What happened?! is the question so many are asking about Friday’s waterfall in prices. A better question is, “Why?” Outside of the insiders, no one really knows. Yes, there can be some fairly cogent explanations, lots of glib answers, but no one knows, for sure. What we do know for sure is that the market is always the final arbiter [and this is what the market is saying:]
So writes Michael Noonan (http://edgetraderplus.com) in edited excerpts from his original article* entitled Gold And Silver – Bullish Hopes In Bear Market, Trend Wins.
This post is presented compliments of Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and the Intelligence Report newsletter (It’s free – sign up here). You can also “Follow the munKNEE” daily posts on Twitter or Facebook.
The article 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 these paragraphs must be included in any article re-posting to avoid copyright infringement.
Noonan goes on to say in further edited excerpts:
…Friday, 12 April 2013, was a sign of desperation. It may become known or apparent at some point in the future, but if we strictly adhere to the message of current developing market activity, as displayed in the charts, almost all market surprises occur within the trend… Amidst all the bullish hopes for PMs to soar to considerably higher levels, the market trend wins, as it always does.
Our comments have not been immune to those hopes, as we have strongly advocated the purchase and holding of physical gold and silver, but the comments have also been qualified with the advice to not buy futures, simply because the charts were sending that very message. The advice to buy and hold physical gold and silver is as important as ever. We have no clue what prompted the Western central bankers to crush the markets lower, but it will ultimately fail, as history as amply proven.
“If you can keep your head when all around you are losing theirs… If you can trust yourself when all men doubt…” Edited from Rudyard Kipling’s “If”
The point is to keep a level head in what appears to be turmoil for the real turmoil is on the other side, the opposition to PMs as a known alternative to the issue of worthless fiat. We cannot say nothing has changed, for price just got lower, but the attempt to destroy whatever opposes fiat debt is obviously a high priority for central planners, and their message is very clear: they will stop at nothing to continue their fraud. Nothing
Instead of trying to figure out the unknown, look at what is known for certain, and that is the results of the decision-makers who cannot hide their intent from the trail left behind – price and volume “footprints” for everyone to see – or for those who choose to see what too many overlook or ignore.
One point worth remembering is the charts reflect the paper market, and the paper market is in the total control of central banks, so you see what they want you to see, and what they want you to see is the apparent failure of PMs to do well. They are succeeding, to that extent. Everything else central planners are doing is failing, and there is little reason to believe they will succeed in this game plan, either.
The trend is always the number one factor, then the location of price within the trend. Gold is moving sideways, but still within an overall bullish condition, based upon the facts presented. The current location within the trend is neutral to slightly negative.
Gold: Monthly Chart
Insiders will never reveal their “hand,” especially the central banking cabal, but we can read what they are doing, overall, by the clues left behind. Within the down channel, there was a definite clue in the weakness of the last rally that failed to reach the upper channel line. Weak rallies within a bear trend inevitably lead to lower prices. As we always say, one can never know how the market will unfold, and certainly no one was prepared for how current market activity unfolded on Friday.
Gold: Weekly Chart
Curiously, the overall volume for the week was not that strong. We construe that as an indication that the number of weak sellers and stops was not that great.
…The trend is very much a fact. [First par. after 2nd chart, plus 3rd chart, Comex Prices Manipulated? http://bit.ly/YYX5HV]
One truism to always keep in mind about the markets is: “Anything Can Happen.” Friday was one of those days. Remember it in that context.
Gold: Daily Chart
Silver: Monthly Chart #1
Silver is already under the 50% retracement from swing low to swing high, which is a general indication of a weaker trend. The bullish spacing is smaller than gold’s, but price is holding support a little better.
As with gold, no one knows how much lower silver can go, and there is no evidence of a turnaround.
Silver: Monthly Chart #2
We certainly held out “hopes” for a turnaround in previous analyses, still not arguing against the tape for taking a long position in the futures, and as a consequence, did not even consider the short side. That is what a bias will do.
Silver: Weekly Chart #1
As pointed out below, given the manner of how price unfolded within the TR, it cannot be a surprise that price continued lower. The extent of Friday’s decline was a surprise, and it goes back to the importance of knowing, “Anything Can Happen.”
Silver: Daily Chart
All anyone can do is wait to see how the market reacts to Friday’s sell-off. It never pays to guess or anticipate, and no one anticipated how price declined so much. Let the market inform us as to what the next development will be, for the market is never wrong, and the market never lies. Trust it.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
Did you enjoy this article?
If so then stop surfing the net looking for more informative articles.
Only the best-of-the-best are posted on munKNEE.com!
Sign up here to receive them all via our Intelligence Report newsletter.
The mailing is free and restricted to active subscribers.
I have no problem with corrections in general, as they are a healthy part of any bull market and provide a platform from the which the next upleg can spring but something is not quite right about the recent price action in precious metals as the markets have become increasingly divorced from reality over the past few months. Let’s look at some of the glaring contradictions and then discuss the implications.
By its obvious and concerted attack on gold and silver, the U.S. government could not give any clearer warning that trouble is approaching. The values of the dollar and of financial assets denominated in dollars are in doubt. For Americans, financial and economic Armageddon might be close at hand.
If central banks are preparing for a major change in the value of the dollar, shouldn’t we? The US dollar cannot and will not survive the ongoing abuse heaped upon it by government planners and federal officials. That not only means the gold price will rise, but that many, if not most currencies, will lose a significant amount of purchasing power. This has direct implications for all of us.
Measuring market data using fiat currencies can be misleading. Even though an asset may rise in dollars, it may be because of declining currency value rather than true economic process. With central banks devaluing currency at record rates, gold’s steady purchasing power makes it an ideal alternative pricing mechanism.