"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


Tuesday, March 13, 2012

Gold crashes through support at $1680

With the mass exodus out of safe haven trades today and into stocks, gold is being sold off with the idea of taking those funds and plowing them into the equity markets to catch the rising tide.

The result of this long liquidation has been a breach of a very important downside support level near $1680 on the charts. The market is holding within the support zone noted that extends down past this level but it will be critical to the metal to hold today's low and last week's low if it is to prevent a further bout of long liquidation that could very quickly take it down to $1620 or even lower.

Keep in mind that the short term oriented traders are now looking at getting long the broader equity markets, particularly tech, and are thus reducing exposure to gold. It is going to be a challenge for the metal to maintain its footing as long as the "GET LONG EQUITIES" mentality is in vogue.

The Dollar is a bit higher today but that is not the main driver for gold in this session; rather it is the theme of getting long equities that is dominating. The Fed has been successful, FINALLY, in herding the hedge funds and other large institutions into equities and they are going to ride this bull as long as they possibly can. Those fearing contagion effects from European Sovereign Debt woes have been overrun by the sheer amounts of liquidity being provided.

As it stands now, even the massive build in overall US indebtedness is no where remotely near the forefront of traders' minds.


  1. Maybe we'll start to see some capitulation and a blowoff top in equities. We're in Greed mode in the equities markets. I know the chart is still strong, but when everyone is plowing in on one side of the trade, things usually don't end well. Especially in equities where shorts have left the house and it's only longs left.

  2. OK, Dan, I lost a grand, and sold all my mining equities again today. I hate losting 5%. I say gold goes to 1500 close again. The financial repression is very strong. I am still holding the oil etf's that made me alot more than they took from the GDXJ today..alot more. I will admit that I lost a bit though by adding to positions. Still a learning process. You are a god sed with the technicals, though a the last 2 years techs could get thrown out the window).Combined techns with a good understanding of the curent understanding of our overall position lead me right into "wheelhouse". I do believe we are onto something. It is Financial Repression at its best. Pressure metals with central banks and bullion banks, hedge funds, and talk up low unemployment, and a rising tide. I wonder though, if they are using two outs for oil. One, the market collapses and all hail the king...or better for me 2) War is inevitable and it is all War's fault. I believe the second. They cannot control it. Let's just see if oil backs below $100 WTI, $125 Brent Crude. Some things you just cannot control w/o a plan to pump the pipeline from Canada. Which our KING has a left front against. Cherrios everyone.
    I am not out forever, but a month or so. I will buy when they lose control of oil markets, and the UE3, finally capoots. Not a second sooner. Too much control of MSM, and yield chasing hot HFT money. I know when I am beat. Thank god I covered the grand by the rising war drum beatings. Oh well, there will again be another shot. Thanks Dan. You are a Patriot.

    1. GDXJ was only down 9 cents today, and only about 35 cents or so down from the FOMC release, while gold fell over 20 points. not exactly back breaking action in the miners.

  3. if you invest in GDXJ then you are assisting your own demise white wolf.....these are vehicles for suppressing the actual price of the miners......it absorbs investor's dollars....invest in the actual miners


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