"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, December 14, 2011

Gold Chart and thoughts

Gold continued falling lower today plummeting over 4% as it failed to hold support near $1650. Once that gave way, it did not take long before it ran the downside stops gathered there which fueled further selling. That selling gathered additional momentum once $1620 could not hold and really ramped up aftter $1600 collapsed.

There has been severe technical damage done to the charts with today's breach of 3 chart support levels. The last line of defense for the bulls to prevent a drop all the way to $1500 is in a band near $1560 - $1535.

One point of slight comfort for the bulls is that the HUI has thus far held suport down near the 500 level. If the Dollar continues heading higher however, it might not be able to keep from succumbing to selling pressures.

Bonds are rallying strongly today suggesting a flight out of the Euro and by consequence risk trades and back into Treasuries and the US Dollar.


  1. Jessee has a couple of nice theories. I think buying mining companies on the cheap fits best.
    Otherwise, Theory 3: Santa had to liquidate all the gold he collected at various tipping residences for the last 5 years. He had to liquidate due to the cost of living increases. His production costs were predominantly driven up by the price of energy (firewood) and Reindeer dung (burned with little CO2 emissions). Additional increasing operating costs included a sub account Reindeer Training-V. These costs tripled under the current administrations extensive mandatory retraining law just instituted in early 2011. This training required all reindeer to attend several certificate training sessions. Additional expenses demanding liquidation of Santas Assets included increase in specific payroll or employee benefits necessary for keeping his labor force. One account nearly tripling identified was "Alcohol allotments". Statements made to press indicated that declining morale issues of the elves. Lastly and not least, the Elves had to vote whether or not to accept Santa's last bargaining agreement. This put them way behind schedule and overtime labor costs increased drastically.

    Merry Christmas Everyone

  2. er that was depressing.

  3. I'm so worn out that at first I thought you meant Jim Sinclair --- he has that farm, so the mention of firewood tricked me at first!

    The alcohol bit reminds me that I need a drink!!

  4. In the age of deleveraging, a buy and hold strategy in stocks, such as the one by Barrons, that is Barron's 10 Favorite Stocks For 2012, will be utter disaster: its falling on a knife. The only prevailing forms of wealth will be diktat and the physical possession of gold. Guy M. Lerner of The Technical Take relates that gold is still in a bull market and presents the monthly chart of the gold showing it to be in an uptrend. Gene Arensberg of Got Gold presents the weekly chart of gold headed to support at $1,535. And Mitch Hammerstedt of Market-Foresight presents the daily chart of gold trading at $1,574 with support at $1,500. Gold Analysis from Shaza references the Arthur Hill presentation of the daily chart of $gold with support at 1,550. Trader Dan Norcini presents the daily chart of gold with double bottom at $1,535. The fall lower in gold reflects speculative exhaustion and presents a buying opportunity.


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