By: Jeff Cooper
Hit and Run Morning Stock Report: March 14, 2023
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The Completion of Gold's Long Consolidation Is On the Radar
Years from now when we look back at gold’s historic breakout, it will be logical that it followed the Fed cutting rates amid high inflation and a distrust in government.
Powell was questioned just last week in Congressional testimony regarding the health of banks in light of his parabolic rate increases.
As well, the CEO of SVB was also a board member of the Federal Reserve Bank of San Francisco.
But somehow this is all a big overnight surprise to Washington?
As of Thursday, March 9, the financial media reported that SVB was being perceived by some to be a US/global systemic risk. And then on Saturday, March 11, it was announced that the U.K. Chancellor of the Exchequer and the Bank of England met to discuss “peripheral risks” linked to SVB.
The concern was that 200 U.K. companies could be directly impacted by SVB’s debacle.
Whatever happened to the supposed stringent Fed Banking Stress Test?
Not everything was conducted in total darkness. The bank’s CEO had sold a sizeable chunk of his shares “prior to”.
The point is that there is merit to anticipating and protecting. That can only be done with leading-edge market analysis that fact that historical cyclical forces are the dominant force that animate all market trends.
Gold make an approximate 8 year peak to peak cycle top in August 2020 at around 2080.
Gold made a secondary high and double top on March 9, 2022 at 2070.
Notice the double Cup & Handles.
The smaller green Cup & Handle is the Handle to the larger black Cup & Handle.
Monday’s explosive rally comes on the one-year solar return cycle from the March 9, 2022 high.
Hit and Run identified the late September 2022 cycle low and the undercut Trap Door test in early November 2022 with the expectation for a 90 day/degree rally.
Gold rallied into late January early February where it left a Train Tracks sell signal.
That signal was followed the next day by a large range Breakaway Gap.
The weekly chart shows the recent 4-week pullback bottomed at a 20/50 week Bowtie.
On Monday the important 3 Week Chart turned back up.
The daily chart shows 2 consecutive Breakaway Gaps to the topside.
Monday’s was a Gap & Go over the 50 day moving average.
In so doing, GLD has met Phil D Gap from February 3’s knife down.
Offsetting that gap is potentially a big bullish deal. So we’ll be intently watching for follow-through because upside continuation threatens to trigger a Keyser Soze buy signal.
A Keyser Soze is a Reversal of a Reversal.
Let’s take a look.
Prior to the February 3 Breakaway Gap to the downside, GLD left downtown Train Tracks reversal bars.
If those Train Tracks are offset a Reversal of a Reversal buy signal will be triggered.
It could be a religious experience for the precious metals bears for whom every reversal over the last two years has been a pay day for the past 2 ½ years.
However, this recent turn to the topside puts GLD in a position to attack the double tops from August 2020 and March 2022.
The pattern from the March 2022 peak has traced out a Misshapen Cup & Handle.
We may be coming out of the Handle right here.
At the same time, the entire price action from the March 2022 high may be perceived as the Handle to a large Cup and Handle from the August 2020 top.
The weeklies show a tops line breakout over 178.
Importantly, coming out of the smaller Cup & Handle opens the door to coming out of the large 2 ½ year Cup & Handle,.
This means breaking out of the massive 1 ½ year double top.
From my perspective, a breakout over the double tops would confirm that the important cycle low which we have been looking for to announce the onset of a super advance in the metals has occurred.
We are in the 12 squared month or 144 month cycle from the August/September top in 2011.
It will be important to gauge gold's action this summer.
If we fail to take out the double top’s on this run over coming weeks then we may see one more setback into August/September.
As well if GLD succeeds in breaking out above the double tops prior to or into the August/September time frame, we will want to see that cycle resolve with upside acceleration.
If we get a breakout above the double tops at any time and the August/September time frame provides upside acceleration (versus a cycle high) then we should be on the verge of a parabolic advance.
Checking the Square of 9 Wheel shows:
1) 180 degrees up from the 150/151 November 3, 2022 low gives 176. GLD cleared 176 in 2023 but lost it. Now it is attempting to reclaim the “square.”
2) 90 degrees up from 176 is 190. As you can see from the above daily GLD breaks out above 180. That opens the door to 190. How quickly can that move occur if we get the breakout. Could be a nice option play.
3) 360 degrees up from 150/151 is 203/204.
203/204 vectors March 24. Is it possible GLD could see a 25 point move into the end of March?
Breakage through the open gap and the at 178 and the Train Tracks sell signal at 180 which ties to the green declining tops line suggests a fast move could occur into the end of March.
Interestingly, counting from the February 2, 2023 SPX pivot high, the Gann Panic Zone ties to the end of March as well.
The fact that the SPX “points” to that time frame along with the aforesaid GLD “vibration” puts that time frame and the GLD setup for a momentum move in our Wheelhouse.