The huge bull market in gold in the 1970s produced a halfway peak at the end of December 1974 and corrected to the lows of August 1976 before resuming the rally into 1980.
The correction lasted 20 months.
This ties to the important 18 month or 540 degree/day cycle I have written about that dominates all trading.
It is a fractal of the Kondratieff 54 year cycle… which in and of itself relates to WD Gann’s 49-55 Panic Cycle in days, weeks, months, years.
The ATH in gold occurred in August 2020. This February is 18 months out.
At the moment, my expectation is there is a strong likelihood gold and miners will move up into the spring.
But we must be mindful of the prospect that they could trough into the spring, too.
Currently, the pattern suggests otherwise… that an uptrend is in force.
It remains to be seen how important the December 15 low will become. Technically speaking, it will be determined by what gold does at 1920 that will be pivotal.
That said, the mid-December low was 2200 days from the December 2015 bear market low, which ties to the ATH price in gold.
2200 is roughly 47 squared and 47 “points” to December 7.
So the upthrust from this December 15 large range outside up day (LROD) is interesting indeed… especially given the follow through.
From the December close at the 166 region, GLD has rallied up to Friday’s high of 171.
90 degrees up from 166 gives 179.
This ties to the May high.
That said, if GLD clears the open massive open gap from November 22 at 172.50, it will be in a position to attack a declining trendline connecting the early January 2021 high, the May 2021 high, and the November 2021 high.
Currently that trendline sits at 174.
In other words, a Jump the Creek buy signal gets triggered through 172.50, backstopping a breakout through 174.
Given the close proximity of the two levels and the currently underlying short term uptrend, my expectation is a Rule of 4 Breakout is on deck.
As well, notably, GLD shows 3 weekly higher lows from the March 2021 low.
In sum, the aforesaid 3 point declining trendline in focus starts from January 4, 2020… last year's high.
So the one year cycle is on the table.
At the same time, last year’s low was the week of March 8.
My take is we could get a directional move from January to March.
Accelerated momentum to the upside is on deck if the Jump the Creek and Rule of 4 Breakout signals are triggered.
If so, the outlook would be for continuation into early March.
This ties neatly with the 18 month cycle from August 2020 ATH.
While we had a nesting of cycles in Dec/January, there is a much larger nesting of cycles 6 months out into July/August 2022.
This, of course, is 720 degrees/days from the ATH.
If we get a spike into March, the message may be another flushout into July/August…another wipeout of bullish sentiment.
I only present this as a roadmap so that your bullish sentiment does not run away with you if we get a nice run early in 2022.
We have seen too many nice runs get the golden hammer since the drive to new all-time highs in 2020.
If we get a breakout or test of gold’s all-time highs, then the cycle nesting into the summer may mean a check/back or backtest of the current rally, should it prove to be significant.
If I am correct, wherever gold is in the July/August period should be the genuine pivot from its huge 10 year Cup & Handle pattern.
While some will say there is no concrete structure in GLD, the way I view the structure suggests the above breakout is at hand.
The 3 Week Chart is pointing up in GLD.
It turned up on the week of 10/18 followed by a Plus One/Minus Two buy setup with 2 consecutive lower weekly lows on the week of 11/29.
On the week of the low, 12/13, GLD undercut the +1/-2 weekly but setup but immediately turned back to the topside, leaving an outside up week.
This looks like constructive behavior.
The metals complex is painting a bullish picture of a potential large rally phase.
In addition to the weekly structure described above, the 3 Day Chart turned up on 12/17, right off the low.
Two consecutive lower daily lows followed, carving out a daily +1/-2 buy setup on 12/21… in league with a test of its rising 20 day moving average (Holy Grail buy).
GLD responded smartly.
Another daily +1/-2 buy setup to the 20 day ma played out once again on 12/29 and GLD exploded.
This is bullish behavior.
That said, GLD and the miners have tried our patience and while I have been dabbling, unless I see a clear cut breakout as described above, I am not going to press the bet.