Gold Review

Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Gold is following the phases rather than random movements. Evolution of the Trade (EOT) breaks the flow of price, time, and energy into the following phases:

(1) Energy build or Nibble
(2) Flip
(3) RESET
(4) Primary Trend Decline

Gold's Nibble phase took place from July to September 2018. The green circle highlights the NIBBLE, a large bullish energy build against the majority's pessimism (see Gold's DI). I remember writing about it, suggesting that the majority believing the gurus that said gold was on the verge of catastrophic collapse were most likely wrong.

The primary trend FLIPPED UP after the nibble on 1/1/19. The primary trend has been UP for 23 months (see Matrix Gold Column H). Primary uptrend has highlighted green in the chart below. Green boxes help us visualize the uptrend, but the cycles of price and time are its most important aspects. These cannot be visualized - only the computer can describe them.

Gold Monthly (Primary) Trend

The composite trend, a combination of the daily, weekly, and monthly trend directions, has been in and out of alignment several times since 1/1/19. The daily price and time cycles often got (get) extended and required a reset of the three trends for continuation of mark up (see Cycle of Accumulation and Distribution for further discussion of mark up). Bearish energy builds, highlighted by red circles referred to as blocking domes, often slow markup and force a reset. The most recent red circle represents, a large energy build against the primary trend (up), materialized as the daily trend was showing extreme price and time cycles. A similar setup showed in silver. At the time, I warned that the setup increased the probability that the composite trend would fall out of alignment against a backdrop of euphoria towards gold and silver.

Gold's daily columns (columns P-Y) showed that gold fell out of alignment 13 days ago. The daily cycle statistics reveal price (BrS) and time (BrST) cyles of 1.2 and 0.1. In other words, the recent decline, while painful, is still not statistically extended in terms of price or time. BrS and BrST readings above 1.96 define ‘extreme’ extension. While gold experts are scrambling to call the bottom, we (smart money) ignore them and wait for extremes. The old trading saying (it's least it's mine) applies here.

Direction of price will change when time is up

Gold will bottom when time is exhausted. Most traders have no idea how to read time, so they chase their tails, listening to experts and foolish goldbugs that do not understanding the Evolution of the Trade (EOT).

We should begin seeing a bullish energy build as the time cycle approaches 1 or 2. The invisible hand understands price and time cycles, so it will begin positioning itself on the long side as most of the gold community capitulates (sells) under a backdrop of fear. A bullish energy build at key reversal zones will mark the next reentry point for gold. It will also setup another successful RESET (phase 3 of EOT). Disciplined traders keep repeating the process until gold enter primary trend decline (phase 4 of EOT).

If you trade or hold gold and don't want to capitulate with the majority into the panic decline as the invisible hand accumulates ahead of another RESET. The vast majority of readers will do the opposite and sell weakness because they do not understand the basic priniciples of the Evolution of the Trade.