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DBA Fibonacci Extension Targets

October 11: By decisively crossing above the first fibonacci level, DBA now has a target of 16.85.  This setup would be broken if price goes below the 0% level.

October 15 update: DBA went as high as 16.01 today.

October 20 update:  We notice that the ultimate oscillator is divergent, in other words trending down as DBA goes up.  This often portends of a coming correction.

October 30 update: Price went as low as 15.76 then entered sideways action and closed at 15.97 today.

November 4 update:  DBA had a high of 16.13 today, just shy of the 50% level, and a new high for the move.

November 5 update:  DBA had a strong move to $16.20, touching the 50% level, and increasing the probability of reaching the 100% level.

December 2 update: Price still hasn’t been able to reach the 61.8% level.

December 6 update:  DBA made another high today at 16.31, then fell back to 16.26.

December 9 update: DBA made another high today at 16.39, then pulled back.

December 12 update:  DBA made it up to the 78% level this morning.

December 13 update:  DBA had a high of 16.79 today, just shy of the 100% level, close enough to call it done.

DBA Weekly Chart

September 13: The weekly DBA chart (agricultural commodities) had an outside day key reversal to the upside. The last one back in May resulted in a multi-week rally that eventually failed. 

October 15 update: DBA closed at 15.99.

November 12 update: DBA closed at 16.24.

December 13 update:  The uptrend is still intact with a high of 16.79 today.

GDX 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 finbonacci extension levels to watch.  If price breaks decisively above the 23.6% fibonacci level at a price of 28.65, then the 50% level at 31.32 becomes probable, and a break above that level makes the 100% level at 36.66 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.

Crude oil futures fibonacci extensions

October 11:  Crude oil looks likely to at least hit the 50% level.

October 23 update: High for the day was 56.07.

November 4: Crude oil had a high of 57.43 today, meeting the 50% level.  The ultimate oscillator indicator had a bearish divergence though.

November 15: Crude had a high of 57.97, decisively crossing the 50% level. Volume was light though.

November 21: Crude had a high of 58.67.

December 6 update:  Crude made another new high for the move at 59.85, still targeting the 100% area.

December 13 update:  Spot crude oil briefly went over $60 this morning.

Silver futures daily chart

September 27: Silver broke down and triggered new downside fibonacci targets  Silver more than most vehicles “always” returns down to previous support levels on the way up.  In this instance it touched on that, then went up and now back down for a second, deeper test of support.  See our article on silver retracements.

October 1 update:  Silver futures had a low of 16.94 so far.

November 8 update:  Silver futures had a low of 16.66 this morning, just shy of the 100% level. Bulls hope that was the bottom.

December 6 update:  The pattern still holds, with a low today of 16.47 before rebounding slightly above the 100% level.

Royal Gold Daily

November 7: As the gold price declined, one of our favorites, Royal Gold (RGLD) had a bullish outside day reversal to the upside on high volume after a multi-week steep correction from an all time high in September.  Also the ultimate oscillator held up recently as price declined, which is often bullish.

November 18 update: RGLD remains in a cautious uptrend today above 116.

November 28 update:  After a high of 120.66 on November 20, price is now at 117.14.

December 6 update:  RGLD has dropped back to 113.65, which ends the predicted rally.

Gold Futures Daily Chart Fibonacci Levels

September 13: Using fibonacci extensions on futures charts, the projected price targets are shown.  These targets are triggered when price goes through the 23.6% line.  Each fibonacci level acts as a magnet which attracts and repels the price.

October 1 update: Gold futures had a low of 1465.  A break above the 0% level before dropping to 100% would be a bullish indicator.

November 8:  Gold futures had a low of 1457 this morning, which completes the fall to the 100% level.

November 11: Gold futures took a quick visit down to 1438.60, touching on a support area from July, then rebounded back up to the 100% level on the chart.

November 14: Maybe too soon to call it, but so far the 100% level is holding as a solid bottom.

November 28 update: The previous low has held so far , and price is currently still hovering around the 100% level.

December 6 update:  Gold dropped back to the 100% level with a low of 1458.50.

November 29: The dollar ramped up this morning in a prelude to forming a bearish outside day key reversal to the downside.

December 6 update: From a close of 98.27 on November 29, the dollar index bottomed overnight this morning at 97.36.

December 4: We noticed that silver miners (SILJ, SIL) were strong today as silver went down, which is a bullish signal to watch.  We have found that mining share action can be a leading indicator of silver or gold prices.  When we see mining shares moving as bullion prices are not confirming, then it is often a prelude to bullion heading in the same direction the next day or days.  By this theory, silver should go up tomorrow or this week if the silver miners hold their gains.  This indicator is most often noticed with gold, so this is an unusual situation with silver today.

December 5 update:  Silver closed modestly higher as silver stocks predicted.  Silver miner ETF SIL was up 1% today, showing investors expecting higher prices.

December 6 update:  Silver fell to previous support levels, so there was no follow through.  The fall was blamed on unexpected job numbers that triggered stops.

Price Forecasting

Be skeptical whenever anyone makes a price forecast for a specific time interval. We have seen it in many cases over the years where the biggest experts made a specific price and time prediction. Most of these predictions turn out to be wrong, sometimes catastrophically wrong. This is a big pitfall when basing forecasts on economic and political factors. All of the conditions might be met, but price can go the other way in spite of all that. So if an expert gives a prediction, we need to look under the hood to find out what factors went into making that prediction, then look at the probability that these factors will indeed influence price within the time frame given. Factors that “should” affect price often don’t for many years on end.

It is better to think of it in terms of probability rather than opinion on what should happen. That is why we here at prefer technical chart probability factors and patterns when looking at where prices will go in the future. We look for patterns that more often than not increase the probability of price moving in a certain direction, and/or to a certain level. With the judicious use of stops, price targets and trailing stops, we can use these probabilities to our advantage. The advantage is that when the chart setup is broken down, the forecast is nullified by definition and you can exit. This automatically changes expectations.

The point here is that instead of relying on the opinion of an expert, just look at the probability factors and work from there. You have to be prepared for a prediction to be wrong in spite of what seems to be common sense.

November 24: Worrysome for gold bulls is that the commercials (insiders, e.g. HSBC custodian for GLD) remain massively short on the futures market. They are either in trouble here or they know something. We would only use GLD for short term trading, not for investing.

SPY Fibonacci Levels

September 19:  Above is a daily chart of SPY with fibonacci extensions and Andrew’s pitchfork with MACD.  The way price sliced through the 50% and 61.8% levels gives weight to a probable run up to the 100% level above 310.  This price target remains valid unless price falls below the 0% level.

October 30 update: The pattern continues to hold with a high today at 304.55.

November 7:  SPY had a high of 309.65 today, just shy of the 100% level.  We will see if that was it for now or not.

November 14: For the last week the 100% level has been acting as a ceiling.  The chart looks like downside risk is elevated here short term.  At the minimum, time is needed to digest recent gains in our view.

November 15: SPY made new highs just over the 100% level. We have to wait and see if this is just a short squeeze or something sustainable. In either case the longest bull market in history is awesome, isn’t it?  Volume was modest.

November 10:  Rumor has it that China is working on a gold backed cryptocurrency.  No info on timelines, so it could be later or not at all rather than sooner.  We can only speculate if it might be a plan for international trade payments only.  It is clear that the Chinese have been increasingly replacing the dollar with their own currency for some of their energy purchases.  We do not see how this could be seen as a positive development for bitcoin, as the market seems to have indicated when bitcoin jumped on the news of Chinese government interest in blockchain systems.

Gold Daily Chart with Andrew's Pitchfork

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.

October 23: For the first time in 21 years, Germany has openly bought gold into its reserve holdings. -Bloomberg

U.S. Dollar Index Long Term Chart

October 17:  The index is currently calculated by factoring in the exchange rates of six major world currencies, which include the euro, Japanese yen, Canadian dollar, British pound, Swedish krona and Swiss franc.

September 17: The repo rate overnight spiked to an all time high of 10%, an indication of interbank liquidity problems.

September 16: “JPMorgan’s Metals Desk Was a Criminal Enterprise, U.S. Says.”  -Bloomberg

September 12: Russia So Flush, Could Pay Off ALL Debt – Foreign, Municipal, Regional, and Domestic – With Cash! ‘Net Debt’ Falls to Zero, -Ben Aris “If Russia suddenly needed to pay off all its debts immediately, it could do it just by dipping into the cash on account at the government deposits with the central bank and commercial banks,” writes Ivan Tkachev, the economics editor at RBC media.

Meanwhile, the U.S. owes $22.5 trillion. 

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.

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.  

Chart updated September 10.

Gold Long Term Fibonacci projections

Using fibonacci extensions on a 20 year gold chart we can see that a projected price target of $2714 has been triggered as the gold price surpassed the 23.6% fibonacci level.

Long Term Gold Chart with Andrew's Pitchfork

Above is another long term chart with Andrew’s pitchfork added.  The theory is that each tine of the fork acts as a magnet (as do fibonacci levels), either repelling or attracting the price.  For now the setup looks valid as the bottom tine is acting as the guide pulling and pushing the price as it goes up.  Using pitchforks in combination with fibonacci extensions can be a powerful combination trading/investment tool.

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Market Views

Market commentaries and charts