By: Jeff Cooper
Hit and Run Bonus Report: April 17, 2023
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GLD and SLV Rule of 4 Breakouts On Deck
The longer the base, the higher the move on a breakout.
There is a false market narrative that triple bottoms and triple tops don’t exist.
WD Gann stated, “Triple bottoms are the strongest and triple tops the strongest, but when it reaches the same level the fourth time, it nearly always goes thru.”
This is why I coined the term Rule of 4 Breakout.
If there is one thing I have learned in markets it is that there are no quadruple tops.
The 4th time through, follows through.
I call it a Rule of 4 Breakout.
This is true whether the triple tops are flat as is the case currently with GLD or angular as is the case with SLV. I call breakage through a 3-point declining trend line an Angular Rule of Breakout.
GLD is on the verge of a close over monthly resistance.
It attempted to clear the September 2011 highs on a closing basis in August 2020 and again in March 2022 but was rejected each instance perpetuating 7-month pullbacks each time.
Cycles and Measured Moves suggest GLD can move higher into September in the near term.
The big question is whether it is an escalator or an elevator higher.
From the 150.50 low GLD has a square objective of 189.
On Thursday it struck a high of 190.41 before gapping down on Friday.
In so doing, it tested its 20 day moving average for the first time since exploding higher in early March.
A lower low today below Friday’s low puts GLD in the daily Plus One/Minus Two buy position in addition to a Holy Grail buy signal (20 day moving average).
However, GLD now has an Island Top from Friday.
If GLD clears the open gap it will trigger a Jump The Creek buy signal which opens the door to 203 (360 degrees up from 150.50). That’s a new all -time high.
The normal expectation would be for a pullback if GLD satisfies 203.
However, if that does not occur, GLD may go parabolic.
SLV went into the monthly Plus One/Minus Two buy position at the March low and exploded.
The momentum indicates an Angular Rule of 4 Breakout is on deck.
If so, a Measured Move opens the door to the 32 region.