Saturday 23 November 2013
However important underlying fundamentals are, in terms of supply v
demand, they have been and continue to be of little to no use in
determining when reality will reenter the market. When that happens,
price will adjust and reflect the true picture of gold and silver's record
All that matters for now is the political situation involving the
moneychangers and their puppet government regimes giving them
cover during the end game of their world-wide theft. Just last
Thursday, we saw once again another "smash-down" in gold futures.
At one of the best possible times to assure liquidity and excellent
execution, 1,500 contracts were sold around 5:30 a.m., CST. Who
needs to worry about getting good fills when the only objective is to
intentionally move the market lower?
In the past few months, we have acknowledged leaning to any price
turn taking a year, or more, rather than sooner, and market activity
continues to bear that out. No matter what the latest "news"
development is for PMs that paints a rosy picture, those in the
fundamentalist camp are looking through rose-colored glasses to
expect change in the near future. The charts continue to tell a more
accurate story that belie all known fundamentals, and the charts
shown here depict a market in decline with no apparent end in sight.
The month is not yet over, and anything can happen before the
30th. A monthly chart is presented to show how the last three
months have had overlapping bars. This means there is a greater
battle between buyers and sellers at a level where sellers should
be in total control.
Contrast the last three bars with the two preceding, and the other
two rally bars show less overlap, indicating greater EUM, [Ease of
Upward Movement]. The ranges of the two rally bars are also larger
than the last three decline bars which supports the conclusions made.
It takes more time and greater effort to turn a monthly trend than a
weekly or a daily one. While there is no evidence of a turn in trend,
the fact that price is hugging the upper down channel line is more
positive. In a down market, one would expect to see price hugging
the lower channel line.
The weekly shows a slightly different picture with price nearer the
lower channel line. We can infer price is closer to a potential support
area, and volume increased in the process. The significance of the
increase in volume is addressed on the daily chart, and again on the
silver weekly/daily charts.
The daily is a more complicated read, yet revealing about that 1,500
contract sale, seen on the third bar from the end with a sharp volume
increase. One would expect a big "win" for the bears, with all that
unopposed selling, yet the location of the close, mid-range the bar,
tells us buyers were equally present, keeping price from closing lower.
It is the nest two trading days that make the read more complicated.
Thursday, 2nd bar from the end, only went marginally lower than
Wednesday's low and closed higher than the opening. Volume was
much higher than average, of late, so buyers were again present,
keeping price from extending lower. Friday's activity is the coin toss.
After two days of showing some presence, buyers could not take
advantage and rally price higher. At the same time, sellers could not
take advantage of the trend momentum and press price lower. This
makes Friday an inside day, and the range was small. From small
ranges, a form of market balance, we can expect imbalance to follow.
Note the small bar, 4th from the end. It led to a wide-range imbalance sell-off, next day
The advantage of reading developing market activity, as we are doing, is you do not have to know in advance in which direction price will
move. Instead, we assess the situation and prepare accordingly,
following the market is it moves directionally.
This analysis is all about the paper futures market, and there is no
reason to be on the long side. As to the physical, continued buying is
always recommended, especially at these low levels. The reason for
buying is to own and hold the physical in opposition to the central
banker's worthless fiat issue, as the most effective means of
preservation/protection of one's capital.
Monthly silver is holding better than gold by virtue of the last three
bars contained in the range of the 4th bar. Gold's 4th bar has already
been exceeded, downside. The message is one of effort v result. The
4th bar shows EUM, and the next three down bars are labored, by
Price is staying closer to the upper channel line, [resistance], and not
reacting away from it. Plus, all the activity is occurring at an Axis line,
a line that acts as support in one area, then becomes resistance, or
vice versa, as here.
The trend has not ended, but it is showing potential for change as
much for continuation.
Volume is the market's energy indicator. The greater the volume,
especially at an area of support, [and resistance, as well], the greater
one needs to pay attention. It is "smart money" that creates volume
and moves markets. It is the public that responds, almost always at
the wrong time, [selling lows, buying highs].
If smart money wants to move a market lower, it sells, [creating
greater volume] at higher price levels, in anticipation of buying in at
lower levels. Look at the high volume low in June. Weak hands were
selling, sell stops being triggered, while smart money was on the
other side, buying. Then note the high volume at the swing high at
the end of August, the reverse effect.
Will the same hold true for this past week? We do not know. Volume
was not as great, but we do not need to know, in advance. If a swing low develops, there will be evidence of one on the lower time frames
that may afford a low-risk entry. That, in turn, depends on ones'
trading style. The point is to see how it is the market that provides
the most reliable information.
The daily chart appears as the weakest in position of the three time
frames. It is closer to a potential turnaround, or ready to head for
The increase in volume on Wednesday, and slightly higher on Thursday tell of a potential story as the daily gold chart. It is always best to let the market show its hand, and then follow. Examples of that were
given on the weekly chart with the June low and August high. These
signs work on all time frames.
Buyers, or Stackers, should continue unabated. Those looking to trade paper futures have no reason to buy. We have not been advocates of the short side, just because we do not like the company and refuse to
be a party to their efforts.