Submitted by SD Contributor SRSrocco:

COMPARING THE ACCUM-DIST DIVERGENCE

I put together (4) new charts to show just how insane the trading in silver has become.  We all know of the Collapse of the PROP DESK at JP MORGUE, so of course gold and silver are down today.  Anyhow, if we look at some trends we can see again what a divergence in the ACCUM-DIST line compared to the price of Silver and the new SIL ETF.

In the first chart I will show what is the normal ACCUM-DIST in a commodity or stock.  You will see that in the two RED TREND LINES the price of Platinum fell and increased along with the ACCUM-DIST lines.

This is also true for that new ETF called DUST that is a WALL STREET ABOMINATION.  It is 3X Bear of the GOLD MINERS.  We can see again in this chart how the ACCUM-DIST lines parallel with the price action of DUST.

Now let’s take a look at the BIG DIVERGENCE in SIL, which is the new SILVER MINERS ETF and GoldCorp.

and now GOLDCORP:

Here we can see two nice DIVERGENCES in the SIL and GG - GoldCorp.  Some of you are probably saying… “Why is SRSrocco using Technical Analysis?”  All I can say to that, is its the TREND BABY.  I am using it to show TRENDS and DIVERGENCES that are taking place that are counter to the fundamental system.

I can’t believe they have that new DUST ETF, but you can see how DUST top action and GOLDCORPS bottom action are at the exact opposites.  However, DUST’s Accum-Dist is acting as it is supposed to, but GOLDCORPS Accum-Dist is behaving in an opposite fashion.

This is the same with the SIL – SILVER MINERS ETF.  At some point in time, we are going to have a HUGE MOVE to the UPSIDE as this sort of Divergent action cannot continue for long.

-SRSrocco

  1. SRSrocco,

    These are some of the most encouraging charts I’ve seen in a while (silver to be exact). I’m not much on the technical’s but even I, being the uneducated dummy I am,can see this. Maybe JP decided to take such a risk to make a profit because they know what is coming in silver. I’m sure they’ll find a way but I’m not sure they can hold silver down much longer. Thanks again for another super information post.
    Weigh in AGXIIK. You’re good at this stuff too. Need another opinion.
  2. I’m sorry but I wish these charts would be explained in LAYMAN’S TERMS.  I read this article and DO NOT UNDERSTAND IT. Something in an ‘OUTLINE’ form; and with a ‘sum it up’ ending WOULD BE HELPFUL.

  3. To all: 

    I have been following your site and I refer to it routinely.
    I am numbed by the power of the financial devils that be to crush silver.
    It is obviously collusion and a sign that the USA’s days of an honorable financial system are numbered as is its fiat. A cataclysm is on the way and it will re-calibrate the US and its govt and its media. ALL are working together to dumb us and impoverish us.
    We are trapped in this insane system. 
    I cannot see silver returning to the 40s in the near future.  I ignore the TA and financial jargon because when “unseeable” forces can collude together and prove that TA is not reliable then where are we, where are the PMs going and when? 
    I cannot think of any other asset class to be invested into 100% which I am. SIL, 500 .999 silver ounces so far, doing my best to buy when I can, AGQ, PSLV,,,
  4. The two other precious metals, palladium and platinum, are, no doubt manipulated and as mission critical as an PM.  Pt is going for almost as much as gold. Pall is about half that.  IMO silver is more valuable than either when it comes to its commercial and commercial values (not to mention its value as collection-based value)   and that does not take away from either P-named metal.   Rocco always has a solid focussed take on these matters.  While I don’t trade the paper markets there is a good case to be made for small short term trades for the miners, gold and silver.  They have been beat down badly due to teh far factor of the PM trades as well as mining costs such as fuel and regulatory burdens.

     But there is a good chance that these ETF and miner stocks could have a large jump when PMs jump in value.  My thinking is that with JPM on death watch with many other banks in similar situations, the Euro situation reaching critical mass with its problems that will blow back to the US stock market and banks, the blood in the streets rotation of money to the downtrodden stocks like miners could support price jumps, with even better returns due to the  3x leverage.

  5. timed out.  Shorter post.  JPM will die of silver poisoning.  Lehman-like extinction level event will hit prices of every commodity. China will turn into a psycho Hoover vacuum cleaner and suck up anything not nailed down or red hot, silver included so they can fill their exchange bank.  Euro is FUBAR and will sell everything including the Queen’s sterling tea set.  $20 trillion in FRNS and other paper lettuce wants to find a home when S&P and Dow drop 20%.  I am going all in as we speak. 100% in phyzz with exception of home equity.  That is self protection and fear factor in our home.  Paper trade for temporary profits is ok if you can get out of harms way in time.  QE 18 will come soon and then QE 19.  China is not in great shape today but they will be predominant.  We will muddle through this mess but not before major pain.  The American people will find a way.  Hard assets are going to be the new coin of the realm

  6. Croc  When JPM fails or is broken up and sold off to other banks, the silver book is going to be a turd sandwich that no one wants unless the gummint guarantees the losses.  When JPM took over Bear sterns the story was the USG would absorb the losses, then estimated at $20 billion.  I guess that JPM figured they could make money on this book of shorts and according the Ted Butler, they made $500 million on the last big smack when 600 million paper ounces traded in a day or so.  So until JPM is killed off, they will continue their game, making money for the simple reason is that they have the liquidity (for now) to effect these trades and do so in such a rapid fire manner that the other traders, commercial, strong or weak hands, will be forced out or pay off the gate keepers.  JPM is addicted to trading as seen from the stupidity of the Whale trade and Dimon’s ignorance of what is going on or the real costs of their derivative positions and other enormously risky positions  Lehman and Fuld throught they ruled the world until they crashed.  Like I said, when Fuld starts yapping, the End is nigh. Who breaks JPM is anyone’s guess. I am thinking they will self immolate due to greed, hubris and stupidity.

  7. SilverRaider… I am not one that adheres towards TECHNICAL ANALYSIS as it pertains to candlesticks and other forms of charting.  However, LONGER TERM TRENDS are different.  Here is a quick definition of ACCUM-DIST:

    Accumulation Distribution

    Accumulation Distribution tracks the relationship between price and volume and acts as a leading indicator of price movements. It provides a measure of the commitment of bulls and bears to the market and is used to detect divergences between volume and price action – signs that a trend is weakening.

    —————————————

    Again, I don’t follow Technical Analysis much at all as the markets are completely manipulated.  However, this ACCUM-DIST indicator gives us an idea of just how much the Gold and Silver market are indeed manipulated.  The price and most technical indicators are controlled and painted by the Big Bullion Banks and the Fed. 

    Normally the ACCUM-DIST line parallels the price movement.  But, we can see that in GoldCorp and in the SIL- Silver Miners ETF (as well as gold and silver), there is a huge DIVERGENCE in the ACCUM-DIST LINE and the PRICE LINE.  Instead of following them, they are acting in opposites.

    This indicator cannot be manipulated.  Time will tell what takes place in the SHORT TERM.

  8. The reason the prices can be manipulated down continually is that they are still capable of delivering all that the specs stand for. When they can’t, it’s over.
    Keep on stacking, I can see the light at the end of the tunnel.

  9. Lol Great looking charts. Hell I’m just trying to learn the other ones and all I’m getting out off them is that They Are Manipulated even I can see that and I’m a Newbee to all this. So I’ll Keep Stacking Physical. I’m “Silver Rich and Cash Poor”.But it sure does glimmer. LMAO

  10. CHESAPEAKE IS GOING INTO THE CRAPPER

    Here is one more example of ACCUM-DIST working in a normal fashion.  I knew Chesapeake was heading down the toilet.  You can read all about the GREAT SHALE GAS SCAM at the links below:

    SHALE GAS SCAM PART 1  http://www.tfmetalsreport.com/comment/143046#comment-143046

    SHALE GAS SCAM PART 2  http://www.tfmetalsreport.com/comment/143051#comment-143051

    We can see that GAS DRILLING will also head down towards ZERO, unless the price of NATGAS heads back up to at least $6-7 mmbtu — which is break-even for most Shale Gas Companies

  11. Side note on two signs of the times.   Canada Tire used to offer counterfeit-proof paper currencies designed to allow customers to be rewarded for their loyalty.  These items would be given to the clientele There is so much in circulation, about 1 billion bills worth about $100 million, that the firm decided to go with Plastic Cards in keeping with the times.  No doubt the Canadian powers that be ‘suggested’ that the firm stop using something of real value.  These bills not only have real value at the Tire stores but they are actually being used for purchases elsewhere since the items can be used for other items sold by C Tire. Log this under “Canadian wierdness’

    The Chinese gummint just told the big four US accounting firms to turn over owership of their China franchises to Chinese partners.  It is assumed, rightly so, that since China is royally pissed at us, they are telling the US to FO.  Additionally, now that these big 4 CPA firms no longer can inspect the books, let’s assume that financial fraud will ramp up just a bit   The Chinese accounting system is not exactly transparent but now that the silver exchange is up and running, expect some  additional non-disclosures to take place  IMO.

  12. ONE MORE THING ON SHALE GAS

    A lot of the Shale Gas Companies have been using HEDGES to protect themselves from such low prices of NATGAS.  However, this nice setup is about to come to an end because most of these HEDGES will run out and they will be getting much less for their NAT GAS.

    This is explained in the ZEROHEDGE article:

    Why Going “Naked To The Strip” Means More Pain For Nat Gas Companies

    The IRONIC thing about the whole SHALE GAS SCAM, is that these companies like Chesapeake have been selling their Leases to cover costs.  These Leases would have provided them with future supplies of NATGAS.  Their existing Shale Gas Wells suffer 80% decline rates by the second year.

    So, they are giving up their FUTURE GAS and holding on to WELLS that will continue to decline exponentially.

    The whole SHALE GAS & SHALE OIL INDUSTRY is nothing more than a GOLD RUSH.

     

  13. As silver and gold diverges, the continued drop in the paper price could be, in part, a plan to dissuade other countries from trading in PM’s and bypassing the Petro Dollar. I don’t think it will work as India just told the US (Hilary Clinton) it will continue trading gold to Iran for oil.

  14. 4 OZ. I agree. SRSrocco rocks! I’ve learned a lot from the likes him, AGX, Jake, Conax, Mammoth, Danno, Da Yooper, 427, ” The crazy Canuck”, DOC and Bull of course, you (4 OZ.) and the list goes on. I can’t name them all. Again, I say, what a site. This forum seems to have a melting pot of different cultures, mindsets, experiences, suggestions and questions. Wish I had the knowledge of most on this site but alas I’m just a little bitty ant in a world of elephants. LOL. Thanks all.

  15. JUST A HEADS UP…

    I will be sending DOC an update to the COST OF MINING SILVER tomorrow.  You will be surprised to find out what the REAL COMPLETE COSTS are for mining an ounce of silver in 2011.

    Here is last year’s chart:

  16. For Silver Raider—”The accumulation/distribution line was created by Marc Chaikin to determine the flow of money into or out of a security. It should not be confused with the advance/decline line.
    While their initials might be the same, these are entirely different
    indicators, and their uses are different as well. Whereas the
    advance/decline line can provide insight into market movements, the accumulation/distribution line is of use to traders looking to measure buy/sell pressure on a security or confirm the strength of a trend.

    READ MORE

    Although I have trouble believing any TA in this manipulated market; or any market for that matter, in the interest of education, I think it’s important to keep track of anything that might contribute to a better understanding as to what these banksters are doing.

    My understanding of this indicator is that it monitors the accumulation (net buying) vs. distribution (net selling) of a security. I don’t like to refer to metals as “securities” as there are very specific reasons for buying physical gold and silver instead of paper stocks and/or paper replacements of gold and silver such as GLD, SLV or mining shares. This is my opinion, but who cares what “anything paper” is doing?…but that’s just me.

    Now that I criticized paper enough, let me say that this indicator shows net buying when it has a positive slope and net selling when it has a negative slope. It can be used to confirm or deny a trend by observing DIVERGENCES. Therefore, in the example of the chart given where this line is moving up and price is dropping or vise versa, one can expect to see a reverse in price “soon”.

    The big problem I see is that trends keep going until they don’t. “Soon” can mean a long time. The trigger to stop them generally has nothing to do with this or that TA indicator unless it monitors influences that have REAL AFFECT on price. The good thing about this indicator is that it does monitor actual buying and selling, but it doesn’t tell who. To me, the COT is a better way to monitor this, but that doesn’t mean this indicator has nothing to offer.

    If you’ll notice on this chart, the A/D line was moving down along with a down move in SLV and bottomed AFTER the SLV price bottomed at the end of 2011. Thus, it trended and did not show divergence. Additionally, it could not be considered a leading indicator for this move. Therefore, I guess you could have concluded that there was net selling into a down trend until there was not and it was only apparent after the fact anyway.


    In our most recent case, there is divergence, and the net buying is very steep but unless this indicator provides a leading signal, which I have trouble believing, it may just fall off after the price bottoms anyway.

    In this case, you should have been monitoring something that has more coincident signals.

    The bottom line is that, this TA stuff here is monitoring paper replacements of gold and silver where shares can be shorted, etc. As a result, you can’t avoid price distortions.

    For example, let’s look at some random price relationships between silver and SLV: On June 10th, 2010 SLV was closed at $17.86. Silver closed at $18.00 (a 0.78% difference). By contrast, SLV closed at $38.56 on Sept. 21st, 2011 but silver closed at $40 on that day (a difference of 3.7%). Today this difference is 1.5%. In conclusion, I just have a hard time using paper anything to judge real silver or gold.

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