What’s At Stake Here is Whether This Is the Turning Point For New Highs in Gold & the PM Miners by Jeff Cooper

A week ago we forecast an explosion in volatility in?GLD?in an article?What’s At Stake Here is Whether This Is the Turning Point For New Highs In Gold & the PM Miners? Let’s take a look at the position of?XAU, the gold and silver miners index using the weekly chart below.

XAU broke a triple bottom the week before last (red).

Bearish sentiment was thick.

However, in so doing, it kissed the bottom of a 1 year trend channel (green).

The false break set up a Trap Door buy signal, which XAU capitalized on.

False breaks oftentimes setup fast moves.

One false break deserves another.

Notice that the false breakout in April perpetuated a trip to the bottom of the trend channel.

The key level to watch is just above 140.

This ties to the overhead 50 week moving average and the level where a large range outside down week (A) occurred 4 weeks ago.

Clearing the outside down week will trigger a Reversal of a Reversal continuation buy signal.

XAU would reclaim its 50 week on the way to triggering such a reversal setting the stage for upside momentum that suggests a test of the top of the trend channel (B).

Breakage above the top of the trend channel implies new recovery highs above this years highs (C) at 167.

The first breakout got the “squeeze,” but the second mouse, the second breakout above this well-defined resistance should get the cheese in the PM miners.

My Square of 9 shows that 360 degrees up from the recent 125 low opens the door to potential to 174 — backstopped by the above upside Cascade setup:

1) XAU has recaptured the triple bottom break lighting the fuse to a bullish Trap Door setup

2) Above the 50 week moving average puts XAU in a position to trigger the aforesaid Reversal of a Reversal or what I call a Keyser Soze. Such reversals can be vicious.

3) Clearing the 50 week opens the door to a test of the top of this one year channel which if cleared signals a new high for the year.

Conclusion.

Drilling down to the dailies on XAU shows there is a declining trend line from the June 1 high at the 140 region.

Friday’s surge in XAU ties to the important 90 day cycle from the June 1 high (September 1 + or -)

So upside follow through over coming days suggests a fuse may have been lit.

There is an open gap on the dailies from June 16 that starts at 150, which ties to 180 degrees up from the 125 low.

Phil D Gap sits at 154.

Clearing and sustaining above 154 points the way to the double top over the last year in the 165-167 region.

Did you enjoy this article? If so, I think you'll like my free eBook about one of my favorite tools: W.D. Gann's Square of 9 Wheel. Unlike most trading tools, The Square of 9 integrates both time and price, which takes you beyond plain-vanilla charts. Download your free copy here:?https://www.t3live.com/jeff-cooper-square-twitter

-Jeff Cooper for T3 Live