“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


To continue following Trader Dan, please sign up for Trader Dan's World at the link on the sidebar to receive a 1 month, no obligation, trial membership



Tuesday, March 18, 2014

Gold heads Lower as Longs Bail out and Bears move back in

The headline title says it all - without a further escalation in the tensions over in the Crimea, gold has nothing to keep the bull fed and thus the path of least resistance is lower for now.

Longs are bailing out, especially those who bought Sunday evening up near the highs and some fresh shorts are attempting to chase them further.

The market has encountered some buying in that first zone of support I noted last evening on the charts. Here is an updated version of the same chart showing the buying zone. If the bulls cannot hold it above today's session low, then the path lower is open towards $1330 - $1325. There looks to me to be a bit of support that could show up near $1340 previous to that.

Yesterday the ADX line was flattening out indicating the potential for a halt in the recent uptrend. Today's action has actually turned it down. Bulls are still in control of the market on this shorter term chart unless gold loses $1320. That would put a big question mark into place.


Gold is therefore probing lower now as it seeks to uncover buying lurking beneath the market. The question is whether or not these buyers are willing to let it move lower before stepping in or are eager enough to hold it here and now. I honestly do not know the answer to that and thus have to wait and watch and observe.

Price will have to extend past $1390 now to run out some of the fresh shorts and to attract some more new longs. With the Fed on track for this week, price action could be volatile so hang onto your hat. If events over in the Crimea region flare up, gold will flare higher as well. STay tuned.

28 comments:

  1. How about Belgium?? They stepped up and bought $300 billion in fresh UST's?????? Wow for a little country a huge investment for us???

    ReplyDelete
    Replies
    1. See my comment at end of last post.

      Delete
    2. I have to say the current gold rally is more healthy than the Aug 2013 one. We can clearly see 3 base building periods on the chart one in Dec, another in Jan and the last in Feb. That's quite a different chart pattern from the Aug 2013 short squeeze. As long as there's no massive crash to punch through one of these bases I think gold might really have bottomed.

      Delete
  2. I don't know if they show you this in the US, so 30 minutes from 10:00 to 40:00 to get the clear position of Russia about Ukraine...for the sake of putting it in symetry with the western position...
    http://www.youtube.com/watch?v=Ayu3Ecdbl0Q

    ReplyDelete
  3. 1350 area of the ema15 daily and also of the ma20 just below, so yes, first level of support I'm closely watching.
    I'm out of my silver long position after the move down today, just above 21 $.

    ReplyDelete
  4. I wouldn't touch anything 'till after Yellen yelps. It's a sad state of affairs when a change in nuance of a few words from the Fed causes major market moves but that's the way it is. you have to play the game as it is but you can sit on the bench for an inning if need be.

    ReplyDelete
  5. Yeah, wouldn't do anything until Yellen speaks.

    We could easily see a "terrifying implosion" in gold prices if she decides to jawbone about the economy recovering and she agrees that more tapering is appropriate.

    But of course, nothing she says will impact Chipotle or Buffalo Wild Wings because the Ukranians (now Russians) are now salivating over the idea of new restaurant openings in Crimea then spreading throughout the region.

    Which explains why those stocks are still sitting at world record highs without a worry in the world.

    Gold, on the other hand, could go down $45 or up by $45 based on the hyperactive Robo/Igor/Algo knee jerks.

    That is why gold is considered the riskiest market because it is so sensitive to news and Fed head yapping.

    ReplyDelete
  6. This comment has been removed by the author.

    ReplyDelete
  7. Dan and board,

    I'm gonna make a bold prediction:

    THE LOW IN GOLD IS IN...for sure.

    After doing heavy technical analysis, and fundamental analysis (while taking into geopolitical forces into consideration), I have determined that the LOW in gold reached in the year 1931 of $17.06, will not be breached.

    Regardless of what the bears or bulls say, we will not go below that low reached in 1931. You heard it here first.

    ReplyDelete
    Replies
    1. Nate, this is a bold prediction. You really extended your neck out there. Is your prediction still valid if the US takes away six zeros from the dollar (due to hyperinflation as predicted by various KWN veterans)?

      Delete
    2. Nate, it takes some courage to announce something like that.
      Your reputation is at stake.
      We'll be following your prediction, as it is a tough call and manupulators could easily send it down right there... :) :)
      Thanks for the forecast :)

      Delete
  8. Yes, I would still stand behind it even if it takes away 10 zeroes! I'm going to start a newsletter that sells dirt cheap. $400 per yr. its called isuxattrading.com.

    ReplyDelete
  9. Hi Dan,

    Is this blog only discuss Metals? what about Equities mkt? is it going to the moon or we will have a pullback anytime soon before going higher? thanks.

    Sylvia

    ReplyDelete
  10. LOL.....look at these guys faces.

    https://www.youtube.com/watch?v=cS9l3zJR1jw&feature=em-uploademail

    ReplyDelete
    Replies
    1. lol, they feel very comfortable. You've got to send this to Jsmineset I think.

      Delete
  11. To summarize and put in perspective. Gold from 1910 to 1180 is a staggering $70,000 loss on a 100 ounce bar of gold, and only a close above 1540 could change anything of that loss. In silver, from 50 to 20, the loss is an even more staggering $150,000 for a 5000 ounce bar of silver, But at this point, I am at a loss as to know what price can change anything in that regard. Dan, could you put a number on it for me?

    ReplyDelete
  12. Well looks like the "Terrifying Collapse" and "Global Panic" is now happening.

    In the gold, silver, and copper markets.

    LOL...

    Go KWN, you guys are brilliant!!!

    ReplyDelete
    Replies
    1. my Lord … so much hate …. these guys must have done you real bad … Try and forget about it Mark , honestly just think for a minute KWN did never exist ! Otherwise , perhaps you should open a hate KWN website , who knows right , perhaps that makes you feel better .Don't you get tired ? LOL

      I am in on my first third for LSG , so I am one third in on MUX at 3.01 , one third in on LSG at .85 …

      Delete
    2. Anon, Mark is just calling it like it is with regard to the billionaires and 60 year veterans over at the laughingstock kwn; nothing more and nothing less; it is what it is; sparks

      Delete
    3. Steve, how can you say that? They are venerable gentlemen over there with decades of experience that are sharing their valuable wisdom with us from the goodness of their hearts. The problem is there are still people who actually believe that manure. I guess people can believe anything.

      Delete
  13. Looks like the worlds new reserve currency will be: soybeans.

    ReplyDelete
    Replies
    1. arnie;

      that or wheat or pork chops...!

      Delete
  14. Regarding the red metal, no question the daily looks like hell, BUT if one looks at the nearest weekly, today just may have been it for the downside; maybe not IT IT, but maybe for the short term anyway. We see how Friday closes and maybe gives us a key reversal? who knows? sparks

    ReplyDelete
  15. taper continues to the dismay of the perma bulls @kwn for 4 months now and running; sparks

    ReplyDelete
  16. Exactly as I predicted. Yellen's comments trigger a horrific collapse in gold prices, while retail stalwarts like Under Armor, Starbucks, Nike, Buffalo Wild Wings, etc. are virtually unfazed by it all.

    ReplyDelete
  17. Copper continues its softness.

    Any additional China liquidity related spooking could take Copper and Silver down. Many of us are wondering, is $20.20 the bottom for today's marathon ? I think Silver can make it into the $19's, with a little help from the China Liquidity Angst.

    Geopolitics can spook markets up and down I guess.

    ReplyDelete
  18. it will be good if we hit 3315 3310 tomorrow , last buying threshold in my opinion … option expiry …. we shall get there with a little luck . At that point even if I do mostly equities , wouldn't mind taking a punt at comex . Hubert , any level you recommend leaving a buy order with a tight stop ? Thanks !

    ReplyDelete