Tuesday Update: A New Look At Gold

It's bearish, not bullish. Has the rise of Bitcoin and other so called "cryptocurrencies," taken the luster off of gold and silver as alternative safe havens and stores of value? Bitcoin has taken hit after hit and  still comes back swinging, up over 500% in the past year. Those doing the hitting seem to have the most to lose from this digital, encrypted, and exponentially accepted facilitator of global commerce. Whatever it is, it is happening and the value of precious metals may have already began a price decent from which the short side may offer timely trading opportunities well beyond shorter term cycles. Here are the charts that tell the story.

First, a 15 year big picture view, including a trading indicator (False Bar Stochastic) that has a 100% accurate timing record over this entire period. It is maybe 1-2 months of signaling a multi-year bear market targeting $600-$800 price window into an ultimate bottom:


Next, an intermediate time frame that provides an actionable price level, $1,287.50 which if broken will be our signal to get aggressively short via inverse ETF's or put options on GLD and/or a basket of gold and silver mining stocks:

Finally, a shorter-term (240 minute) chart of gold that has already turned down. Aggressive traders in our short-term service have already bought GLD Puts (albeit based on GLD's trend signals which are lagging the spot price signals). It is this chart that suggests very strongly that the intermediate term trend, as displayed in the chart above, is a matter of days, or possibly weeks, of triggering its own Sell Signal:

The Bullish Case for Gold
(1) A shooting war in North Korea or Iran. We are already mired down in shooting wars in Afghanistan and Syria, but neither of these countries have nuclear weapons. A war with the above two countries has the potential to, well, let's just say it's dire enough so that the downside potential far outweighs being stopped out on a few puts.
(2) The price weakness we are now seeing in price in the short and intermediate term is but a blip in an ongoing bull market. 
(3) Left field. Something comes out of left field that sends gold soaring. But the way trend following works, it is a very fair assumption that we will be long for that ride, although a few days or weeks late in getting long gold as per our trend analysis. 
In summary, gold has turned down on the short term and is close to turning down in the intermediate term. This could be a prelude to a multi-year bear market, or just part of a very tradable cycling market.  In either case, we are trading the trend, wherever it may take us.