Exploring the Trading Range Limits for Spot Gold Q1 2014

The rally is on. The onlookers now agree that it is on. Buy orders are flowing into gold. For myself, having done a lot of buying in April, July and Dec 2013, I must say that am getting nervous. I don't want to be in a company of late bulls!

But nervous is OK. "Climbing a wall of worry" has always been a good phrase to describe a rally which may continue still more.

So I thought it might be a good idea to explore the technical limits which may eventually contain the price of gold for the first quarter of 2014.

First a weekly chart:

I have numbered the 5 highs at the end of 2013 as # 1 to #5.  These provide me with three good trendlines which move down and forwards into Q 1 2014.

The first, lowermost, red declining trend was broken at the place marked A. Then gold moved fast up to the second blue middle declining trend and broke it at point B.  This appears to set gold up for a rally to challenge the third upper red declining trend, which it might meet somewhere about the projected point "C". But what price, or how high might C be located?

So let's move to the next chart:

Here (above) I have added a trendline to highlight the presence of a higher low in gold from mid 2013 to end of 2013. Is this information of any value? Let's move to the next chart:

Here (above) I have made a parallel on the slightly rising trend and made an attempt to guess where the top of gold's trading range might presently be. I placed the new slightly rising blue line off the half yearly high last August, and it seems to suggest that 1450 might be conceivably possible! It also suggests that the next declining red trendline not yet reached by gold could fall to this rally. That would be nice. Let's move on:

Now I have added two more parallel versions of that slightly rising trend, to try to find where the 1/3rd and 2/3rd parts of the present trading range might be located. I placed them off the last downswing monthly highs and lows. This is beginning to get interesting. Notice how gold laboured to get through the lower blue line just above 1250, zigzagging for  4 weeks. But once it had gotten through that stickyness it was free and accellerated up towards the higher blue 2/3rds line above 1350. It's not arrived yet. This is a likely area where the bears will try to sell gold down again. But they are being pushed back upwards so far.

Let's move to the final chart. This not a forecast, but it is a hypothesis. A possible scenario which could well play:

This is one way in which the current rally in gold can hit all the levels, and respect them, before turning to find where the new trading range base will be located after this rally is "on the charts". Like I said, not a forecast. it's too elaborate to be a forecast. But if spot gold looks sort of reminiscent to this at the end of Q1 2014, I wouldn't be all that much surprised.

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

53 Comments

ag1969's picture

Alright, I'll Take it

First Video ever played on MTV

silver66's picture

2nd

Oh yeah, can barely keep up with all the good stuff here

Silver66

TreeTop Dweller's picture

3rd?

thurd on the third?

Stock_Canines's picture

Argentus

A past contributor to the Set Up forum is calling for something similar to your last chart. He see's gold going up to possibly the 1400 range before heading lower. However, he predicts it's down for the remainder of the year and to  set new lows. He's been pretty accurate thus far in calling gold's move.

dragonfly5's picture

Bottom???

Nice to see the recent gains - especially after what we've been through the last number of months. I hope it holds - after managing to DCA over the last 6 months I'm finally in the black with my humble gold stack. It would be nice if it stayed that way for a while. If price gets killed again I guess I'll be getting more.

Fifth??

argentus maximus's picture

If gold stalls at the October

@Stock_Canines: If gold stalls at the October highs (1360-ish) and does not attain the August highs (1430-ish) then that scenario will probably play, the trading range being displaced about 70-80 dollars lower.

But I'm the eternal optimist until given reasons to be otherwise. smiley

Dr Jerome's picture

Hmmm...

Your chart is reasonable and systematic. World events may be an x-factor that could push gold higher or faster than you have hypothesized. but the lack of war should not preclude something exactly as you have suggested here.

  • those who trade options should buy time--at least 60 days.
  • those who trade miners should beware of 3x ETFs and their decaying returns over time
  • those who stack physical--attaboy!

In other news...I see that Obama plans to put economic sanctions on Russia. He reminds me of some ignorant deluded general who says "Send in the 3rd legion." but his advisor must inform him that the 3rd legion was decimated in a battle 2 months ago. "Then send in the cavalry!"  "Sir, with all due respect, they deserted last month."

What is the US going to do to Russia that will "cost" them? Cut off our exports to them? Last I heard, we don't make much of anything in this country? Are we going to refuse to buy back our treasuries if Russia starts selling them on the open market? Not if we want to keep interest rates low. And I imagine if we cut them out of the SWIFT system the BRICS countries and the rest of Asia and the mid-east will stand with the US? Riiiiight.

Obama, your assets are few and your allies are drifting away. Don't bite off more than the US can chew and expect the taxpayers to foot the bill.

Every year I get even more pissed off at our leaders who think the US must be involved in every conflict on the planet, chanting the memes of "democracy" and "rights of the people" when the issues are clearly about energy and money. I can't name all the atrocities and evil despots who ruin nations that have occurred in the past 20 years where the US turned a blind eye because oil was not involved.

ancientmoney's picture

You've been warned . . . latest by Bill Holter . . .

http://blog.milesfranklin.com/youve-been-warned

"So why is it that all of a sudden “manipulation” is being taken up by the MSM?  Is it because they feel sorry for those of us who have been boisterous for long in our search for proof of the truth?  No of course not, in my opinion it is because the game is very very close to blowing up and “they” know it.  “They” are being the “elites” who run the world.  In my opinion the elites consider it “bad form” not to at least warn the sheep before they are sheared.  I believe that this is why the rash of articles in the 3 most important English speaking countries and from the very mainstream media outlets FT, Bloomberg, London Evening Standard and Handesblatt.  I also believe that after this whole thing goes down, blows up, collapses or however you’d like to describe it, the “elite thought process” will be …you had fair warning ahead of time and you could have acted on it.  You were warned…this is why we are the elites and you are the schmucks!"

Dagney Taggart's picture

Talking to our Broker in Vancouver

today at lunch.

Something he is examining is the possibility for an "Abandoned Baby" formation in the metals until the middle of next month off the April 2013 drop. What if the Boston comedy act was some overt, in-our-face temporal marker?

Other resource-based sectors are loading springs too.

Be extremely careful with leveraged shorts. So much is coming together at the same time. Vigilance on 11 April.

kiss

achmachat's picture

Dagney

where does he see the three parts of the abandoned baby?

litterbox's picture

@ dagney taggart

Abandoned baby formation, can you be so kind to elaborate a little more ? Thanks...

ata's picture

Putin on the Ritz - -

putin_on_the_ritz-116138.gif

ancientmoney's picture

Kunstler weighs in on Ukraine, Russia, U.S. . . .

"So, now we are threatening to start World War Three because Russia is trying to control the chaos in a failed state on its border — a state that our own government spooks provoked into failure? The last time I checked, there was a list of countries that the USA had sent troops, armed ships, and aircraft into recently, and for reasons similar to Russia’s in Crimea: the former Yugoslavia, Somalia, Afghanistan, Iraq, Libya, none of them even anywhere close to American soil. I don’t remember Russia threatening confrontations with the USA over these adventures."

http://www.zerohedge.com/news/2014-03-03/kunstler-welcome-era-failed-states

dragonfly5's picture

litterbox

Was wondering the same thing - googled it and came up with this: http://www.investopedia.com/terms/b/bearish-abandoned-baby.asp

Maestro's picture

"Crushes" all over Dagney

blush

Dagney Taggart's picture

Re Abandoned Baby

The left side was formed in the April 2013 waterfall. The baby has been forming in the sewer for the last 11 months. The right side return mirroring the waterfall to the upside sometime over the next month.

ancientmoney's picture

From the "haircut looking for a brain" (Kerry) . . .

"You just don't in the 21st-Century behave in 19th-Century fashion by invading another country on completely trumped-up pretext."
                                         -John Kerry March 02, 2014 Really? What was Iraq, Syria, and Libya all about?

-----------------------------------------------------------------------

Found at 321gold site.  Might add Afghanistan to the list.

meegoreng1's picture

The EE is 100% in control!

Even now when the Ukraine crisis is in full swing. Has there been any indications anywhere that the EE has lost a percentage point of that? Can anyone here dispute the fact that EE has not lost control?  Even if things get heated up in Ukraine, gold and silver manipulation WILL CONTINUE!

Its laughable when we are still using charts, COT reports, BPR, wars, currencies and more  to predict the near or long term price of the PM markets!

Nothing, ABSOLUTELY NOTHING determines the release of price manipulation except one situation only and that is physical demand outstripping supply. Does anyone see that happening yet? I don't despite the multiple of articles claiming that. I see this ponzi scheme to prop up the USD and other currencies going on for much longer. Call me a pessimist but I know that I'm a realist. This manipulation has been going on before anyone of our great grand parents were born.

This crisis reminds me of the Syrian conflict  Obunghole wanted us to get into a few months ago. I seldom write but I wrote a piece then saying that because sentiment was very high for prices to rise, I started selling PM stocks and phyzz at the height of that crisis. I will do the same here.

I know this message sounds like I'm a PM basher. I'm not. I am a big believer of PM being not only as an insurance policy against fiat depreciation but also increasing your wealth esp in regards to silver.

Don't be fooled by the Willies, Sinclairs, Schiffs, even your host of this site, and those KWN hyper nuts into thinking that we are very close to an explosion of prices. Don't think that will happen soon as the EE has a lot more agendas to be fulfilled, one of which is their plan to steal our IRAs and 401ks. I assure you that will take place before any price explosion to record highs. The EE also wants this country deficit needs to be much larger too. Also more than 90% of US population is still oblivious of the harm and damage that have been done to them, physically, mentally, financially and emotionally. Why would the EE disrupt this smooth flow and transitions as  price explosion of PMs will absolutely wake these sheeple up?

Lots of these sheeple haven't been scalped yet:

AlienEyes's picture

Kunstler is a commie creep !

He is absolutely one of the very last "people" I would ask about anything whatsoever.

ancientmoney's picture

@AlienEyes re: Kunstler . . .

Maybe so, but even a blind pig finds acorns sometimes.  He is right on this one.

Bollocks's picture

Aaand the winner..

of today's crypto-currency wild price-swing action is ... wait for it ...

Cryptographic Anomaly

A mere 260% increase as of writing (it was 320% about 30mins ago).

Many are up by crazy amounts today: http://coinmarketcap.com/

Volatile? Moi?
 

Bollocks's picture

Is an Abandoned Baby good?

I have absolutely no idea.

Unless it was damn ugly I guess? Or one of those reptilians.

achmachat's picture

can't believe it...

Bollocks, i just clicked on that link and this is when I post my Bit-Semper Augustus again!

ancientmoney's picture

@meegorengi re: manipulations' end . . .

"Nothing, ABSOLUTELY NOTHING determines the release of price manipulation except one situation only and that is physical demand outstripping supply."

-----------------------------------------------------------------------------------

Agreed.  This article is realy good, and backs your argument:

http://www.silverbearcafe.com/private/03.14/tipping.html

The end of manipulation will not be gradual.

If we see prices act like they have the last 10 years, up to and including today, we can be sure the manipulations are still on.

I am not sure exactly how it happens, but I suspect it will involve an official announcement on a Sunday night, maybe before a national holiday, that banks will "temporarily suspend day-to-day operations" to gear up for new, required, stronger reserve requirements, or some such hooey.

PM trading will halt, to include COMEX, PM ETFs, etc.  No offer prices will be posted, though they might post low-ball bid prices to confuse people into thinking it best to sell whatever phyzz they might have.  Don't fall for it; it will be part of the ploy.

ata's picture

smart move

145092 600 Passing Putin cartoons

erewenguy's picture

Tulving

Has this been posted elsewhere yet?

http://about.ag/tulving.htm

The Tulving Company is Out of Business

March 3, 2014 3:45PM
As we predicted/requested on Friday, The Tulving Company has gone out of business, as of Monday morning. They are no longer answering their phones, and we have reliable information confirming that they are ceasing operations.

This page will be updated as more information comes in.

Mr. Fix's picture

Pretty charts, and an abandoned baby…

I have my own reasons for thinking that our metals  are being set up for  another plunge, and it has less to do with charts and graphs, or even stories like this:

GOLD & SILVER COT REPORT: COMMERCIALS POSITIONED TO SMASH METALS TO OBLIVION!

MARCH 3, 2014 BY THE DOC 24 COMMENTS

silver smashThe real story is in gold this past reporting period as the commercials added a MAMMOTH 21,432 short contracts to their overwhelming “ILLEGAL CORRUPT” short position andare now positioned to smash this market to oblivion.
In silver, we see the combined commercials approaching 200 MILLION short ounces now.  It would be nothing for them to start the high frequency trading casino wheels rolling and pound silver to below $18.
Again, in silver, we see an almost perfectly even distribution in the dis-aggregated numbers.  COLLUSION my friends, COLLUSION at its finest. 

[Read more...]

It's my basic premise, that not only are the bankers still 100% in charge, but they will not allow gold and silver to rise until after an economic implosion that destroys the wealth of all who have invested in paper promises to deliver.

I still think that futures contracts (which determine the price) will become worthless in such a scenario,

and hence, just learning that the  banks are massively short, tells me that they intend to profit on the way down again.

Also, I think the situation in Ukraine is a smokescreen for a dollar collapse.

Obama can't be as stupid as he's pretending to be, he's on a mission to destroy the United States,

and one way or another, he will find the prearranged help he needs to make that happen.

Any day now…

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