Silver And Gold - Marking Time. Eventual Breakout Will Follow

May 08, 2012 4:11 AM ET
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Contributor Since 2009

Michael Noonan Edge Trader Plus Michael Noonan is the driving force behind Edge Trader Plus. He has been in the futures business for 30 years, functioning primarily in an individual capacity. He was the research analyst for the largest investment banker in the South, at one time, and he managed money in the cash bond market for a $5 billion pension fund using Peter Steidlmeyer’s Market Profile. Proficient in Gann, Elliott Wave, Market Profile, etc, Mr Noonan no longer uses any of those technical procedures. Instead, his primary focus is on developing market activity, relying solely on the information generated by the market itself, such as the interaction between price and volume, and how they relate to important price levels in the market structure. He incorporates proven market principles, such as knowledge of the trend, supply and demand, along with disciplined rules for to find developing high probability trade opportunities. He can be reached by e-mail at his website:

Monday Evening 7 May 2012

The position taken in gold was liquidated profitably, half at 1655 andthe remainder stopped out for aminor profit. [See Gold - Buy Relative Strength, last chart, click on]. Prior to being stopped out, a position was taken in silver, on the same break, but it was stopped out at a small loss. What appeared to be a potential corrective retest never turned into a rally. Mention is made because it shows how difficult markets can be, even when exercising caution on entry.

The following charts will be a review of both the gold and silver markets, gold being the stronger of the two, which should put both metals into a perspective. As we mentioned in a subsequent article on silver, it is just a question of when, not if, both metals will go higher. [See Silver - A Question Of When, click on, second paragraph.] We are not believers in the interests of the corporate federal government for they are opposite the interests of the people and totally in the service of the saving the utterly corrupt banking industry.

It is no secret, but takes digging, that the US went bankrupt in 1933, Socialist FDR shut down the banking system, declaring a "bank holiday," and when banks reopened under bankruptcy, it was the privately owned Federal Reserve in control of this nation's money supply. The Rothschild's had finally succeeded in the takeover of the government. Always remember Mayer Amschel Rothschild's revealing plan for world dominance, "Give me control of a nation's money supply, and I care not who makes the rules."

In brief, Rothschild discovered it was far more profitable to lend to governments and gain eventual control. When one controls the money, politicians are bought and paid for and owing their existence to the moneychangers. If anyone should get in the way, they are dispensed with. It was the English Rothschild family that financed the North during the Civil War, and the French Rothschilds who financed the South.

Wars are very costly to conduct and plunge a country into debt, and the debts were always owed to the Rothschild dynasty. When Lincoln decided to print dollars to finance the war effort, thus not having to pay interest on loans from the Rothschilds and cutting them out of huge potential profits, he was assassinated. It was no coincidence that when Kennedy decided to issue silver-backed dollars instead of using Federal Reserve Notes, [remember, the Fed is a foreign-controlled private corporation that issues its Federal Reserve Notes at the cost of ink and paper, and demandsrepayment in gold and silver, plus interest.], Kennedy, too, was assassinated.

Reagan decided to shrink the size of the federal government. That would mean shrinking the size of the huge profits on the moneychangers. There was a failed assassination attempt on him, and upon recovery, he launched into an enormous expansion of the federal government. The assassination attempt failed, but the message was made. An attempt to control the nation's currency and size was the common thread between these three presidents. Anyone is free to see it differently.

When Barack Hussein Obama was running for president, he promised to control the bankers on Wall St and reduce the deficit. When Obama took office on 20 January 2009, the nation's debt was, this is in the trillions, $10,626,877,048,913.08. How effective was he on his campaign promises? Not one banker has been jailed for the derivative theft on such a massive scale, when in fact, the banks have received trillions of fiat dollars as a reward for their corruption. As of 3 May 2012, the national debt now stands at $15,671,202,480,642. 98, a debt increase of about 47%!!!

The "politician's" answer to the overwhelming debt problem has been...take a guess...add another $5 trillion, and still counting. That is like a fire department spraying gasoline out of its hoses to put out a fire, or giving an alcoholic unlimited liquor to cure the habit. Greece, Spain, Portugal, Ireland, and Italy, all in trouble because they have too much debt. What has been the solution? [Drum roll for the Rothschild solution:] Make them take on more debt to pay back to...the bankers who recklessly made the bad loans to begin with. More money had to be loaned to repay the banks who were about to fail due to their practices. Bail them out and stick the bill via austerity measures and higher taxes on the general populations.

What did Iceland do? It let the "too big to fail" banks fail. The country forgave all mortgage debt. After a few years of financial discomfort, Iceland is in a healthy economic condition. It can be done, but politicians are too beholding to the moneychangers and refuse to take measures that would not be popular with their constituents. Instead, they lie and keep adding more debt to the backs of the people.

As an aside, Italy has over 3,000 tons of gold. Guess why the international bankers are making all the loans to Italy. It is demanding that the gold be used to pay back the fiat computer entries made. If anyone else were to print money, with no backing, and put it into circulation, they would be jailed for
counterfeiting. Bankers do not want any competition, so they make it against the law to do what they do.

What is the point of all this? [Do your own research if their is doubt in the conclusions put forth here.] It is impossible to sustain the infinite expansion of fiat currency, now on a world-wide basis. History proves such fiat currencies ALWAYS fail...but at huge expense to the people and their lives. WHO is making these loans? [International bankers]. Where are they getting the money to loan out on such a massive scale? [Out of thin air, a blip entry on a computer].

A relatively small number of people know this, and they have been the buyers of gold and silver. Those buyers also include the world's central banks. In addition to being greedy, they ain't stupid. Central
banks own most of the world gold supply. The London Metals Exchange is owned and controlled by the Rothschilds. People, in general, are ignorant over these conditions. Most are too busy trying to maintain their own debt situations to care about what has been going on right in front of their eyes, if only they would look. Cognitive dissonance is alive and well.

So, when you look at these charts, ask yourself if gold, the most constant and reliable indicator as a measure of value, is gold going to decline in value relative to fiat-issued currencies? Think about the reality of gold. A few years ago, one could have bought an ounce of gold for $250. Then $500. Now $1,640 for that same ounce! Gold has not gone up in value. Instead, the fiat currency has declined in purchasing power, and THAT is why it takes more and more worthless pieces of paper to buy the same ounce of gold.

No one has to agree with what we see as the reality of how things are in the world. There are a slew of highly educated economists who still believe in the Keynesian approach...[how has that been working for them?], or some similar variation of having the government go further into debt to "stimulate" the economy already floundering under a mountain of debt that has failed to work, [except for the Rothschilds].

It will take some time, as the world bankers continue to play unplayable [debt] cards, but failure is just around the corner. [And as and when it comes, expect the governments to outlaw gold and silver]. All bubbles fail, from tulips to housing. It is just that the bankers are in control of the debt, and most people are so indebted to them that they do as told. Those who own tangible things, [gold and silver among them], have little to no debt and are not beholding to the moneychangers. For this reason, we keep exhorting people to buy and personally hold physical gold and silver.

Just like those who used their homes as an ATM machine, via overbloated property values, and waited too long to do anything before the housing bubble burst, when the current fiat bubble bursts, it will be too prohibitive for most to buy gold and silver. If you want to know the future, look to the past.

All of this makes looking at the charts seem irrelevant, but here they are, finally... A comparison between each time frame will be made for gold, then silver. The bullish uptrend in gold has not been violated since the last swing low in 2008, all recent "sharp" corrections notwithstanding.

We labeled the chart as a one month rally, when the high makes it a two month rally, but the subsequent correcting activity is what counts. The ranges are smaller, indicating a lack of selling, and the closes are upper end of the range, telling us buyers are in control, to a degree. Price is presently at the support trendline. Will it hold or be violated in some way? No one knows, and we make no guesses, so we will simply watch to see HOW price reacts around this support area. Overall, the chart remains bullish.

GCM M 7 May 2012

A similar support line was not used on the silver chart, which is also holding, because we wanted to show how spacing continues to work, despite the relentless selling assaults to drive the price of silver lower. the net effect remains a bullish chart structure, but not as much as gold. Silver is lower from its recent top than is gold. Of course, most everyone is aware that gold is most akin to a pure precious metal, while silver is a greater industrial use that exerts an influence on its price.

SIN M 7 May 2012

There is little new in these charts. the weekly continues locked in a bullish pattern, but within a trading range, not a clearly defined uptrend. We can see more clearly how the correction is labored, ranges smaller to the downside, and recently moving sideways, not lower. Still a constructive chart, but it needs to see signs of an ability to rally above recent highs, and hold. We will get there, but on the markets time agenda and no one else's, no matter how much fiat is printed, so keep that in mind. Follow the chart behavior; do not try to lead it and hope it will follow you.

GCM W 7 May 2012

The same holds true for weekly silver, just a bit weaker. One positive aspect is that while we see lower highs, indicating a declining market, since September 2011, we are not seeing lower lows. There is no reason to be buying futures, at this point. Physical silver and gold, yes, but not the futures.

SIN W 7 May 12

Just under 1620 is an important support area for gold. We see the failed probe that closed on the very low, trapping all those sellers. However, since then, there has been no downside follow-through. Why not? If Lying Ben and his brethern, now government lackey Warren have no confidence in gold because it does not do anything, [except grow in value as all forms of paper depreciate or face greater risk], why aren't sellers taking control? Could be China and India do not share those negative points of view, as they continue to buy gold by the tons.

What the daily charts show, as the monthly and weekly suggest, more time is needed before we can see confirmed evidence of a move higher. Right now, it ain't there, and whenever price is locked in a trading range, the level of knowledge is very low. There is no edge.

GCM D 7 May 12

The daily chart for silver is even clearer in its relative show of weakness on this lower time frame. Price is readily contained within a downward sloping channel, and it is nearer the bottom of the channel than the upper range of it, and that shows weakness. We can see volume is fairly healthy at this lower level, but it is not putting price higher for the effort, so sellers have the edge, for now. Odds favor price to work lower, whether just a little or a lot remains to be seen. Here again, there is no reason to be long futures until there is confirmed evidence of the channel being broken to the upside, and that is likely to take more time.

The powers that be, corrupt as they are, are doing everything possible to discredit the notion of value in gold and silver, and are endeavoring to tire out the bulls and make them lose faith. It is a misguided effort and doomed to fail. In the interim, some damage can be inflicted on the weak and impatient buyers of the futures. The buyers of the physical don't care and are very patient. They know what is in store.

SIN D 7 May 12

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