SD Outlook: A ‘death cross’ in this index says the markets are going down. Gold & silver may get hit on Monday, however…
Gold & silver may have a turn-around week, and I’m preparing for volatility in the markets.
First, China is still on Golden Week:
I do not think gold & silver are in the clear just yet.
What I have been thinking is that we would see more downside pressure on gold & silver, and we’ve seen that, only, I don’t think we’ve seen a good enough amount of pressure to really flush out the specs, so to say.
That said, the cartel has a problem, and that problem is not something that can easily be reproduced on a chart.
The problem is the “fundamentals”.
Let’s run down a few of the current fundamentals, both market and political, both home and abroad:
- The U.S. is in a “manufacturing recession” and the Fed is heck-bent on driving interest rates lower.
- There is general uncertainty all over the world, and it’s affecting the markets – case in point being the Hong Kong protests which have resulted in people draining cash from ATMs, property “values” plunging, and individuals moving their stored gold out of Hong Kong, something I wrote about on September 3rd, over a full month ago.
- Politics at the national level are a mess with this whole “impeachment” thing, and politics at a national level around the world are equally troubling.
- Geo-politics between nations are also a hot mess, and we can look no further than to Brexit or the Middle East for examples galore.
The question is, what do the fundamentals mean for gold & silver?
The fundamentals mean that people will be looking to move into the safety of precious metals, something which us Stackers and other smart investors have been doing for some time.
Drilling it down to this very week, I think there could be a nice buying opportunity today if the cartel is going to come in and really hit price hard, one last time before China re-opens.
By the end of the week, however, we could be talking about the next leg-up in gold & silver, and not only do I think we will be talking about it, but I also think it could catch a lot of people off guard.
Friday is especially in our favor:
We have no Jobs Report to deal with, no GDP release, no Fed Head Jerome Powell, and plenty of opportunity for a shock Tweet or two, so the outlook is indeed bullish as we move through the week.
Of course, we have to get there first, and a lot of that depends on what happens today and tomorrow.
Do I still think a hit on gold & silver is coming?
I do, but unless it’s so massive it really creates the avalanche selling in the futures market, the hit will be a buying opportunity for stackers, and a get-thrown-off-the-bull opportunity for gamblers in the paper casino.
The gold-to-silver ratio is parked at nearly 86 right now:
If we are going back up into the 90s, which I have been calling for, then it’s coming very soon, but even if we don’t get that high, in my opinion, and in practice, anything over 75 changes my behavior to 100% of purchases going to silver, unless, of course, there’s a deal on gold I just can’t refuse.
Overnight and into this morning, silver’s daily chart is being painted in a way as to wreak equal havoc on both the bulls & the bears:
The cartel might not be able to smash silver to $14, but wow, they sure can toy with emotions!
Of course, they’ve been fine tuning their skills for decades, so they should be masters at it.
Just keep in mind, however, that silver’s 200-day moving average is still within reach of the Shanghai Gold Exchanges’s lower-bound allowable price variation between last Monday’s close and this Tuesday’s open, which is limited to a 10% move.
Gold is still treading water at $1500:
The cartel smells blood in that water, too, with plenty of room to run before gold becomes “oversold”.
That said, if we don’t reach extreme oversold conditions on gold’s RSI, and if the technicals matter, then we will have put in a higher low on gold’s neutral looking RSI, and that would be bullish.
It is for reasons like these that I say this week could really play-out as a turnaround week.
Here’s the thing, and by now, it’s getting old, as I’ve been saying it for three weeks now, but thankfully, today is the last day of Golden Week 2019, and the over-arching point is this: If the cartel has a license to smash today, why would they not smash?
I said on Friday I didn’t think the bottom was in for platinum:
If the cartel is going to hit gold & silver today, I think they will hit platinum too because we can clearly see the cartel has been treating platinum more like gold & silver and less like palladium.
I have seen a number of calls for crude oil at a 40-handle:
I don’t think we get there, but trying to understand the crude oil market has been a thorn in my side for two years.
You see, the Deep State Globalists fear silver more than anything in the world, but it’s oil that makes the world go round.
That said, if we do fall into the $40s, I’d expect to begin seeing calls for a 20-handle.
Wasn’t Iran attacking Saudi Arabia or something like that?
Copper’s daily chart may look all sorts of nasty, but I see some pretty solid support at $2.55:
I have been calling this one final flushing for the commodities complex.
I mean, does anybody really think that when the US dollar fiat currency crisis takes hold, people and nations will not scoop up anything non-perishable in sight?
A “death cross” is not a good sign for stock market bulls:
The Russell 2000, the Heartbeat of America Index as I like to call it, which is a major US index, full of American-centric companies, once again appears to be leading the crash.
In other words: When the 50-day moving average crosses below the 200-day moving average, that’s what we call a “death cross”, and it’s very bearish.
It will be interesting to see if the VIX spikes, because the VIX is tied-in to the S&P 500:
A spiking VIX would be a signal that what is happening in RUT is concerning to investors in other indices, however, the VIX is also one of the easiest things to manipulate in either direction.
Yield on the 10-Year Note has been falling for seven days in-a-row:
The “market” clearly “wants” a 25 basis point cut at the Fed’s next FOMC, which takes place at the end of this month, and we’re seeing this pricing-in right now, but if yield keeps dropping, especially if yield is dropping because of a plunging stock market, we may be looking at a 50 basis point cut when it’s all said and done, and, of course, since real rates are already negative, and since an interest rate cut would only serve to push real rates even more negative, then no matter what type of cut happens at the next FOMC, it’s “good for gold”, however, I don’t think any wildly bullish cats will be let out of the bag until China’s markets re-open.
The dollar index is starting the week south of 99:
No longer simply “unchanged” over the last year, the dollar has clearly been rising since June.
The choppy price-action has not resulted in any shock-moves, but I think that is changing.
The bottom line as we find ourselves here on this beautiful Monday in early October?
It is still early, but it seems there are the makings of some scary developments.
In the markets, the economy, with politics and possibly military conflict.
What if some military escalation in Syria comes out of left field?
I recall seeing some propaganda about a new KFC there.
Yes, American fast food “Kentucky Fried Chicken”.
My gut then started, and it got me to thinking.
Why that news coverage, and why now?
Seems like death is indeed coming.
It is coming for the US markets.
Russell 2000 will be the first.
That sign is as clear’s day.
If gold & silver get hit?
It will not last long.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.