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Gold’s Lockout Rally

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Hit and Run has been looking for an explosion in gold ever since we flagged a massive multi-year Cup and Handle pattern.

Actually there is a Cup and Handle within the larger Cup and Handle.

GLD looked like another failed rally was on the table after a failure in late December 2023.

We remained steadfastly bullish and we took some heat and lost a few  members because of my stance on gold.

However, GLD carved out a low roughly 90 days/degrees from the nasty spike October low when the vast majority were throwing in the towel saying gold was going into the abyss and Bitcoin was digital gold.

One of the reasons for maintaining a bullish stance was the third higher low in February:

Fast moves often play out from third higher lows.

In fact, GLD left a weekly Bottoming Tail in early February and pushed to a new closing high in late February.

In early March GLD turned its 3 Week up  Chart ON A GAP and exploded higher.

Hit and Run members began taking positions in GLD calls and AEM calls as well as long swing positions in UGL as well as adding to several other miners.

That’s where the bears were baited.

Two weeks ago on the week of March 18 GLD reversed after making a new high leaving a potentially bearish weekly Topping Tail.

In the past few years that technical setup would have sent GLD reeling.

However, last week GLD telegraphed its change in character validating the breakout:

It knifed through the prior weeks reversal leaving a bullish Reversal of a Reversal on the weekly time frame.

I call a Reversal of a Reversal a Keyser Soze.

This morning’s action shows how violent the pattern can be.

This was a conspicuous bullish event to occur at all-time highs.

Indeed GLD closed at at/near the high of the week and is up over $40 as I write Sunday night.

Drilling down to the dailies shows why we were adding to precious metals last week.

Clearly, GLD was poised to explode  in a 3rd wave following a 1, 2/ 1,2 wave structure.

And explode it did following a 2 week high level consolidation that traced out a mini Cup and Handle…a fractal of the larger Cup and Handles it was sporting prior to the early  March breakout.

In sum, 6 months ago we offered that GLD projected to the 203 region.

This is because 203 represents a 360 degree move off the key November 2003 low of 150.50.

We went on to say that clearing 203 opened the door to 232/233 which is 540 degrees or a cube-out from the 150.50 low.

GLD’s consolidation just below 203 telegraphed an explosion higher.
Rather than spiking above 203 and knifing back below it potentially leading to another downturn, GLD paused underneath 203 mustering momentum for a surge higher.

And momentum we have, with GLD closing on the Friday weekly closing basis at 205.72.

Apparently GLD knows the 203 number as it is ripping higher overnight Sunday to the consternation of bulls hoping for a pullback that backtests the breakout point.

It’s a good old fashioned lock out rally.

It was to be  expected given the amount of energy and momentum coiled after years in a Cup and Handle.

Likewise gold bears looking for another failed breakout as they’ve become accustomed to— or at least a pullback to backtest the breakout pivot at  the 192 region— are having a come to Jesus moment.

233 GLD may come as soon as the April/May time frame.

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