My latest chart.
I am noticing more patterns in the GXY chart the more I examine it. I am thinking that for many months the large trading has been heavily influenced by algorithms using the Li price (probably the spod price) as the dominant directional input, but it is behaving a bit like an AI system that feeds off a number of inputs including various news feeds, which is why it sometimes seems to respond for short periods to major news events but resumes its overall coordination with the spod price medium term. Its starting to look to me very much like a neural network system response curve.
Computer Science is one of my formal qualifications - and specifically AI and the very early years of neural networks is where I did my early research. So I have a tendency to see the world as a complex network of pattern recognition and response programs and look for patterns. This also means that I will see patterns where perhaps non-actually exist. So it is wise to view my observations as entertainment more than anything else.
Anyway, to that end, while I think longer term GXY is a very good "buy" this is how I am currently seeing the GXY short term price behaviour. Firstly, I don't think my earlier scenario B is in play anymore, so I am reverting to only scenario A. now and have deleted Scenario B from the chart. Secondly I have noted a fan like pattern in the downtrends and added more lines - the furthest right fan line (in purple) is the next one I expect. You will note that the lines are approximating a Fibonacci sequence which suggests to me that after the next one the sequence will "flip over" and thus the price will start to recover (ie. climb), I'm thinking from Feb/Mar (maybe Apr) next year. Thirdly I've marked in with a purple line what I think the SP and RSI will do over the next month and a few days (approx 76 between Dec5-10 [leaning towards 10] and 91 Dec 31'ish (give or take a few days). If it follows this pattern it will cause a new fan line which will strengthen the view of recovery Feb+ next year, if it only reaches 85 it will stay in the downtrend for a bit longer - baring something external happening.
While I have marked in my primary expectation I have three alternatives not shown.
1. A recovery now from here (96) would require a complete rework of the patterns and might bring back Scenario B (unlikely I think).
2. A bounce of 81.5 would be a very strong bottom indicator and give a Santa rally point of about 96, and effectively start the long term rally earlier than expected. This is a possibility, but it would need something to drive it onwards. The longer it takes the price to drop the more likely a double bottom becomes, ie if we don't reach 76 by Dec 10 the double bottom becomes more likely, I think. Except if the A40 result is seen as unfavourable then the predicted bottom price is lower the longer it takes to get there. The problem here is there are two opposing ofrces at work - the Santa rally which is a 20% uplift and the down trending fan line. We kind of want it to hit the fan line as quickly as possible to be in position to catch the Santa rally.
3. Various factors that could extend or reduce the price drop timeline into the Santa Rally - the A40 issue above, failure of the US - China trade deal, some other black swan between now and the 10th Dec. After the 10th the line keeps falling below 76, before it is higher so if the price hits the line say on the 5th and turns, the rally point will be higher, but after the 10th it will be lower and after the 16th there is little time left to hitthe 20% rally point.
So here is the chart - note the purple lines are my "future" guesses:
