Happy Nihilist

Touche Hmm, that possibility had crossed my mind. Bubb's comments about low volume on Gold would also favour another correction in the short term. It is possible (perhaps likely) the pattern fails, but this is why I see 1161.80 as a key level to watch? Actually, on a sort of related note, I was wondering (Cf. Bubb's trading thread) about the timing of the recent conspiracy stories on Gold and Silver. I'm not 100% sure, but was there not a similar hype around May or June 2008, right before the big "take down"? I'd have to go back and check. But that could also fit with your "back to the thin blue line" scenario. Anyway, Ross Clark's charts seem to suggest that Gold is on the verge of going bubble. According to his analysis, the 1100 level is key to watch on the downside. I suspect it won't take that much longer for this moment of maximum entropy to resolve itself one way or another.

Gold looks to have completed an inverse head and shoulders? This also seems to be corroborated by Ross Clark's latest analysis on Gold. His roadmap over the last year or so has proved pretty reliable. Link: http://www.321gold.com/editorials/hoye/hoye040710.pdf Some excerpts:

Agreed. Volatility to be expected going forward, and possibly a sharp drop around the corner? But regardless, remarkable how Silver has behaved technically these last few months.

double post Silver looking vulnerable ? :

Just beat me to it ;-) Here are some updated graphics from the Hoye / Clark article:

Indeed, now seems a pivotal moment for markets in general. By the way, here is a link to Ross Clark's Chartworks I mentioned earlier (published on 13th of Jan): Gold ... Resistance In Place

Yes, it will be interesting to see how this pans out. I guess the problem with patterns/cycles like this is that they work until they don't. It looks to me that this (and maybe next) week will be important in determining whether this step like progression remains a valid roadmap?

Where are we now? I.e., do we find ourselves at the half-way consolidation phase through a big leg up in gold (Cf. 2006 and 2008 moves), or have we already exhausted the move up in Gold this time round? From the longer term perspective, it would look entirely healthy if the price corrected to 1045 (34 week moving average) or even 1005 (55 week moving average) from here. But, judging from the chart below, if we did touch the 34 or 55 week moving average, that would suggest the big surge up has already completed this time around. Ross Clark (Institutional Advisors) has identified this week as a likely place where Gold will make an important low and could mark the beginning of Gold's second leg in this move up. Looking at the chart, it seems that this week is indeed make or break for deciding the foreseeable future in Gold. E.g., 34,55,0 MACD is on the verge of turning negative?

Some interesting Gold charts I came across. Looks like the 34, 55 and 233 week moving averages have provided key support levels in this bull market. Interestingly, since 2001, the 34/55 week lines have never crossed. It came close in 2008, but no cigar. Anyway, see what you make of them. 5 year 10 year

With the recent move in Silver past its October 2009 high, the short term divergence between Gold and Silver has resolved itself. (On a slightly longer term a divergence still exists as Gold is making new highs but Silver remains below its March 2008 highs, and going back further is well below its all time high of $50/oz). In any case, recent action in the precious metals is looking very strong, so thought I would update one of Ross Clarke's charts as it presents an interesting picture. From Chartworks 2009/09/07 LINK Update 2009/11/16 2 ways to slice the same cake? On the one hand, there appears to be a negative divergence between the RSI and recent price action in Gold and Silver. On the other hand, as Ross Clarke's chart illustrates, Gold and Silver usually reach an intermediate top with the Silver:Gold RSI above 70, so it would be unusual for the move in Gold to terminate with an Silver:Gold RSI near 50. In other words, if we use this chart as a road map, there is room for a significant move up in Gold and Silver from present levels. ?

Analyst Yamada Says Silver May Be Poised to `Break Out' LINK

That's what I'm thinking. Does that mean you envision Silver decoupling from the "industrial" trade at some point in the future? PS: How about Protagoras?

You mean the Gold:Silver ratio? I agree it is a bit early to tell for sure, but in my experience, divergences often indicate internal weakness. This is why I find it surprising that while stocks continue higher, gold is making new highs, silver is struggling to gain ground, and the gold:silver ratio is struggling to break down. But perhaps i am speaking too soon and Silver is about to catch up. We will see

Then again, if there is no order, you could just as easily go forward and read Heraclitus. I think there is an important difference between the metaphysical concept of temporal order and the pragmatic experience of temporal order (e.g., summer follows spring, spring follows winter etc.). Even if there is no justification for assuming some absolute temporal order, this does not mean that the therefore arbitrary sequence of events (flux) is chaotic or meaningless. Negation does not imply its opposite! In any case ... back to Silver. Well yes, but the point of the graph was to suggest that time has already been telling us something ... but I guess time will tell

The fact that Gold is making all time highs but Silver is unable to exceed its October 2009 highs, not to mention March 2008 and June 2008 is a bit of a worry IMO. And now for something completely different . . . If you intend on reading most of his works, then in my opinion chronological is pretty good as you get a sense for how his thought develops. The way I tend to view the development is: romantic, positivist, zarathustra, post-zarathustra. But in any case, definitely start with The Birth of Tragedy.

50 on the Gold:Silver ratio? Interesting. That would imply another substantial move up in general equities. And yes, The Gambler is a great read. I do have a soft spot for Nietzsche though. As Freud (in my opinion correctly) observed, "he had more penetrating knowledge of himself than any man who ever lived or was likely to live."

Brown "put" meet Indian "call" ?

A pretty nice summary of the Gold-Silver Ratio posted on Slope of Hope

Gary Tanashian makes a compelling case that it is not. He sees a bull flag consolidation in the Gold:Silver ratio, which would imply another strong move up in the price of Gold relative to Silver. Well, at least for the foreseeable future. Perhaps in the really BIG picture your pattern still holds though? http://biiwii.blogspot.com/2009/10/gsr.html

A bearish divergence has developed in Silver vs RSI, MACD and SILVER:GOLD ratio. Typically this would suggest silver is "ripe" for a correction, but obviously it does not guarantee one. Will have to watch this action going forward.

@ Goldfinger + RH Thanks for the caution Still ... I don't imagine that chap would fare all too well should he be so unfortunate and fall overboard.

Thanks. In terms of upside exhaustion, I guess the catch is that in those last moments the price action is usually most violent (at least for commodities). In terms of Silver, an important question seems to be whether it is part of the "all the same markets" phenomenon, or whether the precious metals sector will decouple from the general market (Cf. late 2007 - early 2008). Although I'm no Elliotician, I am interested to see how the wave count on the S&P pans out. According to the current wave count we would be in the final wave now (see attached chart), with limited upside.

Hello, I'm new to this forum but am a regular listener to Commodity Watch / Frisby's Bull's and Bear's podcasts. Anyway, I thought I would upload this Silver chart outlining some bearish divergence. Make of it what you will. In my experience divergences don't necessitate moves lower, but they do point out when the price is "ripe" for a fall. For now it seems everyone is too busy ganging up on the Dollar.