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Trading Lessons

Gold And Silver – Banker’s Grip On Precious Metals Not Over!

Commodities / Gold and Silver 2015 Feb 21, 2015 - 11:34 AM GMT

By: Michael_Noonan

Commodities

To leave the EU or not to leave the EU, that is the question? Pick any hour, and you will have an answer that is good until the next hour passes. While there have been cheers and encouragement for what the newly elected Syriza party has been telling the EU, that no more debt enslavement will work for Greek citizens, it could very well turn out that Greece’s Prime Minister Alexis Tsipras and his Minister of Finance Yanis Varoufakis are waiting for the best deal for themselves before ensuring that Greek citizens remain so enslaved. It is extremely difficult to fight the elite’s system and win.


While this is a rather cynical view, it appears that Greece’s new leaders are doing whatever they can to stay within the failed EU system instead of maintaining a hard-line by refusing to take on more debt and not pay the current debts owed to the EU. An ace up their sleeve, making a deal with Russia, that could possibly include China pitching in, whereby Russia would offer putting part of their natural gas pipeline through Greece and ensure billions of Rubles in income, [fewer and fewer countries want to use the fiat dollar as a trade basis anymore], is not actively being pursued. Instead, all of this back and forth with making an acceptable deal or not is what fills the headlines for this story that gives rise to our skepticism.

If the Tsipras/Varoufakis duo fold, it will not auger well for silver and gold, at least for a while longer. Greece opting to “cut a deal with the devil” will prove that however fragile the staying power of the European Union, the “dead-man-walking” EU still prevails. The message would then still be clear: people do not matter, only the viability of a [failed] banking system counts. and PMs remain pawns.

Despite the pulling away of the curtain of the elite banker’s Ponzi scheme, led by the US failed fiat “dollar,” however much the Western world, mostly the US/UK [with Israel successfully staying in the shadows], is being exposed for its nothing-else-matters- except-adding-on-more-debt-or-risk-economic/military-retribution, people are still not willing to take an opposing stand. The main opposition to the elites has been Putin/ Russia, and what has been their payback: sanctions and Obama’s coup in Ukraine.

It does not matter that the US, led by a Nobel Peace Prize winning president, [cough, cough], has been responsible for starting failed wars resulting in internal devastation for each country: war-torn Afghanistan, where opium production under United States protection is at an all-time high [where do you think the CIA gets its financing for all of their clandestine operations in each of these countries being mentioned?], Iraq, the Bush administration false-flag [non-existent] Weapons of Mass Destruction and the evil dictator Saddam Hussein, a country now being overrun by the CIA-created ISIS.

Libya, led by a Hussein-like “crazy” [like a fox] dictator Muammar Ghadaffi, now a country in utter disarray and lighter by about 144 tons of stolen gold, another CIA covert operation. Yemen, yet another country devastated by Obama and his drone-led forces. Can anyone explain exactly why the US chose to be involved in Yemen?

Syria is a failed Obama-led bring-on-more-war effort that was side-tracked by Putin intervening, but there remains on-going disarray as a result of US attempted and ongoing intervention. There is no justifiable reason for the US being involved in any of these countries. None. The common theme is war and devastation being championed by none other than the Nobel Peace Prize winner. How credible are Nobel awards, anymore?

This is what the United States does [at the behest of the elites running the show behind the scenes]. The only country that wants to arm Kiev with lethal weapons is the US led by Obama. He was oblivious to Germany’s Merkel trying to school him on diplomacy on national television to seek peace-keeping alternatives. “This is what we are supposed to do as politicians,” she exhorted. “I haven’t made my decision, yet,” he responded, at least a decision he dared not make public, at that point, even though his agenda is clear.

Russia and China are moving forward, cutting out and ignoring the US with zero respect or tolerance for Obama, and they are making economic deals in as many countries as possible. War and devastation are nowhere to be found on the agenda of either country. The buildup of the BRICS alliance as an alternative to the fast-fading Western hegemony continues to gain momentum and a growing number of countries are willing and wanting to join and participate, all tired of the US dictating economic and military warfare.

Once the ever loosening grip of the US-led debt enslavement tactics, that benefit only the elite’s banking system, becomes a greater reality, we will then see movement and response in the gold and silver markets. Maybe at that point all of the existing and valid factors of supply and demand, which have been actively suppressed by the elite’s moneychangers, will be allowed to prevail. Until then, expect more ongoing weakness in both metals.

Every once and awhile, we get detractors dismissive of charts, some questioning why show them? Such comments come from people who are clueless on the information charts accurately convey, and they are the most current portrayal of developing market activity, typically way ahead of the news. Yes, there will be short-term, often short-lived reactions contrary to the prevailing trend, but it is the trend that is the truest “story of the market” as its most reliable message. Last week’s read of the charts accurately gave clues for what transpired this past week.

At some point, silver will lead gold to the upside, as is its propensity in bull markets. It is not at that juncture, yet, so we view silver for clues of a turnaround that will prove a new trend higher. For now, such a consideration is nonexistent. Perhaps the best way for “non-chartists” to understand is to see where price closed, last week. Then, look at the rest of the chart on the left hand side of last Friday’s price, and ask, where does it stand compared to recent past history?

There are approximately 156 weekly bars on this chart going back almost 3 years. There are only 5 other weekly closes lower than last week. Clearly, the facts of price behavior give evidence of a weak market. It does not matter what your beliefs may be of the underlying “fundamental facts.” The existing reality of current pricing is all that counts.

The difference between the fundamental facts and current price is not in harmony, for whatever reason, but it is how the market, in total, is pricing silver that counts. Always go with existing price as the most accurate measure. Opinions vary. Price is.

Last week, we said there was the potential for a higher low [HL], forming, but it needed confirmation, noting how the 5th bar from the end was indicating a possible rally. That potential for a rally stopped cold with zero upside follow through, and we noted how the market was still in a down trend. This conclusion was derived from observation of the price structure and drawing a logical conclusion from the factual information provided on the chart.

Rather than guess and preempt what a market may do, let the market confirm its activity, and then make a decision based on conclusive factual evidence. The evidence of silver being in a down trend favors price weakness, not occasional [and failing] price strength.

The purpose behind showing the same horizontal lines and bearish spacing, week after week, is a reminder that however one may believe that gold is very bullish, the picture on the chart is one of weakness and a factual indication that one’s beliefs are out of line with current market reality. If anyone can come up with an opposing argument that says otherwise, please present it.

China and Russia buying as much physical gold as is available, the lack of verifiable gold on the corrupt COMEX and LBMA exchanges are known by everyone who knows anything about gold. Yet, even with world-wide recognition of those factors, gold remains weak, and that is the reality of the current market. How can it be otherwise?

S/D bars are a sign of weakness, especially when accompanied by increased volume, or increased sellers overwhelming buyers. The trend is clearly down. We put forth the observation that S/D 2 differs from S/D 1 in that the activity following 2 is not as weak as the observable activity that followed 1.

Does this mean anything? It possibly means that buyers were more effective opposing sellers, last week. Even if true, the onus is on buyers to continue to prove they can outperform sellers. The point is, we do not need to guess what may happen before it happens. Deal with the known facts. The most important fact is the trend being down.

Will buyers succeed in rallying price above 1235, the high of the S/D 2 bar? If a rally were to ensue next week that failed to surpass that high, it is a message from the market to expect lower price activity, again.

For now, the most realistic expectation is more of the same.

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.

© 2015 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.

Michael Noonan Archive

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