. It has been reverse symmetring down, meaning how it went up is how its coming down. It has formed a second H&S top pattern that has a price objective down to the bottom of the big trading range at 2.49.

Next lets look at the XLE which is an energy etf. After chopping out a complex H&S top pattern it is now in full retreat after breaking out of a bear flag last Thursday.

I would like to show you one more chart for the energy sector before we move on. The XOI  doesn’t have a H&S top but its close to breaking down from a 5 point triangle reversal pattern. As you can see on the chart below its a huge reversal pattern that suggest, when the bottom blue rail is broken, there is going to be a very big move lower.

Copper is a very good indicator of a strong or weak economy. As the weekly and monthly charts below show copper is working on a 2 1/2 year H&S top. This is a big topping pattern that is reversing the bull run off the 2009 lows.

The weekly look.

I just want to show you the monthly look to put this H&S top pattern into perspective.

If the world economies are slowing down the demand for coal should reflect that slowdown. Below is an etf for coal, the KOL,  which shows a very large H&S top in place with the breakout and backtest now finished.

Steel is another commodity that is affected by  the global economies. As you can see on the chart below there is a nice H&S top pattern in place that is still maturing. A break of the neckline will usher in a move down to the 2008 crash lows.

Below is a monthly chart of US Steel that is showing a double H&S top pattern. The price action is sitting right on the neckline.

If the base metals are showing weakness then the companies that mine them should also be under pressure as well. Lets look at three of the very  largest miners.

RIO has a beautiful H&S top that is on the verge of breaking the neckline on the monthly look.

Below is a weekly and monthly look at BHP. The weekly look show it breaking the neckline 3 weeks ago and doing the backtest last week.

The monthly look show a very nice tight H&S top formation on BHP.

FCX is another big miner that is showing a similar H&S top formation that is approaching the neckline.

Next lets look at the NLR which is a Uranium etf that is showing a H&S top pattern in place. Its been testing the neckline for 3 weeks now.

Lets take a look at the rare earth etf, the REMX, which doesn’t have a H&S top in place but it has been falling hard after breaking down from a morphing triangle pattern. Note the little red bear flag that is ready to break to the downside.

Lets now look at a couple of agriculture etfs. After topping out in 2011 with a H&S top RJA has been in decline mode. It has just broken out of a smaller H&S consolidation pattern about 4 weeks ago.

Below is a weekly line chart for MOO which is another agricultural etf that is showing a very large slanted H&S top in place. It just recently broke out and had a small backtest to the neckline.

Lets finish off this report by looking at some precious metals stock indexes. The PM stocks have been leading the way down by breaking out of their H&S tops long before most of the charts above show. They also got a good bounce while everything has been decline over the last several weeks. This counter trend rally is working its way back up to the necklines that once held support. This is going to be a critical backtest. It will tell us if the recent move off the bottom is just a short covering rally or something more like a flight to safety. We won’t know the answer to that question until we can take out the necklines to the upside. The Monthly look at the HUI shows where the price action will encounter the neckline at 475 or so. This will be a big deal as to how it interacts with the neckline.

GDX is getting close to backtesting it’s neckline at the 48 to 50 area.

I want to show you a slightly different look to the XAU. I could draw this support and resistance rail on the HUI and GDX as well. This support and resistance rail has been key in determining support and resistance points since the 2008 H&S top. The rule of thumb is, above the S&R rail is positive and below is negative. Until these PM indexes can trade back above these critical lines in the sand we have to be on the cautious side for the time being.

It looks like just about every area of the markets are being affected by some type of deflationary event that seems to be well on its way. All the fundamental news is tied up in these chart patterns. These chart have been telling us now for about 3 months or so that something is in the wind. What exactly that something is will present itself when the time is right. If you add  part 1 of the article, Global Stock Markets H&S tops to the charts above, I believe they paint a very clear picture of what is coming our way. For right now we wait, positions taken, for the event to come to light.  All the best.. Rambus

SLV just touched the bottom blue rail of the big bearish falling wedge at point 6. This is a critical test taking place right now for SLV. If SLV can trade above the top blue rail of the bearish falling wedge I will concede silver is turning the corner.

GLD broke out of it’s red triangle this morning with a big gap. Its now approaching its first significant resistance area which is the breakout gap from the blue rectangle and the 300 dma from a month ago. The 300 dma comes in at 159.54 today. This area is a big test for gold.

Below is a combo chart that shows the HUI on top and the SPX on the bottom. I call this chart my Divergence Chart as it shows when the stock market is out preforming the HUI or under preforming. For the last 2 weeks or so it shows the stock market going down and the HUI going up. How long this divergence goes on is anybodies guess but until it changes we have to go with what its saying and act accordingly. You can see when the stock market had it’s big decline last year the HUI had a nice rally. The yellow vertical area shows where the HUI topped and the SPX bottomed in September of last year. This chart is suggesting, as long as the stock markets are weak in here the HUI will out preform.

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

January 27, 2012

Priscient Note from a Rambus (HUI) post today

“Today were going to look at the HUI from top to bottom. Its been a long two year drought for most of the precious metals stocks. When silver had it’s near parabolic move higher last year the stocks barely budged and even declined in many case. Same thing when gold had it’s big move later in the year. The frustration felt by the precious metals stock investors was beyond frustration. How could gold and silver have such big moves and the underlying stocks actually go negative. All I can say its the nature of the markets to make life as difficult as possible, to wear one out with frustration, and then when the investor finally can’t take it anymore he quits in disgust blaming everybody and everything for his failure. Remember we are competing against the best and brightest investors around the world who want your money. This is a game where only the strongest and smartest survive. So keep those thoughts in mind the next time you put your hard earned capital in markets. If it was easy everybody would be millionaires and we know that can’t happen no matter how smart we think we might be.”

www.rambus1.com

is gathering a nice following from 8 coutries and counting…fun to watch it grow

To review the post which lead to this comment click on the top right under “Wizard of Rambus”