By: Jeff Cooper
Hit and Run Morning Stock Report: December 2, 2022
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What’s Up With Gold?
Gold has rallied by almost $200 off the October lows.
A Ghost Line (purple) shows 3 drives to yesterday’s high.
Gold closed slightly above this Ghost Line.
Is it real or Memorex?
Is it a breakout or a Pinocchio?
Let’s take a look at GLD, the gold ETF.
We wrote that GLD left my Gilligan to buy signal pattern on November 3rd.
A Gilligan buy is a gap down to a new 60-day low with a close at/near session highs.
As well GLD left a Soup Nazi to buy signal on November 3rd-- a new 20-day low that knifes back up through the prior 20-day low.
Note the Gapism following the November 3 buy signal.
This indicates November 3 was a Trap Door or Bear Trap.
Taken together-- the Gilligan/Soup Nazi signals followed by the massive gap up was screaming that gold was going to make a run.
We bought GDXJ and GDXJ calls and UGL in November to participate.
Notice the first pullback into November 21st after the upthrust saw a turndown in the 3-Day Chart at horizontal resistance.
GLD backed and filled on an up-slope and then exploded again on Thursday leaving a large range outside up day (LROD).
This is either a continuation signal for higher prices straight ahead or short-term exhaustion.
Notice GLD ran into Phil D Gap yesterday-- the open gap from Nov 17.
From its 150.50 November 3 low, GLD has run up to 167.95 yesterday.
My Square of 9 Wheel below shows that one geometric 90-degree square up from low is 162.50.
GLD closed with authority above this 162.50 square yesterday at 167.84.
This gives a projection to the next 90-degree decrement higher which is 175.
175 is square December 29th. My interpretation is that GLD should run up into the end of December -- to at least 175.
At the same time, as flagged on the Hit and Run Private Twitter Feed on Thursday, GDXJ is flirting with a 180-degree move up off its September low of 25.80.
180 degrees up from 25.80 is 37.50.
GDXJ flirted with satisfying this synergistic relationship yesterday with a push to 37.30.
No one wanted to believe it at the time…even myself…however; we noted that from the April 18th closing swing high of 50 ish that 360 degrees down is 26. This ties to the 25.80 low in September.
You can’t make this stuff up.
See how 36 is 1 full square of 360 degrees down from 50 (red arrow)
This is how you square the circle or square the CYCLE.
Now notice how that 50/26 price square VECTORS/VIBRATES off November 3.
Check out the November 3rd pivot on the above daily GDXJ. The next day GDXJ gapped up and has not looked back since.
This is the power of my Square of 9 Wheel to determine both time and price pivots.
As traders, we’re not necessarily looking for absolute highs or lows but accelerations-- points of impulse.
Let’s take a look at a weekly gold:
I have placed two Ghost Lines on the chart.
A Ghost Line is essentially a trend line that extends out into the future long after it seems that price has forgotten it exists.. but it comes back to exert its influence and make its presence felt.
On Thursday GLD spiked to backtest the red Ghost Line that has defined important price regions for almost two years.
The black Ghost Line defined the pivot from which gold started this rally.
The normal expectation would be for gold to pull back in deference to this overhead resistance, before extending.
Monday’s Hit and Run Report will walk through the big picture in gold, where this rally is headed in the near term and where a pullback will offer a buying opportunity.