"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


Wednesday, February 22, 2012

Gold Reaches Resistance at $1780

Gold is surging higher later in the session today having caught a gust of wind that took it all the way to major overhead resistance at $1780. The ability of the market to REMAIN ABOVE $1750 caught the attention of momentum based traders and that was all she wrote. Up it went taking the weak-handed shorts out of their positions until the bullion banks could regroup and start their selling again at $1780.

Bulls have their sights set on putting a handle of "18" in front of the gold price. The Central Bank pals - the bullion banks - are going to try to prevent that. If the bulls can keep gold above $1780, they should be able to take out the bullion banks.

Downside support now becomes the $1750 region.


  1. We blew passed jim sinclair's 1764 angel. will we drift back?

  2. passed 1764 tooo fast to do that.

    just my take is all.

  3. dfly - $1764 has no significance. The key was $1750 followed by current resistance at $1780.

    1. Umm...Dan?

      OK, in the last few weeks and today's price action maybe not, but are you saying you don't pay attention to JS's Golden Angels?

      After all, it is Jesse Livermore's Square Of The Numbers passed down to us and above $1,764 gold is due to go exponential. The square root of $1,764 just happens to be...(paging Douglas Adams!)...42.

      Just asking.

    2. I shorted gold at 1777 with a stop at 1785. I'm hoping it comes back to 1764. That's why i asked. If the chances are greater than 50 percent that gold retreats to 1764 before it heads to 1785, then i think this is a good trade.

  4. And the "reason" for it MSM says MINUTES FROM THE BANK OF ENGLAND. If you look at a gold/GBP it took out the resistance. So the London cartel boys have their work cut out for them tomorrow.
    "Should I stay or should I go?3

  5. I have a real weird intuition about things...$1776...is a God given American number. It is exactly $13 off (of Jims $1764) number. Unlucky $13..but for which side. If I am incorrect God backed a very different nation in the year of 1776. Let's see what happens. I am hoping for the 18 handle myself. Oil...well it is almost a given with our new Muslim king.

  6. Whoops, what is a $1 bill to anyone, I must have made a George Washington mistake.....haahhhahhhhha

  7. Silver Timer:

    To answer your question - every trader has his or her own methodologies that they use once they find them to be successful. I personally use another way of analyzing markets, particularly gold, than the "angels". I also have not found Livermore's methodology to work in my personal trading and therefore do not pay attention to it.

    That is not to run it down - it is merely one trader's views who does not employ it and therefore does not find it consequential. Actual resistance and support zones that form on price charts as the result of actual price action are far more significant than numbers arrived at by various computational methods in my opinion.

    One last thing - anyone who somehow managed to lose all of the money he made in the markets and ended up taking his own life, as Livermore did, is not my idea of someone I look up to.

    1. Thanks Dan, fair call.

      btw, Liquiat Ahmed in Lords of Finance says JL was not broke (I think $5m in the family trust) but his demise was a poor example to set.

  8. On a more serious note Dan...the spot gold price started to spike after 2.00pm NY...I understand Comex Gold closes at 1.30pm, so which market was the spike on (Globex?) and why the 30 minute delay?

    I ask because I trade the London AM Fixing, sometimes the PM Fixing and I would like to understand the mechanics around this price move.

    Thank you.

  9. Silver Timer - I think news came out near that time frame that the Bank of England was going to increase the size of their target purchases on their QE program. That seemed to be the catalyst that took gold higher.

  10. Making some money now,,,thinking I better sell soon, because all the chickens are starting to squawk. It must mean a total beatdown is close. Hmm? What you say "god traitorzzz', appears a good selling time or are you guys going long. Can't say I blame you, loss of control can mean very dangerous times. How is the volume treating you now?
    I say you cannot control the oil markets..better start getting those jets fired up soon. Good night Mr. Diamon.

  11. Two large bids took out all the asks from 1755 to 1760, and then from 1760 to 1765. After that, the momentum traders piled in for the rest. That is two days in a row a half an hour before the crimex close that gold had a significant move up.

    Personally, I think it was a confluence of events:

    1) The cartel is allowing a bull cycle in gold, given the COT data, and did not oppose the runnup until 1780.

    2) Pressure has been building on the long side fundamentals for a while (BOE, China, Japan). With gold underperforming, while platinum and palladium was screeming higher.

    I remain highly cynical of the system as you can tell, and the cartel is running the show like they have been for a long while now - especially on the weak volume we have now after MF Global, with Jeffries in the warm up circle. Now that could change in a heartbeat, but until the fractional reserve paper trading system falls apart - gold and silver will be supressed. Trade accordingly.


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