As we discussed in Friday's podcast, be on the lookout for some Cartel selling this week as gold approaches some key resistance and silver gets a bit overextended.
Gold rallied overnight and extended those gains in the NY pre-open. However, check the high for the day...$1168.60. And what was the intraday high back on "Blue Monday", August 24? $1169.80. So in order to make our first "higher high" in a while, gold needs to plow through that $1170 area. Is there any surprise, then, that it stopped just below and has now reversed back down to $1162?
Of course, there's still a possibility that it could break through $1170 and keep moving higher. It's above it's 2015 downtrend line AND it's CoT structure isn't that bad. IF it can keep moving higher, the obvious target is the 200-day moving average, found today near $1178:
And even longer term, watch for key resistance near $1230 and this 2.5-year down arrow:
However, and as discussed on Friday, my main concern continues to be what They may be preparing to do to silver in the short term. Though gold may continue to climb higher AND though this may help silver hang in there, the CoT structure has changed significantly AND there are two other factors which concern me:
- It appears that the "retail silver shortage" story is easing a bit.
- And this piece of garbage smells A LOT like the "gold is a pet rock" WSJ story from 7/17: http://www.marketwatch.com/story/heres-the-chart-gold-bugs-dont-want-you-to-see-2015-10-09
And, I don't know, but do you see a little JPM cap going on at the 200-day? Maybe?? Or is it just me???
I mean, seriously. How many times have we seen this pattern play out? A thousand times? It's like Groundhog Day!
- Price rallies on some fundamental news or simple short covering.
- Cartel Bank (JPM) sells like crazy in order to manage the rally.
- Price gets hard capped at some key technical point or moving average.
- Momentum stalls.
- Bank raids price to set the trend back lower.
- All of the brand new Spec longs immediately head for the exits and get flushed back out.
So, would a drop back toward the black UP arrow and the 50-day moving average surprise anyone? Not me!
It's a bank holiday in the U.S. today so be wary of the action overnight and into tomorrow when The Monkeys return to their desks. I'll be typing a public post next that details the latest BPR and we'll have the usual podcast later, too, so please be sure to check back later.
Have a great day.