Commodity Trade Mantra

In The Gold And Silver Markets, It Is Always About One Thing – Timing

In The Gold And Silver Markets, It Is Always About One Thing - Timing

In The Gold And Silver Markets, It Is Always About One Thing – Timing

Is the current rally from the lows the result of:
A. Long lines to buy silver and gold coins world-wide
B. Unprecedented demand for those same coins, year over year
C. Drawdowns of physical gold/silver on COMEX
D. Central bank PM vaults about empty
E. Reneging on delivery by banks to gold customers
F. Deutsche Bank demanding repatriation of some of their gold, [unavailable]
G. Allocated gold accounts that have no allocated gold, [Paper promises instead]
H. China, Russia, India taking all offers by the tonne
I.  Potential attack on Syria unilaterally by O[bomb]a
J. All of the above
K. None of the above

We would take J. All of the above, and then add, is that all there is?  Is that the best the gold and silver market can do in light of so many ultra-positive dynamic developments? Is there any powder left in the PM guru muskets to substantiate pie-in-the-sky-promises, all unfulfilled, as of Friday?  How much more information will it take to propel gold up to the “lofty” 1438 level?  [Not as much pie, and not as much sky.]

There is one exceptional chart that best captures the essence of the current PMs scenario within its 5,000 or whatever year history, and it lets all know that everything else is a symptomatic consequence.  When you understand the implications of this chart, you then understand it is all a matter of timing.  You can add to the above list as many other aspects relating to gold and silver, and when the list is complete, ask, “How is it working out for you?”

Credit to Incrementum for their great chart.  It would be even more dramatic had it gone back to 1913, when the private banking cartel, aka Federal Reserve, took control of the US money supply.  It has always been just a matter of time.  Everything else is but a symptom.

 

Gold Purchasing Power

The London fix has been replaced by the endless “guru fix’ to supply the shot in the arm so necessary to sustain the belief of over-the-moon-prices.  “So and so said gold is going to $5000 and silver to $300.”  And?

How many times have we heard it?  The drum beats are again getting louder.  Meanwhile, the market struggles to maintain a solid rally.  “The paper market is not the real market!” Okay, where is the “real market?”  Being neither Russia nor China, most people are paying “paper market” prices for the real physical.

It is not that the potential for much higher prices is unlikely or the messages are without merit.  It is not as though we have not been drinking the same gold/silver Kool-Aid, for we bought gold over $1700 and silver over $45, [physical], and still own it, as well as still buying.  No credit here  for timing, on that score, although the buying was more than for price sensitivity.  It was for the pragmatic purpose of actually having the metals, in hand, no matter where the price was.  That has been covered numerous times, already.

This is why we only rely on charts to do all the “talking.”  The market is the chief Auditor of what the actual participants have to say.  “Listen to what the market is saying about others, and not what others are saying about the market.”

Another potential the weekly chart shows is from the late June low to the August swing high, price can easily correct to 1270 area and still keep the integrity of a potential bottoming formation intact.

It is all about Timing.

 

GC W 6 Sep 13

The chart comments adequately express what is developing near term.  It is necessary that we admit to taking “stupid pills” when gold reached the August swing highs. Instead of realizing at least partial profits at an obvious resistance area, we ignored the clear message of the market and opted for “staying long” based on the “obvious” non-timing market belief that “reality” would set in.  That was a misplaced “belief.”

It is all about timing.  Why didn’t we read our own message?!

 

GCZ D 7 Sep 13

There are some positive short-term developments noted on the chart, but this lower time frame is subservient to the higher time frames.  It does not look like a correction could go to the 1275 area, on this chart, but the weekly says it could happen, and we all need to be aware of the possibility.  Let the market lead the way, then follow.

 

GCZ 120m 6 Sep 13

Silver continues to hold better than gold, for whatever reason.  The gap we noted, when it occurred, is interesting to follow, just for drill, to see if it holds, [for a lifetime] or gets filled.

The whole world knows about that 26 resistance area, so expect some backing and filling when it is next approached.

 

SI W 7 Sep 13

The current activity on the right side is necessary to absorb all the selling from the left side box area.  Since no one knows how any market will develop, we do not know how much time it will take for silver to spend whatever time is needed to successfully rally above the 25 area, which may also be a part of the more obvious 26 price level.

SIZ D 7 Sep 2 13

The intra day breakouts, D/S notations, are growing more than selling efforts, S/D. When, and how price approaches/overcomes/fails to overcome the immediate 24.60 area will provide important market feedback on the character of the silver rally. Still long both metals.

SIZ 120m 7 Sep 13

 

Can $23 Level in Silver Prices Hold? $26 Should

The silver situation continues to grow more positively, based on developing market activity.  Almost everyone has an opinion, but they are all subservient to whatever the market dictates with its most current and most reliable information.  It is then a matter of reading the message.  Sometimes it is very clear, sometimes not.

The resistance for silver at $26 is uppermost on the mind of everyone with any degree of awareness for this market.  A lesser market message, but one still quite clear was the lesser resistance from a demonstrated failed swing high retest back in April.

The new swing high in August closed poorly, the market advertising the likelihood of a correction to follow, as one did.  We took no defensive action on this, at the time, with the “belief” that $26 would be the more important area from which to respond, and the activity for silver was developing positively.  The point is, even though the market gives out important information, it is not always heeded, for a variety of reasons.  For the most part, many do not even “see” the “message.”

The TR box on the left shows how price failed to overcome $23 at the end of May and early June.  There was an indication of how $23 could be important when price held that level, earlier in April.  Broken support becomes resistance.  The second, smaller TR box at the right shows that $23 was traded above/below for six TDs before  rallying strong above the TR, making it support, once again.

The upside breakout gap is shown as a measure of potential strength underlying presently developing market activity.  The sharp volume increase on the first TD in September is likely to be further defended by buyers, and it was.  The question posed, will $23 hold?

A look at the intra day for a possible answer.

 

SIZ D 2  7 Sep 13

The starting point for this scenario was 23 August, when silver had a breakout from a wedge formation on exceptionally strong volume, [shown on the 3rd chart].  Whenever there is high volume behind a breakout, it will be defended on any retest, as those who bought, at the time, want to protect their purchases.

The first retest came on 1 September.  There was an effort for price to go lower, but it failed, evidenced by the market’s ability to respond with a strong rally.  This is an example of the HOW a market responds to a known support/resistance area, and it gives us added information from newly developing market activity that $23 is holding very well.

The failure rally of the 28th, in between, had a secondary retest right after the S/D wide range bar lower, and that little retest effort failed at just under $24.60.  Its importance became evident when price contained another attempt at that level, early in September. This created a small TR between 24.55 and 23.

There were two more attempts to break support at $23 on Thursday and Friday, and both failed when, for a period of time, $23 looked like it would not hold.  The increased volume sell off on the 5th became pivotal on the 6th when another retest was failing to confirm the attempted break.  You can see the high volume rally that created a collective sigh of relief for silver longs, at that point.

What makes that strong rally bar even more significant was the bar just before it.  It had all the appearances of a potentially failed rally, followed by a poor close that looked like new lows were eminent.  That would be a legitimate opinion, at the time, but the market does not care what we think.  It will do what it will do, regardless of anyone’s opinion.

For now, silver is in a small trading range, and $23 has held.  This can change on Monday, if silver were to sell off under $23.  We do not know, nor do we have to know.  All anyone can do is deal with the available information in the present tense.  If new, future market activity alters that view, we get to deal with it then, and respond accordingly.

If that little bar just prior to Friday’s strong rally tells us anything, it is to wait for confirmation before acting.  Had we determined silver was about to break under $23, by the looks of that bar, and acted on it, we would have missed out on the rally, just a few minutes later.  This is why we always say to follow the market, not lead it.

SIZ 90m 7 dec 13

This chart of the then lead month, Sep, is included to show how the breakout on the 23rd occurred on very strong volume.  It was a pivotal piece of information, and still is.

SIU 90m 7 Sep 13

 

 

Submitted by: Edgetraderplus

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