Gold Technicals: Keep your EYES on the Ball
by Stewart Thomson, Graceland Updates | May 21, 2010Print
- Gold hit $1166 last night. The “count” is now $84. That‘s a key number to focus on. The more that number grows while you take NO action on the buy side, the worse your situation becomes. It’s like being slowly transferred OFF the playing field and into the AUDIENCE. An $84 move is aprox 7%, and marks the move away from $1250, the highest point reached in the latest gold price upsurge.
- Silver touched $17.50. The silver count away from the 19.85 high point is $2.35. Aprox 12%. The Silver Gridline has 19 key price points. Each dollar an ounce marker, from $1 an ounce to $19. One point was eliminated, when it traded under 19. Another when it traded under 18.
- That leaves you only 17 gridline major buy points, to take action as a player. Are you playing on the field, are you on the BUY? Or are you shoving your latest “silver goes to $200 next week!” prediction from the gurus back in the closet, as a growing price air pocket between your only price-chased buy and the actual price… expands by the hour?
- Some are claiming “the banksters are finished covering their metals shorts now”. Don’t assume any such action as fact. Maybe they are, maybe they aren’t. The funds hold several hundred thousand contract positions in gold, and are in liquidation mode (some in forced liquidation mode), so guessing “this is the bottom, I know it is, the selling is done, let’s party!” is not a professional way of thinking, or acting.
- As long as the funds can be convinced to sell, the banksters will buy longs and book profit on shorts. The currently dropping gold price is caused by fund and retail selling, not bankster selling. The reality is the banksters are the only major group BUYING on the comex now, which is the major determinant of the gold PRICE, and without them doing that, gold would likely be trading well under $1000 right now, and silver proably in the $12-14 zone.
- Graceland subs are like the fish attached to the bankster shark, but our continuous buying here and now is not halting the gold price decline, sorry to break the bad news. We’re simply too small. As least we’re part of the solution, not the problem.
- Here’s a look at the Silver Weekly Chart Notice we are into a key gridline now, in this 17.50-17.70 area. This isn’t a “reversal call”. It’s a strategic buy point. We can’t know whether price will break higher or lower from here, or just mark time. I know you are hearing from gurus that claim they DO know. “I called the top!”. “No, I did!” “This is the bottom!” Whatever. What these overleveraged top callers did, the few that were successful THIS TIME was: barely get out alive on a price BLIP down, one that could have blown them out of the water. That’s the bottom line, that’s the reality.
- Here’s a look at the Gold Weekly Chart: Key Current Gridlines
Note that as with silver, we are into a major gridline here and now, the uppermost of the 3 blue gridlines I highlighted. A major strategic buy point. If price fails here your sole mission is to prepare for action at the next gridline point.
- HSR (horizontal support and resistance) gridlines are places of large supply and demand. They are in fact major battlegrounds between buyers and sellers. They are bands, not points. Team TakeLoss (aka team stoploss) thinks they are points, and jump in and out thinking they have identified the exact final point where price will either rise or fall. With the exception of a few professionals, that’s not possible to do for the average investor.
- Right now the GOLD PRICE BALL is on the substantial $1170 gridline band.
- Keep your eyes on the ball, right? Wrong.
- Keep your buys on the ball !
- The banksters want the funds to think price will fail and start the fundsters selling hard, so it does fail, and they can buy all the funds bail on. The banksters have ZERO interest in calling any turn in the gold price, either up or down. They are however, manically obsessed with taking ACTION at every gridline point. If price is moving down, there is “only” a 100% chance they are buying. What is the % chance that YOU are buying? This consistent action of price RESPONSE in the major markets is why they are TRILLIONAIRES, and why Elmer Fudd, well, is what he is.
- Here’s a closer look at the current gold gridline, highlighted on the daily chart. Gold Daily Chart: Current Key Gridline Band Take a hard look at the 1170 marker.
- Professional money managers are underwater for the year. The Dow is now trading down on the year and Elmer Fudd Public Investor is paying the piper, bigtime, for his latest price chasing adventure.
- The Dow soared 70% in a year and Elmer Fudd believed the banksters’ “the recovery has legs, you’re missing out, buy big now!” propaganda show. And what a successful show it was. Poor Elmer price-chasing Fudd marched back into the stock market waters singing “one more for the gipper”. The result? He was ripped to pieces, in weeks, by the bankster sharks. This ends with him OBLITERATED.
- Meantime, he’s already bailing again. Now Elmer Fudd Public Investor REALLY wants out of the stock market. He’s mentally and financially broken. Yes, Citigroup is 3 dollars a share, but Elmer Fudd paid $50, then $45, then $40, then $35. Then he nosedived into 97 cents like the hindenberg on fire, with no more capital allocated at ANY lower prices. He’s FINISHED in the market. He did NOT buy at $5, $4, $3, $2, and $1 in a pyramid formation into the Dow 6500 lows.
- What I do in a pyramid formation is NOT averaging down. Each trade, even in the same item, stands on its own merits, its own parameters.
- Fudd just went Thudd. He is totally underwater on his stock market positions (those that haven’t been delisted or reverse split to infinity), totally demoralized, both mentally and financially. His whole financial life now depends on the banksters keeping interest rates low, so his junk bond, real estate, and income (dis)trust “portfolios” don’t meet the banksters’ flamethrowers. Good luck on winning that lottery, Mr Fudd. I see you bought 500,000 tickets for the junk bond lotto draw. I wonder why the banksters are shrieking with laughter.
- I’m sure this is priority number one for the banksters. “We have to protect Elmer Fudd’s junk bond investments, that’s our highest priority!” –Banksters, May 21, 2010. Somehow, I think I may have misquoted the banksters….
- The Dow. If you are running a Dow short program, you are ringing the cash register bigtime. My great worry is that the gold community has such a crazed obsession with shorting the stock market that no profits are being booked. Here’s a look at the Daily Dow chart. Dow Daily. From Overbought to Oversold in days!
- It’s going into oversold territory or at least approaching it. Profits must be booked on the short side and longs should be added here and now. Note the CCI, Williams, and RSI. All hitting oversold levels. Instead of booking profit, what I see in the general gold community is almost there is a high-fives party going on, with each leveraged short Dow player “knowing” that “we’ve got it now!”, knowing nothing can go wrong with the trade. Greed is EVIL. The first attempt at shorting the Dow failed as the banksters announced the down move was all an “accident”. The shorting party, if it goes out of control, will end with the banksters closing the markets and perhaps busting team shorty’s trades to “save the system”. Dow 6500 is the line in the sand where the risk of IMMEDIATE stock and bank closure worldwide redlines. I would not count on collecting Dow short winnings if the Dow breaks 6500.
- Do I think it will? No. Do I think that if the US fed fails to act and pump liquidity into the system, that the lows have a high probability of failing? Absolutely. Do YOU still wonder why I’ve continued to remove cash from the banking system over the past few months while Elmer Fudd waved his “the recovery his legs!” flag that the banksters had specially built for him at the Oscar Mayer Wiener Factory? The global financial system is destroyed and kept alive as a ZOMBIE by fake accounting and liquidity pumping. Only GOLD will end the crisis and it will be the Gold PUNISHER that ends it, not the gold saviour.
- I continue to ring my bull US dollar pgen cash register this morning, so I really don’t need the bulls to tell me how great and smart they are for calling the dollar rally. Power investors like GoldLion have gone into a USD SHORTING pyramid, while noting that following any sharp hit, the dollar could still soar way way higher. A focus on buying gold, not shorting the dollar, is probably the best approach for most investors. Here’s a look at the MASSIVELY overbought US dollar. US Dollar goes NOSEBLEED overbought: Daily Chart View
- The bulls are failing to book profit, and in fact they are buying more! Look at the top 3 oscillators, RSI, Williams, and CCI. Into the ceiling! And it’s not just the daily chart. The WEEKLY chart is showing a similar situation of overbought action: US Dollar Goes NOSEBLEED OVERBOUGHT on the weekly chart!
Copyright © 2010 Stewart Thomson
Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form. Giving clarity of each point and saving valuable reading time.
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