By: Jeff Cooper
Hit and Run Trading Morning Report - October 16, 2023
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“I was born in a crossfire hurricane” Jumpin’ Jack Flash, The Rolling Stones
Following Monday’s gap up in GLD, Hit and Run issued a special report, Is A Gargantuan Gold Run At Hand.
While Friday’s $50 plus explosion in gold took some market participants by surprise, we thought a massive move was on the table before the fact.
GLD made a swing high on May 4th, 2023 at 191.36. This was a test of the all-time weekly closing all-time high of 190.81 scored on the week of August 3rd, 2020.
May 4th is 180 degrees straight across and opposite 169.
GLD saw a plumb-line drop to 168.30 on October 5th for a possible Time/Price square-out.
In other words, in keeping with W.D. Gann’s Law OF Vibration that asserts “when time and price ‘meet’ or square-out, expect a change in trend gold saw a climatic drop.
In my experience the harder the drop into these Time/Price square-outs, the stronger the likelihood of a turning point.
90 degrees up from 168/169 is 182/183
180 degrees up is 196.
The above weekly supports the idea of the Gold Gargantua.
There is no other way to count the move from the May 2019 low into the August 2020 to but as a powerful Wave 3 advance.
That means the decline into October 2022 was a Wave 4 low.
The advance into May 2023 looks like a wave 1 high of a large Wave 5 making the recent low a wave 2 low of this possible major 5 wave advance.
Wave 5’s in commodities are often larger than wave 3’s so that gives you an idea of the potential.
As well the mapping suggests this would likely be only the 5th wave of a larger Wave 1 advance from the December 2015 low.
Notice the confluence at 195/196 where the purple and red Ghost Lines intersect.
This ties to the 194.44 all-time high seen in August 2020.
It would not be surprising to see a pause there.
The price action following the recent potential square-out validated the turning point: Monday, Oct 9th, left an Island Bottom.
Tuesday GLD ‘inhaled’ or paused following Monday’s large range Gap & Go.
Wednesday saw another gap up to the 20 day moving average.
Thursday’s GLD pulled back after testing the 20 day ma, turning its dailies down by 2 cents.
Near Thursday’s close we sent an alert for Hit and Run members to reload a long swing in gold streamer FNV.
The presumption was the series of gaps to the topside validated the idea of a Selling Climax into our Time/Price square-out.
If so GLD was poised to trigger a Trap Door buy signal by knifing back up through a trend line connecting the June/July lows.
It didn’t take long for GLD to trigger the Trap Door.
Friday it exploded gapping through the aforesaid trend line and breakdown pivot as well as it’s 20 and 50 day moving averages.
Importantly, GLD also knifed through a declining Tops Line from the May high triggering a Rule Of 4 Breakout. This is a breakout above a 3 point trend line.
In so doing GLD broke out over an important “square”.
This is because 90 degrees down from the May 191.36 high is is 177.50
GLD closed at 178.33 on the important weekly closing basis.
Friday’s close well over 177.50 suggests an extension higher to test the prior 191 region.
The current momentum suggests a breakout thru 191.
Pulling back the lens shows breakage above 191 triggers a massive 3 year Rule Of 4 Breakout.
It is a breakout over triple tops. There are no quadruple tops so last weeks momentum indicates
A major move is at hand.
Indeed, a drive thru 191 amounts to a GLD coming out an 18 month Cup and Handle.
What does a major move mean?
My Square of 9 Wheel suggests 203 as an initial projection as it is 360 degrees up from the October 2022 major low.
Above 203 targets a full 540 degree move to 232.
As shown in the daily GLD from last weeks Is A Gargantuan Gold Run At Hand, GLD closed above a Neckline of a Head & Shoulders topping pattern at 175.
This opens the door to 183 and an recapturing a “Right Shoulder”.
Clearing 183 triggers a powerful Blade Runner continuation buy signal as fast moves come from failed patterns.
Clearing 183 with authority indicates a run to the key 191 level of lore.
In sum, in the summer we said we could get one more flush out before a genuine bottom in gold.
We got it.
It was a difficult slog but the subsequent price action suggests September saw a Selling Climax.
Importantly the low followed a turn down in the 3 Month Chart.
Trade above September’s high of 181.12 would install a large range outside up month.
The last time GLD traced out an outside up month was November 2022.
GLD ripped 30 points from where the outside up month was triggered.
In sum, gold is recognizing a crucial time in history where cycles are exerting their influence.
I walk thru these esoteric cycles in a special report to Hit and Run members this morning.
For those that maybe question how I have been able to accurately identify major turning points in gold since the 1999 low it is because I am not looking at ‘reasons’, I am looking at mathematical, geometric time and price synchronicities.
I am looking at confluences of time and price.
This is what allowed me in July 2011 to call for a major high for September 2011 at 1921.
Gold topped at 1921 on September 6, 2011. It declined for 4 years into December, 2015.
It didn’t make a new high until August 2020.
The only way I know to do this is with a tool called the Square of 9 Wheel that integrates time and price.
Early September squares out with a price of 1921.
This in conjunction with multiple time frame pattern analysis and sentiment/positioning is what truly drives markets.
In 2011 gold topped right into the heart of Fed easing and QE.
Gold topped in August 2020 into the heart of pandemic driven inflation.
Clearly something else other than a Fed easing cycle and inflation can drive precious metals.
Be that as it may, we have a strong signal that a low is in place in gold and silver and the breakout setup to new all-time highs is on deck.