By: Jeff Cooper
Hit and Run Morning Stock Report: December 21st, 2022
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“Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. I view gold as the primary global currency.
It is the only currency, along with silver, that does not require a counterparty’s signature.” Alan Greenspan
The long-term cycles that told us in October 2021 that “January 2022 would see the market get hit hard kicking off a vicious bear market” continue to unfold.
With the turmoil in 2022, it is clear as to why I continue to recommend precious metals.
They are the best hedge against inflation/hyperinflation and the destruction of the purchasing power of all fiat currencies.
What happened in the UK this quarter is a warning to the rest of the world. The UK Treasury was forced to transfer billions of pounds to the Bank of England to cover losses from quantitative easing so as to defer the default of many pension funds.
Our presumption was for a low to unfold in gold on the 49-month cycle low which was October.
GDXJ bottomed in late September at 25.90 and hit 37.40 on December 2nd, a 50% increase.
GLD made a major bottom in August 2018 and turned up two months later.
7 squared months from the August 2018 low is the September 2022 low. After two months GLD impulsed higher in November 2022.
If cycles follow suit the metals could be up for the next two years.
If metals follow the cycles I’m looking at from 49 years ago from the early 1970s, they could go vertical into 2029/2030.
Remember, the 7 squared years cycle was one of the factors indicated in my forecast for a top in January 2022…49 years from the January 1973 top.
This 7-squared cycle plays out in days, weeks, and months.
GDXJ exploded yesterday prior to reaching an idealized 32 region.
Follow through from here suggests continuation into year-end.
2023 is a more difficult call. There should be a turning point in March and again in May (18 months from the November NAZ 2021 ATH). This is also 15 years (180 months) from the start of the 2008 crash (180 days from May to November 2008).
In the short run, this week (+ or -) vibrates off the 2020 Winter Solstice Jupiter/Saturn conjunction.
The SPX is attempting to rally support.
Initial resistance is 3844 which is 360 degrees down from the 4100 December 13 top.
However, that top actually ‘started’ on the December 1st 4080 square-out high.
Consequently, 3829 …20 points below 3844 is a pivot.
The SPX is trying to escape over 3828 from Tuesday’s backing and filling.
If successful, the overhead 50-day ma at 3871 comes in.
Then we have 3900 resistance which ties to a declining hourly trend line connecting the December 13 and 14 hourly highs.
There is a setup to get to 3900 as 390 is 180 degrees opposite December 26th.