A look at the charts shows that there is no foreseeable change for gold and silver that has not already been covered in previous articles, and certainly elsewhere, and puts an end to all the pronouncements from so-called experts that PMs would be much higher.
The above introductory comments are edited excerpts from an article* by Michael Noonan (edgetraderplus.com) entitled Gold And Silver – For Elites, All The World’s A Stage, Including China And Russia.
Noonan goes on to say in further edited excerpts:
While there is no specific pattern developing in the charts for this article to address, we do point out specific activity points in commentary on the following charts as to the likelihood of how price will respond in the near term.
We state, once again, that we do not listen to what others have to say about the market, but instead, watch what the charts [markets] are saying. The charts do not lie…One qualifier, because there are
many who express disdain for charts, and we have no quarrel with inability or ignorance, is that charts are not like a crystal ball that lets one see into the future. Instead, charts reveal developing market activity as shown in the structure of a bar in its high, low, and close, coupled with volume which form patterns, and these patterns often repeat over and over in any market. It will not be the exact same but often sufficient enough to rhyme.
Another important factor before commenting on this week’s charts is that when you are able to identify chart patterns and know how they develop through empirical observation you are able, in effect, create a set of rules that define how you will trade a specific pattern and, as such, you are taking
control over when and how you will participate in a market and not leaving your decision-making to chance or whim. When you start trading on higher probability outcomes only, your odds for successful results increases dramatically, and your risk exposure decreases.
Comments on the monthly chart demonstrate how the market advertises its intent. Very often, you will not know what a market will do until after the fact, even when trading a specific high probability pattern that offers increased odds for a favorable outcome. This is why it is important to have activity confirm your observations prior to making a decision.
We cannot know how December will unfold, nor should we care, but we can extract a few observations that suggests a slowing of the downward pace. The chart observation may not always lead to a trade, and certainly not from a monthly time frame, but there is a context for what may develop that can eventually lead to a trade on a lower time frame.
Both the monthly and weekly charts on gold below are showing an ability for price to hold support.
Gold: Monthly Chart
Gold: Weekly Chart
The wide range bar lower is an immediate message to stay away from the long side until more favorable activity develops. It has been our choice not to short gold or silver as a stance against the manipulators who are driving price lower. Were this a different market, there were clear signs of weakness leading up to Friday’s sell-off, and we note them on the chart comments.
Since the strong rally higher in mid-November, price bars began overlapping, indicating a balance between buyers and sellers. When you know that from balance, unbalance will follow, and knowing the trend is down, odds are favorable for a short position based upon established rules of engagement. For example:
- Note the poor close (mid-range), 5th bar from the right. The location of the close tells you sellers were present – otherwise the close would have been higher – and confirms how
price is struggling and likely to sell-off.
- Look to the left and note the activity at the end of October. Price moved down with ease,
and that area is likely to become resistance.
- The next 3 TDs move sideways, the closes are not strong, and the second bar from the end closes dead center of the previous 3 days, a form of balance about to become unhinged.
Gold: Daily Chart
The daily is from where potential trades develop. Given that:
- the trend was down,
- the price was at defined resistance noted from the end of October and
- the poor close for the current week,
any sign of a sell-off should trigger a short entry. This is one way to use developing market activity without having to guess or predict what may happen. Odds for a move lower were clearly favorable.
Silver: Monthly Chart
Keeping observations as simple as possible, until there are signs of a turnaround in price activity, silver will continue to sell off, or move sideways, based on the monthly chart below.
Volume is picking up and price is moving sideways within a clear down trend. There is nothing to suggest a change in direction, but the activity as just described warrants a caution flag for a lower move, even though odds favor more of the same. Again, charts are not a crystal ball, but they do send messages, and we see a potential sign of caution for a move lower, even though there is nothing yet to confirm it.
Silver: Weekly Chart
The comments for caution on the weekly chart may be for naught, but that is not the point. The point is to be aware of how activity appears, and then look for signs to confirm or deny, and this is how one sharpens one’s ability to read market activity.
Silver: Daily Chart
The daily chart below does nothing to support the note of caution from above. It may change in the next few trading days, but that is not important. What matters is there is nothing from which to base a trade decision and, therefore, no reason to waste time trying to imagine one.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
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Other Recent Noonan Posts:
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