Jan 13 2017
Long Term TREND – bearish– (Moving Averages 1214-1222)
The correction since July 2016
As described in previous reports since August, our analysis has favored this current correction that began in July should end in the November 2016 to January 2017 time frame. How that TURN looks on its pattern will give evidence if it’s just going to be a bounce like we saw in the first half of this year. In the last update, our outlook was we favored the turn has been underway since Dec 21st. As long as we remain above 1110-1122, favor the correction from July is complete and a move higher is beginning.
The 2015 low
The last Long term window forecast was for “the” low to take place between Dec 2015-March 2016 and December 2015 was the bear market low so far at 1045. Odds still favor it as the low, but until we get above the 2011 downtrend line and the 2014 high of 1388, we can’t eliminate this current correction won’t break that low. We had estimated in November either 1172-1182 or 1072-1122 (weekly closing basis) as the two target price ranges that favor where the price low takes place. So far gold has reached 1122 as a low during December.
If we bottomed at 1072-1122, then gold is favored to move higher into mid-February/Late March. Then we’ll see what the pattern looks like. If gold closes below 1110-1122 on a monthly basis, odds favor the correction hasn’t ended. For now, our outlook for (Nov 2016-Jan 2017) to favor where the low from last July takes place looks to be in play.
The current bearish trend reading
The moving averages are at (1214-1222) If gold closes above 1222 for two consecutive monthly closes the trend will be upgraded to Neutral.
NOTE: GOLD IS TESTING JUST UNDER 1241-1222 as of this report. We should favor that 1214-1222 is strong MONTHLY RESISTANCE. A January & February close above 1222 upgrades the long term trend from Bearish to NEUTRAL. Note also the December low touched the long term uptrend lines and a good bounce has developed. This also is encouraging that gold could be making a HIGHER LOW than 2015’s. If 1110-1122 holds (the low is 1122) then the upside could get interesting later this year. Watch the moving averages. If we get above them, then the 2011 downtrend line will be the next long term test of significance for gold.
On the upside (and the moving averages).
The Blue average (1214) must move back above red average (1222) and price must be above both averages on TWO monthly closes to turn the long term TREND back to bullish. The RED BEAR AVERAGE is only 8 dollars above the BLUE BULLISH AVERAGE. The BLUE average has to get above the RED average and price has to be above both averages on two monthly closes for the LONG TERM trend to turn Bullish. In addition, price has to close back above the 2011 downtrend line (1272-1308) and the 89 month moving average 1337 and the 2013 price high of 1388 for gold to signal that the long term odds have turned and the gold correction from 2011 is over and a new bull market leg going towards 2300-5000 is underway.
Finally, it still takes two monthly closes above the triple green momentum lines at 1488-1530 to confirm the long term bull market UPTREND OF MOMENTUM has resumed. A yearly close above the long term red line on the weekly/monthly chart above 1600 would favor a move to 1794-1925. A yearly close above 1922 would favor a move to the 2300-2500 area.
Bottom line – The 2011 downtrend (Bear) channel remains in play. January is the odds current target time for low but it’s possible we saw it in December at 1122. If we close above the moving averages in January (1211-1222) then a test of the 2011 downtrend line should take place this quarter. A monthly close below 1110 cancels the above outlook. Gold needs to close above 1180 in January as well to keep the upside going into Feb/March.