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Trading Lessons

Gold And Silver – A Change In Suppressed Down Trend?

Commodities / Gold and Silver 2014 Nov 15, 2014 - 03:16 PM GMT

By: Michael_Noonan

Commodities

Until there is a clear break of elite’s central banking dominance over the gold and silver markets, there will be no dramatic recovery reflective of where the true price for both metals should be. Whether it is $5,000 or $10,000 for gold or $100 or $200 for silver [the ounce], the current distorted pricing, as dictated by the paper derivative market and not actual physical metal, will prevail demonstrating the power the elites exert at will.

The probability of the elites being “all in” has not even reached the stretching point, yet, although it may be getting there. All that remains, really, is to wait and let events take the unnatural course they have been on for several decades. The undoing of too many decades of gold/silver manipulation/suppression will not be accomplished in a single year, as it has not been over the past few years, and there is no way of knowing the time factor for change in the year[s] ahead.


We have said on several occasions, the elites think in terms of decades, while most people have trouble planning a year in advance. Back in 1988, the Economist, [A Rothschild- backed publication, certainly in terms of content], published an article, “Get Ready For A World Currency By 2018.” Here is a 30 year plan as evidence of how the elites work, and there was surely years of planning involved before the article was even published. The new world currency was to be administered by the International Monetary Fund.

It could only work if nations gave up their sovereignty [Hello, European Union], and all currency control to the IMF, as it was imagined back then. Greece, Cyprus, Ireland, Spain, etc, etc, and more to follow, have virtually given up their sovereignty in favor of increased debt “bail-outs” to “cure” the excessive debt under which each country was already buried.

There is no one who would agree that increased doses of heroin will “cure” an addict, or increased whiskey or vodka will “cure” an alcoholic, yet the Western banking elites have sold the notion that the only way to save a financially destitute country is to take on even more debt as a “cure,” and the masses continue to buy into it.

There is one thing upon which almost all can agree as a certainty: the paper fiat currency scheme, as it exists today, is near its end, inevitably doomed to failure. Consider a few related circumstances. Seven years ago, the Fed’s balance sheet was 6.3% of the U S economy. Today, it is over 25% of Gross Domestic Product. During that time span, the Fed’s balance sheet grew 5 times larger while the actual economy was up about 20%. All that the Quantitative Easings have done is shore up the entire underwater banking system while the US economy has been purposely gutted in the process.

In the 10 year period prior to 2007, $13.88 of new GDP was created for every new Federal Reserve Dollar printed by the Fed. From 2007 through the first half of 2014, only 81.8 cents of new GDP was created for every fiat Federal Reserve Note. This is but one example of how the elites are destroying the Federal Reserve Dollar, gutting the economy, and propping up their precious “Do Not Disturb” fiat debt enslavement Ponzi scheme. Most Americans remain in a comatose state of [un]awareness when it comes to understanding how the fiat monetary system [does not] works.

The G-20 met in Australia last week, and guess what has been announced as a part of their agenda? The G-20 has vowed to focus on a plan to add $2 trillion to world GDP. This kind of economic insanity has no limits for the elite’s New World Order, to be controlled by a single IMF currency. Can it be any clearer why gold and silver are being suppressed in order to serve the greater NWO good?

We mentioned the importance of the Swiss referendum requiring the Swiss National Bank to maintain a 20% gold reserve requirement, from the current 8%, and it also prohibits the Swiss central bank from ever selling any Swiss gold. What is of great interest is the ability of the elite’s central bankers possibly preventing the Swiss referendum from passing. Should it pass, despite both Swiss government and banking pressure against it, the question then becomes, what will the payback consequences be against the Swiss for fighting the elite’s system of controlled debt.

All Western politicians are controlled by the Rothschild central banking system, and all Western governments are subservient to these banking interests. While it may appear that China and Russia, along with the other BRICS nations, have banded together to put an end to the elite-controlled fiat currency system led by the once “almighty dollar,’ now in rapid decline, appearances are never what they seem to be, on purpose. What is not clear is the extent to which the elite’s central banking system has control over both the Chinese and Russian governments.

The United States, as a world-dominating power, fades with each passing month. This country is done, finished, and is running on its remaining military might. The US has no viable means of sustaining itself. There is no manufacturing base, there are no savings in plant and equipment from which to rebuild. Cities, even states, are facing bankruptcy, burdened by decades of public pension promises that can no longer be met, along with diminishing tax revenues. Which country will take over?

Both Russia and China have a host of issues that preclude them from implementing a workable world-serving financial currency/system. It is not clear that China even has the capacity to become the next world powerhouse. Russia does not. Yet both nations have expressed support of a currency system run by the IMF, the elite-controlled mechanism for running its New World Order agenda. Why would they say that?

The elite-dominance of its fiat paper dynasty has ruled the world for a few centuries. Money is least understood by the masses, yet it is the greatest controlling influence by a small group pulling the strings by which the Western world operates. Does that small but most powerful group extend its control over China and Russia? While the thinking is that both countries will “reset” the price of gold and silver as the fiat system of the Western world is toppled, who knows if the elites are simply changing horses, as it were, and will eventually be running China and Russia as it has the US/UK/EU?

There are so many unanswered [unanswerable?] questions, beyond when will gold and silver “take off?” As to the latter, the charts still say “No time soon.” While this is true as the way things stand now, change can occur at any time, but that is future, and all we is address what is actually known in the present tense.

Yes, last Friday was the best for silver in a single day in over two years, but that does not materially change anything. Three weeks ago there was a S/D [Supply over Demand], two day move lower when the recent 16.60 support area was broken. The decline started from the 17.20 level, so resistance is defined by that range. Last Friday was an attempt to begin an assault on this immediate overhead resistance.

Friday was a D/S bar, [Demand overcoming Supply]. Combining the last two Fridays, we are starting to see a change in the character of market behavior where the strongest bars in the down trend are to the upside. For next week, it is important to see if there will be any upside follow-through, and to what extent, given the overall layers of resistance, and also the way in which Friday’s rally bar is retested.

An example of a positive retest is what occurred two Fridays ago when price moved in a sideways manner for four trading days, maintain the gains. Once a pattern of gains being able to hold emerges, it will lead to a trend change.

When last Friday’s impressive rally is incorporated into the weekly chart, the response is not as enthusiastic for its impact. There will be an increasing number of articles declaring silver is on its way, probably from the same writers that said the same thing over the past several months. Glance back at the low for 2010, and you can see how after an initial rally, price moved sideways for about five months. It does not mean a similar pattern develops here, just that it can take some time for a trend to change course, and being first in is not always the best situation. Waiting for an upside breakout of the 5 month pattern brought more immediate results, so it pays to be more select in one’s timing, at least for futures.

Gold’s pattern is more stable than silver’s, even though silver outperformed gold last week on a relative price relationship basis. The previous two swing bottoms in 2013 and almost 2014 did not lead to sustained rallies, and there is zero available evidence that says a new bull move will commence, presuming the recent low holds as a swing low. Let the market prove itself first.

You can see how the general level of volume has picked up in the month of November. The fact that the volume increase is occurring at the lows, if they hold, usually indicates a change from weak hands into strong. Keep in mind, it takes time to turn around a trend, and the down trend can change into a sideways move before an up trend occurs, so patience has merit for not “jumping the gun,” which often means a false start.

Note the combined volume of the last 10 TDs [Trading Days]. In total, it still has not led a price move over the single down day and its volume from 31 October. It shows the difficulty of effort required of buyers to overcome sellers in a down trend. It also suggests the volume and price behavior is more in the form of short-covering as opposed to new longs being established.

Gold has dropped 770 dollars from its highs. A rally of 55 dollars should not be viewed as game-changing.

By Michael Noonan

http://edgetraderplus.com

Michael Noonan, mn@edgetraderplus.com, is a Chicago-based trader with over 30 years in the business. His sole approach to analysis is derived from developing market pattern behavior, found in the form of Price, Volume, and Time, and it is generated from the best source possible, the market itself.

© 2014 Copyright Michael Noonan - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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