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

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September 4th daily update. After breaking out of the 5 point triangle reversal pattern USLV has been on a tear. Its signaling it has alot of strength to this move as the pullbacks are very shallow. The green arrows shows the date and price of our 2 buys in the blue 5 point triangle reversal pattern.

Just a quick update on the star performer for the month of August. Weekly look shows the breakout of the 5 point triangle reversal pattern. I like to see nice long bars when a stock begins a new leg up. Its a sign of strength.

Note the percentage change for the month of August at the top of the chart, red circle.

I just want to quickly update NUGT from yesterday. So far the 38% retrace is holding as support. Today’s rally is taking the price action back up to the all important support and resistance rail. I want to add another dimension to this chart hopefully showing some reverse symmetry back up. Note where the pointers from the support and resistance rail are pointing right now.  If we are starting to reverse symmetry back up, today’s price action back up to the S&R, shows us the bulls are still strong by the ease of rallying backup to the S&R rail. Next the bulls really need to show who’s in charge by either gaping above the key S&R rail, or producing a nice long weekly bar, closing close to the high for the week. Price with some good volume would also be nice..

Its nice to see the closing price on the high end of the weekly bar this week. Double bottom still in progress.

Seeing its the end of the month I’ll post the monthly chart for NUGT so you can see what it has done on a percentages basis. You will see why we call them Kamikaze trades. NUGT