Today, we’re intensely illuminating the S&P 500 index as well as Dr. Copper and their tracks into the 1-year-cycle high.
S&P 500 index – representative for all the important Western broader stock markets.
High Grade Copper – vicarious for most other base metals and the Base Metal Mining Stocks.
Then – most intensely – I’ll be going into gold, the distortions in the futures markets arisen during last week and the now rather predetermined way of the shining metal into its soon expected 1-year-cycle low. Finally, I’ll briefly touch the HUI (standing for the Gold and Silver Miners) on its way into the 1-year-cycle low.
On 10/30/2016 - "Tricky Election Pullback in the Stock Market", I last analyzed the general situation and the overall outlook of the S&P 500. Two weeks ago, we had to work on the assumption that the pullback dragging on miserably long would exhaust with the first test of the 2016 1*1 Bull Angle and thereby at about 2092 index points.
After the 2016 1*1 Bull Angle being worked off = its very first test, correspondingly the year-end rally was to start then. The sell and buy signals resp. targets then derivable from the weekly chart above were very well accepted by the market. The 11/01 close at 2111.72 activated the test of the 2016 1*1 Bull Angle. Then, the final pullback low was reached at 2083.79 points on 11/04.
With this next important higher 2016 low, thus the year-end rally began that is supposed – with very high certainty – to go on a little further than just till December 31, to exhaust afterwards into the 1-year-cycle top by the end of January/beginning of February.
==> Some new all-time highs are on the agenda now!
The last trading week (week # 20 of the uptrend that had begun at the # 1-Brexit low) could finally overcome the Blue Arc that is a pre-defined strong resistance arc in the yearly time frame since by this resistance, the current 2016 high was triggered in the weekly time frame, so were the current alltime high and the subsequent pullback at the same time.
In this way, last week crucially overcame a yearly resistance arc on closing base! Thus, according to the GUNNER24 Forecasting Method, the first square line (2198.40!) as well as the 1st double arc upmagnet in the newly started weekly uptrend cycle will be worked off now with a +75% of probability.
With the aid of the Fib number count, we’ll have to assume that both the first square line and the "round" 2200 will have been worked off in the course of next week = # 21 resp. at the latest the week after next, # 22 = 21+1.
==> Due to the slightly overbought situation, the index may pull back once more onto the 1*1 Bull Angle during the coming 5 trading days = week # 21. Then, the long-entry for the 2200 shortterm target can be dared.
Technically, after the 2200 being worked off another 2-3 week pullback should have to begin again testing back some important supports before the index will go on booming into the 1-year-cycle top afterwards. Main target stays 1st double arc = 1-year-cycle high at 2230-2235 index points around the end of January/early February 2017.
Analyzed in hindsight, copper (together with other important base metals) was certainly the first market/sector that promptly sniffed out Trump as new president anticipating a beginning inflation thrust:
The present rally move started at the low of October 20 (2.08) and at the so far last test of the upper line of the 2nd double arc in the valid monthly GUNNER24 Down Setup that acts as important support for 2016-2017.
Last Sunday – free GUNNER24 Forecasts, issue 11/06/2016 "Historical Copper Breakout Is Due", we realized the most powerful buy signal for 4 years at this metal, inter alia with the aid of the valid 5 Candle monthly up above. Our "desired" long-entry at 2.20-2.22 for the 2.68 main target at the ATH 1*1 Bear Angle (February 2017) was not reached. Copper acted in such an extreme and crazy way the last 5 trading days…
For our edification, here comes the update of the 5 Candle up in the monthly time frame:
Starting with the 11/07 Monday low at 2.26, the red metal cracked into the early 11/11 Friday high at 2.73 in order to retrace from there by 22 cents into the 2.51 weekly close. Just for comparison: From January 2016 till October 2016, copper quoted in a narrow margin of not more than 38 cents.
By this narrow margin formed during many months being deserted a buy panic in the weekly and monthly time frames was triggered. This panic energy turns out to be in such an extreme extent so, as a first step, the GUNNER24 February 2017 Uptarget at 2.68 was overshot within only 5 trading days already.
The hefty 22 cent late Friday retracement from the 2.73-November high leaves a rather toppy looking November candle. The severely long upper wick signals a buying exhaustion and an important intermediate high made on Friday. The hefty 22 cent Friday retracement was accompanied by extremely high volumes in the futures contracts.
==> Copper as well as gold and silver were sold off COLLECTIVELY on Friday, with very high volumes!
==> With very high probability, copper will have to keep on retracing within the coming 10-15 days to test back some existing important support magnets.
==> The next important copper low is likely to be brought in when gold and silver will have found their respective 1-year-cycle lows. See the gold forecast just below…
==> Technically, the next important copper low should have to test back at least the first square line at 2.32, perhaps a little lower down to the 1*1 Bull Market Angle, maybe even down to the important monthly Blue Arc support.
==> After this next intermediate low at one of the mentioned important monthly GUNNER24 Support Magnets, the red metal will be supposed to set off upwards again. Because of course!!!! so far, the ATH 1*1 Bear Angle hasn’t been reached or touched!
In this buy panic cycle in the weekly and monthly time frames, the ATH 1*1 Bear Angle will have to!!!! be reached and worked off. So I think that 2nd double arc including ATH 1*1 Bear Angle will be reached through the end of January/beginning of February being marked there the final 1-year-cycle high. Being overshoot the ATH 1*1 Bear Angle and 2nd double arc at the 1-year-cycle high must be taken into account since copper is now in a confirmed buy-panic mode.
Let’s go on now to the gold market and its pending 1-year-cycle low. As last announced in the "Days of Thunder" issue on 10/23, it’s now prepared to work off/reach its 1200 downtarget! Fast + tough + merciless.
Nasty for all the gold bugs is the case resp. fact that the arisen distortions in the futures market permit a test of the 1172 (1222-50) yet, resp. even of the 1122 (1172-50) for the important 1-year-cycle low:
Above, for your brushing-up once more the weekly forecast chart of the "Day of Thunder" issue:
Technically, gold would not have been allowed to reach more than 1277-1282 (corresponds to the combined monthly + yearly 1272-GUNNER24 Magnet) till the presidential vote, in order to start afterwards its decline into the long activated and foreseeable 1200 main downtarget, released by the prevailing and actually dominating 1st double arc yearly resistance.
==> The final break of the 1*1 Bull Market Angles at the beginning of October 2016 activated the 1*2 Support Angle as next important downtarget according to W.D. Gann`s important Gann Angle trading rules. ==> 1200 till year end.
Now, I’d like to go into the proceedings of the last trading week, with the aid of a chart that is admittedly "cluttered with information":
First of all, I adjusted the weekly up setup in a way to make the Blue Arc express what it is, mainly for gold: Present yearly resistance.
This Blue Arc doesn’t lose its yearly-resistance influence before about mid of March 2017 or so. So, it is given strong resistance into the year 2017. The downtrend that began at the #1-high – the final 2016 high – tested back the Blue Arc at the highs of the Fib number weeks 5 + 13! In addition, the high of the downtrend week # 10 and the high of the downtrend week before the last = # 18 have tested the Blue Arc, to a T from below.
==> Die Blue Arc is furthermore weekly closing base resistance. Thereby, a first weekly close above the Blue Arc will be a strong buy signal.
Altogether, last week was the 19th of the predominant downtrend cycle. Please, take a look, where the "Trump high" came in…! The Trump spike-high (Wednesday 1338.30) tested pinpoint back the previously downwards broken 1*1 Bear Angle.
==> Once more, this negative pinpoint backtest of the 1*1 Bear Angle confirmed completely that the 1*2 Support Angle will be reached in this now dominating panic down cycle! The negative backtest of the 1*1 Bear Angle on Wednesday was the next massive sell-signal!
On the early Wednesday when Trump’s victory became apparent, by the 1272-GUNNER24 Pivot being overcome the first important buy signal was triggered. Besides, since the early Wednesday rally was also able to crack the important 1308-horizontal resistance (final 2015 high is at 1307.80) gold had to shoot up to 1322 immediately. Buy panic! After the shortterm overcoming of the 1322, gold exhausted up to 1338.30, into the given 1*1 Bear Angle resistance.
==> By this backtest of the yearly resistance, the sentiment switched from buy panic to sell panic because a strong yearly resistance was tested back negatively at the Trump-spike-high…!!!!
In the further course, Wednesday actually closed where the buy panic had begun, namely at 1273.50.
However: On Wednesday, 816.000 December futures contracts were traded. The highest recorded day volume in gold. After the early Wednesday upwards break of the 1272 pivot, the speculators = Hedge Funds jumped on the long-wagon, going long more and more, heftier and heftier up to the 1322 and beyond. With the Wednesday close at 1273.50, the Hedge Funds were largely troubled already.
With the Thursday close at 1266.40, the combined monthly and yearly 1272-GUNNER24 Support Magnet was broken downwards then. Thus, the next lower monthly 50$-GUNNER24 Support Magnet was activated at 1222 (1272-50).
The final Thursday 1272 break augmented the selling pressure for the Hedge Funds leading to more imbalance yet. That’s why the combined monthly and yearly 1222-GUNNER24 Support was worked off posthaste. Friday low at 1218.70. Then, Friday and the week succeeded in closing scarcely above the 1222, at exactly 1227.40.
Since last week – especially Friday – ended clearly below the previous weekly Support Angle, another hefty sell signal weekly GUNNER24 Sell Signal is generated!!!! For this, watch above again: The Support Angle was well defined and strong support for the whole month of October.
The 1200 at the 1*2 Support Angle will be worked off at a 99%. It’s likely to be in the 22nd week of the current downtrend. That would be 21 Fib weeks of downtrend + 1. Then, the 1*2 Support Angle and the falling – green dotted – final year 2014 high trendline support will become merged at exactly 1200 in the week of 11/28 till 12/02.
The current bear market low was reached at 1045.40 on December 3, 2015. Adding exactly 1 year, we’ll come to December 3, 2016, but that’s a Saturday.
The 1200 don’t have to bear yet because, in case a market sells off into its 1-year-cycle low, we’ll really always reckon with extreme exaggeration. So, since the Hedge Funds – as I see it, were caught on the wrong foot, the 1172 – or in the worst case the 1122 – may thoroughly be reached in the running panic down cycle:
To conclude today’s analysis, as promised a last glance to the HUI (NYSE Arca Gold BUGS INDEX). This one was likewise last prognosticated within the "Days of Thunder" issue on 10/23 indeed as follows:
It came the way it had to come… Unfortunately, the optimal short-entry at 226.52 was missed scarcely. The HUI couldn’t close the daily gap completely. It finally turned at 226.27 pts day high of 11/02.
Since the last trading week closed finally and crucially below the 192-weekly sell trigger – week closed at 180.10 – so the 1*2 Support Angle in the weekly chart above is finally activated as panic-cycle low target now.
We’ll have to wait and see when exactly the HUI will reach the 145-155 downtarget at the 1*2 Support Angle. If in the coming 1-year-cycle low the precious-metal complex wants to perform the way it did by reaching the 2015 resp. the 2016 bear market lows, the Gold and Silver Miners will be supposed to be under the last ones in the file to deliver their 1-year-cycle low.
The Gold and Silver Miners did not turn upwards finally before January 20, 2016. Platinum found its bear low on January 21, 2016.
As mentioned above, gold finally bottomed on 12/03/2015. Silver was second to bottom on the 12th of December 2015. The palladium bear low occurred on January 11, 2016.
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