Gold – The January Pop – On Schedule?
Posted on January 15, 2015 by Martin Armstrong
Back in December, we warned that gold would produce a pop and that the main resistance was in the 1250-1275 level. We now need a closing ABOVE 1250.50 tomorrow to confirm a further advance is possible. This is part of the interconnections. This forecast for a pop in gold into January was not “opinion” and it most definitely was not based upon any fundamental. Gold was basing even when the dollar was rising because the capital flows were sensing major problems in Euroland. I have warned that gold is NOT A HEDGE against inflation, it is a HEDGE AGAINST GOVERNMENT and that is what we are watching – the European hedge at the moment against the collapse of the Euro. In this context, gold and the dollar can rise together. Gold is not only a dollar influenced commodity.
Hopefully, people will start to notice that it is futile to argue against me when this is not my personal opinion. It is irrelevant as to what anything “thinks” v another or to pound one’s chest that they are right and everyone else is wrong. This is about reaching a new understanding that we ALL NEED EACH OTHER and the free movement of capital is essential to world economic growth and sustainability.
Raising taxes reduces disposable income and that can ONLY reduce economic growth. France with its insane 75% tax rate sent hoards of French to move to London abandoning their homes in Paris renting them out really cheap because they could not sell them. This is PRECISELY the deflationary aspect created by taxes and this is how Rome collapsed.
Theories about money supply have misled countless people and most of the manner in which analysis is conducted on a domestic level, prevents us from advancing economically from here. Politicians run promising to change whatever domestically, which may not even be possible given the global trend.
We have so much to learn and it seems there is no incentive to make that small step forward to save ourselves and our posterity from the same repetitive nonsense that clouds our future. We remain blind, deaf, and politically-muzzled with little hope of making life better. Political-correctness in analysis is killing us. It certainly is reducing our ability to survive what awaits us ahead.
The CHF de-link should have been expected. Allegedly there are over 40,000 U.S. "black" accounts there alone. What about all the other countries needing discrete banking services; so I view Switzerland as an elite cabal enabler.
But what did they just do for their banking? Gave themselves a raise (up to 30%) which increases their purchasing power, buy up more assets for their loyal customers and all those "black ops" not only continue to get funded, but they actually now have more money on a comparative basis to do it. This funding is how global control and oversight is maintained. You now have a trusted "neutral" country that is capable of paying all the "operators" even while the USD crashes leaving its citizens, and dependent countries around the world aghast. It's all about maintaining control, and being able to pay your own global control enforcers, with already established working accounts. That doesn't mean the USD crashes tomorrow, it just means they couldn't allow CHF pegged to EURO to devalue causing a loss of purchasing power from the CHF already accumulated. And the break away will actually result in more fleeing to the CHF for "safe haven" like the USD building it's strength higher (BUT CHF basks in the assumption of an abundance of "on premise" gold).
Lagarde, head of IMF, a UN conceived and run baby, saying she had no clue is just is not credible; what a chuckle-head.
Only keep in the stock market what you are willing to lose; it really is rigged, but they have to move the stocks to reap the benefits too. Still playing it like I called it above and by next SAT we will know if it's right. Short term CHF will be strong like POPEYE after spinach. LT I think CHF banking system a dying breed as money moves EAST where the perception is nation building vice funding the destruction of nations.
All the BS about how terrible this is for the Swiss, just that BS, about 3/4 the Swiss GDP is services like, oh, you know, banking. And the average citizen just woke up 15% to 30% richer. Not a bad day. Good luck.
Jim Willie in his interview with Elijah Johnson on Jan 13th said the peg wouldn't hold. Others also expected it who believe markets can only be distorted for so long - which is a lot of people. So I assume many people made a lot of money.
Few made as much as the party who acquired a quarter of a million of gold calls the day before. Congratulations whoever you are! ... or Swiss Natl Bank!
I don't expect much in the way of inside trading investigations into that anytime soon...
Target reached as forecast on 10 December 2014
Thomas Jordan: The rationale for discontinuing the minimum exchange rate and lowering interest rates
"Recently, divergences between the monetary policies of the major currency areas have increased significantly - a trend that is likely to become even more pronounced. The euro has depreciated substantially against the US dollar and this, in turn, has caused the Swiss franc to weaken against the US dollar. In these circumstances, the SNB has concluded that enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified. "
Hmm, divergences between monetary policies? Really? There not walking in lockstep? Believable or just part of the plan? Change is afoot.
So, are you going short here? It looks if most here (who post) agree gold will soon drop. I guess the relevant question is 'how much'. It appears AM believes the next low is being determined by this up move whereas Carbonjunkie see a low of 1190 or so in the near future. I will say it is a tad deflating after all this time - every pop in gold will be followed by a sell off and according to some, a sell off back below 1200 to probe old lows. I wonder if the yellow metal and it's derivatives will ever find the energy to move up and away from these price levels (ever is quite a longtime of course, lol)
Sorry to clutter up this fine thread, but I just found this pretty funny given the recent moves in the Swiss franc.
Last time gold was at these levels, miners were significantly higher. Poor action in miners may portend near term sell off in gold. Love to hear thoughts here.
AM, A question if it's appropriate to address here in this forum. If not, no problem.
I understand your recent commentary you've made on Ice and HFT. Zerohedge did an article on it and there have been press releases by this exchange as far back as two years ago to try to thwart this behavior.
I'm trying to figure out who are the forces involved and why is this group trying to thwart Central banks and the cartel? Or are they? Do they have their own selfish interest or is somebody in the financial industry really concerned with fairness and justice in the market? Is this political will vs banker will? Ain't this exchange Goldman Sachs people? Or maybe a third option, they see the bullish pattern emerging you've been talking about , lows bouncing quicker and more frequently, and simply the recognition shorts could be taken out often by new forces entering the market, so stay clear? I understand the dynamic but not the why and at this time?
We are above Armstrongs early December 1250-1275 resistance area.
We closed December within Armstrongs 1310 to 1042 range in 2014 which he said would be bearish for gold in 2015. It hasn't been yet.
People were screaming the bottom is in. Armstrong retorted, it's not over until the fat lady sings. What happens if the fat lady sang and AM's heavy buying late last year was the fat lady singing? Not that he has said it won't be the last time but those bottoms haven't been staying too long for you to grap your car keys.
MA stated Gold will see the bottom (which bottom I don't know) EXCEPT if it rises above 1350. And that's good because he acknowledges the fluidness of the market so he is a little less definitive about a definite bottom.
Now we wait for this current inflection point period and Februarys uber dense inflection point period to take us up to new highs or not? It will tell us if he needs to recalibrate again. And that's fine, better to recalibrate after busting through resistance, then stubbornly ascert something so you don't look wrong.
Armstrong is a smart dude. All his theories on capitol flows has taught me alot. His ascertion about inflation and the dollar very astute which doesn't make the reverse true. Deflation and gold because as of yet deflation doesn't seem to be taking a toll on gold but it's early.
It's going to be very interesting in Jan and February. The message I continual get from MA is hold off, hold off, hold off with slight and very subtle shifts as he acknowledges the fluidness of the markets. He emphasizes the downside possibility over the bullish possibility and some of it seems like a reaction to the last three years of gold salesman so I detect a very subtle bias but not so bad that he isn't willing to recalibrate. Again, that's ok BUT if you consider the certainty that existed here in the last two months about buying opportunities and you ignored it by weighing it against more bearish attitudes, you've lost leverage in the market. If you Snooze you loose. Miners are fighting a new deflationary environment, I wouldn't worry too much about them now and maybe they are screaming buys too, now or soon.
The last thing I would be doing at this juncture is looking for a new sector to put your dollars in because we are in a deflationary environment. Seems to me, finally, that gold is the trade and the big set up is closer even if it's not tomorrow. A chess game ain't about how fast you can gain points, but how well you position your players until the time is right.
Armstrong has a model that gives triggers. Timing turn points and specific buy or sell signals.
He gave a price for the end of the week for a continued rise which has been achieved.
The turn point seems to have led to a break out rather than a turn.
Once the above two were clear he gave the monthly close number for a continued rise.
Armstrong will knows the date of an important low. it could be a high but that is another matter.
Until his buy signals are triggered the assumption will be that it is a lower low.
There are plenty of very intelligent people out there. Armstrong is one. As Jim Sinclair puts it - he will be short for too long as he always is. Talking of Sinclair - I think Armstrong calls him pretty well. He will be long too early and before the bottom. Both are smart. Both deserve respect.
Thing with cycles is that you get inversions. So the exact high or bottom is hard to call. You get important turns which may be higher or may be lower, but they are important none the less. Sinclair called the bottom at 1188. He was early. When I remember 2011 - well armstrong called the top too early and missed out on some. He called an important top. When the final top was made he revised his call. Sinclair revised his when lower bottom made.
Thanks for thinking out loud for the rest of us. (:-). This one guy I follow (private) brilliantly called the lows on Jan 2; but slightly after the fact; as a failed wave 5 of an ending diagonal. He viewed the entire move as a giant wave A from the 1900 highs in August, 2011. Interesting that we have seen a series of 5-upwaves (impulsive) since that time. So, now we are in wave B higher. He's calling for first, 1525, and possibly 1800.
According to my notes, M.A. was saying if gold closed < 1227 as of 12/31/2014 (which it did) we would see new lows in 2015.
It would be nice to see CarbonJunkie's price testing the lows, but it doesn't look like that's in the cards. Lends a new meaning to the term "left behind at the train station"? The tell seemed to be the strength in the gold stocks.
Now on to little Bo P. He is calling for rises into a turn date towards the end of the month which is similar to a date given by AM.
Could this lead to 1350? I wonder what will happen on Monday on the inflection. Maybe it was early and today with someone front running AMs inflection :-).
But this is where armstrongs system is robust. By saying price is down until 1350 is taken on the monthly he is saying that price is down until it is clear that it isnt. He cannot be wrong.
When he compares the swiss to the dollar - it all makes a lot os sense. Could the dollar do a swiss and appreciate big time. Yeap. Could that be an event to bring in a gold low. Yes.
But then you get to the bit where i disagree with him. He says now is not the time to buy gold. Gold went up in Russia but it isnt gold it is currency falling. Well - sorry Martin, but if you are Russian - now is the time to have gold. if you are a hedge fund - then fine, invest in dollar assets or whatever currencies will benefit. But if you are joe public, then I am with Sinclair. Gold is insurance. It is savings.
Excellent context and perspective!
Green Lantern wrote: AM, ..... I understand your recent commentary you've made on Ice and HFT. Zerohedge did an article on it and there have been press releases by this exchange as far back as two years ago to try to thwart this behavior. I'm trying to figure out who are the forces involved and why is this group trying to thwart Central banks and the cartel? Or are they? Do they have their own selfish interest or is somebody in the financial industry really concerned with fairness and justice in the market? ....
AM, ..... I understand your recent commentary you've made on Ice and HFT. Zerohedge did an article on it and there have been press releases by this exchange as far back as two years ago to try to thwart this behavior.
I'm trying to figure out who are the forces involved and why is this group trying to thwart Central banks and the cartel? Or are they? Do they have their own selfish interest or is somebody in the financial industry really concerned with fairness and justice in the market? ....
First I mention this is outside my area of expertise. I expect Eric Scott Hunsader of Nanex would be the best source for an opinion on this.
I can draw together a few strands of information which suggest that it might be a combination of:
The publication of the non fiction book Flash Boys by Michael Lewis documenting front running, spoof trade quotes etc
Consequent adverse publicity telling the public that markets are rigged and finally getting that message across,
After an FBI investigation, a $4.5M fine for NYSE and 2 other exchanges which were apparently paid without admission of malpractice (but impede ongoing episodes of the same business model)
The launch of the IEX HFT-proof trading system/exchange
That at times during December last the IEX trading volume surpassed the volume traded on AMEX.
In other words a withdrawal of business by clients could be at the back of the changes, and possibly the regulation might force a change of the way HFT operates from the past, or it might reduce profits substantially.
The failure of Virtu Financial, the HFT trader with only one losing day ever to make an IPO seems to confirm that their best days are over. Possibly.
The IEX trading platform website is here. Basically they seem to have scooped up a large portion of the business of the other unfairly run exchanges in such a short time as to force a tightening on HFT's worst methods.
and NANEX is here: https://www.nanex.net/index.html
You had it given here two years ago.
Long time readers of Setup might like to have a careful look at post #7 of this forum and then get a chart out of XAU:CHF.
Seeing that cycle from 2007 to now puts a different perspective on all the "immediate reasons" advanced for the SNB action and CHF's revaluation.
You see, the cycle in post #7 goes back to before the CHF:EUR peg existed, yet it timed this alteration to the peg.
Here is the same chart with one cycle updated to today:
So last week I said change was imminent. It was. Readers of Setup were on the right side of the move.
Two years ago I showed cause sufficient for such as this week contained. So of all the analysts out there who proclaim they "predicted" this Swiss National Bank move first, I just might have a bit of a head start, and you did also - Feb 9, 2013.
Tend to your stops diligently. This can break up or down, that contest is not yet decided.
Next month will be off the wall in many ways. I only said such once before here and didn't disappoint then. So again we wait and watch.
Next Monday is a holiday, no trading. Just adds another small twist.
It looks like after ending the long fibo time sequence ending in early jan gold has started now short term up sequence which ends latest on January 22nd, day of ECB meeting . What if ECB does not go for QE which is still opposed by Germany? What if Swiss knew it? Peg does not make sense if EUR is not tanking due to QE? Whatever, here is the sequence of tops:
Quite possible for gold to reach 1310 before this run ends.
This was a sight to behold.
Gold having 20 and 30 dollar up days, while the EUR is crashing, with possibly the biggest EUR fall to come if the ECB does QE next week.
In just a couple of days, gold blasted through the formidable 1000 euro resistance like a rocket, and sits now at over 1100 euro. Many horizontal resistance lines were trashed along the way.
There are some gaps too, on the route to the all time Eur high, just under 1400.
This is epic stuff; Eurozone is wealthy regardless economic woes, and holders of Euro will be really spooked what is happening to their currency. They will be seeking safety from currency problems, from rapacious tax authorities, and what is becoming increasingly apparent loss of control by central banks.
Price in dollars and dollar chart be damned, the Eurozone joins the rest of the world is being given a prompt to buy physical gold. Supply that cartel please, or stand back. Oh dear, rapid price rises in gold just attract further buying, no? Self reinforcing cycle may be dead ahead.
I have stopped trading for now; I will sit this out and watch. Like Argentus says, not a time to lose positions.