Stocks and Precious Metals Charts - Austria's Beer Party Pours It On, Pulls a Head

 

"A political party in Austria that started as a joke is surging in the polls after coming up with an unusual strategy to curry favor with Vienna's populace — proposing a policy that would give a monthly barrel of beer to each household in Austria's capital. The aptly named 'Beer Party,' is currently polling at 12%, faring better than the center-right ÖVP party, which earned 10% in the latest poll, according to The Local, an English-language news outlet based in Austria.

If the state's elections were held today, the Beer Party would be on track to pick up city council seats. The Beer Party started out as satire. Dominik Wlazny, a 36-year-old musician, doctor, and performer created the group in 2015 to draw attention to what he saw as corruption within Austria's political ranks.

The organization's priorities include getting rid of taxes for beers served at bars while simultaneously upping the tax on 'Radlers' — a 50:50 concoction of beer and lemon soda — as well as similar mixed-drink 'atrocities.'  Meanwhile, the party's Radler buy-back program would allow people to turn in the lemon-flavored drinks in exchange for 'real beer.'

Wlazny ran for president in Austria's 2022 elections, becoming the country's youngest-ever candidate at 35 years and 10 months. Among his list of policy goals were a media literacy campaign in schools and a competency test for elected officials. He earned roughly 8.1% of the vote that year, per EuroNews. Besides its beer-themed policy goals, the party also holds a progressive stance on trans rights and green initiatives and wants to expand investments in public transport and sports facilities."

Nick Gallagher, Austria's Beer Party Surges in the Polls Ahead of State Election, The Messenger

 

Stocks slipped gear back into rally mode today, rising into their highs in the late afternoon on dodgy volumes.

Wash - rinse - repeat.

VIX fell.

The Dollar chopped sideways.

Gold and silver rebounded also going out near the highs.

Stock option expiration tomorrow.

There will be a February gold futures contract option expiration next week.

I like the idea of Austria's Beer Party.

We also have less serious satirical political parties in the US that propose outlandish policies and offer even less qualified candidates than the British.

They are called the Democrats and the Republicans.

And because they act so goofy doesn't mean that they are crazy.  They just think you are.

And you shouldn't have to be a banker or billionaire to be able to party hearty on the government tab.

Have a pleasant evening.

Stocks and Precious Metals Charts - Gold Chart Potential Cup and Handle

“Everything passes, only truth remains.”

Fyodor Dostoyevsky, The Brothers Karamazov

Charts at Market Close - The Duty of Delight - Cup and Handle

"How necessary it is to cultivate a spirit of joy. It is a psychological truth that the physical acts of reverence and devotion make one feel devout.  The courteous gesture increases one's respect for others.  To act lovingly is to begin to feel loving, and certainly to act joyfully brings joy to others which in turn makes one feel joyful. I believe we are called to the duty of delight...

People say, what is the sense of our small effort? They cannot see that we must lay one brick at a time, take one step at a time. A pebble cast into a pond causes ripples that spread in all directions. Each one of our thoughts, words and deeds is like that."

Dorothy Day

Today was the weekly trip to the butcher and the baker. We tend to be a little picky about quality, so we do drive a little distance but it is well worth it.

It is the little things that make life worth living.  Maybe that is why those who have too much, and think too much about themselves, are so often rather hard to please, and among the most miserable of God's creatures.   Greed can never be filled, and therefore the greedy heart is never at rest.

Stocks were in a lazy upward drift for the better part of the day, with silver following and gold in a sideways chop.

Kohl's and Macy's cut forecasts after the bell, and both stocks are getting slammed lower. Just another sign of the great and glorious consumer recovery.

The first one hundred days of Trump's administration are sure to be interesting. He is not even sworn into office and is already making a big splash.

Just to reiterate what I said yesterday, if gold and silver can break out from here, it will look like a rather long handle (ladle?  lol) in a cup and handle, with measuring objectives as initially indicated, and most likely much higher from here by year's end 2017.

But first the breakout attempt and a confirmation.  One step at a time.

Have a pleasant evening.

Gold Cup and Handle Targets 1490 On a Breakout, With New All Time Highs Likely In Silver

A reader, David B, has suggested that I remind you all of the big cup and handle of 2010, with its subsequent breakout run higher in 2011.   The bottom of the first big retracement was on the August 2010 gold option expiration on the Comex.

I admit that being preoccupied with other things, and not wanting to get ahead of ourselves,   I have merely been plugging in prices for you, and not discussing the progress of the cup and handle.  Since I have had several emails about this, I thought a brief discussion now might be worthwhile.

First as a reminder, here is the cup and handle of today.  The target on a breakout is 1490.  I have included that notation, admittedly in the 'small print' for many months.

I will fill more things in, such as initial targets and retracements, once the formation is activated and confirms its viability with a breakout.  The fundamental driver could be a break in the free gold float in London and a short squeeze in search of physical supply, and a deleveraging of 'paper gold.'

In the very last chart I show how silver broke through 19 and ran to break above 40 in the same time period.  If we get a breakout in the weekly cup and handle in silver that is working itself out on the charts I think a new all time high is in the cards.

Let us not get ahead of ourselves.  The price must breakout over the topmost slanted trendline in green in order to be activated.  Thinking about what may or may not happen next sets us up for a disappointment and does not lend itself to 'get right and sit tight.'

So far I have not been particularly surprised by anything that has happened.  If you refresh your memory about the prior cup and handle you will see why.

Patience is our ally, and time is on our side. Change is coming, slowly but surely, and at the end, all in a rush.

And we'll always have rock n' roll, moondogs.

Below is a chart of that prior cup and handle from the year 2010 which initially targeted 1375 and then 1455.

And below that is a picture of its fulfillment early in the year 2011.

But we'll always have rock n' roll.

Speaking of being preoccupied with other things, I will be spending most of the afternoon at hospital with herself, getting her sorted out and prepared for the next steps, so there may be no updates tonight.

The Next Battleground for Gold Will Be At 1550 If the Cup and Handle Formation Completes

If and when gold breaks out of this cup and handle formation, which is a matter of probability and not certainty, the next real battleground in a new bull market will be around $1550. One of the more interesting variables will be the manner of any breakout, and the 'time' it takes to reach a minimum measuring objective.

This is quite appropriate as 1550 marks the major support level for the channel in which gold had been moving prior to the recent bear market.

A successful cup and handle formation, should this occur, would mark a bottom for gold and quite possibly a resumption of another leg of the bull market.

It will be interesting to see how the future movement of gold as a cross to the US dollar may unfold. If the money masters were wise, they would permit it to rise back into the old trend channel and seek to find a balance in the wagers with the available physical supply.

However, wisdom so often being overlooked by power and overwhelmed by it, we may have to consider that a 'break' in the market may precipitate this activation of the cup and handle and therefore the next move higher, and a challenge to 1550 that completes rather more quickly then might otherwise happen.

In seeking to extend control and overreaching, people sometimes bring about the very circumstance that guided the fear that led to their overconfidence and misjudgment.

O, what a tangled web we weave when first we practise to deceive!

Walter Scott, Marmion

And this is what continues to muddy the waters in too many markets these days.  That there has been and continues to be manipulation of prices of too many important benchmarks and assets is no longer a serious question for open minds.    There are still too many minds that remain stubbornly, or wilfully, closed to the necessity for reform.   It is not the original offense but the overreach and coverup that knocks holes in the edifice of established power.

Rather, what remains puzzling are the details: the extent of it, the actual players who are involved besides the usual suspects, and of course, any motivations that may exist then the mere greed for illicit and outsized trading profits.

Gold Daily and Silver Weekly Charts - The 'Dangerous Obsession' with Gold

"Gold has worked down from Alexander's time.  When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory."

Bernard Baruch


"The commerce and industry of the country, however, it must be acknowledged, though they may be somewhat augmented [by paper money], cannot be altogether so secure, when they are thus, as it were, suspended upon the Daedalian wings of paper money, as when they travel about upon the solid ground of gold and silver."

Adam Smith, Wealth of Nations, p. 262


"Gold, unlike all other commodities, is a currency...and the major thrust in the demand for gold is not for jewelry. It’s not for anything other than an escape from what is perceived to be a fiat money system, paper money, that seems to be deteriorating."

Alan Greenspan, former US Federal Reserve Chairman, August 23, 2011


"For central banks this [gold] is a reserve of safety, it’s viewed by the country as such. In the case of non-dollar countries it gives you a value-protection against fluctuations against the dollar."

Mario Draghi, ECB President, Q&A at the Kennedy School of Government at Harvard, 2014


"Le papier-monnaie revient finalement à sa valeur intrinsèque - zéro."

Voltaire

Someone sent me another clumsy hit piece on the precious metals today, coming out from the mainstream financial press, passed on by their courtiers and hangers-on in support of a hit on the metals. They do this not only for the metals but for the miners as well, and it is sometimes surprisingly blatant. New York and London have nothing over the Canadians in this regard.

And why a hit on the metals now? Because I think the physical bullion 'float' in the West is getting more and more thin as a result of the misguided attempt of the financial engineers to correct their outrageous and persistent errors in monetary and fiscal policy by reshaping the markets and values to suit their own personal needs.

They are attempting to sustain the unsustainable, which is one of the artifacts of the credibility trap.

These sorts of affairs are 'fiat' with a capital 'F.' Things are this way and of this value because we say so. But unfortunately that sort of approach to reality only works as far as your span of significant control.

And this seems to be the reason why so many modern theoreticians seem to be caught up in a Ponzi-like need to keep expanding and increasing that control, because their policies and theories are cutting so badly against the grain of reality.

External standards and restraints, such as gold in the case of money, seem particularly dangerous to those with an almost pathological obsession with power.  Perhaps I am incorrect, but this is where the data leads my thinking, and history tends to support it.

But, after all, we are in a largely unreformed and corrupt financial system against the broader backdrop of a major change in the global currencies, also known as a currency war.   And truth is often one of the first victims.   C'est la guerre.

Speaking of data there was little meaningful action for gold at The Bucket Shop yesterday, although there was some movement in silver.

A customer coughed up some silver bullion and the house at JPM took most of it, with Nova Scotia taking the rest.   And in the warehouses, silver continues to move since this is how CNT is managing its wholesale bullion business.

The cup and handles on the charts are still operating but not activated yet.  If you do not understand this you may wait for it to happen and be reported here or you can click on the topic on this site and read the explanations of this chart formation.

We need to see a resolution of 'the handles' especially in gold. In silver it must merely sustain any retests.

In the short term gold is now oversold.   It may become even more oversold.  Silver is not quite there yet as can be seen on the special charts with technical indicators below.

Have a pleasant evening.

Gold Cup and Handle From the Prior Leg of the Bull Market

As a reminder, here is what a 'successeful' activation and execution of a cup and handle formation looks like.

And as another reminder perhaps, this particular bull rally was later ruthlessly crushed by an avalanche of synthetic gold derivative selling that over time significantly depleted the 'gold float' of physical bullion available to the Asian markets.

Gold: A Closer Look At The Potential 'Cup and Handle'

Here are the possible outcomes for the current 'rounded bottom' for spot gold.

If it has a retracement that successfully returns to set a new high for this leg of the market we will have a successful handle and the formation is activated.

However, it is also possible that there will be little to no retracement, and that gold will pause, backing and filling its recent gains, and then break out higher.  This would be just a rounded bottom, with a similar measuring objective but a slightly lower probability and a greater risk of a later correction as weak hands are shaken out, most likely in March.

Or it could just break down from here.  Gold is a very manipulated market, because it has been traded like a virtual currency lately, rather than a commodity money.

The commodity aspect of this market is going to wreak havoc at some point if this continues unabated, because unlike the Dollar the Federal Reserve does not own a gold printing press.  Although the banking system has been doing yeoman work in ginning up synthetic gold through their highly leveraged derivatives.

The astute will notice that I have essentially listed most of the possible outcomes here.  How could I not?  The trick is not to use a system to predict the exact outcome well ahead of time.   That is a good way to go broke, unless you are just selling the information to others.

No, never has an aphorism been more true that that of Walter Bagehot's, that 'life is a school of probability.'

Most want to hear exactly what will happen, and not only that but exactly when, maybe with a few days leeway.

No one knows that sort of thing, and if they did, they would not sell it to you.   There are those who have made about twenty or more tremendous predictions for a bottom in gold over the last 24 months, and one day they may be right.

And the apologists and trolls for the status quo in a corrupted market have made an equal number of more calls for gold's doom, and have done so even as it ran initially from $250 to $1850.  And quite of few of them were broken by that run, and were even whipsawed, and so nurture an abiding discontent for gold and silver, as if these venerable metals take any notice of it.

There is nothing wrong with talking about this sort of thing, and pushing back and forth on opinions, some informed and many others not.  But it is a dangerous business to actually put your money to work on this sort of basis, because you may find yourself exhausted both emotionally and financially when and if the market actually shows its hand.  And it will.

No, our job is to assess the inputs and lay of the land, understanding what is determining the price, and the various supplies and demands and what drives them, and then to learn what to watch for and to properly assess the probabilities.  And of course that is just the beginning because one has to learn discipline and money management, and the tuition for that course in life learning is rather high.

So let us continue to allow the market, and especially the analysis of the underlying stock of gold inventories and mining production, and the ebbs and flows of the currency war, the times being what they are, to inform us.

Gold Daily and Silver Weekly Charts - Cup and Handle - How Sweet It Is

“After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting.  Got that?  My sitting tight!

Those who can both be right and sit tight are uncommon. I found it one of the hardest things to learn.”

Jesse Livermore

I had such a feeling that these jokers were going get stuffed on the usual Non-Farm Payrolls precious metals hit.  And I may have had some modest wagers in that direction from this morning.

But for most of us, and for most of my own portfolio, we do not wager against The Bucket Shop and exhaust ourselves trying to play their short term wiggles, dodges and headfakes with their synthetic gold.

We 'get right and sit tight.'  And I am seeing confirmation after confirmation that the fundamentals on the precious metals are solid, to be understated about it perhaps when so many will be going hyperbolic.

There are still difficulties, and things could turn rather ugly on the political fronts.  Who can predict that sort of thing?  But based on the knowable, things are unfolding in a very rational manner for those who can see past the noisome rantings of the financiers and their economic status quo.

One might take measures to get their metals into more appropriate places for 'insurance.'  And that means out of any unallocated accounts, or places presided over by the bullion banks and their associates, where ownership could become a debating point under duress, as in the case of MF Global.

If Nick Laird's analysis of the 'gold float' is correct, then we should start seeing fireworks on the physical front sometime later this year.

I have drawn the beginnings of the 'cup and handle' on the chart. The 'handle' will form on the right, and will take the shape of a retracement from wherever the top of the cup may be.

It will not be an active formation until the retest is successful, the handle is set, and the price of gold breaks back out to new highs.

That is a lot of things that may or may not happen from here.

But for now I will just say, have a pleasant weekend.