Friday 5 July 2013
When the markets "speak," we "listen." For all of the non-stop bullish"news" about the unprecedented demand, more for gold than
silver, and all of the talk about how useless the COMEX paper
market is, it has been the paper market that the forces of supply
and demand have been heeding. If it were otherwise, the
unprecedented demand for gold would have the price of gold higher
than the bogus paper market. Yet, that has not been the case.
When will this bear market in PMs turn around? When it does, and not a moment before. This is not some flip answer, it just happens to be
the way all bear markets end: when they do. We have seen calls for
a turnaround for several weeks now, none of which have been even
If you want to make rabbit stew, first, you have to catch the rabbit.
First, lets' see some concrete signs that a bottom is in before the
regurgitation of "Gold is going to $10,000!" starts showing up in a host
of new articles pandering for attention. It sure did not work for the previous ones.
The best way is to decide for yourself. Anyone can read a chart, [just not necessarily well], so let us go to the most reliable source, the
market, and see what the prices of gold and silver have to say about
what everyone else has been saying about them. People have been
known to exaggerate, even lie in their "opinions," but the market never does either. It just is.
The issue we have with gold is a lack of an immediately identifiable
support area. There is support, a little lower, and for that reason, we
do not see a strong message coming from gold, just yet. On the other hand, [never take anything for granted in the markets], the fact that
price is holding above obvious support is an indication of underlying
strength. IF that is the case, we still need to see some concrete sign
of stopping activity before price can turn around.
We show some potential support resting under current the price.
Silver, unlike gold, is already at an area of support. We will get to
The reminder about the importance of how a wide-range bar usually
contains future price activity is shown to keep it fresh in your mind
when you see it again in the future. If you pay attention to charts,
you will definitely see this pattern repeat over and over.
As we did these charts, in order as presented, after seeing the daily
silver chart, you can come back and revisit this one with a different
"eye" for its content. The difference between gold and silver was the
synergy in all the time frames in silver, not so for gold.
It is a great example of reality is always there to be seen, but
sometimes we fail to see it. The truth is often under the brightest
light, while people look elsewhere for a "hidden" message.
Here is silver on the monthly, already into an identifiable area of
support. We should be looking closely for some form of stopping
action, telling us price may stop going down.
Last week's bar stands out as a red flag for its price and volume. The same bar in gold was too similar to one that had already failed, so it
could not be viewed in a more important vein as this one. We give a
more detailed analysis on smart money and high volume activity on the daily chart, below. Suffice it to say that what is true on the daily is
also true for the weekly. It is just more visible and easier to explain
with more bar examples.
When you understand the explanation given on the daily, come back
and look at this one again so you increase your discerning eye more
when it may seem less is apparent.
Finally! The explanations on the chart as to why silver is sending a
message. What needs to be understood is that there is no
confirmation that a bottom is in. Before a trend can turn, it must stop going down.
No one can definitively say the trend has stopped going down, and
even when it does, then we must deal with how long it may take to
reverse. That can take many more months, or a year or two. It could turn around very quickly, but we cannot know the odds for that event, were it to occur. What we do, in the interim, is prepare! If this
happens, then do that.
It never pays to buy the first rally after a bear market ends. There is
usually a form of retesting of the lows before a market can begin to
move higher. This is the first time we have talked about specifically
preparing for a possible change in trend, at least from a pragmatic
perspective. Sentiment for a change has been long-standing, [but
of no avail.]
Keep accumulating physical gold and silver, a pragmatic stance we
have advocated during the entire market decline, but for a different
purpose. We cannot say the turnaround for gold and silver is "rabbit
stew" ready, just yet. If the end is near, there will be many more
signs. The market never lies.