Michael Noonan: “If you want to know your past, look into your present conditions. If you want to know your future, look into your present actions.” ~Buddhist Saying.
The cliché for that is, “you cannot know where you are going until you know where you have been.” One of the most direct applications of this wisdom of the ages is found in charts.
Left to the realities of supply/demand factors, gold and silver would be considerably higher, already. We can think of no other commodity situation with unprecedented demand and shrinking supply that has done anything else than drive price much higher. The fiat cartel will not allow reality to supplant their massive wealth-transfer Ponzi scheme, as it enters the final stages like a cancer consuming everything until inevitable death results from this banker faux-Kabuki theater.
This leaves us with monitoring the measure of price “reality” found in the charts. Lacking an alternative, the COMEX and LBMA remain the questionable arbiter of last resort to see how the marketplace is assessing what “value” to use in determining the current price for gold and silver, as derived from the exchange paper markets. Ultimately, therein lies the most important element, that of timing.
Fortunately, charts are a good thing, providing a past as a guide and pointing to a likely future direction.
Charts are the distillation of all available information, including inside information, even manipulation. It is okay not to be able to understand or read them, but it is a huge mistake to dismiss them. You see the results that include the most highly informed, as well as those with the highest degree of skill in trading. You get a front seat on the battle line, observing first hand what is going on. Too few realize the importance of the valuable information a chart can and does convey.
Some of the finest and most highly regarded minds in the world of PMs have been saying metals are going higher, most particularly over the past few years. The charts have “said” otherwise, and that has been the correct read. Charts are infallible. Why? They are the market. They are the mirror of what the war between supply and demand is. They show the intervening battles between buyers and sellers, and everyone gets to see the results, as they develop, each and every day.
If demand is greater than ever; if supply is shrinking, relative to demand, yet price is and has been moving lower, then the problem is what almost all recognize, manipulation. The charts for both gold and silver have been steadily reflecting that fact. What that fact is telling the world is that the manipulators have been in control, and still are.
If gold is going substantially higher price levels, it must first show an ability to rally above certain resistance levels. That has not happened, in large. The same holds true for silver. If you read about all the reasons why both metals should be at much higher levels, weigh that information with what the charts are revealing.
If you want to make rabbit stew, first you have to catch the rabbit. It you want to see prices go higher, first you have to see them stop going lower. It could not be any simpler.
Within this context, here is our read of the charts.
The reason why the trend is mentioned so frequently is because it tells you if the ocean tide is coming in or going out, as it were, and you do not want to be opposing the direction of prevailing strength. In gold, the trend remains down, but evidence is building that shows there are signs of weakening.
The simplest definition of an up trend is a series of higher swing lows and higher swing highs. The most important information in the weekly chart, after acknowledging the trend is down, it the first higher swing low since the 2011 lows. This is showing factual evidence of a change in market behavior. While the trend is down, it has weakened, but not ended.
What would change the trend? A higher swing high above the August high of 1434. In a down trend, the onus is on buyers to demonstrate a change in market behavior, and this is one of the measures.
If you notice the bars since that August swing high, they have remained relatively large and overlapping, at the same time. In making that observation, we learn buyers have been more active and responsive to selling activity. The proof of that comes from the outcome: a newly established swing low. Price closed at the highest weekly level since the opening week of September. This is a red flag for the bears.
Weekly charts are not used for timing. We need to look at a daily chart for more detail.
Charts can be a thing of beauty when they capture an ongoing synergy that procedural leads one in a certain direction, and with a purpose. There are a few aspects found in this daily chart.
On the left side, there is a clustering of closes, at “A.” A clustering can lead to a brief pause before resuming the previous trend, [down, in this case], or it can lead to change, as it did here.(...)Click here to continue reading the original ETFDailyNews.com article: Gold and Silver: Sticking With The ChartsYou are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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