“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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Monday, December 12, 2011

Gold Breaking down out of its triangle formation

Gold has broken down through the bottom uptrending support line in its triangular consolidation pattern but thus far is holding horizontal support near the $1660 level. Failure to hold this level will send it down towards $1620 initially followed by a test of $1600 should that fail to stem the decline.

A rebound back above $1680 is needed to reinforce the support level at $1660.

The breakdown in the Euro following disappointment over the events in Europe this past weekend has sent the US Dollar strongly higher this morning and that is pressuring many of the commodity markets in general. The CCI, or Continuous Commodity Index, has moved to a new low for the year signaling investor fears of a slowing global economy and thus a dampening off of demand for many commodities in general.

Crude oil will need to stay above the $95 level to prevent a double top from forming on that chart.



10 comments:

  1. Dan,
    The ma150 daily has been a support for the last 2 years.
    Very accurate, very powerful...I wonder how many stop losses are "securely" put under it, and what snowball effect would happen if gold prices ever went under it...it is now around 1650 $ level if I remember.

    If gold pushes through 1630, I think we may have a panic liquidation of some longs...

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  2. Thanks Dan,
    Please let us know when its safe to buy back the gold we dumped today (if ever).

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  3. We'll see how this all shakes out?
    But, I'll tell you what, you can't find gold coins for much less than about $1725 around where I live or on line.
    I joked with our local seller about why he isn't selling at about $30.00 over spot instead of $60.00 over. He had no comment.

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  4. Technical analysis is a windsock...not a crystal ball.

    Beware of a bear trap in the CCI and Gold price.

    I feel sorry for those of you who threw away your insurance on an obvious takedown of price at 9pm CST on a Sunday night (the most illiquid day/time of the trading week)

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  5. When one says gold is selling at $1660 an ounce, one says it all.
    Gold is valued in dollars, dollars in gold. It is a straight up swap, one for the other.
    The dollar is the prettiest fiat in the crap pile now, but it is still part of the crap pile.
    The demise of the Euro is just noise in the wind.

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  6. How I wish you would post a cross-trade chart of SP500/Gold. This is THE game. If they (the people behind the curtain) see money coming out of stocks - gold gets promptly sold off - with all the logical news that justifies the move - placating the sheeple's way of understanding. It is the ratio which counts - all the rest is noise!
    This will come to an abrupt end when people come to realize that there is little gold held in storage for futures contract delivery. The very charts you are posting will become meaningless when physical gold trades at a different price to "futures gold". This is already happening - that on a futures market take-down, the premium on physical gold versus the futures gold price augments.
    Having said that I appreciate and I thank you for your charts; your viewpoints,and your efforts to inform the public.

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  7. so you got fleeced, neil.

    this is what JPM and the evil empire does...borrow from the FED at .25 n see a temporary dollar strength n short it down (its such a small market,really)

    if ever....pretty funny, like they're going to solve this with paper.

    in oct-nov rising wedge gold broke to down before going to 1795......heyyy-ooo

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  8. If Dan says its breaking down then it's breaking down. I'll buy back in at 1600 or when he says.

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  9. The manipulation goes on...and on...and on..
    This is the most rigged market in history. Banks assets are worth little but they have to keep up the charade. One day..it will fall. It is so sad to see this unfolding. They will indeed flush this until their is no more water to pour in the toilet bowl. Closer we get. For a trader timing is everything. For me the bottom in miners is not in yet. But will be soon. They own the land which holds the unsold gold. I wish they took Sprotts advice...hold silver and gold as a b/s asset in lieu of cash and keep it from the banks. Then the bankers game gets more difficult.

    ReplyDelete
  10. Are you sitting comfortably? At one stage or another, every man woman or child will be faced with the issue of formation trading. Remarkably formation trading is heralded by shopkeepers and investment bankers alike, leading many to state that it is impossible to overestimate its impact on modern thought. It is an unfortunate consequence of our civilizations history that formation trading is rarely given rational consideration by the aristocracy, obviously. Relax, sit back and gasp as I display the rich tapestries of formation trading.

    ReplyDelete