All fundamentals and opinions are useless in the markets because they pertain to timing, and timing plays a huge role when investing/trading….[and only] put one’s belief system into a context with regard to the market[s]….It does not matter what others say about the market; what matters is what the market says about others. The market is, and always will be, the final arbiter of all “facts” and “opinions.” [This article give an update on exactly what the charts are currently saying about gold and silver.] Words: 914; Charts: 4
So says Michael Noonan (http://edgetraderplus.com) in edited excerpts from his latest article* entitled Gold And Silver – All Fundamentals/Opinions Are Useless.
This article is presented compliments of www.munKNEE.com (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Noonan goes on to say in further edited excerpts:
The market is composed of all the known [and not so well-known] facts that affect supply and demand….yet, the price of both gold and silver are languishing in protracted trading ranges. So how valuable are the fundamentals or opinions about gold going to $5,000, or silver to $400, (pick your own number, as most undoubtedly have one) [Update: 51 Analysts Now Maintain that Gold is Going to $5,500 – $6,500/ozt. in 2015!]?
For the past 18 months or so, the best information in the world, the strongest opinions held, have been “useless.” Charts, (the market translated into a visual format), reflect the trading ranges, and current prices are just about dead center within them. The middle of a trading range is where the level of knowledge is at its lowest. It is a coin toss. Price can rally to the top of the range and still fail, or it can decline to the bottom of the range and fail to go lower. Flip a coin!
Whatever your opinion of where the price of gold and/or silver should be, this is what the market is saying about your “belief/opinion:” The market is showing price to be in the middle of a lengthy trading range, [TR], and until the TR is broken, up or down, one is spinning wheels in between.
Weekly Gold Chart
Last week [These Charts Provide Detailed Insights Into Gold & Silver Price Activity], we showed how the clustering of closes could signify support and a rally, or a pause before continuing lower. The gold “rally” fizzled and has retraced back to the clustering. Will it continue to act as support, or fail? Not only is gold in the middle of the TR, it is also in the middle of a down channel. It is anyone’s guess for now.
Let us add that the fundamentals are incredibly bullish [Goldrunner Update: Gold, Silver & PM Stock Sentiment Sucks BUT the Fundamentals Are Off the Wall!], and within that context, we continue to advocate buying the physical at any price, and buying consistently…[but] regardless of the bullish context of the fundamentals, the market is saying, “Not right now.” Until price rallies above $1,800 [Alf Field: Once $1,800 Is Taken Out Gold Will See a Vigorous Climb to $4,500 Area] it is not going [to] reach whatever future expectation one may have [because without] timing, any/all fundamental considerations are useless.
For positioning one’s self in the physical, now is the time. When gold/silver take off… it will be fast and furious with no looking back but that can be months, quarters, possibly year(s) away.
Daily Gold Chart
The daily chart comments below pretty much speak for themselves.
Last week, we noted a long position on the strength of the wide range, strong close bar, 6th bar from the end. The recommendation did not lead to much profit, but profits were taken prior to the decline, based on developing market activity at the time.
Weekly Silver Chart
While silver is weaker, relative to gold, it is behaving relatively stronger of late. Note how the weekly close is higher/above the clustering of closes, where gold is right at the clustering location, (both still in the middle!).
As with gold, now is the time to continue accumulating – stacking, as it were – silver at any price….
For as much as an argument can be made that price is holding reasonably well within the ongoing TR, the “fact” that silver failed to reach the upper channel line is a sign of weakness. Yet, unlike gold, the decline in silver held above the wide range, strong close bar where a long position was recommended. You can see the small range high at 32.50, 3rd bar from the end. It was the market’s message telling us that demand was weak. The long position was liquidated profitably, before the decline set in. Love those messages!
Where will the decline stop? We have no clue, nor do we, or you, need to guess. Instead, simply wait for developing market activity to indicate demand is overcoming supply. Why guess when the best source of information will make some kind of factual declaration?!
Maybe price will hold potential support at the clustering of closes, maybe not. What is more important is that the existing TR is telling everyone to wait, for those inclined to heed the market’s message. Even on a shorter time frame, within the TR, the market is STILL saying, price is not strong. Buy the physical, but not the futures.
Fundamental context matters for what side one chooses. The message from the market matters the most for timing and implementing one’s belief. That is a fact that has never changed and one that never will. Count on it! [Read: The Charts Tell ALL and THIS Is What They’re Saying About Gold & Silver for 2013]
Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
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