Markets Update… Precious Metals Yellow Flag

Back in 2016 after one of the strongest impulse move in history I had to leave the party earlier when I saw an H&S top forming instead of a consolidation pattern. That call cost us a lot of members that didn’t want to hear it which I can totally understand. Even that massive H&S top at the 2011 high most analysts didn’t see it for what it. There was a list a mile long why that most symmetrical H&S top wouldn’t play out. I believe Sir Fullgoldcrown made a list at the time of many of the analyst and their reasons that H&S top wasn’t valid, and put it on the sidebar somewhere.

Editor’s Note: Precious Metals Too Big To Fail

Right now we could be at a very important inflection point in the PM complex which makes no sense from the short-term charts VS the long-term charts. I will be the first to admit that I’m beginning to have some doubts, at least for the short to intermediate-term, that things could get pretty ugly if the PM stock indexes don’t start showing a sustained move to the upside. Again, it is not what I want but what the market is giving us to work with and it is our interpretation of the price action to make a decision. For now, just think of this daily combo chart as a heads up until we begin to see some of the potential H&S necklines give way.

The very first thing you need to see during the formation of an H&S top is for the price action to trade below the left shoulder high. Then after initial support is found you will get the countertrend rally which generally makes a lower high in the move down from the head. In a very symmetrical H&S top you will see both the left shoulder high and the right shoulder high form the same distance above the neckline which creates the neckline symmetry line.

It is not unusual to see a small consolidation pattern from the left and right shoulders. Keep in mind we still have to see the bear flag break its bottom rail and then the neckline has to be broken before we have confirmation. Again, this is just a heads up and something we need to follow until we are out of the woods.

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