Gold Daily Chart To the Cup of the Cup and Very Long Handle Formation

As you may recall I keep a number of charts and spreadsheets that I do not post here that I use for my own analysis.

Here is a copy of the longer term gold chart, back to the very large cup and handle formation.

As you can see it is a bit difficult to view, although you might be able to download it and see it more easily thereby.

I also include a standard weekly chart of gold going back five years.

The Bullish Case For Gold: Indicators Suggest Gold Has Laid the Groundwork for a Substantial Rally

For those who care about gold such as myself, in the just released CFTC data for the week ended Tuesday, speculators went net short for the first time since December 2001 when gold was priced at $275 an ounce. It’s tough to find a more contrarian indicator.

Peter Boockvar


"They run all away, and cry, 'the devil take the hindmost'."

Beaumont and Fletcher, Philaster, or Love Lies a-Bleeding

The one thing that gives me pause is the current interest rate actions by the Fed. They *could* delay the rally until it becomes almost overwhelmingly inevitable.  They do tend to do that sort of thing.

Timing is primarily an issue for those who are trading with leverage and for short term profits.

The Dow/Gold ratio is now back to pre-crisis levels (chart not shown).

As compared to 2002, the 'free float' of gold is tighter now, and central banks are net buyers rather than sellers.  Physical gold may be more of an issue than normal, as opposed to the unwinding of paper positions after a multi-year price manipulation.

At this point one might 'get right and sit tight' in the usual measured way, and wait for the banquet of consequences to be served.

And finally, the gold/silver ratio is now at a recent high.   It may go a little higher, especially in the event of a currency crisis.

This suggest that IF gold rallies, then eventually silver will kick in with a vengeance and provide some outsized gains.   But if the gold rally is a result of a crisis, silver may lag, and perhaps substantially.  If it is in reaction to inflation, they get ready for a ride on the silver rocket.

I like to read Ted Butler's commentaries on silver, and he is saying much the same thing with regard to the composition of the Comex positions. 

Dave Kranzler at Investment Research Dynamics sees the gold and silver in a similarly bullish setup with some slightly different reasoning.  I like to obtain multiple perspectives from different indicators.

I am waiting for my charts to signal their move, with confirmation, and hopefully to provide a new and workable formation to gauge the extent of any reversal and breakout from this long trading range we have been in since the 'cup and handle' formed and then failed.

Stocks and Precious Metals Charts - End of the First Quarter

And Jesus said to him the third time,  `Simon, son of Jonas, do you love me?'   Peter being distressed replied,  `Lord, you know all things; you know that I love you.'  And Jesus said to him, `Feed my sheep.'

'Verily, verily, I say to you, when you were young, you girded yourself, and walked where you liked.  But when you are old, you will stretch out your your hands, and another will gird you, and shall carry you where you would not like to go.'

Today was the end of the first quarter for 2017. And the paint is now dry on the tape.

The economic news, of at least the 'hard numbers' kind is not particularly good, as noted on the economic calendar included below.

Next week we will be enjoying another Non-Farm Payrolls Report.

You might be surprised to hear that corporate profits are up 10%, and the wealthy are enjoying very fat returns on their paper assets.

The common person, not so much.

The news on the tests was not very good, and so we will be going back for another round of treatments for a new tumor in the brain. Well, at least this explains why the queen's memory and awareness have been so dodgy for the past six weeks. And she has been having light seizures and fatigue, so it has been a bit of a task to keep an eye on her and still carry on the household duties. It was becoming fairly apparent that something was very wrong. Please remember her in your prayers as the next few months will be difficult.

Let us see how things develop for the metals next week. April looks to be a more lively month for gold and perhaps for silver, judging by the first clearing reports for both included below.

The 'defense' by the gold bears which is so obviously being waged around the 1250 level is more related to the neckline of a developing inverse head and shoulders bottom pattern as noted on the chart. I have been watching this for some time.

Some think the key battle if gold moves higher will be around the prior 'Trump election night high' for gold. I think it will be a little north of there, but that may be more of a quibble. It looks like we might be seeing a much larger pattern on the gold charts that could prove to be interesting.

It was nice that silver held its level. It is operating on a longer term cup and handle which is fairly evident on the weekly chart. Silver could really get some legs if it starts breaking out.

Please remember all of God's creatures, including the birds and the animals, as well as the poor in both material things and of the spirit. Both have a hard life.

Above all never feel so powerless and afraid that you miss an opportunity to take part in the sacrament of the present moment. His angels and tender mercies are there, often unnoticed if we are distracted by our fears and desires. One could wish nothing more than to be a part of this celebration of true life.

Have a pleasant weekend.

Stocks and Precious Metals Charts - The Irresponsibles

“There is only one thing more painful than learning from experience, and that is not learning from experience.”

Archibald MacLeish


"We all make choices, but in the end, our choices make us.

Andrew Ryan as a character in Bioshock

It will be interesting to see if Dandy Don and the Republicans can get their own house in order.

The party leadership, particularly in the House, encouraged the frivolous use of Congressional time with their fifty odd and meaningless votes to repeal Obamacare. They are now so used to acting like powerless frat boys, that they can't seem to buckle down and get to work.

Well, maybe that is not all that bad, all things considered.

So stocks were wobbly today, because the gross ineptitude of the Trump Administration and the Congress is making most everyone doubt that they can get anything done except the grossest of neo-liberal betrayals of the American public.

They certainly do not seem to be able to create an infrastructure plan, fund it, and still provide sweeping tax and healthcare reform.

Perhaps they will settle down and start acting like adults. I am not putting my money on that particular number yet.

But then again, this is always the real challenge for the superior human beings isn't it?  And do not doubt for a moment that the fortunate few think that everything they have is richly deserved, due to their natural superiority.

And so they are puzzled by what they are to do about 'life unworthy of life' that is such a burden on them and their fellows high achievers.    And of course they think they get to decide which life is worthy of the benefits of society.   Or perhaps they let some other group of thugs, or impersonal 'market forces' to do it.

The obvious solution is single payer for all. Every other developed country has made it work. But for some reason Americans cannot seem to do it. I wonder why?

The root of the problem is predatory profit seeking at work in healthcare, pharma, and financials, areas which are always tending towards monopolies and price gouging when not restrained by sensible regulations.

Gold and silver are still hanging on below key resistance.

I have noted a potential 'inverse head and shoulders' formation on the gold chart. It is part of the long handle in the cup and handle formation.

That cup and handle is much, much easier to see on the silver weekly chart. And so far it looks good.

But as always, formations are only potential until they are activated. What the potential formations needs is that upside breakout. And do not think for one minute that a lot of the Street denizens are not watching that action as well.

Have a pleasant evening.

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.

Charts at the Market Close - Things You May Not Want To Hear, But May Wish To Know

This year I think that I am going to be publishing all of the charts in one posting, rather than splitting them up between stocks and metals.

Today was a lazier trading day than the numbers might have indicated. It was easy to lift stocks today, in other words.

There was little of note in the Comex reports from the last day of 2016.

I was looking over some old charts over the weekend, and I think that the direction of the gold and silver markets in the first couple of months will be quite telling for the rest of 2017.

The key level will be for the metals to break out above their 'election night' highs when the markets realized that Trump had won.

This atmosphere and tone of the markets reminds me of the period during which the big cup and handle retraced 50 percent or thereabouts in gold, and then took off on a steady run to its all time high.  Remember that?

Still, without the breakout, we have nothing but what we have, which is a sideways chop.

A long time reader sent me this link to this live updating chart that compares the metals prices on the dollar and yuan markets.

Another honored patron introduced me today to the twitter feed of Harald Malmgren, a former presidential adviser to JFK, LBJ, Nixon Ford, US Senate Finance.

I thought quite a few things that he said about stocks and other matters were quite to the point.

Some of Harald Malmgren's tweets from earlier today in descending order by time:

His [Ben Bernanke] continuing denial that QE wrought damage suggests it is he who cannot handle the truth.

Correlation of 1 across all asset classes combined with high leverage & narrow exits means catastrophically fast implosion, sooner or later.

Gold a really big subject. I'll save my thoughts on gold for another day.

What i am trying to point out is that markets and even the Fed are acting on unreliable,overoptimistic official data (aka fake news).

World trade contracting,growth stalling, but CNBC advertisers, Bloomberg customers & political leaders don't want downbeat news. Market illusions.

BEA uses own unique, low deflator (never CPI) to get higher inflation adjusted GDP growth rate, higher consumer spending, hiding feeble real growth.

Most jobs data cherry picked, manipulated, guessed. Declining payroll tax deductions published every day ignored. Job gains illusion.

Occasional glimpses of real economic news reminds how misleading is WH economic recovery spin and its adoption in the form of MSM fake news.

Financial leverage higher now than 2008, systemic risk greater, most jobs created part time, median income down, debt multiple, wealth gap bigger, etc.

On that we seem to agree. A phony recovery reliant on contrived fake data transmitted as fake news, now becoming "post truth".

At this stage of my life you get my views unadulterated with hidden ambitions.

What more can I say after that?

Have a pleasant evening.

Charts at the Close of Trade on a Blustery Winter Afternoon

"It would not be an overstatement that demonetisation announced by the Prime Minister of India on November 8th might have been one of the largest self-inflicted macroeconomic shocks on a country in the absence of a short term crisis.

Given the sheer size - the decision to withdraw 85% of the cash in circulation has thrown India into disarray.   Such a large and unexpected policy change naturally carries with it a large collateral damage at least in the short run."

Areendam Chanda, Notes And Anecdotes on Demonetisation


"Plunderers of the world, when nothing remains on the lands to which they have laid waste by wanton thievery, they search out across the seas. The wealth of another region excites their greed; and if it is weak, their lust for power as well.

Nothing from the rising to the setting of the sun is enough for them. Among all others only they are compelled to attack the poor as well as the rich. Robbery, rape, and slaughter they falsely call empire— and where they make a desert, they call it peace."

Tacitus

There is a major snowstorm moving on the northeastern United States that is centered now on Massachusetts and is moving up the coast as a classic nor'easter.   I hear that they are expecting several feet of snow from this.

Luckily for us, the weather here is too warm for snow, but certainly cold and raw enough to discourage any thought of working outside, although feeding the birds, God's little ones, is a high priority.

There are more storms coming.  Many of them have been caused by the greed and arrogance of people who lie so often to other people and their friends that they lose touch with common reality.

And so they may be shocked when the consequences of their actions come home to roost.  They will say, 'no one could have seen this coming,' and what is worse, some of them may actually think they believe it.

Gold and silver had a bit of a rally today, off a deeply oversold short term condition.  Bloomberg TV was quick to challenge that, and show a longer term chart of gold in an intact downtrend.

Funny they did not mention silver at all.   I would suggest that if we do rally from here that we have a confirmation of a massive cup and handle formation that is only visible on the weekly chart.  And it is one that is also nested within an even bigger formation that can only be seen on the long term monthly charts.  Silver is reflecting more of the natural market action than gold.

But that is a big if, although many of the usual suspects will be quick to pounce on anything positive to generate breathless excitement without waiting for confirmation.

Things will be more impressive and exciting when gold and silver start moving limit up, with triple digit and triple dollar moves to the upside overnight, as the precious metal manipulation pools begin to fall apart.   History suggests that they must, and eventually that they will.

Of course one cannot rule out some sort of official reaction bordering on the madness of the bureaucrats, as we have been seeing with Mr. Modi in India and his crackpot demonitisation actions.

Violence begets violence.  And frightened people who are caught badly enough in a credibility trap will be tempted by extremities, after first depersonalizing those whose differences are a nuisance, and then an embarrassment, and finally a perceived challenge to power.  The deplorables, the parasites, the other.

Let us remember that violence is rarely justifiable on another human being except in the most obvious acts of self-defense.  That is not to say that violence doesn't happen, because it does every day.

We are such sophisticated barbarians that there are schools of thought, among them the neo-cons in foreign relations and the neo-liberals in economic policies, that see violence of whatever sort as a first choice to another people's failure to submit to their grandiose schemes of power.

Hubris warps vision, and the policies that proceed from the heights of arrogance have often produced cold-bloodedly horrific results, to which the parties are blinded, at least for a time.

Because a group is well-dressed, and covers their barbarous hearts with the trappings of culture, does not mean that they are 'civilised.'   Their murders are merely more calculating and efficient— grotesquely passionless.

And finally, let us remember each other in our prayers, so that we will not allow our love to grow cold, if there should be an increase in wickedness.   Although we all do what we must do, this holding on to our own hearts and souls is the only transaction that in the very long run really matters.

If you love the Lord, truly as He loves you, then you cannot be afraid.

Have a pleasant evening.

Charts For a Winter Afternoon - Fed Hikes 25, Signals 3 Hikes In 2017

The Fed hiked 25 basis points today, as most everyone expected.

They also made some hawkish noises for next year, which had the dollar soaring, and the metals and stocks slumping.

Gold is now at the full retracement if this cup and handle formation is valid. More like a ladle with a pretty long handle. lol.

Let's see where this all goes.

A strong dollar is the last thing the real economy wants, and what one might wish to see if they were Donald Trump, looking to stimulate the economy by dampening imports.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - So Far So Good

Gold and silver caught some legs to the upside today after the Fed did nothing.

The markets suspect that the Bank of Japan will be announcing something that sounds like 'helicopter money' on Friday, which will continue to boost the global liquidity depending on what they do.

Another day or two of upside for the metals and we may be getting that 'up, up, and away' action that we discussed last week.

We have an intermediate inverse head and shoulders working, and if it breaks out it signals 1450 as a minimum objective, against the cup and handle longer term target of 1490.

Silver is just a beast, explosive to the upside.

It turns out that the DNC had been warned some time ago that their servers were vulnerable to hacking, and they chose to do nothing about it.   I suppose that is consistent with Hillary's Luddite approach to tech security for her own State Department emails.

Let's see if gold and silver can hold on to these gains and add enough to stick a close in the breakout territory that lasts.

Have a pleasant evening.