July 13
Long Term=Up (major resistance 1767-1804 needs to be exceeded on a monthly close) Medium Term=BEARISH (Major Resistance 1672-1705 Monthly Close) Technically in bearish mode until we close above 1685. Intermediate Term= Bearish – Need a close above 1633-1642 to favor a key intermediate term low. Short Term= Bearish– A close above 1595 will neutralize the downtrend. Support and Resistance for Friday Initial Resistance for 1575-1583 and 2nd tier 1592-1596 Initial Support 1558-1568 and 2nd tier 1535-1545 What Next?
Price bounced from where it had to on Thursday and kept above 1565 on the close. But things are not well in any market as China stocks are on the verge of a breakdown in charts, so is the Euro and the DOW might still have one push higher into August but looks like there could be major trouble coming. Silver at the low today was only 40 cents from a major break below 26 and gold was less than 35 dollars from its triple bottom at 10 am this morning. If the bounce continues into Friday the 1575-1583 is the most likely peak, but we won’t rule out a move to 1595 either. In summary, so far this is only a bounce in gold. Short term cycles favor one final low next week. If we close above 1592 then the potential will increase we might have made the low. Bottom line What it comes down to is the BLUE LINE on the hourly chart is a PIVOT. That is either going to become support or resistance. If the cycles play out we'll get one more low next week and then odds will turn that a rally into month end will be in play. The cycle window opens on Monday for a short term change. Today's low seems to early for the cycle, but its not like anything out there is normal anymore. The 1555 area hold today was a key area. We will stick with the outlook for one more push down into the cycle. As far as the chart goes and the pattern, it is still possible that the low was made today and that next week would be a pullback not as deep. We're just not sure. If we close above 1592 it would certainly open the potential. As long as we're below that, the odds are still for the low next week. July 12
Long Term=Up (major resistance 1767-1804 needs to be exceeded on a monthly close) Medium Term=BEARISH (Major Resistance 1672-1705 Monthly Close) Technically in bearish mode until we close above 1685. Intermediate Term= Bearish – Need a close above 1633-1642 to favor a key intermediate term low. Short Term= Bearish– A close above 1595 will neutralize the downtrend. Support and Resistance for Friday Initial Resistance for 1575-1583 and 2nd tier 1592-1596 Initial Support 1558-1568 and 2nd tier 1535-1545 What Next?
Price bounced from where it had to on Thursday and kept above 1565 on the close. But things are not well in any market as China stocks are on the verge of a breakdown in charts, so is the Euro and the DOW might still have one push higher into August but looks like there could be major trouble coming. Silver at the low today was only 40 cents from a major break below 26 and gold was less than 35 dollars from its triple bottom at 10 am this morning. If the bounce continues into Friday the 1575-1583 is the most likely peak, but we won’t rule out a move to 1595 either. In summary, so far this is only a bounce in gold. Short term cycles favor one final low next week. If we close above 1592 then the potential will increase we might have made the low. Bottom line What it comes down to is the BLUE LINE on the hourly chart is a PIVOT. That is either going to become support or resistance. If the cycles play out we'll get one more low next week and then odds will turn that a rally into month end will be in play. The cycle window opens on Monday for a short term change. Today's low seems to early for the cycle, but its not like anything out there is normal anymore. The 1555 area hold today was a key area. We will stick with the outlook for one more push down into the cycle. As far as the chart goes and the pattern, it is still possible that the low was made today and that next week would be a pullback not as deep. We're just not sure. If we close above 1592 it would certainly open the potential. As long as we're below that, the odds are still for the low next week. July 12 Long Term=Up (major resistance 1767-1804 needs to be exceeded on a monthly close) Medium Term=BEARISH (Major Resistance 1672-1705 Monthly Close) Technically in bearish mode until we close above 1685. Intermediate Term= Bearish – Need a close above 1633-1642 to favor a key intermediate term low. Short Term= Bearish– Need a close above 1608 to neutralize the downtrend. Support and Resistance for Thursday Initial Resistance for 1579-1586 and 2nd tier 1595-1604 Initial Support 1558-1567 and 2nd tier 1535-1545 
What Next?
What Next?
Price reached 1565 again on Wednesday and there is a potential we’ve made the lows for the week or will make them by Thursday morning. The short term cycles are due to bottom next week on the 17th (plus or minus 72 hours). At the moment there are a few key spots in price. The first is this 1565 area we’ve been using and on the hourly chart. By next week, that number becomes 1555-1560. Finally the daily chart where the cycles are listed has the lower channel line currently at the 1535-1540 area. Perhaps we get another bounce here and then make the low at one of those areas next week when the cycles come due. As long as we hold 1565 on a closing basis, that’s what we would favor. By Friday, 1565 will become 1558-1560.
China reports GDP today and that could potentially be a commodity moving event. Keep that in mind.
Bottom line
What it comes down to is the BLUE LINE on the hourly chart we’ve labeled PIVOT. That is either going to become support or resistance. Look at that first chart again how today we kept going above and below it. If it becomes support, then we’ll look for a bounce for the rest of the week and target 1590-1600 again. Today’s action just did not leave a good clue as to whether it will be support or resistance. The pattern is a mess from today right at that line.
In summary, the short, intermediate and medium term trends remain down. Short term cycles should bottom next week, and from there, odds will favor a rally to month end. Thus the trend remains down. The seasonal low might be on this coming cycle next week, we’ll have to see. Things are very dangerous everywhere we look and we must remain flexible.
July 11 Long Term=Up (major resistance 1767-1804 needs to be exceeded on a monthly close) Medium Term=BEARISH (Major Resistance 1672-1705 Monthly Close) Technically in bearish mode until we close above 1685. Intermediate Term= Bearish – Need a close above 1633-1642 to favor a key intermediate term low. Short Term= Bearish– A close above 1625 will lead to 1646-1660 next == BUT A close below 1565 puts us in full bearish mode. Support and Resistance for Wednesday Initial Resistance for 1575-1585 and 2nd tier 1595-1603 Initial Support 1555-1565 and 2nd tier 1539-1547 What Next?
Today’s lows at 1565 reached our point of moving a lot more bearish on the short term. We discussed closes below 1560-1565 would add to the downside, and we hit that range today. Odds remain in favor that we made the high on the cycle on July 3rd and favors the next turn point to be July 17th (plus or minus 72 hours). ANY CLOSE below 1560-1565 will add evidence to that outlook. We discussed the most favored point for a high last night as 1600 at the purple channel line and today’s 1602 high right there and subsequent 35 dollar drop confirmed that we had that one right and our outlook that price would first move there on the bounce played out perfectly also.
Our best take is that mid week Wednesday (tomorrow) or by Thursday morning in New York should be the low point for the week. There are a lot of potentials for this week’s low. The lower channel line on the daily cycles chart is the preferred area, but it could very well be that we wait until next week to reach it. We’re not sure yet if it wants to go there this week or not. With the low of the week favored in the next 24 hours as one potential, there’s also a strong IMPULSIVE downside pattern that began today that is suggesting that’s it’s a 3rd wave down on this pattern that began on the 3rd of July. If that is the case, then certainly we could see 1540 a bit sooner. Odds favor that resistance will be the blue line near 1575-1583 for the next bounce, be it tonight or after one more low this week. We’ll favor that we have one more push lower this week before it’s over. We’ll look for a bounce to 1575-1583 to develop from today’s low and then one more push lower. However, we’re not as sure about that one more push lower.
If the blue line starts to support at 1575, it’s not out of the question for price to catch a bid to end the week. We have the FOMC minutes tomorrow, and if there is hint of easing, we’re not sure how we should take it. Usually, it would be bullish, but look what happened when rates were lowered last week and the bad jobs report came out. It still tanked. Thus maybe we get a bounce to that release on Wednesday and get a bounce lower, but we won’t rule out the potential that it could spur prices higher into Friday.
We’ll reprint what’s coming in the next few days: Wednesday - Minutes of FOMC Meeting: Following the recent FOMC meeting, in which it was decided to extend Operation Twist throughout the rest of 2012, the market reacted to this news as gold and silver tumbled down. The minutes of the FOMC meeting might offer some insight behind this decision regarding the future steps of the FOMC especially in anticipation of the upcoming FOMC meeting at the end of the month; Thursday -China Second Quarter GDP 2012: During the first quarter of 2012, China grew by only 8.1% in annual terms; the current expectations are that the Q2 2012 grew in annual terms by only 7.5%; if the growth rate will be lower than in the previous quarter it might adversely affect commodities; Friday - U.S. Producer Price Index: In the recent report regarding May this index for finished goods fell by 1% compared with April's rate and rose by 0.7% in the last 12 months;
Those are a lot of things to consider.
Bottom line
the best take is the short term cycles are in play to the downside-----especially if we close below 1561-1565. With the way gold reacted OPPOSITE of reports that used to be bullish, and what’s on tap the next few days, we have to remain flexible. We’re not sure what the FOMC will say as they know how much things are in trouble, and we’re not sure how much China will MANIPULATE the GDP number, and the Producer Price index on Friday is also on tap. We’ll favor the situation remains bearish, but concede that we’re not sure how gold will react---whether they will continue to discount what was once good news, or if the control boyz want to change it up for a few days.
Regardless, the short term trend is down, and while a bounce can develop and a major bailout at any moment, it is what we have to deal with. Odds are still with us that the metals can move lower into the 17th.
One note is that the turns have been coming in on the early end of the window, and the window opens on the 14th as the date when a short term change can develop. That suggests not until next week, but as we saw at the end of June, it came a day early. So we’ll favor lower but remain flexible. The most likely situation is a low within the next 24 hours. With the news coming out and how choppy and nutty things have been, we urge flexible thinking. In sum, we got our push down this week, and now 60 dollars since the July 3rd low. The last two lows carried 80 dollars in total between the FOMC meetings. Will tomorrows FOMC minutes (not meeting) give us the final 20 dollars to make it three times? If it does, we’ll favor that as the low for the week. Odds are still for the downside and the bias. A Wednesday bounce should find resistance at 1575-1583 at least initially. We’ll look for more detail on the intraday update in the morning.
July 10 Long Term=Up (major resistance 1767-1804 needs to be exceeded on a monthly close) Medium Term=BEARISH (Major Resistance 1672-1705 Monthly Close) Technically in bearish mode until we close above 1685. Intermediate Term= Bearish – Need a close above 1633-1642 to favor a key intermediate term low. Short Term= Neutral/Bearish– A close above 1625 will lead to 1646-1660 next == BUT A close below 1565 puts us in full bearish mode. Support and Resistance for Tuesday Initial Resistance for 1592-1602 and 2nd tier 1610-1615 Initial Support 1573-1583 and 2nd tier 1556-1562
RECAP
Gold prices rebounded to the first mini moving averages on the hourly price chart and settled at the 1588 area in august gold.
Our weekend update discussed and downplayed some of the conspiracy theme’s on gold, but only to the extent that we sometimes put too much emphasis on the “Gold Cartel.” As I stated we still believe in manipulation and that it exists, but we also wanted to discuss that there are corrections in every bull market. It was nice to see Jim Rogers basically say the same thing. So we are not discouraging Gold Bugs, nor are we saying there is not any manipulation. We are just saying that these corrections are to be expected in all bull markets. We are still very gold bullish, but we want to be portraying what is really happening in this current market and that is we are in a medium term bearish correction. We think it is better to portray reality than to keep saying the low is in. When this market turns, we’ll be the first to embrace it.
Commodities guru Jim Rogers believes the current 20 percent correction in gold prices could continue for a while longer. Rogers said the time for investors to jump back in to the metal is unknown for now.
"I've actually owned gold for longer than 11 years. I'm not buying now. Gold went up 11 years in a row, which is extremely unusual for any asset. I don't know of any asset in history that's gone up 11 years in a row without a correction."Corrections are normal and are the way things should work, the way things do work. Having said that, I don't know when the correction will stop. It's normal in my experience for corrections to go down 30 or 40 percent. It's just the way markets work."
But none of this means that you should short gold either. I’m certainly not selling my gold, because I suspect gold will be much, much, much higher over the next decade.
What Next?
Odds favor as we come into the week that prices made their cycle high on last week July 3rd at 1625. It would take a close above that are to favor higher into July 17th. ANY CLOSE below 1560-1565 will add evidence that prices should dip favor lower into the 17th. Odds slightly favor that we’re going lower on the cycles.
Monday tested our listed resistance at 1592-1597 and came in at 1593. Support was listed at 1568-1570 and came in at 1575. We got to the green moving average on Monday on the bounce and that might have been it. However, that purple channel line is still the most favored spot for a chart high this week on the hourly near 1600. The bounce so far is choppy and that keeps it favored as just a bounce at the moment. We’ll favor it moving to the purple channel line at the moment.
Bottom line
the best take is the short term cycles are in play to the downside-----especially if we close below 1561-1565. Once this bounce ends, the chart still favors lower. We’re hearing rumors of a 15 trillion dollar injection coming and if that’s true, all bets will be off for the downside. We think at the moment it will not be announced (if it’s even true) until the FED meeting in August. We just don’t know how much validity or when at the moment. But events like this have to keep us flexible.
July 9
Long Term=Up (major resistance 1767-1804 needs to be exceeded on a monthly close)
Medium Term=BEARISH (Major Resistance 1672-1705 Monthly Close) Technically in bearish mode until we close above 1685.
Intermediate Term= Bearish – Need a close above 1633-1642 to favor a key intermediate term low. Short Term= Neutral/Bearish– A close above 1625 will lead to 1646-1660 next == BUT A close below 1575 takes us out of bull mode.
Coming into Monday, we have minor support at 1575 at the mini white dotted trend line and more important weekly support at the lower blue line in the 1566-1570 area. There have also been some important lows on previous drops at 1555-1560 that needs some watching. With that said, the blue line is the most important area to watch for support and perhaps the mini white line because that represents the 61% retrace of the rally from 1540. Finally, the lowest white dotted trend line encompasses a parallel to the upper one and contains the entire sideways channel at the 1530-1540 area. If the cycles are really in a downtrend until the 17th of the month, that should be one of the targets that will be reached. For Monday, the white dotted at 1575 and the lower blue at 1570 is the one to focus on. Since last week was a holiday week, perhaps the market did not react as it should have with lower interest rates and a bad jobs report. We could argue that the control boyz were in charge. But we also must ask if coordinated central bank activity in lowering rates and a bad jobs report didn’t help gold----than what will? That is the exact opposite of what we have seen in the past. This coming week should provide some of that answer. If the market is back from vacation, and prices start a sharp rise up, then we can chalk it up to the control boyz, but if the market remains weak, it should be a concern to all gold longs. The seasonal aspect is here, but as we mentioned in the weekly, sometimes it doesn’t show up until August. Actually, higher prices in July and August are only good to a certain extent. Last year when we made a new all time high in August, we warned that NEW HIGHS in AUGUST are not usually a good omen for the last half of the year. July and August are cycle lows during a bull market run, not highs. In fact, there are a lot of cycles that point to the September and November time period as the most likely time that GOLD will make its lows this year. Monday’s & possibly Tuesday should see the 1568-1597 area as a price range. Monday’s lows favor either 1568 – 1570 or 1577-1551. Anything below 1555-1558 would argue for a test of 1530-1540 during the week.
What Next?
Odds favor as we come into the week that prices made their cycle high on last week July 3rd at 1625. It would take a close above that are to favor higher into July 17th. ANY CLOSE below 1560-1565 will add evidence that prices should dip favor lower into the 17th. Odds slightly favor that we’re going lower on the cycles. Monday has first resistance at 1592-1597 and support at 1568-1570 --- odds favor the bears are in charge overall, but a bounce might develop first on Monday.
Bottom line
The best take is the short term cycles are in play to the downside-----especially if we move below 1568-1570. With the market uncertainly let's stay flexible and see what price does Monday.
Market should pop up towards 1597.05 or 1603.86 this bullish scenario would be damaged if 1580.34 - 1570.43 zone is broken, a severe break down could then occur. Gold Weekly Update
Gold prices reached our weekly resistance on the upside before a late week sell off that had prices touch our weekly support on Friday. By the end of the week, gold was off only $12 dollars but it sure seemed like it was a lot more. Gold continues to act like it has been for quite a while. The typical scenario is after a one or two week trading range that moves below 1600, we get a 50 to 100 dollar day rally on news that has nothing to do with Gold and then people like Jim Sinclair and John Hathaway send messages to all the key internet pump gold sites and claim the low is in place and if you don’t buy right now you’re going to miss the biggest move of your life. Please understand that I have no ill will against any of these analysts but I am just relating back to you what has been and so far continues to be what has been happening all year long and for part of last year as well. In fact, longer term we agree with their analysis and there can be only two reasons why they keep calling the bottom. The first reason is just their way of “calling the bottom” in gold prices for which (after 20 times of doing so) will eventually get it correct and market land will cheer in the glory of their astute call at the bottom. They realize that their audience demands this type of analysis and conclusion. The second reason they keep doing this is that like everyone else they do not know when the bottom will occur and no one knows tomorrows price. My own conclusion is that both reasons are correct. Here are the latest quotes from the gold bug community and for what it’s worth, I am not disagreeing with them per se; Jim Sinclair said, anyone who didn't recognize yesterday's [and Thursday's] price bashing in gold as a rig job "is either blind or brain-dead." Of course that goes for silver and the other precious metals as well. Sadly, there are still quite a few people who fall into that category, especially the silent co-conspirators in all of this, the large cap gold and silver mining companies. A lot of the smaller companies are well aware of what's going on, but even they won't speak up in public, and when one of them finally does develop the gonads big enough to do it, they don't do it very loudly. As my good friend John Embry has said over the years..."the mining companies are either ignorant, naïve, or complicit."...and he's disgusted with the whole lot of them. The attempt by gold to break above its 50-day moving average was thoroughly crushed by JPMorgan et al. What they started on Thursday morning in London trading, they finished on Friday...just over 24 hours later...and where we go from here price wise, is anyone's guess. (Note the last sentence---and precisely what I’ve been saying…no one knows tomorrows price) There are certainly a lot of factors that imply gold is manipulated as are most markets in the digitized monetary world we live in. The part that I have a problem with is that ALL MARKETS go through corrections during long term price increases. This is just the reality that exists in markets. This conspiracy we are told is not just the government, it’s the GOLD MINING INDUSTRY as well and it’s not just gold. It’s silver and all the precious metals as well. And it’s not just the large cap companies but a lot of the smaller ones are aware but won’t speak up. And the reason given by John Embry is they are either ignorant, naïve, or complicit. I don’t know about you, but that is a very long stretch of the imagination for me to consider that the conspiracy entails even the mining companies, the smaller ones at that. Which sounds more logical----gold is going through a cyclical bull market correction or a conspiracy that even involves the mining companies themselves are keeping the price down? Not that it matters that gold has been appreciating 30% per year on average over the past 11 years. But that is just not enough. Someone is keeping the price down. I’ll admit that I believe in manipulation of the market but some of this stuff can be explained away by mere cyclical forces present in all markets. I had to laugh the other day as the day after the 50 dollar up move, a well know internet site reported that the GOLD CARTEL was responsible for a 10 dollar pullback on the following day. HUH? Does that make sense to you? It doesn’t to me. In fact, these types of stories concern me about these internet sites. I mean, it’s ludicrous to pin 10 dollar pullbacks on the “GOLD CARTEL.” Is it really the gold cartel that can’t keep prices below 1500 or is it the mining companies cost of an ounce of gold production is on average 1200 dollars and PERHAPS it is them who are not willing to sell gold below 1500? If we really think about it, does it matter which one it is? Price is reality, regardless of what’s keeping it down or making it rally. I think it is well enough to say that gold hasn’t completed its revalue bull market move up, and while there is enough evidence to imply manipulation to some effect, eventually all things manipulated catch up with real price values. The London Gold Pool of 1968 was not up to the task and eventually gold was allowed to trade freely. The same will occur here. GOLD WILL EVENTUALLY trade at a FAIR value and what fair value is will in the end be determined by supply and demand and greed and fear and CONFIDENCE in the monetary system and governments. Claims of $55,000 thousand dollar gold are most likely Tulipmania extrapolations where if the government had to make every paper dollar backed by gold then that would be the price. This is non-sense. The government is not going PAY back the debt. It never does. Not in Rome, Greece, or Europe in the past and not in the USA in the future. Governments always DEFAULT and create new currency. The gold market move is not over but has been in a cyclical correction. Once that correction is complete there is most likely one more wave higher that will take gold much higher. There are biblical events coming to the global community. The current system of things is in deep trouble and like in the past, will fail. ALL SYSTEMS INHERITENTLY FAIL. This is how the complexities of the world have played out through history and will continue to do so in the future. The wisest man to ever walk the earth, Solomon, said “there is nothing new under the sun.”
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards
