Hi its Fully here

I was just going through Goldtent archives and came across a series of posts by Rambus from 2008…which he called “What If”

March 28th 2008

These Posts from the old Goldtent site lost in the shuffle to the new site

March 31 2008

We were on a great run in 2008 and Rambus was hot…and bullish…making one great PO after another…then suddenly he turned bearish and Many scoffed at him….here is one of his charts from that era…just to show you …he projected HUI 145….I though he was a raving lunatic !! HUI dropped to 149 shortly thereafter !

Now I Pay attention when Rambus Speaks !

and here is what happened

and how about this ONE for Perfection….sheesh Rambus !

Gold Bottomed where ?

695 !

Then there’s this chart of Oil calling for 35 after a parabolic move to 145 ! Which is exactly where it went !

Rambus Quote from the 2008 era

I just want to say the reason I haven’t posted much lately is because I know I am in the small minority here and you all don’t need somebody with a bearish mindset to make you feel insecure about your long term positions. It isn’t about being right or wrong for me, but about keeping it true. If the market changes I have to change or I will get left behind or trapped in a position that will be hard to recover from. I know most here are long term bulls with a long term look at things so until the market changes to the more positive side I will just post once a week or if something important happens to bring it to your attention.
All the best…Rambus

Yesterday we got to within 2.63 points of hitting the sell/stop that I showed last week. We are still at a very critical area right here. We need to see the SPX close back below the downtrend rail and back into the triangle. The whole rally of the last 6 days or so has been on diminishing volume and that is why I called into question the breakout. Remember we are using the S&P 500 as a proxy for the other stocks that are listed on the sidebar. Just in case you missed it, yesterday we added UUP to the model portfolio which is long the dollar.

S&P 500 daily sell/stop at 1272.

Please go to the Form (linked at top of the right sidebar) and Vote at the New Poll !

May God have Mercy on our Goldbug Souls !

Fully
How do I start. I can’t believe you day traded the model portfolio yesterday. I thought we had a game plan that we were going to use. Here we are the first day out of the H&S and bingo its time to day trade. I don’t get it Gary. Did your emotions get the better of you? What changed from last week when everything you tried to trade went against you? Unless you can tell me that the devil came to your house this last weekend, for a drink, and you discussed with him that you wanted to be a day trader for your soul then that’s a different story. But if the devil didn’t come to your house for your day trading soul then there’s a problem. Gary your not a day trader, I’m not a day trader and there are damn few day traders that can do it day in and day out. Discipline and having control of ones emotions are the two biggest factors for being successful in the markets. What yesterday’s trade will do to you is embolden you to try it again and again because you got lucky. But I can assure you it won’t work. What you did is called sabotaging the trade. What if ZSL kept going up and you couldn’t get back in at a lower price? Do you chase it higher, do you wait for it to come back down or do you stay out altogether because your afraid now that it has gotten away from you. I’m trying to be gentle Gary but if we don’t have any discipline and a game plan to follow, for the markets, its like taking candy from a baby. If you feel the compulsion to day trade could you please do it with just 25% of the model portfolio? I hope you take this as constructive criticism because that’s all it is. What strikes me as odd Gary is how you can sit on a losing gold stocks for years and not trade it and then once the model portfolio starts to show alittle gain its time to day trade. Please tell me you made a pact with the devil so you can day trade and we’ll all be rich beyond our wildest dreams. Your brother in the Ozarks….Rambus

Last week I showed many H&S patterns that were still in the developing stage of their right shoulders. This week we got the neckline breakdown from their H&S topping patterns that is suggesting, in no uncertain terms, that deflation is going to rear it’s ugly head. Just about every index I showed you in the last Weekend Report have broken their necklines. To make this breakout “Picture Perfect” is for a small counter trend rally back up to the underside of the necklines which would be the last bit of work that needs to be done before the next impulse leg down gets underway in a big way. This would be a good place to reread last weekend’s report on all the H&S patterns that were still trading above their necklines. http://rambus1.com/?p=1583. As this weeks price action was so critical to the big picture, we’ll look at those same H&S topping patterns, from last weeks report again, so you can follow along and see the breakout process up close and personal.

We’ll start with the all important US Dollar index that is most critical in understanding the big picture. I used a line chart that showed how the dollar had already broken the neckline and was in the process of doing it’s backtest. So far its picture perfect.

US Dollar weekly line chart with H&S breakout and backtest complete.

Next is a weekly look at the Euro and it’s inverse look to the dollar. If the dollar is putting in a H&S bottom then the Euro is putting in a H&S top. This bar chart shows this weeks breakout from the H&S top formation. One nice long bar through the neckline says it all. The only question now is if we’ll get a backtest to the underside of the neckline.

Xeu weekly H&S top breaking the neckline.

I have been showing the gold to the US Dollar ratio chart for awhile now. Last week I said it was a very ominous looking chart and that if it broke the neckline, to the downside, would not be a very good sign for gold. As you know gold fell hard this week against the US dollar which broke the neckline confirming the H&S pattern has topped. We could now see a short term rally to the underside of the neckline as it’s backtest before the next impulse leg down gets started in earnest.

Gold to the US Dollar ratio chart showing the breakdown from the neckline.

The next chart is the CDNX index where many of the small cap mining and oil companies are located. You can see the CDNX is still building out the right shoulder of it’s H&S top. If you own a bunch of small cap mining companies this is a good chart to keep a close eye on because it led the precious metals stocks lower back in the 2008 crash.

CDNX small cap index working on the completion of it’s right shoulder.

Last week the CCI commodities index was sitting right on the neckline. This week you can clearly see it has broken support at the neckline. I hope I’m painting a clear picture of what is unfolding right before our very eyes.

CCI weekly H&S breakout. Will we get the backtest?

Platinum was also sitting above it’s neckline as last weeks trading ended. This week you can clearly see the neckline was broken. If Platinum is breaking down so must the other precious metals. Again you can see where there is just a little wiggle room for a backtest to the neckline.

Platinum weekly H&S breakout.

Lets now focus on silver and gold to see how this weeks price action showed the completion of several H&S patterns. First, SLV broke it’s small, right shoulder H&S pattern on Tuesday of this last week. You can see the huge gap that formed on the breakout move. Here again you can see the potential for a backtest to either the neckline or just high enough to close the big gap. So alittle strength at the beginning of the week should be expected for the backtest move. Should be expected but not guaranteed.

SLV daily H&S breakout of right shoulder.

The daily chart for silver shows the breakout from the small H&S, above chart,  that formed the right shoulder of the much bigger H&S topping pattern. What this weeks action did was break two H&S pattern necklines,  the small right shoulder and the big H&S top neckline. A backtest to 31.50 should offer stiff resistance if we get it.

Silver H&S top with 2 necklines being broken this week.

A week ago I showed this chart on Gold showing the fanlines. At the time we were sitting right on black fanline # 2. You can see the big gap that accompanied the breakout from fanline #2  on Monday. The third fanline didn’t offer any support as we plowed right through a potential support rail. If we get any type of counter trend rally this week I would expect that fanline # 3 would act as resistance.

GLD daily fanlines.

One last chart for Gold. You can see that we could be building a serious H&S topping pattern going all the way back to May of this year. As with silver, GLD formed a beautiful small H&S right shoulder,  of the much bigger H&S pattern. I put a red circle around the breakout of the two necklines. Any little counter trend rally to backtest the necklines should be stopped at the 161 area which would be a good low risk entry point for short.

GLD daily H&S breakout and possible backtest.

So the bottom line is that last weeks big decline for the risk off trade is starting to confirm that a serious bout of deflation maybe starring us directly in the eyes. Its no coincidence that we are seeing so many H&S tops being completed. Alittle strength this week should be expected that will put the last nail in the coffin showing that deflation and the risk off trade is how you want to play the markets going forward. I’ve said before and I’ll say it again its time to protect your hard earned capital by whichever means necessary. Keep in mind that markets go down alot faster than they go up.

All the best…….Rambus

With so many H&S patterns breaking out this week I always look for the backtest to the necklines as a low risk entry point. The UUP daily chart shows this weeks breakout of it’s neckline and it looks like we are in the process of getting our backtest. It looks like 22.40 will do the trick which is about 10 cents below today’s price. I really want to see the backtest fulfilled just to confirm the big one year neckline is HOT.

UUP daily H&S breakout and backtest.

If the dollar is breaking out of the top of it’s neckline then the XEU is breaking out of the bottom of it’s neckline. As you can see the XEU has broken down from it’s H&S top, this week, and could be ready to backtest the neckline from below. Again I would like to see the backtest completed to confirm one more time for me the neckline is HOT.

In the weekend report on H&S patterns I showed these two stocks that had a nice H&S top in place but hadn’t broken the neckline yet. With the dollar breaking it’s own neckline today, on the upside, the CCI and CDNX have broken their own necklines, to the downside, this morning.

CDXN  daily H&S breakout.

The CCI commodities index broke it’s H&S neckline yesterday. That is telling you commodities are going to under pressure going forward.

Folks I can’t stress enough how important it is right now to protect your self from what I see coming down the road. All these H&S patterns are shouting loud and clear to protect your hard earned capital. There will be few if any stocks that will be able to go against the liquidation in a deleveraging spiral that seems close at hand. We are just at the very beginning stages of this process. There is an old adage on wall street that says  “he looses the least amount of money in a bear market is the winner” to that I say “bah humbug”. There are many ETF’s that make it easy to short these markets. This is not a time to be thinking of buying your favorite little junior precious metals stocks because they may have good drill results or some other positive new. As 2008 showed the baby WILL get thrown out with the bath water. Having cash available at the end of what lies ahead will be the best way to pick up bargains but if you don’t raise cash now it will be too late and you will end up selling in a panic when the pain gets to much to bear. You can look at it this way. If I’m wrong the worst that could happen to you is that you still have all your capital to work with. Its a no brainier IMHO. The markets are going to be around alot longer than we will so there will be plenty of more opportunities, down the road, to put your hard earned capital to work.

I know alot of precious metals stock investors are holding this stock as it has been a start performer. The daily chart is showing a 5 point triangle reversal pattern that broke the bottom rail, on a big gap, this morning. I’ve labeled the reversal points with red numbers. Remember an odd number of reversal points equals a reversal pattern and an even number of reversal points equals a continuation pattern. In this case it looks like EXK will be heading lower. Preservation of capital is most important at this stage of the game.

EXK daily 5 point triangle reversal pattern.

The dollar is testing the neckline of it’s major H&S base today. A clean breakout from this big base is going to create a paradime shift for the precious metals complex, commodities and the stock markets. The dollar chart is the most important chart to focus on to get a feel for the direction of the many markets that it affects.

UUP daily testing the neckline.