“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)

"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

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Thursday, September 22, 2011

Silver - Weekly Chart and annotations

Silver tends to get harder than gold during bouts of risk aversion related selling. That was made evident today as the metal lost nearly 10% during the session. Potential buyers who had been active on dips below the $40 level and ranging down towards $39 stepped out of the way of the herdlike fund liquidation removing the buying support beneath the market that had been putting a floor there.

There are several minor bands of support between the present level and the critical $32.50 region. Whether it holds those depends on the extent of further risk aversion related selling. As long as this market holds above the $32.50 region on a weekly closing basis, it will be okay and will continue to consolidate, although within a larger range.

If it fails there, the potential for a move towards $30 becomes likely.

Bulls need to take price back above the $40 level to shake the confidence of the bears after today's rout.


  1. Thanks Dan for the posts! I don't know how you do it all when there is total CHAOS in the markets! I and many others truly appreciate what you do! Thanks again!

  2. Thanks Super Dave....

    the trick is to trade smaller in size and run like hell when the trade goes against you!

  3. Sliver is awaiting for its daily/ weekly / monthly bottoming...it's another long-awaiting moment...montly one...still take one or two weeks I guess...once weekly is done..monthly will come right after....who cares it's 3X or 2X...just take another long term ride then.....28.4 or 24.6...well...19..also not a bad idea..how does that sound?

    4 gold...1645 and 1404 then down to 13xx or 12xx Why not?? since weekly / monthly ones look like half way wuter faling....though daily one is nearly bottoming....sign...wutever...just let it falls..since Fall is cominng...after falling..then we'll have another winner vacation!!!

  4. Dan--

    On your most recent gold chart, you talk about price going under the 50 MA for only 6 sessions this year. That decline was stopped by the 90 day EMA -- which now sits at about 1681. You may want to put it on your chart as a possible downside target for this go-round.

    I really appreciate all of your superb analysis. THANKS SO MUCH for all that you do!

    All the best,


  5. After a day like Thursday, I think you can appreciate this. I was laughing so hard, I was crying:


    All the best,


  6. P.S. I'm not laughing at anyone's losses, it's just that -- I've been there. As you've said, it's important for people to control their position sizes in a market like this.


  7. Hi Dan and thanks a lot.
    Most of your analysis are short term.
    Do you think that, on the long term, the trend has reversed?
    Thanks in advance,

  8. Dan,
    You said on gold: " former gap region near $1680 which should provide pretty solid support if this thing is going to stabilize."
    Today gold went down to 1680.80 and has rebounded to $1695. Hopefully you were right and the POG will stabilize before going up again (after the gold options expire!)

  9. As Jim Sinclair said, buy when the chart looks like a fishing line. Sell when it looks like a rhino's head. This will be another fantastic buying opp in an historic bull market.

  10. Dan, thanks for being a stat, chart, technician extrordinaire. Also, your views of this market are extremely appreciated. Best around. Help me here. I have 60% cash, and have taken a beating on the mining shares this year. Last was much different. My thoughts.
    1)Nothing has changed in leveraged world. In fact getting worse.
    2)As far as the eye can see interest rates will probably be "negative" considering inflation, thanks to the Fed.
    3)Supply Demand for Gold is favoring Bulls.
    4)More money will have to be created before the European banking crisis ends.
    If you could afford to lose, don't the Unhedged miners still look powerfully attractive. Their earnings will most certainly show growth if not exploding growth? Is not Homestake Mining still possible?

  11. In latter part of depression it(Homestake)Mining exploded and price of gold had not nearly the run we are experiencing. I know about the ETF's, and manipulation, etc. I just think with the Chinese, Indians, and so much printing eventually the common investor overcomes the algos?

  12. The notion that this isn't another complete collapse is ridiculous. I like the metals but the bulls get to extremes and fail to admit when they are really really really wrong.

  13. Ok,
    If total collapse similar or worse than 08-09.
    HUI and Gold collapsed first-10/08 HUI-168.
    DJIA-5 months later 3/09 @ 6662.
    Since then trillions printed. We wont see those numbers as deflated assets are already going to show higher values in Dow/HUI values. I just say that the HUI has gone up 90% since then and the Dow zero to negative. You have to be a long term bull Crusso.

  14. So the charts changed; they do that every trading day.

    The fundamentals haven't changed; these are 24/7. That means the paper that banksters and government’s decree as worthy is going bad every day...24/7.

    Big investors drive all markets, and whatever freakiness any of us feel, they feel it more. Temporarily, the deep pockets have switched their allegiance back to the notion that cash is king, and risk is off.

    This too shall pass.

    Buy what others are selling, and sell what others are buying. Buy gold and silver.

  15. This thing smells like a desperate short-cover. Look at the open-interest and the commercial net-short position during the 2008 crash. The BBs are trying to run it down in order to cover.


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