Noonan on Gold & Silver: Is Another Trap Being Set To Complete the Bottoming Process? (+2K Views)

The trend continues down in gold & silver irrespective of all the positive news, charts, graphs, and other news writers specializing PMs present. The major players may be setting up one more trap to take the price of silver down to levels most do not expect. After all, how many expected crude oil to go from $105 to $45? 

By Michael Noonan (edgetraderplus.com). The original article* was posted under the title Gold And Silver – Forget The News. Silver 12 – 14? Gold 1,000 – 1,100? 

We are just being the messenger here.  Look at the news, then look at the prices where gold and silver are.  There is a disconnect between what one believes about the news and how price does not reflect the overwhelmingly bullish factors.  That in itself says a lot.  You may not like what you see, but unless and until you see a change for the better,
you are going to have to trust in what is.

If you want some “news” that may impact the market, take another look at the graph below that we presented last week (see here) showing that the largest traders, (the banks) are shorting over 300 million ozt. of silver.

The above raises two questions (with answers):

1. why? A: expectation of lower prices and
2. for how much expectation of gain? A: most likely not a move from $17 down to $16 or $15. These guys are out for blood.

The major players may be setting up one more trap to take the price of silver down to levels most do not expect. After all, how many expected crude oil to go from $105 to $45?  Those in control do not play for petty cash, obviously.  Can they take silver down to $8 or $10? Whatever level is in the cards being dealt by them, the purpose is to get as many people as possible discouraged and out of the market.

The above is not a clarion call for doom and gloom in silver, just for an awareness of the possibility which has an increased probability based on the COT chart shown.

Silver: Weekly Chart

The dark horizontal line in the weekly chart below for silver used to be support but is now resistance. At best, silver is in a bottoming process, and it is yet to be determined if the low has been established for one certainly has not been confirmed.

Silver: Daily Chart

The current bottoming process is not developing in a very strong manner.  It is flatter as compared to gold.  The band of support has the look that it may hold, at least on the first retest.  All one can do right now is be patient and observe how the character of the market unfolds.

Gold: Weekly Chart

As can be seen in the chart below, price stopped in the middle of the TR 3 weeks ago and formed another lower swing high. The inability for gold to rally away from obvious support means more retesting is likely, and the more retesting that occurs the more the probability increases for a downside break.  That is looking ahead.  For now, price could rally higher next week.  This is a time for watching and exercising patience.

Gold: Daily Chart

Volume clearly increased on Friday as price declined into the beginning of a support area. Sometimes, higher volume at a new recent low can be a small washout prior to a recovery. It would not be surprising to see a rally, next week.  For now, the near term trend is down.

The article above is presented courtesy of Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and has 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. This paragraph must be included in any article re-posting to avoid copyright infringement.

*http://edgetraderplus.com/market-commentaries/gold-and-silver-forget-the-news-silver-12-14-gold-1000-1100

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1. Noonan: Lower Gold & Silver Prices Materialized As Expected – Here’s Why