Update: Gold Sold
Spot Gold was trading $1341 when we posted this. That put it just in the area warned of basis December futures.
Here we are now, the break came in the hour after the original post. We're now $8 lower from that level.
The hourly Bollinger band warned of a violent move pending after our other indicators out it on the radar.
Intraday Analysis
Right now Gold is steady and Silver is strong. Silver it should be noted is playing catch up if one subscribes to the correlation between the 2 metals as being still strong as we do. But frankly, Gold is controlled by Central banks explicitly and is being remonetized slowly. Silver is more subject to the industrial supply/ demand factors and un-retrievable consumption. Silver is not money.. but it will be a proxy (like oil) if Gold ownership is ever restricted in Asia
To the point of this post:
The Yen has made a double bottom on the daily today. If it holds, we see Gold being more susceptible to profit-taking. On a daily basis, new lows in the Yen warn of a top in Gold.
The Euro also looks a little toppy vs the USD and we see profit taking there the last few days based on flow info and the long wicks above. Not as classic, but cautionary none-the-less for Euro longs. Right now in terms of FX pairs, we continue to watch the Yen.
Look Out Above
And the $1346 level (basis Dec futures) was given repeatedly as a possible exhaustion area. So even if the Yen penetrates and makes new lows, watch how gold handles a retest of that area. it already flirted with it the other night on the gap higher. From a previous post:
According to Moor Analytics: One area of possible exhaustion for this move up comes in at 13466-556. The decent trade back above 13278 (+1 tic per/hour) put the macro bull calls back into play.
While $1346 to $1356 may seem a wide berth. It is not. It is proper and responsible. Michael deals in longer term levels. A $10 area of expected selling makes a lot more sense when you look at Gold in time frames of years instead of days. Further, the problem with most technicians is they put emphasis on a number, as if that number has some magic. What matters is when a cluster of possible levels are near each other, like where Michael notes. And his numbers imply a penetration of $1346 does not necessarily mean propulsion higher .
Watch how the market reacts when it is in that zone, if it gets there. Does it make a bull flag? Does it show higher highs with lower RSI? Does OI go up or down? So far it hasn't even been breached on a daily settlement basis. We smell a ton of selling in that area. And just as we saw producer selling in April above $1850 in Silver, we are saying be careful if a $20 pull back in Gold from here puts you out of the money as a trader.
Gold is a Market Now
But when resistance becomes support, like a couple days ago when the market gapped above the $1331 area, that makes us smile. For when afterwards, that gap was filled and gold bounced we were very happy.
We like this: Gold filled its hourly gap and resumed its rally... (spot chart)
Click chart for live mkt.
We like it not because we are bullish ( we are), but because the market is respecting levels in a MORE TIMELY FASHION. And that dear readers, is a sign of a trade-able market. All markets respect the numbers. Its only the ones that respect them quickly that you trade. Quick feedback whether your idea is right or wrong, especially with our style, is the key to ROR in trading.
We don't like this.. when Gold touches the possible exhaustion area Moor Analytics points out and runs away. RSI and BollingerBands also warn of exhaustion ( Z futures)
A Word about Recommendations:
Yesterday we got long Silver for a more macro trade than we usually do. We also cited Kitco as one firm we deal with. in response to reader comments and emails: That is not a negation of other good places to do business, and we said as much. It is a personal choice. In an industry rife with dishonesty and charlatans who have maligned the very reputation of Gold as an investment tool it is paramount to have your own personal relationship with your metals dealer no matter who it is. We as LLC owners must now personally guarantee our trading accounts, it similarly behooves us as investors to get someone on the hook for personal accountability if only to remind them of moral obligations. Frauds like Elemetal who we wrote on here and here had much more wrong with them than their fronting for drug gold. They were selling metal they didn't have.
And you never know. For example, "Bon Scott" had a good relationship with PFG although he had to deal with amateur salesmen trying to fade him on price. But once he got the deal done, the metal came quickly. Who knew that they were frauds? FRankly, not many aren't. its just the low lying fruit that is gone after these days. Juking statistics isn't just how police operate.. but we digress.
Basically, who you use has to be personal choice. One of us has repeatedly bought on ebay and insisted on meeting the seller (who was actually registered and legit) at Grand Central station's Oyster Bar to verify the Gold was good. Insane right? But he likes to find undervalued needles in haystacks. We collectively think he secretly wants to beat the snot out of a fraud.
Other recommendations by Soren K. Group for which no compensation is given except content for readers
- Enda Glynn for Elliot Wave Analysis - whose wave count for Gold still unwaveringly points to $1550 even though we chickened out
- Moor Analytics - Professional technical analysis used by $BB hedge funds
- Geroge Gero - who we've known for years as a man who can see the tape like no other.
- SRSrocco- for subjective probabilities based on real data , EROI
- Trading View- their real time, interactive chart set up is Kitco's best kept secret and in our opinion a real coup. We use their Kitco charts sometimes here and now have our own account set up for more cash market access. Sunday nights call on where Gold would open was a function of that product. We use professional tools in our trading accounts. But the difference between the pro and public tools isn't much these days
- FinViz- for their market snapshots and heat maps like in the cover photo. Great tool for graphic COT reports too
- Zerohedge- needs no endorsement from us, common goal of pointing out hypocrisy going back to 2010. Inspired the idea to write for Marketslant when the site came up.
- Readers who know their shit.. that is you.
Soren K. Group Angle
We believe that technology is no longer the game and the message is the message now. Content is king again. The MSM has abrogated its responsibility, but fringe blogs generally do not have the megaphone or resources the incumbents do. And once they do, they risk being co-opted as well. Original content that is not echo chamber driven is hard to come by. We've been fortunate in our careers thus far, and this is a lesson we learned by mistrusting trading advice given by players to us.
Our selfish goal is to be able to do this more and in more depth. Stories we did on the court manipulation cases, exposing the fraud underlying Tesla's corporate structure, reports spelling out the tactics in the ongoing abolition of cash, and questioning the very market structure that enables manipulation of government GDP numbers (patterns exist, proof does not - we have not devoted the time needed to flesh this out yet)are what we want to do more of. For that we are contemplating creating a Patreon site. Until then we have to focus mainly on metals now.
Our angle is satisfaction in being right, and the education received in expanding our core competency to areas that prey on the public: whether they be government like Dan Malloy, Corporate, Banking, legal or even clerical fraud. The game is rigged on every level. Beware of manufactured consent and controlled opposition in whose statements you subscribe to.
On a Tangent
Change is coming and it might be terrifying. Trump is the (possible)culmination, not an aberration of our governmental de-evolution. While we do not ascribe to the Fourth Turning's pseudoscience, we do note the concept of political Anacyclosis: 1. monarchy, 2. kingship, 3. tyranny, 4. aristocracy, 5. oligarchy, 6. democracy, and 7. mob rule
Just be careful
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