"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

Trader Dan's free work will soon be available at www.traderdan.biz

Monday, March 24, 2014

Silver Succumbs to Gold Weakness

Silver had been managing to hold above $20 today in spite of the Gold weakness until late in the session when gold began sinking even lower and the shares continued to puke. That finally pulled the rug out from underneath it and it became a teenager once again. It had managed to become an adult in early February but could not act its age and decided it liked the "freedom" of having  "teen" in its age.

In looking over its daily chart, the bears are back in control of the market, which is essentially meandering back and forth in a broad range. It is below the 50 day moving average which is bearish but as is the case with any market stuck in a sideways pattern, moving averages are not especially useful in analyzing them.

This is reflected in the ADX line which continues to head lower indicating the lack of a firm trend.

It is going to be interesting to see how gold trades in Asia this evening. Will bargain hunters surface or will they sense lower prices ahead and thus hold their fire to secure the metal at a better price. If the West starts selling gold once again, Asia is going to have to provide whatever price support this market might have.

The Dollar


  1. It's more like "leads" than "succumbs". Silver shows little speculative interest the entire month and now just rolls over again. That whole Feb rally was the result of GOFO going negative. Once GOFO pressure was gone not it's falling again.

  2. Speaking of silver how about that MNKD?! Afrezza is going to revolutionize diabetes treatment globally. Watch the shorts get crushed on Apr 1 and Apr 15. It will be something to behold!

  3. Okay for Silver my analysis shows we bottom in July at $16. Get in July/Aug for a nice fall move. Long-term your numbers are $16, $25, $36, $50, $95, $125, $160. Timetable 2014-2019

    1. Giving that FED intending to drop QE and even increase interest rate, I say metals might get stuck here for a long while. While I do agree FED probably will re-increase the QE later but there's no stopping them from talking the market up and down in a one (or two) year frame.

    2. u r smoking too many fatties, Bob; sparks

    3. I think the lows are June/july near $17. new highs by Q3 2015.

  4. Well the "horrific collapse" being wailed about is here.

    In the precious metals mining complex.

  5. Thanks Dan for the last two posts.
    It's refreshing not to hear any GOFO, backwardization, evil banker gibberish involved in any of your analysis.

    Someone in a previous thread mentioned the QE taper being gold positive because of the early 2014 run up in price...until recently & significantly.
    I'll lob this thought out there for all the GOFO, backwardization, evil banker cheerleaders eventhough they'll revert to their petma-bull biases.

    Yellens mention the other day (probably not by accident) of possible rate hikes after the taper concludes was like a high inside fastball to any hedge fund manager who thinks a safer and less risky return on investment (compared to gold) might be close at hand IF rates go up.
    That's a big IF.
    However, all she really had to do was float that possibility out there regarding rate hikes even if there is no intention in the short term to fo any such thing.

    The perma-bulls can't or won't consider such things that might negatively effect gold's bearish/neutral sentiment going forward. It would be bad for their bottomline regarding subscribers to mention metals in bearish tones even as their credibility the past 2+ years has been undeniably shredded by remaining blindly or misleadingly bullish.
    Chances are that if someone is hawking merchandise or services is that they'll NEVER be bearish against their own marketing agenda or bottomline. It's easier to suck the sheep in with emotional cheerleading and a barrage of data points they THEMSELVES admit might be skewed or irrelevant.

    Think about that for a moment. Some of these shills would have you fully buy into there "reasoning" while also admitting they're going by data that might be skewed or supplied by the same entities they accuse of being manipulative.

    I see this type of thing bandied about online in the gold blogosphere all the time where some folks are unashamedly trying to have it both ways all the time. In the end, it ensures they'll never be wrong.

    The further back I step away from the "get rich quick or eventually" online cult of thought the more I see the leaders of them for what they are. Unbalanced in thought and sentiment.

    1. Go to youtube and watch the Alfred Hitchcock episode entitled, "mail order prophet". It basically deals with the idea of never being wrong. You will have to wait until the end to see what the trick is. Enjoyable watching.

  6. The only thing in backwardation is the price of GOLD.


    Bob is right about MNKD, although MNKD mentions should have stayed in the Biotech Post's comments section.Also, technical analysis on MNKD is useless until after dust settles....

    I sold out of my GLD puts too early, sucks...

  7. If Fed is truly tapering QE then it would have greatly supported the dollar index to rise. But despite the 3rd taper announcement, dollar is in lurking at its imp life support.

    Also most of the equity rise was due to QE money in past 4 years. Not real economic growth. Then why are stock markets NOT FALLING after taper3?

    Maybe just like Libor, and various other scams, are they also lying about tapering? As no one to audit whether fed is truly tapering or simply verbal tapering.

  8. Hi all,

    On the weekly time frame, the "critical" level for me to remain in a neutral/bullsih configuration is 1300.
    No time to post chart, sorry.
    But it is the mlh sup of the previous downwards red pitchfork which is now support, and the mlh inf of a more recent upwards pitchfork, both on the weekly time frame.
    I hope you can see them.
    Anyhow, under 1300 by the end of this week, it would look really ugly for the bulls from my point of view.
    Of course, we are still above 1300, so a bounce and a more neutral stance is still quite possible.

    1. Here is the chart.
      the ema15 is also going through 1300 area.
      But I've been cheating with the last pivot of the pitchfork.


      So it's not really accurate.
      The purple pitchfork should actually be a bit below 1300.

  9. Silver 17.50 and then 24.50 to 19.70 then 26.30 18.20 33.00 new low at 16.50, absolute low january 15 2015. From there 44.

    1. Johan, can you do this with every market?
      If so, you must be extremely rich, probably close to Warren Buffet, having started with 100 $.
      OK, I'll keep your documented forecast for the record.
      Silver :
      - 17.50
      - 24.50
      - 19.70
      - 26.30
      - 18.20
      - 33
      - 16.50
      - 15 in january 2015 (without any dates, it was too easy a forecast)
      - 44

    2. Hubert, I think this Johan is just monkeying around; not serious like Dan, yourself, myself and so on; sparks

  10. Well gold has stopped going down for now, only because relative strength in foreign markets has kept SPY and DIA in play.

    Meanwhile, Richard "Mother of All Tops" Russell is still chortling about secular bear market while IWM is only $3 from world record highs and still way above 2000 and 2007 highs, LOL...

    1. but Mark, he is the Godfather of letter writers zzzzzzzzzz; sparks

    2. Yes Steve, the poor "Godfather" completely missed the greatest bull market in stocks since the 1990's and today with the Dow Transports at 7600 and pinned at record highs the man is still scared stiff and still recommending his subscribers to bail on stocks and stay in gold and Treasuries.

      Of course, that is easy for him to say, luxuriating in his La Jolla beach home fully paid for, while 250,000 subscribers send money each month, why take risk when you are already rich? Easy for him to park his money in T-Bills and buy a little gold here and there, but the common man cannot survive or make it through retirement on such paltry returns.

      However, the aggressive ones who loaded up on the consumer and tech "glam" names in 2009 and held on with a death grip have already acheived a lifetime's worth of wealth in a mere 5 years time, and those guys can sell now, park the money in income properties, and never look at a stock screen ever again.

      And certainly not waste time subscribing to gloom and doom letters and attending Q & A sessions, lol...

  11. GDX/GLD has once again plummeted to 2 month lows, the "nightmare" of precious metal stocks investing continues unabated.

    Hands down, this sector has been locked in one of the longest bear markets in history, since the 2011 highs, the amount of time has now exceeded the 2007 crash and the Nasdaq 2000 crash.

    However, none of the "acclaimed experts" or "40-year veterans" predicted this before it happened to get investors out of harms way.

    Really, no different than Jim Cramer pumping his 10 "must own" stocks prior to the 2000 peak only to lead his readers to slaughter.

  12. Advanced signal on copper about to work.
    Bollinger Band inf should reverse very soon and go up, becoming support to prices. Let's see, maybe the bleeding is over on copper for now.
    Yet, if the bollinger band keeps going down within 2 to 3 candles (daily), wow,that will be very bearish for copper prices, signaling a very strong bearish trend.
    (at least that's the way I interpret my indicators :))

    1. Hubert; Last week was a bear trap at $2.93 March copper, I think; now it is rally time for a minute, but when we next close weekly <$3, I think the party is definitely over; sparks

    2. Hi Steve,

      Anyway, I had no opportunity to buy copper : prices were too far above the Bol Inf for an interesting risk / reward for a contrarian trade in a bear trend.
      So I'm simply watching how things evolve.
      For sure if prices go down once more and bol inf goes up eventually, I'll risk a long position on copper.
      Signal still has to be confirmed : it's been 2-3 candles now that the ETMACD is going back down from new high levels of volatility. If bol inf keeps going down within 2 candles, it won't be a bullisj signal anymore, rather the opposite :)
      I'll try to post a chart later on...
      Good trades to you :)

  13. Another strong day for the Dow, with IBM, CSCO and JNJ breaking out, new highs for the move for HPQ also.

    Tomorrow we could see more big Dow components start making moves.

    Meanwhile GDX owners just got "bailed in" by a 20% loss in 7 trading days.

    Stay in the system.

  14. Gdx making h&s bottom on 6 mth chart.

    Copper now rising after bull hammer few days back. China will never allow collapse.

  15. This happens rarely enough on a daily time scale so that I focus on it.
    Here is also the occasion to show why I often use Bollinger Bands in my trading decisions.

    Copper, daily time frame :


    The ETMacd reversed down after reaching new highs of volatility. That is the advanced signal which usually warns about a coming reversal of a Bollinger Band, when both Bollinger Bands are heading the same way, just as now (down, i.e the trend is down).
    When that happens, it can be interesting to play a contrarian trade provided that prices get close enough to the BB about to reverse, as it will play a role of support, allowing me to put a stop loss close to my entry point.

    Again, I'm not using T.A here to magically foresee where Copper prices will be in a few weeks.
    I'm only using T.A to try to detect potential reversal areas, supports, resistances allowing me to put a stop loss close enough to benefit from a good risk/reward ratio.
    Use T.A that way and imho you will reduce your losses, and even start making some profits on the long run.
    Trade without understanding what trading means and you will remain the fish who is here only to give his money to the pros of the trading floors and their monster algos.

    Macd is also crossing up.
    So, if copper prices would now once more test 2.90 with a bollinger band heading up towards 2.85 and more, I'm pretty sure I'll go long in that area.

  16. This comment has been removed by a blog administrator.

  17. H'mmm....but I thought gold was about to sky-rocket due to it's scarcity?!?!

    Why would Sprott sell (or shill) gold last year and this year if the Comex or LBMA was about to collapse???

    SRC=Sprott Resource Corp.

    "During 2013, SRC sold 73,971 ounces of its gold bullion for approximately $100.6 million dollars at an average price $1,359 per ounce. "

    1. Dan the Man;

      Many thanks for putting up this post and the link. Individuals like Sprott continue to pull these sorts of stunts while they come out with their outlandish predictions as they play the gold community for a group of suckers and fools.

      Just the other day I was in my truck and up popped another one of those gold commercials in which the huckster was quoting none other than Eric Sprott with a claim that this year gold was going to hit $2000 and that was the reason that the listeners should get in right now.

      Yep, Sprott is so certain, so convinced that the metal is going to $2000 this year that he dumped it last year below $1360.

      When are these poor people reading the vomit that these men upchuck as "analysis" going to wake up?

    2. Sprott is no different than you. Selling his book. It took a month for gold to rise 90 dollars and 3 days to crash at option expiration...no manipulation there eh Dano. To admit that there is manipulation of the metals (which is so widely accepted now by everyone) would mean that your charts are useless ergo your advice becomes useless. keep selling your book Dan.

    3. Got it Wrong;
      What book might that be? Please do let me know where it is and I will gladly sell it.

      The gold cult, of which you are sadly a blinded member, simply cannot admit that they have been chasing a losing investment strategy for the last two years now. And, NO, it is not widely accepted by EVERYONE as you so blindly assert. It is asserted by some and is easily disproved by an understanding of hedge fund activity; something which the gold cult will never understand because they do not understand the nature of today's modern markets.

      And if my "advice" ( which I do not give - I give interpretation of price action via charts) is so useless, what in the hell are you still doing here reading it every day and annoying the rest of the readers and posters here who actually try to engage our brains and think and analyze what the price action is telling us? those are the actions of a hypocrite with no integrity or sense of honor.

      Why not go away and enjoy drinking the Kool-Aid at the many other perma gold bull sites out there. I really think you would be much happier because there would be nothing there that might upset your world view. Enjoy the cult mentality because that is what you are trapped in. I sincerely hope you come to your senses at some point and understand what has happened to you.

  18. Link to above info.


  19. Dan The Man,

    There is no scarcity of gold. Some are buying, but many more are selling.

    That's why the price is going down.

    COMEX has plenty of inventory, there's not going to be any default.

    That's just another wild-haired story, just like Jim Willie's story last year about how Morgan Stanley Lehman-style collapse was "imminent".

    Nothing but sensationlism.

    1. Mark,
      I'm not buying into the gold shortage/empty vault's etc. hyperbole either.
      I know the perma-bull shills will always cry manipulation as their fallback excuse for price drops.
      But how do they explain away (besides evil manipulation) the recent lousy price direction in gold despite the reported large purchases by the CB's of Iraq, Turkey, Russia, China/Hong Kong and probably India and many other countries who are going long and who apparently have little problem procuring phyz gold?

      It probably sounds like I'm a gold or silver hater but I'm just a patient stacker whose tired of the 24/7 cheerleader shills out there who don't possess an ounce of unbiased objectivity they'd dare share with their followers.
      The biggest fear of the pumpers is a disinterested sentiment in gold and silver. That's why they cheerlead even in the face of bearish realities.

      Crying "manipulation" all the time is a simplistic emotional crutch they cling to and it's also the hook they use to keep their followers from wandering off from disinterest.

      CB's buying massive amounts of gold should be mildly bullish EXCEPT sentiment sucks. Unless you're a pumper who shills services and merchandise.

    2. PS. Willie is nothing more than a eccentric sensationalist pumper of fictional scenario's that are intended to suck in the easily amused who'll believe anything.

  20. Fresh new lows for the move in GDX/GLD.

    The "terrifying collapse" continues unabated.

    Meanwhile, the economy booms. Steelcase Furniture up 18% today, Movado up 9%, AOL up 6%, more breathtaking moves in the consumer and cyclical space.

  21. Seeing as I'm new to trading... Can anyone suggest a sector to keep tabs on while gold is being beat down? Equities are obvious but certain ones it would benefit me to learn, know and trade

  22. gold can often make a turn off of options expiration, as the market makers will put prices where it expires the most options worthless... also in the money options held will become a futures contract on re-open, so the boyz will often yank those holders right out of the new positions!
    gold has the 200-day MA right on the 1300 round number, so things are getting interesting!

    here's a statement on the ags, but it has been the same on fund longs in crude oil, gold, you name it across commodity land:
    In recent weeks funds have gone from net short in total Ag position to net long and are seen holding largest combined net long in the grains and soy complex since 2012. Fundamentals have supported some of this reversal from net short in corn and wheat as demand and weather have offered support but sharp shift has market trimming risk with long range fundamental outlooks both domestically and globally still bearish.


  23. Just bought silver a bit under 19.80, at 19.78
    Call it compulsive buying lol.
    The reason : it's the middle of the range 19-20.60 which extended to 22.20.
    Well, that's it.
    Uh, no, wait, it's also the 77% Fibo retracement area of 19-22.20.
    And bloody copper is at 2.95 closer to the bol inf, and...euh...because I'm a jedi apprentice and the force told me to buy. I said it was compulsive.
    Ah, now checking on the 1 hour candle (after buying, sic!), I see a double bullish divergence on the macd...that is...if the macd turns back up. And it's still far from propagation axis, too, so no, I would have anticipated this signal anyway, it's much too early still.)
    Yes, really compulsive jedi apprentice long, so I put a stop loss at 19.65, not to look too stupid if it keeps falling :)

    1. Tango Duhaut to ground control.
      Reasons of buying :
      - 19.80 in the middle of 19 - 20.60 range
      - gold hit 1300 level = ma50 = ma200 = target
      - because I'm high and I think I'm a Jedi

      Other signals : none. i.e much too early to have any confirmation of a bounce. MACD 1 hour silver still heading down and not on its propagation axis. Bollinger Bands daily on Copper still heading down, which may lead to disaster tomorrow and a reinforcement of the bear trend.

      Conclusion : this was a compulsive crazy trade. When I start making compulsive crazy trades, I turn off the computer and stop trading for the whole day. So that's exactly what I'm going to do :)

    2. So the trade met its logical conclusion :
      silver went down to 19.50 and I got stopped, losing 13 cents.
      Lessons to be learnt :
      - no compulsive trades
      - don't get in the market all the time, and when you do, with a real strong reason
      - if you feel emotionally weak that particular day and that this will make you act strangely, just turn off your computer and come back one or two days later
      The last condition I applied plus my stop loss allowed me to lose only a little yesterday. That's still too much. I had the feeling that the trade was wrong a few minutes after I made it, which is why I described it here as well. Learn from successful trades. Learn from mistakes as well. Trading is a constant fight against yourself. Don't think you are a Jedi. If you do, turn off the computer :)

  24. Axis Bank fourth quarter (January-March) net profit rising 18.5 percent year-on-year to Rs 1,842 crore on higher other income and net interest income. Net interest income during the quarter jumped 18.8 percent to Rs 3,165 crore while non-interest income climbed 10.3 percent to Rs 2,213 crore year-on-year.Asset quality improved sequentially.

  25. Copper prices declined on Tuesday, as investors remained cautious ahead of the Federal Reserve's policy meeting due to begin later in the day.

  26. Gold held below $1,300 an ounce as investors assessed the health of the U.S. economy and the impact on monetary stimulus against tension in Ukraine and Hedge funds cut bullish bets on gold futures by the most in a month as holdings of physical bullion in exchange-traded funds dropped to the lowest since 2009.
    Bullion Tips


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