As currently ‘risk OFF’ gold and silver prepare to get thrown out of the bull party (celebrating a bankrupt country’s pending agreement to play ball) once again…
…we conjure some stuff that some in the gold “community” were considering last week.
For reasons of decorum I won’t name the source, but the following was written on a chart presented in the weekly free ‘analysis’ of a writer who has somehow managed to do two things all through the gold bear market; 1) remain bullish and 2) always sound authoritative and flat out right. That is some trick. Never have I seen a mistake admitted.
“GDX is sporting a drop-dead gorgeous bull wedge pattern.”
NFTRH 348 summed up wedge patterns thusly…
“This is a convenient opportunity for us to be reminded again that Wedges, either bullish
falling or bearish rising, are among the most hyped things in TA. And when they do
work out, they only have relevance for 1-3 days, assuming the chart is a daily like this
Here is the state of the “drop-dead gorgeous bull wedge pattern” at yesterday’s close.
NFTRH 348 continued:
Here are some facts…
• HUI lost the key support parameter of 160.
• HUI is below the 50 and 200 day moving averages.
• MACD and RSI are bearish.
• HUI broke out of the “drop dead gorgeous bull wedge pattern” and then soiled
itself the very next day.
• Key support levels now are the November and December lows, just as we noted
• HUI is bearish until proven bullish, technically. Not the other way around.
I am not trying to be like ‘hey look at me, a genius’. I am trying to be like ‘hey, this was obvious and I have got to wonder who on earth is still taking the bait in the gold “community”‘.
When there is no more bait and when the fish stop biting, the precious metals will be ready. I am not bearish gold or silver on a risk vs. reward basis given other factors coming into play, but as we have been noting all along certain indicators and macro fundamentals have just not registered yet.
The way the markets are going, that could change in a flash (today, next week, next month?), but you don’t sit out there spouting dogma with your capital on the line, waiting for the change. You gather indicators, funda and technical data points and build your case. The gold “community” may have to wait until the stock mania is fully expressed, again, whether that is today, next week, next month or…
We just don’t have answers, so it pays to just admit as much and do the work in an ongoing way without the need to provide easy answers every step of the way.
 Durable goods fall 1.8% in May, and gold gets hammered further. But this is actually a positive to the real, long-term bullish scenario for gold. The one that ignores cartoons about Indian Weddings, China Demand, strong US economy pushing up prices and sending institutions running for gold’s inflation hedge, etc. etc. etc. We are of course talking about a counter-cyclical environment.