Silver Cup and Handles Project to a Price Target of $54

I know some of you have been projecting these nested 'cup and handle' formations on your own, because several readers have sent their examples to me and have asked for comments.

My first comment is the most important and I wish you to take it to heart.

Projections such as this are not forecasts, because the chart formations in these examples for the most part have not been 'activated' and are therefore merely potential things, possibilities, lines on a page subject to a great many exogenous forces and variables, including human and institutional decisions.

Only the cup and handle 'a' on the chart below has been activated and achieved fairly quickly I might add.   We are now working on 'b' and it will not be activated unless the price of silver takes out 21.50 or so.

And then and only then if the price of silver in dollars holds that level with the kinds of retracements and pricing action one would expect to see as a confirmation of it can we say that the chart formation is active and 'working.'  And even then it could fail.

And then after that we would be watching and considering scenarios c and d.

Again, this is not a forecast because it cannot be since it is not an active chart formation.   It is a set of possibilities based on the mechanics of supply and demand and price.  And as we all know too well, these various aspects of the market can be led down a dark alley of leverage and willfulness and strangled.

Let us bear in mind that at this time the central banks, too often in concert with their associated multinational banks and camp follower hedge funds are openly engaging in market actions to move prices for the short term where they will, and that these actions are not limited to interest rates.  I hope we have moved well past this debate.

The question is how long can the financial engineers keep doing this type of 'pooling,' as the have done in the past, with assets that have ties to physical reality that tends to trump debate?   And what happens when the pool dissipates and the markets revert to longer term relationships as they always seem to do.

I will not be posting this chart on a regular basis.  But as long term readers know I keep several of these scenario charts going in the background for my own pathfinding purposes.  And that is all it is. It is a sketch of realms still unknown.  But it is nice to keep sketching out a map of where one has been and where one might be heading.

So let us consider this a diverting look into what might be possible on a slow Friday afternoon rolling into a three day weekend on which we celebrate the sacrifices for freedom of those who have come before us.

Gold Daily and Silver Weekly Charts - Hi Yo Silver!

Tony Sanders made a confoundedly interesting observation today.

"I keep hearing from anti-Brexit cheerleaders that it is about immigration. While there may be some who voted for Brexit to get their borders under UK control again, it is mostly about the big banks and who is going to bail them out. Again."

And that may be a good question for most of the beleaguered citizens of the Western developed nations to consider.

I wonder if the sado-monetarists will be as hard on the shareholders and management of Deutsche Bank as they have been on the people of Italy Greece, Portugal and Spain.

Mexico's central bank raised interest rates 50 basis points today to 4.25%, largely in a market positioned move to give a pause to the forex traders who had been players various crosses short the peso. It certainly wasn't due to a robust economy.

The British pound fell today as the Bank of England's Mark Carney suggested today that they would be back in the monetary stimulus saddle in response to Brexit.

And as you can see below we saw the first significant deliveries in Comex silver, as the July contracts come into play, which is an active month for silver and not gold.

So keep an eye on it, because except for the huge physical hoard in JPM's warehouses, physical silver seems a little on the tight side against demand at these prices historically.

The 'breakout levels' for both gold and silver are fairly easily seen on the two charts below.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - BofE's Carney Saves the End of Quarter

Today was the last trading day for the second quarter of 2016.

The Bank of England's Mark Carney pledged today to do whatever the Bank must do to support Britain's economy.

And on that accommodative note, global paper assets turned around and took some legs higher.

I am starting to think bearish thoughts here, but wish to see what stocks do when they hit the overhead support levels.

As you can see, they bounced very nicely on the underlying support. The NDX is particularly well-behaved, with the SP futures being the pivot on stock market upside interventions.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - The Men Who Sold the World

"You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them. And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not.

And it's not surprising then they get bitter, they cling to guns or religion or antipathy toward people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

Barack H. Obama,  San Francisco Fundraiser, April 11, 2008


"The problem of the last three decades is not the 'vicissitudes of the marketplace,' but rather deliberate actions by the government to redistribute income from the rest of us to the one percent. This pattern of government action shows up in all areas of government policy."

Dean Baker


"If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time."

Simon Johnson, The Quiet Coup

Today was a double-header of discouragement in how quickly the pampered plutocrats are dismissing any possible lessons they might have taken from the Brexit.

The Three Stooges Amigos at the North American Leaders Summit, Barry, Pena, and Justin, were talking up free trade, globalization, and the benefits of corporatism for the ignorant masses.

And on the other hand, the profound thinkers of modern finance returned to Aspen today to celebrate the Aspen Art museum, a monument to the nouveau riche with a 'broad base of community support of one million dollar donations from 28 individuals.'

The interviews with the very serious people there were surreal, almost otherworldly and profoundly discouraging in their lack of understanding of what is happening all around them, and any sense of context and self-examination.  Well, that is why people go to Aspen and all the other enclaves of unreality these days.

I fear that this is going to get much uglier before it gets better.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Down In the River To Pray

They'll never learn.

It looks like it will have to be the hard way.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Pouting Plutocrats and Their Pampered Professionals

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.  Intellectual myopia, often called stupidity, is no doubt a reason.  But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right."

John Kenneth Galbraith


"Egypt is poor precisely because it has been ruled by a narrow elite that have organized society for their own benefit at the expense of the vast mass of people. Political power has been narrowly concentrated, and has been used to create great wealth for those who possess it, such as the $70 billion fortune apparently accumulated by ex-president Mubarak. The losers have been the Egyptian people, as they only too well understand.

We’ll show that this interpretation of Egyptian poverty, the people’s interpretation, turns out to provide a general explanation for why poor countries are poor. Whether it is North Korea, Sierra Leone, or Zimbabwe, we’ll show that poor countries are poor for the same reason that Egypt is poor.

Countries such as Great Britain and the United States became rich because their citizens overthrew the elites who controlled power and created a society where political rights were much more broadly distributed, where the government was accountable and responsive to citizens, and where the great mass of people could take advantage of economic opportunities."

Daron Acemoglu and James Robinson, Why Nations Fail

Don't you just love watching the public reaction to Brexit, and the barely concealed contempt in which the professional class, including the liberal establishment, holds the general public?

It will keep getting more and more obvious as the people continue to diverge from an increasingly unsustainable and superannuated status quo.   And she-who-must-not-be-named is its poster child.

Could their designs be any more obvious?   They will certainly continue moreso as the mask of civility drops away and the thuggish side of the will to power rises.

This is an old story, and as always is going to end very badly unless some cooler and wiser heads begin to rein in the pigmen.  And that will not be happening anytime soon judging by the other worldly denial of insiders, the very serious people.

Today was a 'risk on' day with gold and the dollar giving back some of their recent gains.

Let's see how we go into the long weekend.   I had forgotten that the 4th of July was coming up, but was reminded of it by the samples at Costco this afternoon, which were particularly generous and quite good, forgoing any other thoughts of a separate lunch. Samples lunch at Costco with your best girl?   Life is good. lol

Have a pleasant evening.