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Bitcoin within a multi-month bullish
triangle consolidation
Bitcoin should continue to run into an ascending
bullish triangle for at least a couple more weeks. I hope you
followed my recommendation to buy below $380. Now you should be fully
invested and just stick to your position. We have been buying
weakness within a bullish formation. The breakout above $500 will confirm
the pattern and activate our profit target at $800. I like to buy a
quiet market with a great fundamental and
technical picture instead of chasing an overbought
and volatile market like gold is at the moment.
Action to take: Hold your Bitcoins
Stopp Loss: $290 (28%), we will increase the stopp once we
hit $500.
Profit Target: $800
Timeframe 6 -18 months
Risk($80) / Reward($430) = 1 : 5.4 (very good ratio!!)
Position Sizing: Don´t risk more than 1% of your equity.
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Midas Touch Gold Model on a Buy Signal
since January 26th
The model remained in bullish mode during the last two
weeks. Obviously due to Gold´s strength the bullish mode has
intensified.
The recent changes include buy signals from:
Gold USD - Monthly Chart
Ratio DowJones/Gold
US-Dollar Daily Chart
A new sell signal is coming from:
Gold Volatility CBOE Index
A neutral signal is coming from:
US-Dollar CoT-Report
Overall a very strong bull signal. But be aware
that it doesn't take much more downside action to flip
the signals from Gold in Indian Rupee and Gold in Chinese Yuan to
a sell signal. As well the available CoT numbers for Gold do
not include last week´s spike! I think we will quickly see my
model shift to neutral mode but obviously that is my personal opinion.
Until now the model is bullish and has been created to take
out any personal interpretation.
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Gold broke out of its falling wedge
Mid- and long-term this bullish and the bottom
is very likely in. But short-term Gold is about to fall back within the
downtrend-channel of the last three years. Combined with
the unsupportive seasonality until June I think we will see
a large pullback starting rather soon.
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Gold with spectacular and parabolic rise but close
to a sell signal
With the daily chart we are zooming
into the recent price action. Instead of pulling back around
$1,140 Gold surprised nearly everybody (including me) and rushed to the
upside.
But looking forward to the next couple
of weeks and months I am now very cautious and even outspoken
bearish. To get moe clarity about what Gold can do from here I am
going to lay out the three basic directions any market can
take: up, down and sideways.
- The imminent bullish case: The ongoing pullback
this morning confirms a short-term top at $1,263.90 is in place.
But if Gold still wants to continue and push higher towards the
next target around $1,300 the support zone between $1,190-$1,210
has to hold. As you can see in my model update Gold in Yuan and in
Rupee can not fall much lower from here ($1,209) without
triggering a sell signal. That means Gold has to stay above $1,205
(today´s low so far is $1,207). So should we get a bounce from
here Gold has to quickly regain $1,230 and especially $1,242 to
keep the bullish picture alive. In that case we should see $1,300
rather soon. The probability for this scenario is only 15%.
- The sideways consolidation case: Gold has
become very overbought and needs at least a breather. As long as
it stays above $1,205 and especially above $1,180 we could
see a sideways consolidation. The slow stochastic could stay
embedded in that case. The probability for this scenario is
25%.
- The bearish case: Gold is extremely overbought.
RSI and MACD are extremely overbought. Thursday and Friday´s close
have been outside the upper Bollinger Bands. The Parabolic
Sar will flip to a sell signal below $1,181. Gold stocks are
heavily overbought too. Such a first parabolic rise has always
been corrected in the past! GDX & Co. usually have retraced 55%
of their sharp advances in the past. Sentiment levels are way too
optimistic. The Kitco Gold survey has seen three weeks in a row
> 85% bulls. The general stock-market is oversold and ready for
a bounce. Silver has been kind of lagging the current move. The
Gold/Siver-Ratio has not confirmed the recent spike in precious
metals. Seasonality is not supportive anymore. We often have seen
dramatic sell-offs starting in February or March. I could
continue on and on. The probability for the
bearish scenario is at least 60% and I expect Gold to fall
down all the way back to its 50MA because jumping above the
200MA for the first time since many months usually forces prices
to correct at least back to the 200MA more likely down to the
50MA.
Conclusion: Gold
mostly likely will start a severe pullback towards $1,130 rather soon.
But overall the picture has improved and I expect we don't see prices
below $1,100 anymore.
Action to take:
Nothing. Stay at the sidelines but plan to buy with both hands once
Gold is pulling back towards its 200MA ($1,130) and especially towards
its 50MA ($1,105).
Only experienced traders could sell Gold short into any intraday spike
towards $1,228 - $1,241 with a tight stopp at $1,255 and a profit
target at $1,130.
Investors should continue to buy with both hands if Gold moves below
$1,130 again until you have at least 10% of your net-worth in physical
Gold and Silver.
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Portfolio:
- We bought Bitcoin at $372.
Stopp at $290. Profit target $800. Plan to hold for
a couple of months.
- Buy Gold at $1.130 with a stopp at $1.100.
Mostly likely we will have to wait until march for this trade to
become possible.
- Buy GDX (Market Vectors Gold Miners ETF) at and below $15.45
with a stopp at $14.00
- Buy GDXJ (Market Vector Junior Gold Miners ETF) at and below $21.15
with a stopp at $19.00
Watchlist:
- DRD Gold (DRD)
- Endeavour Silver Corp. (EDR.TO)
- McEwen Mining (MUX.TO)
- Mag Silver Corp. (MAG.TO)
- United States Oil Fund (USO)
- Agriculture ETF (DBA)
Track-Record:
- We got stopped out of our gold
short position on January 4th at $1,083 for an outstanding
gain of $97/contract or 8.2% (=8.08R).
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Long-term personal beliefs (my bias)
- Officially Gold is still in a bear market
but the big picture has massively improved and the lows are
very likely in. If Gold can take out $1,307 we finally have a new
series of higher highs. If this bear is over a new
bull-market should push Gold towards $1,500 within 1-3 years.
- Long-term price target DowJones/Gold-Ratio
remains around 1:1.
- Long-term price target Gold/Silver-Ratio
remains around 10:1 (for every ounce of gold there are 9
ounces of silver mined, historically the ratio was at 15:1 during
the roman empire).
- Long-term price target for
Gold remains at US$5,000 to US$8,900 per ounce
within the next 5-10 years (depending on how much money will
be printed..).
- Fundamentally, as soon as the current bear
market is over Gold should start the final 3rd phase of this
long-term secular bull market. 1st stage saw the miners
closing their hedge books, the 2nd stage
continuously presented us news about institutions and central
banks buying or repatriating gold. The coming 3rd and finally
parabolic stage will end in the distribution to small
inexperienced new traders & investors who will be subject
to blind greed and frenzied panic.
- Bitcoin could become the "new money"
for the digital 21st century. It is free market money but surely
politicians and central bankers will thrive to regulate it soon.
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Disclaimer &
Limitation of Liability
The above represents the
opinion and analysis of Mr Florian Grummes, based on data available to
him, at the time of writing. Mr. Grummes's opinions are his own and are
not a recommendation or an offer to buy or sell securities. Mr. Grummes
is an independent analyst who receives no compensation of any kind from
any groups, individuals or corporations mentioned in the Midas Touch.
As trading and investing in any financial markets may involve serious
risk of loss, Mr. Grummes recommends that you consult with a qualified
investment advisor, one licensed by appropriate regulatory agencies in
your legal jurisdiction and do your own due diligence and research when
making any kind of a transaction with financial
ramifications. Although a qualified and experienced stock market
analyst, Florian Grummes is not a Registered Securities Advisor.
Therefore Mr. Grummes's opinions on the market and stocks can only be
construed as a solicitation to buy and sell securities when they are
subject to the prior approval and endorsement of a Registered
Securities Advisor operating in accordance with the appropriate
regulations in your area of jurisdiction. The passing on and
reproduction of this report is only legal with a written permission of
the author. This report is free of charge. You can sign up here: http://eepurl.com/pOKDb
Hinweis gemäß § 34 WpHG (Deutschland):
Mitarbeiter
und Redakteure des Midas Touch Gold Newsletter halten folgende in
dieser Ausgabe besprochenen Wertpapiere: physisches Gold und Silber,
sowie Gold-Terminkontrakte.
Imprint & Legal
Disclosure
Anbieterkennzeichnung gemäß § 6 Teledienstgesetz (TDG)/Impressum bzw.
Informationen gem § 5 ECG, §14UGB, §24Mediengesetz
Herausgeber und verantwortlich im Sinne des Presserechts / inhaltlich
Verantwortlicher gemäß §6 MDStV
Florian Grummes
Hohenzollernstrasse 36
80801 München
Germany
E-Mail: info@goldnewsletter.de
Website: www.goldnewsletter.de
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