Oct 19, 2013




  1. Please click here now. That's the 60 minute bars chart for McEwan Mining (MUX), and price has burst upside, from a bullish wedge pattern.

  2. When sugar burst up from its bullish super-wedge, it pulled right back inside the wedge, before blasting higher.

  3. You can't know what comes next for MUX, in the very short term, and I'll ask you to think about the action in gold and gold stocks, over the past 3 trading days.

  4. On Wednesday, all seemed hopeless, after a decent Tuesday up move. Wednesday really marked a low point in the morale of the gold community.

  5. On Thursday, gold skyrocketed in the night, and the gains carried into the day, and even into the wee hours of Friday morning, but Friday was another disappointing day.

  6. Gold rises on a wall of worry, and it peaks on a wall of “it's getting away, the dollar is going to zero!” gold buy orders.

  7. Look out your market window. Do you see a wall of worry or a wall of greed?

  8. I see a wall of worry.

  9. Manipulations can be to the upside, and I believe you are on the verge of watching the banksters manipulate gold to the upside, for a period of time that will last 100 yrs.

  10. Define verge? Beginning in the timeframe of 2013 – 2017. I think the upside march begins in late 2014, as the Indian government undoes the shackles on the world's most powerful gold buyers. Am I worried about what happens to gold between now and then?

  11. No.

  12. In the intermediate term, I think gold is more likely to tag $1480 than $1180.

  13. All “gimme an upside manipulation, and gimme it now!” fans, please click here now. That's the GDX daily chart. It has a powerful bull wedge pattern in play, like the “leading” one I showed you on MUX above, except there's no breakout...yet.

  14. Also, if you look at the low point of the decline this past week, you can see that price is “2 days away” from that low point. Edwards & Magee require 3 days away from the high point of the bar that marked the day's low, to define that bar as a minor trend low.

  15. This looks pretty good, but it's not quite celebration time yet.

  16. Please click here now. That's the monthly chart of the US dollar. There's a huge symmetrical triangle in play, targeting the 50 area.

  17. Technical odds are 67{7d2759035a2769ee7a6afa7c646e6642b67314b0cd0e17ac0c6ae4f965ff87d9} that the target gets fulfilled, but the question is, if the dollar continues the decline that started on the default news, will gold rally?

  18. The answer to that question isn't likely found in a chart, but through fundamental analysis.

  19. The top bank economists believe that gold should rally from here, but their view is that the rally will die by Q1 2014, because their view is that US growth will accelerate a bit, while growth acceleration in China stalls.

  20. Their view seems to be that Chinese growth is more commodity-oriented than in America, and Americans are likely to be sellers of gold, while Chinese demand doesn't overcome the American selling and the Indian handcuffs situation. They feel that a falling US dollar won't necessarily be a big reason to buy gold.

  21. In the shorter term, many of these bank economists believe gold can rally quite strongly from here. My point to you is that I don't think it's “urgent” that gold starts “the big move higher” from here, but I think you could be shocked by the power of the rally.

  22. The difference between the bank economists and the gold community bears is that the bank econs think gold could decline to the $1000 - $1200 area, while the gold bears think gold must crash 1980-style to $200 or even lower.

  23. Until Chinese growth stalls, a fall in the dollar is likely to pump gold higher, and powerful economists around the world are beginning to predict the dollar is going a lot lower.

  24. Indian gold imports, for all practical intents and purposes, can't go any lower. That means they can only turn higher. Wait for them to turn higher, rather than assuming they'll never turn higher or assuming gold can skyrocket in the current environment without the Indian buyer onside.

    Report Card Day!I don't think many investors in the gold community understand how strong gold is right now. If gold can rally while Indian demand is in a choke hold, that's pretty spectacular. Wait for the return of the Indian buyer. Wait for Shinzo Abe's cost push inflation. Wait for the end of the US business cycle. Then you'll have your parabola. In the meantime, you should get a powerful short term rally. Is there anything big that I'm concerned about, in terms of downside risks to gold? Answer: No.










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