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Trading Blog

  • Trends are examined using chart analysis to determine price direction and strength of each sector. 

  • Trading opportunities are identified by using various charting indicators, including 12 Points Trend Strength indicator.  

  • Out of the 11 sectors we follow, the trader can usually find opportunities at any time.

Latest Posts

Posts with trade setups are based on probability factors and are posted for educational purposes. Make trades at your own discretion.
Posts with the latest updates are moved to the top of the list.

Long Term Real Estate Chart

August 16, 2019: VNQ, is the Vanguard Real Estate ETF “tracking the performance of the MSCI US Investable Market Real Estate 25/50 Index that measures the performance of publicly traded equity REITs and other real estate-related investments.”
Make of it what you will. 2007 was considered by many at the time to be a real estate bubble.

Chart updated September 10.

March 21, 2020 update:  VNQ has fallen to 59.68.  We wouldn’t expect a booming real estate market any time soon.

Gold:Silver Ratio starting in 1980

The chart shows the historic gold/silver ratio from 1980.  The ratio was 16 in 1980.  The dotted line shows the median level of about 62, which at $1500 gold would mean $24 silver.  A ratio of 16 would mean $93 silver.

Silver seems unlikely to return to the historic 16 to 1 ratio now that governments are no longer drawing supply for minting silver coins intended for everyday use as money.  

Long term holders can use this chart to make allocation decisions on purchasing and selling gold or silver.

March 18 update:  The ratio today had a high of  131.41 which is a 5000 year record.

Gold Daily Chart with Andrew’s Pitchfork and fibonacci extensions

October 3: The tines of the fork act as magnets, attracting and repelling price.  Note how price followed the lower tine, then jumped to the middle tine, followed it for a while, then jumped to the upper tine and followed it for a while.  Now it has bounced off of the middle tine.

October 15 update: Gold returned to the center tine of this fork.

October 30: Chart was updated today with trend change trigger line added.  Price continues along the center line of the fork.

December 18:  Chart was updated today.  The bottom tine has been acting perfectly as support.

December 28 update:  Fibonacci extension targets have been added.  Upon a move past the green trigger line at 1520.93 the 50% target at 1595.65 and 100% target at 1745.10 become probable.  This is based on a low of 1267.3, high of 1566.20, and a low of 1446.20.

December 31 update:  The game is on.  Spot gold reached 1524.80 overnight, predicting a rise to 1595, then 1745 during the next few months.

January 8 update:  Spot gold went over $1600 overnight, which decisively crossed the 50% target.  This makes the 100% target at $1745 likely in the next few months. Normally we would expect a slow grind back and forth to stay above a big even number like $1600.  Trades based on this setup would raise stops to the green line trigger point now.  Selling half at the 50% level while raising stops would have been good money management in this case.

January 18 update:  There is a similarity between this chart and the charts of silver and mining share ETFs that offers encouragement to fibonacci extension traders.  If you look at the corrections from February 2019 to May 2019 and the correction from September 2019 to November 2019, these two corrections look similar in duration and depth.  So this proportionality gives added probability that the fibonacci targets listed above on December 28 are valid.   The same pattern can be used on silver and mining share ETFs at this time.

February 21 update:  The chart was updated today.  The identified patterns continue to hold nicely.

March 3:  The chart was updated today.  The fork pattern is holding well.  The fibonacci pattern identified on December 28 remains in effect, so $1745 is still in play.

March 14 update:  Price dropped below the fork, but the daily uptrend remains in place.  On the weekly chart there was an outside bar key reversal to the downside, which is bearish for the intermediate term outlook.  The monthly chart remains bullish.

Long Term Bitcoin and GBTC Charts with Price Projections

Feb 4: On the Bitcoin monthly chart, a fibonacci extensions target has been triggered.  Price is projected to go to 11,510, then if that is exceeded, to 16,571.  This pattern is nullified if price goes below 6450.

GBTC is an ETF that can be traded like a stock for those who don’t want to trade actual bitcoin.  GBTC uses derivatives to track the price of bitcoin.  It doesn’t exactly track bitcoin, but is close enough for traders to use it as a proxy.  

The GBTC chart shows the entry, exit, and stop levels that correspond with the price levels indicated in the bitcoin chart above.

March12 update:  Bitcoin dropped as low as 5790 this morning, which nullifies the above patterns.  Gold and silver are being hit as well.  We will have to wait to see what is just nervous reactions, and what is a trend.

 March 14:  The price of bitcoin went as low as 3949 this week, which nullifies the patterns above.  The market panic this week included bitcoin.  Price has stayed above the January lows, so that is a positive development so far.

Market Outlook

Gold miners have been sliding down along with the general stock market.  This is in spite of the fact that the price of gold has been holding up well.  We suspect that when earnings season kicks in that gold miners will outperform.  That is as long as the gold price stays above $1600 or so.

The general stock market on the other hand looks like it will be in for a period of disappointing earnings.  This would be a heavy weight on the S&P going into summer.

We continue to watch chart patterns for opportunities.  TLT had a nice upward spike, then fell back.  There are still factors pointing to more interest rate reductions, so there could be meat still on the bone there.

Crude oil remains unsettled between corona virus and the Russian-Saudi price war.  The virus seems to be keeping demand subdued.  Russia is in much better condition to weather lower prices than Saudi.

In the near term it looks best to be very cautious in everything while looking closely for opportunities in bonds and gold.

 

 

Long Term Bonds (TLT) weekly fibonacci extension trade triggered

Feb 1: Many analysts expect interest rates to continue down this year.  The president has called for the Fed to lower rates during this election year in order to compete with most of the other major countries who have rates near zero already.  Bond prices rise as interest rates are lowered.

Using fibonacci extensions, a trade on TLT (long term government bonds) has been triggered this week.  The green line on the chart shows the buy level.  This is based on the low of 111.90, then the high of 148.90, then the low of 134.46.  At the level of the green line, price has clearly exceeded the 23.6% fibonacci level, indicating a high probability of reaching the 50% level of 152.95.  Once the 50% level has been clearly exceeded, the 100% level at 171.45 is in play.

This setup is reinforced by the proportionality of the two down legs on this pattern.  Note that the drop from August to November 2018 is similar in depth and duration to the drop from September to November of 2019.

A prudent way to trade this setup would be to buy with stops just below 134.45.  The trader would have an OCO order to sell half of the position at or just below the 50% level and another OCO order to sell the other half just below the 100% level.  Once the 50% sale is executed, raise stops to the green line to lock in profits.

Feb 12 update:  The chart was updated today to show projected profit levels.

Feb 25 update:  TLT almost touched the 50% target today with a high of 151.76.

March 3 update:  As expected, the Fed lowered interest rates again.  Trump has been putting maximum pressure on them to do so.  Bonds remain one of the few bullish vehicles.  TLT went as high as 159.70 today.

March 6 update:  TLT went to a high of 169.33 today, just shy of the 100% fibonacci extension target identified on Feb 1.

GDX Gold Miners ETF daily chart

October 2:  GDX trends down while Ultimate Oscillator trends up.  This gives an elevated probability of a bottom forming.

October 15 update:  GDX dropped below support, but ultimate oscillator divergence remains.

November 18 update: 25.98 is the low so far.  Ultimate Oscillator remains supportive.

November 20 update:  We have edited the chart to show new patterns developing.  The ultimate oscillator continues to trend upward.  An Andrew’s pitchfork pattern is shown in blue with the trend break trigger line in red.  The fork pattern is negated if price drops below the trigger line.  If the pattern is valid, the tines of the fork will act as magnets attracting and repelling price.

Additionally we have calclulated fibonacci extension levels to watch.  If price breaks decisively above the 23.6% fibonacci level at a price of 28.69, then the 50% level at 31.39 becomes probable, and a break above that level makes the 100% level at 36.80 more probable.  This fibonacci pattern is negated if price falls below the 0% level at 25.98.

November 28 update:  Price came down to the trend break trigger line, but hasn’t clearly broken below it and has remained above the November 12 low of 25.98.

December 13 update:  GDX remains above the trend break trigger line on the chart.

December 20 update:  The chart was updated today.  GDX price continues to ride like a tightrope along the trend break trigger line.

December 28 update:  On December 26 the high was 29.25, which, as predicted by the bullish rounded bottom, decisively broke above the fibonacci extension trigger line shown in green on the chart.  This gives an elevated probability that price will reach the 50% level of 31.39, then when that is exceeded, the 100% level of 36.80.  These numbers are slightly different from our original calculations due to price adjustments for dividends, etc. by Stockcharts.com.

January 17 update:  The fibonacci targets of 31.39, then 36.80 remain in effect.  Price continues to dance precariously on the Andrew’s pitchfork trend break trigger line.  The original round bottom drawing is still on the chart, but it has been drawn out a bit and remains valid. Ultimate Oscillator fell with price on Jan 8, which is concerning.

Traders would have entered a buy on the break above the green line with a stop just below the November 12 low of 25.79.    Bold traders would buy the dip with stops at the above mentioned level.  When price reaches the 50% target, prudent traders would sell half and raise stops to the green line.

February 8 update:  Price has fallen below the pitchfork trend break trigger line with a low of 27.77.  The gold price has been positive, so there is room for optimism for the miners.  The fibonacci extension trade is still in effect.

February 13 update:  The chart was updated. GDX price dropped below the trend break trigger line, but price is remaining inside a bull flag. The fibonacci extension trade remains valid. Caution is warranted.

February 21 update:  The high today was 30.71.

March 3 update:  The 50% fibonacci target was met.   If the trader had taken half in profit at that point and raised stops it would have been a profitable trade even with the corona virus inspired selloff.  We will watch to see if the old pattern resumes after the spike bottom and recovery.

 

Gold, Silver, and Miners Posts

Stocks, Real Estate, Bonds, and Currency Posts

Crude Oil, Agriculture and Commodities Posts

Blog Posts

Market Outlook

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