16 August 2010

Gold and Silver Charts; US Long Bond

Gold Daily Chart with Cup and Handle Formation

After three up days gold could be in for a bit of a pullback to test support at a little lower level and consolidate its gains. However, there is a whiff of hysteria in the air, and this could feed another advance or two. I do not like to see gold get ahead of itself.

But having said that, at some point it may just break away, and that will be that.

For now I like to hedge against the downside plunge in stocks that will become more likely after the US Labor Day holiday and we enter the period of highest risk, September to November.

Gold Daily Chart With 50 Day Moving Average

Gold has decisively broken through its 50 day moving average. This should provide support around the 1210 level for any pullbacks.

Gold Weekly

Gold is moving up to test the big resistance level again around 1255. I would like to see it approach that level with backing and filling, on a steady sustainable pace.

Silver Weekly

Silver is lagging a bit in its breakout and is facing determined resistance around 18.75 and then 19.50. The coming explosion in the price of silver could see daily gains hitting up limits, trapping shorts. But not yet. The big dogs are trying to back out of their short positions and cover their tracks without creating a buying panic. Silver remains more vulnerable to stock sell offs.

US Long Bond and Ten Year Note

Remarkable climb that probably signals risk concerns, even with the official buying support from the Fed and their friends. When the time comes it will be an epic short. But who can say when that will finally be.

"Do not be afraid of them. There is nothing concealed that will not be disclosed, or hidden that will not be revealed. What I tell you in the dark, speak in the daylight; what is whispered in your ear, proclaim from the rooftops." Matt. 10:26-27