Charts are not predictive in nature, rather they are instructive on how
to best prepare and get an edge when deciding to enter into a
position, [or exit one]. It is of the utmost importance to have a game
plan in place, beforehand, otherwise, one is relying upon factors more
emotionally driven than fact driven.

The function of reading a chart is to gain insight from the most reliable source available, the market itself. What a market does is generate
information that reflects the outcome of all source decision-makers,
from the most highly informed and experienced to the least informed
and weakest, with varying degrees of skills in between.

We know that "smart money," [a term to describe dominating forces
that move a market], is always active at high areas, distributing, and
low areas, accumulating, with occasional participation in between. They are deft at hiding their "hand," as it were. However, there are
clues they cannot always hide as they leave behind "foot prints," or
a trail to follow, if one chooses to do so. The biggest clue comes in
the form of volume.

High volume bars, especially at highs, lows, and important market
turning points are created by them as they take positions. The other
side of their trades are the public and less skilled participants. When
you see such high volumes at these turning points, it is usually a
transfer of risk from weak hands into strong hands. Rather than guess, predict, or rely upon gut feel, [emotion], it is better to follow
their lead because they ultimately are the trend setters, literally.

Clues can always be found in the charts. Last month, May went into
new high territory, but the close was mid-range the bar on a strong
volume increase. Markets have much more logic than people realize.
The increased volume is created by smart money. It is the public that reacts to it, almost always to their eventual detriment.

Applying logic, we see the market is at new highs. It is axiomatic to
state that smart money, [SM], sells highs and buys lows, so it is no
stretch to infer SM is actively selling at this current high level. The
fact that price closed mid-range tells us that sellers were meeting the
effort of buyers, sufficiently to keep the close from being higher. The public see price is breakout out, above the previous 2008 swing high,
so they "jump aboard," not wanting to miss the market going yet
higher, or so they believe.

It also worth noting that this selling activity is occurring at the
previous high, actually, just above it, making it look like a potential
breakout, [SM is big on false appearances]. Price stopped at the overbought TL, [Trend Line], as well. There is a converging of a few
important observations that raises one's level of interest.

Few market participants pay any attention to higher time frame charts,
like a monthly, but a monthly is not used for market timing, anyway.
Timing goes to the daily and intra day charts, once the monthly and
weekly provide reasons for doing so.

The KISS principle at work. Rather than focus on too many things,
there is one factor we can take from the weekly chart, and it may
prove critically important. For sure, it alerts us to a change in
behavior not seen since the bull market began in 2009. It is highly unlikely that the public, and even many smart traders, would pay
attention to this subtle change.

It is the first time that volume has increased as the market sells off
from a high area. Most often it is an indication of a transfer of risk:
strong hands taking profits and selling to weak hands, eagerly
anticipating higher prices.

Some things never change, and noting those changes can be
rewarding.

The OKR, [Outside Key Reversal] high is a shot across the bow, a huge red flag when the other noted factors are added into the mix. There
are no accidents in life, not even in the markets. Everything happens
for a reason.

The May high has a possibility of being a top. The one caveat we
personally hold is that this bull market has been Fed fiat-driven,
actively managing the market for economical and political reasons.
Economically because the Fed is keeping its fiat-house-of-cards
afloat and does not want the market to come crashing down,
exposing its fiat-Ponzi scheme.

Politically, the Obama regime does not want to world to crash the fiat Federal Reserve Note Ponzi scheme, [Federal Reserve Notes are issued by the Fed and incorrectly called "dollars."], and force Americans to
realize the lies and deceptions since the Federal Reserve Act was
introduced in December 1913, oddly enough, 2 days before Christmas
when most of Congress was home on holiday. This is another story,
but more important than 99% of American can fathom. It is what is
impacting the markets, today.

The two strong reversals off important support is the market's way of letting us know that buyers are defending support. Will they succeed
is the all-important question? The last rally attempt failed as a retest of the May OKR high. Will this resistance hold, for it is an important
piece of information?

We started off saying charts are informative, not predictive. We do
not have to know in advance what this chart, and the others, are
saying. For now, we are seeing a flurry of red flags to be defensive in participating. This daily chart is telling us to sell out longs or at least
place close stops to protect existing profits. For any positions with
losses, this is a huge warning to take them now before they become
larger. For obvious weak stocks, taking a short position should be
considered, always depending upon one's rules and market objectives,
profit being the ultimate one.

Wednesday's sell off on increased volume was a strong warning, [3rd
bar from the end.] Thursday's rally, [next bar], erased the downside
effort of the previous day, but it failed to elicit upside buying, and it
stopped under the failed retest.

For now, as long as the retest swing high holds, selling against it would be the order of the day, but only when there are indications to sell.
What are those indications? They would be your rules of
engagement. If the market does this, then do that, and always in that
order. It is how to stay in sync with a trending market, in whatever
time frame chosen.

The tech-heavy NASDAQ is showing a little bit weaker, another red
flag. You can see how the trend is no longer up, once a lower low
occurred after the most recent lower high, as evidenced by the line
connecting the swing highs and lows.

The rally attempt on Thursday did not erase the previous down day,
like it did in the S&P, and each bar since the failed swing high, [not
marked, but 5 bars ago], has been a lower high and lower low.

What the daily charts are telling us about the market and the higher
time frames is that the potential for an end to this bull run is
increasing. It has not been confirmed on the higher time frames, but
the daily is serving ample warning for anyone willing to observe.

There are no Black Swans in the market, just people unaware of being
unaware.

Opinion: noun 1. A belief or judgment that rests on grounds insufficient to produce complete certainty.

That pretty much sums up what has been proposed and "re-proposed"
as to the lofty heights that both gold and silver will/may/should
attain. For many, the anticipated higher prices should have already
been attained. In fact, over the past several months, many
opinions have been "re-proposed" as often as central bankers have
re-hypothecated their gold holdings. With all the known information:
strong demand,[for the physical], inability to deliver the contracted
physical, etc, gold and silver remain at recent lows. Hence, the
"value" of opinions.

While opinions can never be asserted with "complete certainty," there
is any absolute certainty about them: they will never go away. Who does not have one? A brief editorial on the above follows, followed by
the charts.

[Some say their eyes glaze over when confronted with charts.
However, there is a high degree of logic within them, so for those with glazed-eye tendencies, maybe the appeal to your logic will help,
considerably, when reading our comments on/about them.]

We look for certainty in the charts, for they are absolute and the final
word at the end of day, week, month, etc. There can be no dispute
over a bar's high, low and close, plus the volume, for whatever the
time period under consideration. There can be differences of opinion
over their interpretation, but establishing a fixed set of parameters can mitigate most any potential dispute.

Little can be added to the ongoing developments, from a fundamental perspective, that has not already been painfully scrutinized and
presented. When a change does occur, it always, [or almost always,
to stave off picky detractors] shows up in the charts in some form of
a change in price/volume behavior.

In defense of charts, and for clarity of purpose, they present nothing
more than up to the moment past tense facts in the form of price and
volume. They are not predictive in value, contrary to many
misconceptions, but they can be helpful to read the market's intent.
When one can get a fix on the intent, what is then required is
confirmation in order to then act upon the developing information.

If one forms an opinion, based upon a reading of a chart's developing
market activity, the opinion can be proven wrong, with the blame
being assessed against the "faulty" chart, surely not one's opinion.
Alternatively, if one makes a reasoned determination about a market's
intent and then waits for confirmation to validate the intent, the odds
of being successful increase dramatically.

For many who played the futures market, expecting to score big time
on the anticipated sharp increase in gold/silver prices, the losses have
been huge over the past 20 months. Opinions can be costly. However, if one had waited for confirmation that prices were in a clear up trend,
as opposed the protracted trading range and now down trend, losses
would not have occurred or would have been relatively smaller.

Without rules for engaging the markets, opinions do not matter, and
blaming charts for the wrong reasons is a refusal to accept
responsibility for not using confirming rules. No one can escape from
forming an opinion. The difference comes in how it is executed in the
marketplace. An "unconfirmed" opinion can be dangerous. Even a
confirmed one can still prove wrong, but the circumstances are totally different. To the charts.

We can assert the trend is down because of lower lows and lower
highs. June is now just half-way through the month, so not much
credence can be placed on the abbreviated information. What can
be seen, at this point, is a very small range, so far, following a
small range in May that closed poorly.

What we know for certain is that the downtrend has not yet changed,
so lower prices can be expected. Whether lower prices develop
cannot be known, but it would be a safe bet to not buy into a
declining market. We may hold an opinion that gold will ultimately be
considerably higher in value, but there is no confirmation that price has begun to rally.

We have repeatedly advocated buying, and personally holding physical
gold, but for a different stated purpose, as a measure of insurance andthe potential for creating wealth, based upon past history.

We have stated that wide range bars with closes in the middle tend to contain prices for some time, moving forward. That is an assessment
based upon fact from proven market behavior. [See Markets Provide
Us The Best Information, click on http://bit.ly/18pk8yE, first 3 gold
charts, as examples].

There is insufficient market activity from which to draw a conclusion,
at this date. There will be some kind of developing market activity
that will alert us to a potential change, and even that will have to be
confirmed by subsequent market behavior.

Can this be stopping activity from which price will turn around, or is it a temporary resting area before price resumes the trend lower? We do not know. In fact, no one knows. What we do know is that it does
not matter. All we, or anyone, need do is wait for the market to
confirm its [advertised] intent, and then follow the market. Too
many try to lead the market, based on [ego] opinion[s].

The daily confirms the weekly and monthly, at least in that the[paper]
futures market is not going up. There we see the power of a wide
range bar containing subsequent price activity, and the last 18 TDs,
[Trading Days] show how weak the rally attempts have been.

The chart "story" remains the same: the price of gold is not going up,
for now, no matter whose "opinion" you hear/read.

Silver is a bit more interesting, as we suggested last week. Past swing highs can often act as support, and how price reacts to the potential
support factor will determine if the high will hold. Right now, the April
2008 swing high has slowed, if not stopped, the decline.

Confirmation of the "opinion" comes from the position of the close 3
months [bars] ago. It was in the middle of the range, telling us buyers
were present at the lows, [an example of the logic mentioned earlier],
and the following 2 bars have also held. In addition, we are seeing a
clustering of closes. What that means is a balance between the
forces of supply and demand. From balance comes imbalance, so at
some point, we can expect directional movement, up or down, from
this area.

The obvious question is posed on the chart: "Where are the sellers?"

Silver did not hold the wide range down bar in April, as gold did, but in
the process of breaking and going lower, it has not gone much lower.
The momentum has stopped, and we see that in how some of the bars have formed, [based on factual observations]. More developing price and volume activity is needed to determine the market's intent. For
sure, the paper market is not headed higher, at this juncture.

We said silver was more interesting. The two failed probe lower bars
are important pieces of information. They are a demonstrated form of buyers supporting the market. Will it hold is the question? [Will that
observation be confirmed?]

Additional information helped to give added confirmation to what we
posed last week, will it hold? The past 5 trading days say yes, at
least for now. That could change next week, with additional
information, but next week has not yet happened, so one can only
base a decision on what is.

In the previous week and now with last week added, we are seeing a
slowing of the downward momentum, [remember the monthly swing
high potential support]. Is it enough to stop the decline? It is a
question many would like to know, but not important to know, because the market will provide us with confirming market behavior that will
then put us in a position to possibly take a position.

If this happens, Then do that. Just like not putting the cart before
the horse, one does not "do that" before the If.

What we know for certain, based upon facts presented in the charts
as derived from the market, the best source of all, is not to be buying
the paper futures market. We covered some of this approach in a
different market, the S&P, if anyone wants to learn/read more on the
topic of learning to be more successful in trading markets. [See S & P
- Trend, Facts, Rules = Successful Trading, http://bit.ly/19efpTs].

Markets provide an opportunity to grow one's capital, and create a
return on capital, in addition to a return of capital, its preservation
being the benchmark to ensure it remains fully intact. Is there a
magical formula for success in the markets? No. However, there
is a realistic approach to increase the odds of consistent returns
while keeping exposure to risk at an acceptable level.

The S&P used to be our mainstay market concentration, but we
stepped away from that market when central planners took over,
starting with POMO, [Permanent Open Market Operations], conducted
by the privately owned Federal Reserve. With fiat being pumped
into the markets on an ongoing basis, it was a fatal blow to free
market operations, where supply and demand were the true measures
of value. Now, [then], there was only an artificial demand that took
quarrel with any attempts by supply to alter the Fed's upward
trajectory.

These circumstances were unacceptable, and so we withdrew from
analyzing the equity markets, rightly or wrongly, but right for us.
There may be change coming, and if/when it does, 2008 will likely be
relived, again, possibly worse, given how the buy side market has
become so distorted. It is now back to our game plan, and greater
attention will be given to reading developing market activity, which is what we do.

Are successful results possible? Absolutely! There are never any
guarantees in obtaining profitable results, but we know for certain that guidelines exist for gaining an edge in all markets: Trend, Facts, and
Rules.

The trend is the most important first piece of knowledge one can have in order to become profitable. Trends persist in the market, and they
often go much farther than many think likely. If you want to be
successful, you must always trade in the direction of the trend, in
whatever time frame chosen. Plus, one must also be mindful of the
next higher time frame to not run into a larger, potentially opposing
force. Just this one observation, alone, can enhance one's odds for
success.

Facts. They are incontrovertible, conclusive, not subject to dispute.
Facts are in direct opposition to opinions, themselves subject to beliefs or judgment, both of which fall short of certainty. We want as much
certainty in decision-making as possible. Facts provide that.

There are ways of determining the trend based on facts. There are
ways of determining which force, supply or demand, is in control,
based on facts. When you take the trend and combine it with factual
market observations, it results in creating an edge for every market
decision that can lead to stock market success. There is one more
element.

Rules, the missing ingredient for a majority of market participants.
What undercuts successful trading/investing more than anything else? Having an opinion. We all have them, but they cannot be the compass upon which decision-making is based. Why not? Opinions are
subjective, and almost always charged with emotion, ego, both of
which are destabilizing factors.

Why do so many people lose so much money? They have an opinion about what a market will/should do. "This market can't go much
higher." But it does. [Trend]. "The market is overdue for a
correction." It may be, but it does not correct. [Trend]. Once
positioned in a market, emotions take over. "I can't take a loss. The
market will bounce back." [Going against the trend and ignoring the
facts.] You get the idea.

Rule One: Trade with the trend. Rule two: Buy strength, not
weakness. Rule three: Buy at support, once proven it will hold. Etc,
etc, When you have a fixed set of rules that determine when to
take a position within an established trend, the risk factors have been
greatly reduced, and the odds for success have been enhanced.
Neither is guaranteed, but the odds of probability are now tilted in
your favor.

With this brief, but comprehensive groundwork, we apply it to better
understanding the charts and moving forward.

The first fact to determine for the weekly S&P is the trend, and
clearly, it is up. You can see how the lighter line connects the swing
highs and lows. The highs are higher and the lows are higher, the
essence of a trend. [It does not matter how one defines a trend, as
long as the guidelines for its determination are used consistently.]

It is also apparent that price closed higher for the week, and it did so
on increased volume, both facts, regardless of what opinion someone
may have. What does not show is how the weekly bar looked so
weak, going into Thursday, and it appeared that the market would
continue to sell off. However, the time frame is weekly, and we have to wait for the end of the week close in order to make a valid
assessment. That would be a basic rule for weekly.

If one made a determination to take action, based upon apparent
weakness on lower prices starting Thursday morning, that action would have been based upon a judgment made at the time, [and proven
wrong]. Taking any action at that point would have meant it was
based on opinion and a breaking of rules, or alternatively, not even
having a set of rules in place, which is just as bad.

This is not to belabor the point, rather to drive home the importance of knowing the trend and adhering to rules, based upon market facts. The time frame is weekly, so no decision can be made until the close
of the week is known, another fact. Despite the apparent drop in
price, almost 50 points, starting out Thursday morning, the Trend,
reasserted itself, and by day's end, price rallied the most in a single
day from low to high close in many months.

The weekly chart shows a strong, trending market. Higher time frames are stronger than lower time frames. The daily chart had been selling
off, longer in time and greater in price since the November 2012 lows.
The sell-off was approaching a swing high support from April, and the
bottom of the down sloping demand line.

The fact that price reversed and rallied so strongly from a known
[potential] support area, demonstrated how and why knowing the
trend is so important in order to react to the developing market
activity and not be swayed by emotions. This is how to trade in the
markets: knowing the trend, using facts gathered from the market,
and having a set of rules for engagement.

What to do now?

Was the May high the high for this move? The trend says no. More
evidence of a change is needed to make an informed decision. There
are two likely scenarios. 1: The high is in and this is a retest of the
high that will fail, leaving price to go lower. 2. This was just a natural
correction within a bull market, and price will make higher highs,
keeping the trend intact.

With a set of rules, the decision is an easy one. For now, we have to
go with the trend is up and should be heeded scenario, until proven
otherwise. We can also add the fact that the last swing low, from
Thursday, [should it hold], left bullish spacing. The last swing low is
above the last swing high, as the two horizontal lines show.

A weak retest of the 1596 low will confirm that the daily trend remains
up. [The weekly is not close to turning, at this point.] What is a
weak retest? Smaller range bars and lower volume when price
declines, indicating sellers are not in control, as one example. Should
that happen, it can set up another buy opportunity, next week.

The NASDAQ shows greater spacing between last Thursday's low and
the mid-April swing high. It is testing 50% of the previous range, a
general guide, indicating overall strength. There is a slight conflict
between the stronger volume on the sell-off from the May high,
compared to the lesser volume from last week's rally. The possible
offset to that negative is the fact that price rallied so easily from the low. Where were the sellers to stop the buyers?

Bottom line is, in both markets the trend remains up, and a solid set of rules to determine when to buy within an uptrend will best serve one's
objective of consistently profitable trading success.

It never gets tiring to say how the market is the most reliable
source of information in the form of developing market activity.
Prior to the sharp sell off in mid-April, the prevailing belief was that
central bankers had their golden teat caught in a demand ringer
from which there was no escape. Never underestimate the[devious] ability of those in power.

No one expected Cyprus to happen, and no one expected the April
sell-off to happen, at least for the reasons it did, which was
massive [illegal] naked short-selling by JPM, sanctioned by the
Comex and the Obama administration, who has yet to uncover any
illegal doings by those who control Wall Street, [along with his
administration.]

Regardless of the how gold and silver prices broke down, they did,
and the market was telling anyone who paid attention that the odds favored lower prices. We certainly did not heed the higher
probability, as was true of most of the PM community. [PM =
Precious Metals].

Lesson to be learned. Never go against the market. It does not
matter what your beliefs are, for beliefs are not reality, just an
opinion about reality. It does not matter what the fundamentals
are. All the fundamentalists and "value" investors had their world
of beliefs turned upside down when the stock market crashed in
2007-2008. The signs of change were still there, but "unseen" in
the light of day.

Where? In the charts, as they depicted developing market activity.
The charts are neutral. When one begins to apply exogenous
"technical" tools and superimposes them onto a chart, in an
endeavor to "interpret" what any market is "saying," the technical
harness may not always fit. Then a chart is no longer neutral.

What is a "technical harness?" RSI, Moving Averages, Bollinger
Bands, MACD, Elliott Wave, et al, you name it. Many have their
favorites and swear by them. They do not often swear at them
when the tools fail, and most of them fail more often than not.
You never see any such "tools" on our charts, for a reason. As a
disclaimer, we do not pretend to be the best interpreter for reading
developing market activity, but it is all we do.

Technical tools are all past-tense derived and imposed upon present tense market activity. Past behavior may be the best predictor for
future behavior, [a Dr Phil-ism], but how any market performed in
the past is not a guarantee of how it will perform in the future. One
bull market is never the same as a previous bull market because the
participants are not the same, so the behavior of the newer players
will not be the same. Price may trend up, as it did in a previous bull market, but never in the same way. History bears that out.

What is the most important thing any one can know about a
market? [At least from our view, based on market wisdom from past experts]. The TREND! Once you know if the trend is up, you then
need a game plan on how to participate from the buy side. When
the trend is down, the plan is how to participate from the short
side. If there is no trend, then the odds are not favorable for either game plan. Plan accordingly.

What can be said for both gold and silver is their price trends are
down, whether viewed from the Potemkin COMEX, or whether
viewed from the known strong demand from any part of the world.

Is there anyone unaware of these two opposing forces? For right
now, the world of make-believe is winning. What is right or wrong
does not matter. What relationship supply has to demand does not
matter. Whether central banks can make delivery of physical does
not matter.

No matter what the disdain is that PM holders, and the rest of the
world, have for the Potemkin paper exchanges; no matter what the
demand is world-wide, what the premium is over spot; no matter
how empty central bank [gold] cupboards are, what is the one
source to which everyone remains riveted? The Paper Market!
What else can be said?

Here is what the paper charts are saying:

First of all, homage is paid to the trend, still down, for both gold and silver. We have been unabashed advocates for buying the physical, at any price, for the past several months. We have not been
advocates for buying futures against the trend, with a few [many
profitable] trades on the long-side off support, and some trades
were losers.

Ample explanation has been given to the staying power of a high
volume, wide range bar and a close in the middle, [See Markets
Provide Us The Best Information, click on http://bit.ly/18pk8yE, first chart and two paragraphs above]. Price continues within the bar's
established range, and the past three week's closes have been
within a small range. The market is saying there is a balance
between buyers and sellers, [at an area where sellers should be
dominant]. From balance comes imbalance, and we can expect
price to move directionally, once the imbalance is triggered.
Probability favors the downside.

Probability is not certainty.

The daily chart is an excellent example of how developing market
activity reveals the most likely market direction. By knowing that
the trend is down, it puts how the market has been unfolding into
a cohesive process that typifies weak markets.

Even though the trend is down, we do not know how price will react to the potential support area at 1340. We know the signs to look
for, wide ranges down, increased volume, if support is to fail, but
until price develops, we cannot make any determination, except to
be prepared for the how of then developing market activity.

Silver looks weak, plain and simple. Note the inability for a any kind
of market rally over the past seven weeks.

Even though the weekly looks weak, one should not take anything
for granted. The daily chart is more interesting, and it may be the
best barometer for what to expect, moving forward.

You can see the difference in the price distance from the first box
of clustered closes, on the left, and the next one, in the middle.
There is very little downside from the last box, relative to the
distance between the first two. Are we getting a market clue that
sellers are running out of effort?

Developing market activity my be the truest and best source for
reading a market's intent, but sometimes the understanding is only
after some indication of confirmation. This is why we say to follow
the market signals and not try to "predict." No one can accurately
tell what will happen before it does. The way to follow the market's infallible lead to have a set of rules of engagement.

"If, Then." IF this happens, THEN do that, but only in that order.

The close on 15 April's sell-off was high-end on the bar, telling us
that buyers not only met the effort of sellers but overwhelmed them to get such a strong close. Under these market conditions, the
buyers were "Smart Money," not the public. We see more evidence
of the same kind of support at 1, in mid-May.

Note the response for the next 12 trading days. Price stayed in a
tight range. Where were the sellers? Why didn't they show up to
press price lower when it was to their advantage? Did they finally
show up on Friday with a sell-off on increased volume?

Compare volumes 1 and 2 and the difference in range size. 2 has
strong volume but the bar range is half the size of 1. These are
market messages. Sometimes they are hard to comprehend, at
least with certainty. For now, the developing market activity is
raising more questions which are not necessarily supportive of a
market in decline.

How silver reacts to the potential support bars from 1 and 15 April
will give important clues on what to expect as to which force
remains in control. Right now, it is the force of supply, however
suspect it may be. Confirmation is required, either way.

We would be remiss to not say, Buy The Physical!

The market is undergoing a correction, but it is enough to call it a
top? No. More evidence is required before saying that the Fed has
thrown in the towel. If it takes more fiat to keep prices inflated, it will be provided. The alternative would be too painful for investors, [not
of concern for the Fed], and too embarrassing to admit to the fraud of QE-Infinity to keep the bubble intact.

The stock markets are the antithesis to gold and silver. The latter
have an insatiable demand, as price has declined. The former is void
of demand as price has risen to all time highs. The Fed has driven
what participants there are to the markets because there are no viable "earning alternatives" to match "rising" stocks. The Fed has chosen to
destroy retirees and anyone else seeking gains in interest bearing
instruments as a vehicle for income in its efforts to keep the market
[lie] alive.

Just as there has been demonstrated manipulation on the Precious
Metals, via naked short selling that has no intent of ever delivering
what was sold, [anyone else would go to jail for the practice], the
same holds true for the stock market. So how valid are the charts?
They are all we have, so they must be judged based on what they show. At some point, the reality of [lack of] supply and [false]
demand will prevail. All anyone can do is read developing market
activity, for it tells the most accurate story of who is winning the
battle, and ultimately, the war

Here is what the charts say...

The starting point is to give recognition to the most important element in reading and understanding any chart, in any time frame, and that is
the trend. Trends have a proven tendency to persist, and when a
trend stops, it takes time to turn it around. There are always signs to
act as a guide.

Since the 2009 low, price has been in a steady up trend, with a few
corrections along the way. Corrections are a natural and healthy
reaction within any trend. What we see for the month of May, [new
highs], is a mid-range close. The market's message from that kind
of close tells us that sellers more than met the efforts of buyers at the upper part of the highs. The current unfolding decline ran out of
month before finishing, so we must deal with what is, as justdescribed, for it could have been worse.

Yes, yes...woulda, coulda, shoulda; just stick with the facts as they
are. The trend is up, and there is not enough evidence to say a
change has occurred, or even may occur. The higher monthly time
frame is more prevailing in effect than lower time frames, and it
always makes sense to keep this in mind.

The weekly time frame supports the trend of the monthly, up, and
shows no sign of any change, at least none that would warrant going
against it, at present. The last two swing lows show how long they
took to correct, and how many points in each decline, before
resuming the up trend. Volume has increased over the last two weeks
as price declined, and using close stops, or simply taking profits, in
individual stocksmakes sense, but the Fed Bubble has not yet burst,
based on the current chart structure.

The daily is the most sensitive to change of the three time frames
covered. Even here, one has to respect past activity, like the April
correction, and the market's ability to recover and rally to new highs.

We can say that the trend is still up overall, but presently trading
sideways. More price development is required in order to determine
the character of the present correction. If this market is turning, and
existing evidence does not support that conclusion, yet, we will be
able to assess the quality of the next rally, as it unfolds, and make a
more informed decision. We stress "as it unfolds" because there is no
reason to "predict" or get ahead of the market until it tells us, beyond
doubt, its intent.

If volume picks up on the next rally and closes are strong, overall, then we can expect higher price levels. If the developing price activity is
weak, as in lower volume on rallies, poor closes, increased volume and
greater ease of movement on declines, then we put ourselves in a
position to be in harmony with the current trend development.

The track record of those who have been "predicting" a top and
shorting the market while in an uptrend is very poor, so picking tops
is not a profitable endeavor. Let the market reveal its message, and
then follow along.

For right now, the message is one of caution, for both the bulls and
the bears.

The month of May is now on the books. The question is, can anything new be learned from them? Maybe not, but you would have to see
them to understand why not. One qualifier to be added is, from our
perspective, charts include all the known factors from those who have
made a market decision. The basis for the decision-making may be
fundamental, [including supply and demand], technical, [including
technical supply and demand factors], a combination of the two, gut-
trading decisions that may not reflect either and just be ego-driven,
and finally, the uniformed, who believe otherwise but trade just the
same.

We make no effort to dazzle anyone with fundamentals. There are
those who are known to be expert in the field of precious metals who
provide detailed analysis and reason for asserting why gold and silver
should be trading at considerably higher levels. Their facts and figures are most impressive, but the current prices of gold and silver present a quarrel with their fundamental information. Our sentiments are with
them, but our hearts remain with the charts.

Why? The market is the final arbiter of all available information, again,
based upon the final decisions of the participants. There are many
who argue that the price of both gold and silver are being manipulated, [and we are among them, actually standing in the front line of the
collective accusers]. A few would argue that paper gold and silver
prices are a sham and emanate from trading exchanges that are
equally a sham. That may be truer than not, but those who take that
position provide no meaningful alternative, as a guide.

We are keenly aware of the unprecedented demand for physical gold and silver, as it is certainly one side of the all-controlling supply and demand equation. Despite the world-wide unprecedented demand
for the physical, it is the supply part of the equation that is being
ignored, even if the supply element is being administered in fraud, as many believe to be true. Based on where the prices for gold and silver are trading, one has to accept and deal with what is, and one
does not have to know what the definition of is is, either.

Let us assume that the price for gold and silver is being rigged and
does not reflect a "true" relationship between the forces of supply and
demand. Then one has to recognize and at least acknowledge that
whatever is driving supply to keep PM prices low, it is succeeding.
This is a more important fact of which to be aware until demonstrated
otherwise. As a reader of charts, we must accept what they show,
for in the end, that is all that is showing.

It may well be that central banks have no gold for delivery, and
defaults are being called something else to provide cover for the lack
of available PMs, and all deliveries are to be settled by fiat only. Thereis one thing for certain, and the charts reflect this, regardless of what
anyone believes to be true, or not, the truth is neither gold nor silver
can mount any sustainable rally. What does that say for all the
"dazzling" fundamentals and demand?

Is there a difference between gold and silver prices, as reflected on
the exchanges, and the price for gold and the price for silver? Yes.
While we fall into the camp who recommend buying either physical gold or physical silver, or both, [and we say at any price], we also have to
pay heed to the controlling forces of supply, for that is the dominating
side right now, from a factual perspective.

To put it another way, expressed from market wisdom, "Don't fight the
tape."

We hold that the higher time frame charts are more controlling than
lower time frames. The month of May had a smaller range on increased volume. What this says is that the buyers were meeting the effort of
the sellers, preventing the range from extending lower. The close,
about mid-range the month, confirms this observation. That would be the qualified good news.

The bad news is all of the activity occurred under the close for April.
Buyers did not have enough power to rally price higher. It takes time
to stop a trend. So far, there is not enough evidence that the down
trend has stopped.

The breaking of the support channel and longer term support line
show just how much overhead resistance there is before gold can turn
around. The weak response from last week's feeble rally could be
problematic. Volume, [effort], increased significantly. For all that
volume, last week's close was not much higher. Where was the
payoff for the effort? There was none. Weak rallies almost always
lead to lower prices as price moves lower to uncover demand.

We explained the significance of a wide range bar[s] as it relates to
price, moving forward. [See Markets Provide Us The Best Information,
http://bit.ly/18pk8yE, 1st paragraph after 1st chart]. While price has
not traded lower after the semi-selling climax on 15 April, we would
have expected a stronger rally than has developed.

The trading range can hold for many more days, even weeks, but the
trading range from which price just broke was much stronger than the one now developing. The odds of it holding are small, for now. While charts are leaning lower, we add the following:

The reason[s] for buying physical gold are opposed to current charts,
and actually opposed to all central banks and government interests,
but we adamantly maintain the interests of the central bankers and
corporate government are opposed to the individuals, those being
"governed." One need only look to events in Cyprus, Greece, Ireland,
a crippled Spain and Italy to understand why having physical gold
offers the best financial remedy against those in power who have been abusing and/or misusing that power.

The power wielded by those who have it are prevailing, and those
relying upon the demand side "sentiments" are underestimating the
ability of those so willing to remain in power, at all costs, and those
costs are being borne by those not in power...the reason to buy gold.
Rather than repeat this after the silver charts, the same holds for
those buying silver.

Unlike gold, silver traded under the April low. However, what deserves attention is the how price traded lower. The range was smaller and
volume decreased. This tells us that the supply forces were
[relatively] weak, or a lack of supply. Demand was not there to
offset weaker supply, so this is not to make a case for no, or limited
downside from here.

We would expect more sideways, and generally lower trading until
there is evidence that the forces of demand can make their presence
known. Supply has proven itself. Demand has not. It does not get
any simpler, regardless of sentiments. Stick with the known facts.

The chart comments capture the weekly activity. When you look at the wide range bar down, seven weeks ago, and then gauge the
subsequent inability of silver to rally against it, you better see how
what remains lacking is strong evidence of a turnaround.

A clustering of closes indicates the forces of supply and demand are in balance. Since the April 12 and 15 sell-off lows, price has clustered,
as seen in the rectangular box. We await the breakout imbalance that naturally follows.

The headlines touting much higher gold and silver prices may attract
attention, but the attention is pandering to the sentiments of those
who want to hear news supportive of their own belief system[s]. How
has that been working out, so far?

Do not buy gold or silver because you think the price will go higher.
Buy because all fiats are being destroyed, and it takes more and more
fiat, if one chooses to hold that paper form, to buy the same ounce of
silver or gold. [That has not been the case for the past 18 months.]
Cypriots would tell you they would rather have paid much higher
prices for gold and silver than have kept their fiat powder dry waiting
for lower prices. Their remaining fiat holdings will not be able to buy
anywhere near what they can now afford. That is what one has to
consider as reality, from now on.

If anyone thinks it will not happen in the United States, or other
countries still lying in wait, it is like playing a form of Russian roulette.
The odds are in your favor, until they are not. Then you will know
what it is like to be a Cypriot bank holder. There are no Black Swans,
just people unwilling to see the warnings of darkening clouds.

We have acknowledged the eventual likelihood of much higher prices
and support the sentiment, which is why our message has been
constant: Buy either, or both, physical gold and silver, at any price,
for when the day of reckoning arrives, they may not be 1. available,
[Never underestimate what the government can/will do], or 2. only at
prices that are considerably higher. Hence, better a year early than a
day late.

At the same time, we have recognized the reality of the charts and
to not buy futures while the trends are down. It is possible that the paper market may be destroyed before any buying "opportunity"
presents itself. Paper trading becomes less and less appealing or
even relevant. Always remember, if you do not hold it, [personally],
you do not own it.

Has anything new been learned from the charts? Not much, for the
trend remains down. A lot can be learned from the fact that they are
down, relative to the reality of demand, and how that reality does not
matter, at least for now. That is a powerful message. We see it as
added reason for the constant buying of the physical.

Where? At any price.