10 May 2016

Charts at 3:30 PM - Fractal Cup and Handles - Hard Tutelage of Lessons Unlearned

"Our mistakes have become our secrets. Editors and journalists tear up with a guilty air all that reminds them of the party promises unfulfilled, or the party ideals reproaching them. It is true of our statesmen that socially in evidence they are intellectually in hiding. The society is heavy with unconfessed sins; its mind is sore and silent with painful subjects; it has a constipation of conscience.

There are many things it has done and allowed to be done which it does not really dare to think about; it calls them by other names and tries to talk itself into faith in a false past, as men make up the things they would have said in a quarrel. Of these sins one lies buried deepest but most noisome, and though it is stifled, stinks: the true story of the relations of the rich man and the poor in England."

G. K. Chesterton, Eugenics and Other Evils

Taking visitors back to the airport.

Notice how the gold chart looks like it might be forming a little 'fractal' cup and handle on the larger handle. And even this bottom formation appears to be embedded in a much larger cup and handle.

For you non-technicians, this merely means that gold may be forming an epic bottom that will result in a push to much higher prices.

But let's take this one day, and one chart formation, at a time. Right now the push through the psychologically important $1300 level is more important.

Silver is looking particularly attractive on the charts.

Someone remarked to me yesterday that gold was following the USD/JPY almost tick for tick. I have not looked at it but it would not surprise me since gold is being traded as a currency by speculative traders and central banks in the 'crosses' as I have noted.

But unlike paper money, in which a sovereign technically 'can never default' because they can print more and often obtain enough power to make their actions into laws, those who engage in the longer term abuse of gold will find that they cannot so easily manipulate a money that endures and exists in its own substance, and which cannot be replicated except by deception and the abuse of power.

 History is littered with the practical defaults of sovereigns through inflation and devaluation.  But these are lessons unlearned by a generation of willful moderns.

Have a pleasant evening.