Noonan on Gold & Silver: “Markets Don’t Lie & Opinions Don’t Matter.” These Charts Tell It Like It Is (+2K Views)

…[W]e choose to focus on,,,the charts…[because] a reflection of developing market activity tells the most accurate and current story.  It is not a promising one…heading into 2015, however, but it is reality, and to expect anything else will lead to the same disappointments of 2013 and 2014.  Forget the ego-driven predictions that have all proven wrong again and again, and deal with what is – and this article deals with what is by looking at the charts.

By Michael Noonan (edgetraderplus.com) originally* entitled Gold And Silver – 2013, 2014, 2015…Expect More Of The Same.

If you are willing to accept the message the market is giving to everyone, you will understand the folly of those who opt to make price “predictions.”  Keep in mind, a good many of the experts with the largest followings were touting a price breakout by the end of 2014.  None called for new recent lows, and if someone did, our apologies for not knowing who you are.  Bottom line:  predictions are a waste of time.

Gold: Annual Chart

While most never look at a monthly chart, even fewer would ever look at a Quarterly or Annual chart, but they are substantive when looking at market direction.  Why?  It takes so much more time and effort to alter their course. The annual chart shows a modestly lower close for 2014 over 2013.  For this it can be said the downside momentum slowed, but there is no sign of change, yet. After holding the 1200 area for 5 quarters, price finally gave way to the downside.

Gold: Quarterly Chart

As with the Annual, the range for Q4 of 2014 was relatively small, and the close was mid-range, an
indication of some buying activity, even if only short covering.  It has to start somewhere.

Bottom line assessment is that there is no indication that the market is ready to turn around, at this point.  What this means is to expect more work in the next few months, at a minimum, as price seeks a bottom where demand will take over.

Gold: Monthly Chart

The chart comment for the month gives our view at the end of Q3 which shows the value of paying attention to what the market’s message is as determined by reading the charts.

Most do not like to hear news that is not supportive of what they want to see happen.  We are just as eager in wanting to see a strong rally, but those expectations are contrary to what the market is advertising.  Consider just viewing the facts, as presented on the weekly, and then decide if it makes sense to expect a change in trend any time soon?

Gold: Weekly Chart

For review, the concept behind Bearish Spacing is when a swing high rally fails to reach the low of the last swing decline.  It leaves a space, as shown by the two horizontal lines. What this means is sellers were sufficiently confident that lower prices would follow that they did not wait to see how the market would retest the last swing low.  Obviously, it has a bearish connotation that should not be ignored.

The series of LHs, and another LL is a text-book example of a down trend.  When you consider just these observable, undisputable facts, the reality of what to expect for the near term future cannot be in doubt, and any “bullish” analysis [to the contrary] should be put into perspective as being significantly uninformed and very misleading. When you look at these charts, you can better understand how all of the current event stories are not what is driving the  market, a concept many find hard to accept.

After declining from the last swing high to a recent low in just 13 Trading Days (TDs), the question to ask yourself is, how is the market responding?  Well, 21 TDs later, 50% longer than it took to decline, price turned back lower.  Is that a strong reaction or a weak one? When you ask these simple questions about what the market is doing, you actually get an immediate and accurate response.  Price is struggling, and this is to be expected of a market in a down trend.

Gold: Daily Chart

37 TDs after the last swing low, how is price responding?  It is now only at the half-way mark and even lower than the 21 TD rally.  The market message is very clear for those willing to observe what is.

Silver

The silver market has a lot of work to do before any kind of  prospective turnaround can occur.  Does it matter how great a shortage there may be for physical silver, for how great the demand is for this metal?  Not according to what these charts are saying.  Before this market can go up, it has to stop going down.  Can it be any simpler, and can you see how relying on shortage statistics, et al, can be very misleading, at least as to timing? Markets do not lie, and opinions do not matter.

Silver: Monthly Chart

[As you can see in the above]…chart, prior to the last two Qrtly bars, price was unable to rally away from support.  Axiom:  weak rallies lead to lower prices.

Silver: Weekly Chart

Silver: Daily Chart

[As was the case] prior to the last two Qrtly bars in the monthly chart above…you see a similar price activity situation on the daily chart below with the price not rallying away from the 15.50 area.  It may hold, we are not saying it cannot, but when considering what price is likely to do from a probability perspective, it is more likely to give way, especially when viewed in light of the trend.  It is just common sense.