A Closer Look At An Evolving Gold Chart Formation - Three Scenarios - Time

"Le temps mûrit toute choses; par le temps toutes choses viennent en évidence; le temps est père de la vérité."

François Rabelais


“Hubris calls for nemesis, and in one form or another it's going to get it, not as a punishment from outside, but as the completion of a pattern already started.”

Mary Midgley, Myths We Live By

As we have seen so many times, the nature of a chart formation is revealed at key moments when the chart action approaches a critical decision point, especially after a sustained move higher or lower.

In this case gold is struggling hard to break a multi-year bear market and form a successful bottom off the big 1080 support.

The gold bulls can hope for a retracement that finds support fairly quickly, and mounts another assault at making a higher high than the last failed breakout attempt that was stopped at 1230.

The gold bears are quite confident, to the point of overconfidence in their ability to smash the price lower with an avalanche of paper sells in quiet hours after two years of having their way with this market.

And all the while they have been setting themselves up for an eventual confrontation with the physical consequences of their actions.  By now this should be a very familiar theme for a willful generation on any number of fronts.

A bullish interpretation can hold with declines even down to the bottom of a new bullish uptrending channel.

A break to the downside of 1120 negates this formation.

So in summary there are three general outcomes.

The first is a shallow retracement and a breakout that takes some greater momentum higher towards the 1300 level and makes the bottom with some decisiveness.

The second is a deeper retracement, with support found somewhere above 1120, with another assault mounted for a breakout higher from there.

And lastly, we must keep an open mind about a possible breakdown below 1120 setting up a retest of support, perhaps down towards 1080, or the establishment of a trading range.

I am not applying the normal probabilities to this evolving chart formation because of the obvious price manipulation that has been occurring in the paper gold markets, justified in the minds of the ringleaders no doubt by 'the currency war' and the flexing of monetary muscles.

In this environment gold and silver are being traded more like currency crosses, and less like commodities with a real basis of physical supply and demand underlying the transactions.

Perhaps the money masters may take their cue from the platinum coin, and declare a pile of sand to a thousand tonnes of bullion, of whatever variety they wish.

And you might be suprised at how many true believers will gratefully rise to praise this, drinking deeply of the madness of the will to power.  If only all would believe, it would be true! But alas, they never do.   There are always a stubborn few who fail to follow the dream into the abyss.  And so the world divides into the enlightened and the spoilers, between us, and them.

To the truly relativistic mind, nothing is impossible if you apply enough conviction and power, at least in the musings of the modern and, at the lingering last, the high walled bunkers of the few.  Their pipe bowls waft out familiar dreams, of freedom from restraints, and from their own mortality, and in the end perhaps, the last of their humanity.

All will be revealed with time.  We cannot presume to know exactly when.

Till human voices wake us, and we drown.

Gold Daily and Silver Weekly Charts - Pause At Resistance

Gold and silver paused today, after bumping their heads for most of the New York trade against overhead resistance.

The dollar rallied back a bit today, at least as measured by the DX index. Why? Because the euro was lower, based on the European stance towards additional easing and a weaker currency to aid German exports.

The Bucket Shop was deadly quiet on deliveries, and the gold warehouses continue to look like wax figures in Madame Tussauds'. See how paper gold used to be hypothecated and traded in the 20th century.

There was the usual slow leakage of silver bullion.

Let's see if the metals can form a new base here and consolidate their recent gains.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Bad News Is Good For Paper Assets - Option Expiration

The economic news this morning was simply awful.

You can skip over the unemployment claims figures, and take them with a grain of salt.  They do not show a 'strong labor recovery' to anyone who has an open, reasoning mind.  They show an economy of low paid stagnation with a sizable portion of the labor force laid out with exhaustion and giving up the pursuit of jobs.

But the Empire Manufacturing and Philly Fed numbers were chilling.

And that is why stocks rallied so hard today, because except for the inimitable servant of the New York Banks first and foremost, Bill Dudley, there won't be any rate increases from the Fed anytime soon.

However, the Fed's presumed lack of further action, caught as it is in a credibility trap of policy error, does not do much for the rest of the world, particularly China.

And in that we may find a scapegoat, but no respite or relief from the mismanagement of the economy by the kleptocratic elites and their minions.

Where to next?

Let's see if hope floats.

Especially since tomorrow is an option expiration for equities.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Paper Bullion Marketplace Fading Away- Pet Rocks

Gold and silver both had nice rallies today as they moved even deeper in the overhead resistance of the long bear market.

I have updated the gold chart with some new indicators of where we are.

The next big level for gold is at 1210, although 1200 is likely to be a significant 'psychological' barrier.   And of course, gold needs to hold within the new uptrending channel it is establishing on any retracements and corrections.

The Bucket Shop is becoming very quiet, like a museum, but empty, devoid of humanity.  More like a ghost town perhaps, an artifact from a place that time and custom are passing by.

As of today, gold and silver are outperforming stocks year to date.

Let's see if gold and silver can truly break out from here, or just form a different trading challenge.  I have not noticed any genuine reform in the paper markets.

I wonder how the fellows who say that gold and silver 'have no fundamentals' would explain this?  I am sure it would be misleadingly distracting.

That seems to be the currency and major export of America's elite ruling class and their servants these days.

Pet rocks.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Scraping Them Off the Sidewalk

As I indicated the other day, based on the extreme reading in skew, and intraday today on the warning from Walmart and the general lack of economic recovery which is seemingly invisible to the upper crust and their media minions, I think that sometime within the next year or two we are going to see quite a surprising correction in terms of real valuations of stocks.

Whether that is nominal or just real depends on the dollar.

Have a pleasant evening.

Walmart Stock Craters On Profit Warning - The Fatal Blindness of Greed

"America's great now -- it's never been greater.

Our kids are going to live so much better than we do now."

Warren Buffett


“Among 21 countries in the study the U.S. ranks second-to-last in the percentage of its GDP spent on benefits for families, despite one of the highest relative child poverty rates of the comparable high-income countries. [only Turkey was worse because it failed to provide any data]”

Child Trends, World Family Map 2015

Walmart warned on its profit outlook for 2016 and the stock dropped about 8 percent.

As the pampered princes of financial television put it:

"To say that Wall Street was surprised by what Walmart had to say is an understatement.'

The spin is that Walmart is 'brick and mortar' and that it is losing ground to Amazon.

And amongst the worst analysis, Walmart ought not to have given its employees, who are among the lowest of the working poor, a raise in wages.

Walmart merely needs to 'reinvent' itself.

Maybe that is true.

Or maybe it is tied into the overall retail results which we saw this morning.

Walmart is at the sharp point of the failing US consumers, who are un- or under- employed with stagnant wages and shrinking benefits, pinned by rising rents and healthcare costs, possessing little discretionary income, almost no savings, and living virtually paycheck to paycheck.

In the new retail models, like Walmart and Amazon, the vast bulk of the income goes directly to the top, to a fortunate few like the Walmart family and Jeff Bezos, with a little to shareholders, and crumbs to the employees who are driven harder to be 'competitive.'

There will be many more surprises for Wall Street, and for the very comfortable ruling elite.

The banks must be restrained, the financial system reformed, and the economy brought back into balance, before there can be any sustained recovery.

Gold Daily and Silver Weekly Charts - The New Abnormal - Mackie Messer

“The mythological Narcissus rejected the advances of the nymph Echo and was punished by the goddess Nemesis. He was consigned to pine away as he fell in love with his own reflection - exactly as Echo had pined away for him. How apt. Narcissists are punished by echoes and reflections of their problematic personalities up to this very day.

Narcissists are said to be in love with themselves. But this is a fallacy. Narcissus is not in love with himself. He is in love with his 'reflection'...

In the narcissist's surrealistic world, even language is pathologized. It mutates into a weapon of self-defence, a verbal fortification, a medium without a message, replacing words with duplicitous and ambiguous vocables.

When narcissism fails as a defense mechanism, the narcissist develops paranoid narratives: self-directed confabulations which place him at the center of others' allegedly malign attention."

Sam Vaknin, Malignant Self Love: Narcissism Revisited


“There's a reason narcissists don't learn from mistakes and that's because they never get past the first step which is admitting that they made one. It's always an assistant's fault, an adviser's fault, a lawyer's fault.  Ask them to account for a mistake any other way and they'll say, 'what mistake?”

Jeffrey Kluger, The Narcissist Next Door

Gold and silver managed to nudge up a little tighter into the overhead resistance at 1166 gold and 16+ for silver.

The Bucket Shop was dead quiet on precious metal deliveries yesterday.  No surprise there.  And no surprise that the bullion continues to slowly leak out of the warehouses as shown in the reports below.

There was intraday commentary on a remarkable spike in an indicator that in the past has presaged significant stock market corrections.    You may find some value in reading it at Stock Share Risk Measure Rises To Highest Level Ever.

As the Austrian school likes to say about the velocity of money, the risk measure in question, the skew, doesn't do anything, in much the same sense that the speedometer on your car does not do anything.   What it does is provide some information that may prove to be useful, especially when you are heading into a sharp turn at over 100 mph.

And that information suggests that there is an exceptionally high probability of a stock market decline of significance within the next two years or so, depending on how some exogenous events may unfold.

I learned the hard way after the tech bubble not to underestimate the Greenspan put, and the willingness of the Fed and their courtiers to throw the real economy under the bus to pump up an asset bubble for the benefit of the Banks, even when the financiers are acting at their very worst.

I like gold and silver more now than I have in some time.   As I suggest in the intraday piece on the mispricing of risks, I do not see how the Street is going to avoid a very embarrassing break in the bullion market if things keep going on as they are.

But we may find some of the antics of Big Money's courtiers to be amusing as they continue to say and do the most ludicrous things in order to save the hides, bail out once more if you will, of their felonious cousins at the Banks.

After the bell JPM missed both top line revenues and their earnings estimates, even with a ten percent reduction in loss allowances.

Just doing God's work.

As I suggested in the intraday commentary, there is a strong likelihood of another financial crisis coming.  There is already a search for a scapegoat to deflect attention from the recurrent and ongoing looting of Main Street.

"Make no mistake about it, just as Lehman Brothers was set up to take the fall for triggering the 2008 collapse, China is being groomed as the new scapegoat for the coming crisis. But China’s economic slump is only a symptom, not the disease."

Pam and Russ Martens, The Real Reason Global Stocks Are Flashing Red this Morning

Have a pleasant evening.