In my last outline on the precious-metal sector on 06/15 I could state some impressive change-in-trend signals in gold, silver and the gold- and silver miners that however would have had to be confirmed by virtue of the seasonality. For new buy signals/the presumed change in trend the performance after the last FOMC meeting played the decisive part:
Gold and silver performed gorgeously after the 06/17-18 meeting closing now even the traditionally weak month of June near the highs. Whereas silver generated a clear buy signal by the strong performance of the week before last already in the weekly time frame (mind on this likewise the GUNNER24 Forecasts, issue 06/15/2014) now, by the extremely strong June close it is upping the ante with another strong buy signal on monthly base. Nor the last pending June trading day is going to change this. We’ll buy silver on monthly base with first target 25.10$, no stop-loss.
With a high certainty, gold is not going to achieve a June close significantly above the important 1322 GUNNER24 Horizontal Resistance:
Thereby, in spite of the current reversal candle, an official monthly buy signal will be postponed into July 2014. 1322 is the make-or-break resistance for gold regarding a first important buy signal on monthly base. It will take a monthly close above that (to be precise a monthly close above 1328) to signal us that in deed a new lasting monthly upleg – duration of 5-6 months – is underway. Target in this case is working off the currently most important monthly resistance, the lower line of the 3rd double arc in the monthly 9 Candle GUNNER24 Up Setup above at 1400 till January 2015.
Likewise in the issue of 06/15 I already discussed the setup above most extensively, inter alia pointing insistently to the extraordinary significance of the June 3 lows that was brought in during the 34th month of the correction AND MOREOVER AT THE SAME TIME in the 144th week of the correction of the secular gold bull-market. This combination of high Fibonacci numbers in both important time frames together with the fact that this June low furthermore worked off most exactly the 1*1 Bull Market Angle existing in the setup, is a serious indication that gold has bottomed for the time, being underway an uptrend lasting at least 5-6 months that must reach the 3rd double arc – and at least the 1400.
Lacking is still the confirmation of these conclusions… that can only be a monthly close above the important 1322 mark.
It’s not at all uncommon that gold drags behind the miners and silver in terms of signaling at the start of a new trend. In case of a perhaps new started uptrend this is technically even positive for all the bulls because A) it is normal as the past teaches us and B) moreover it is pointing to a strong (i.e. long-lasting and thereby normally potent even in price) future trend-move.
In the weekly as well as in the monthly signaling silver is going ahead of gold. In the monthly time frame a Gann Angle – an important Resistance Gann Angle – dominated the whole correction since the last all-time high, reached on 04/30/2011. At first, I’d like to show you where we’ll have to anchor this important Resistance Angle in the current monthly 3 candle silver down setup and what is the silver performance at this angle like, seen over the last 3 years:
As usual, the angle is being applied at the starting point of the setup, the all-time high of the year 2011. The analysis and the setup are based on the silver continuous contract. Since we may apply the angles at every point where the different squares develop respectively end,
just theoretically we have many possibilities of angle anchoring but little selection if we concentrate on the intersection points and angles that coincide with the price course. In the monthly setup above we identify rapidly the "most important angle"…
At the very first intense glance already, we recognize that silver has never succeeded in closing significantly above this Resistance Angle, except for the current month of June 2014. It’s a buy signal after more than 3 years of correction!
Altogether we count 9 candles where silver was able to exceed the resistance angle. Furthermore interesting is the month marked with the blue arrow. This February close 2014 was narrow, really extremely narrow above the Resistance Angle. In my opinion, it was the very first try to take the angle. Likewise super-interesting is the May 2014 candle at the orange arrow. The month closed exactly on the angle. In fact, exactly at the last May trading day, 05/30/2014, the monthly close at 18.615 was produced. From there, immediately with the first June trading day, silver bounced significantly off the Resistance Angle. June 2014 is showing now a pretty reversal candle that departed from the Resistance Angle thereby. This one triggered a significant rebound upwards!
Let’s relate now this turning signal with the correctly adjusted setup:
We draw the Blue Arc to the low of the 3rd month of the correction recognizing that the low of the May 2014 candle is not only lying on the Resistance Angle but the Resistance Angle is simultaneously intersecting the upper line of the 2nd double arc. The June low is likewise exactly at the upper line of the 2nd. So, since the low of 05/30 silver has been bouncing away from a Gann Magnet that in this case is showing an unequivocal support function of course.
Since the current bounce A) started from a recognizable important GUNNER24 Support and this one B) is strong enough to produce a reversal candle in June and C) simultaneously even overcomes the current monthly down trendline (dotted purple line), after the GUNNER24 and the Gann Angle trading rules it will have to reach/work off the next higher important GUNNER24 Magnet = resistance, at least the next important horizontal resistance at 25.10 = first target. If this may even be taken upwards on monthly base, afterwards the lower line of the first double arc between 27$ and 28$ will be activated.
According to the Gann Angle trading rules, technically the important 2*1 Gann Angle has to be aimed at/worked off now, since the resistance of the dominating Resistance Angle – that has existed 3 years – is finally overcome now. The 2*1 Gann Angle intersects the important GUNNER24 Double Arc Resistance at 27.70 thus shaping there the very most powerful magnet for this bounce on monthly base, 27.70 = main target for this bounce.
Not before the 2*1 Gann Angle on monthly base is overcome we will have the confirmation that the current up-move is not only matter of a bounce in the monthly time frame but the very first leg of another 5 wave up-move in the secular silver bull!
To conclude, here comes a little US stock market update. I think that at the stock market everything is taking its course, as analyzed last Sunday in detail. The NASDAQ-100 has clearly seized the leadership again:
Between Wednesday and Friday the tech index succeeded 3 consecutive times in closing above the important 75% retracement, starting from the all-time high. The 75% retracement is at 3811. Thus, the next higher and more important 78.6% retracement at 3955 is activated. The 3955 is likewise recognizable resistance in the currently most important NASDAQ-100 up setup, the weekly 8 Candle GUNNER24 Up above. At 3955, the currently strongest resistance intersects the upper line of the 3rd double arc by the beginning of August.
In the setup, we register that the last 4 week candles clearly oriented themselves by the Resistance Angle. Obviously this one is attracting the market now, preventing it from correcting deeply. Certainly, the NASDAQ-100 is trading beneath this determining angle being kept up by the same one however. Monday to Tuesday/Wednesday of the coming week the next higher and strong weekly 3866 resistance horizontal is supposed to be reached and worked off.
Normally, after reaching the 3866-3870 region, the market is likely to correct again for 3-5 days to test back successfully the important weekly 3800-3810 support area. After this little correction being finished, a rally to the 3905-3955 target area – likely to be reached between 07/24 and 08/05 – will be supposed to start. Not before this target region is worked off, the long-time expected summer correction may begin, with target 3300.
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