SD Friday Wrap: The bully may have pushed gold & silver down, but they are standing up now, they’ve brushed themselves off, and they’re about to start swinging…
I may seem a little hostile, but as you read on, you will understand why.
But first, let’s start out with a word from our President from just this afternoon:
— Donald J. Trump (@realDonaldTrump) August 24, 2018
“It’s said now?”
Um, I think he means “I say now”.
But don’t take Ol’ Half Dollar’s word for it. See for yourself:
First off, let me be clear: This is not a rant against the President.
It is, however, “constructive criticism”.
Here’s a brutally honest question so brace for it: How can you Make America Great Again before you drain the swamp?
It’s a serious question, and the answer is that you can’t. You cannot MAGA before you drain the swamp. There are a quadrillion cliche’s and idioms that can be used to cover the problem with making the economy great before draining the swamp, but the one that I like best is “treating the symptoms but not the disease”.
You see, this has been on my mind, a lot lately. I keep hearing that the arrests are coming! Just trust the plan! Good things are happening!
Well, I’m sorry, if he can MAGA in less than two years, surely he could have made an arrest or two. And please, don’t come back with the 45,000 sealed indictments, or wherever we’re at, and don’t come at me with Harvey Weinstein or other low-level scum like him. You see, that’s all just cannon fodder. President Trump still has an administration full of swamp creatures, and nobody of any real significance has been taken to the chopping block.
So back to my question: If Washington is full of corruption and Deep State to the core, which even people in the mainstream are starting to realize – if you don’t get rid of the rot, that is, if you don’t treat the disease, how can you fix the economy?
The fascist corruption between big business and big government worsens by the day, and whatever statistical lies about the economy the President wants to embellish, even though he rightly called them out as a candidate, if they are to be taken at face value, if the economy has been made great again, with the Deep State still firmly in control, how could the economy stay that way for any real length of time?
It’s not going to.
Because even if you believe the economy is doing well, President Trump has only masked the disease by treating the symptoms.
Furthermore, he has fully embraced the “big, fat, ugly bubble”, and, market manipulation cast aside for a moment, on the surface, that record stock market is only possible by way of share buy backs thanks to the generous corporate tax cuts from the Tax Cuts and
Share Buybacks Jobs Act. Additionally, increasing deficit spending, making government even larger, and borrowing more from our future to provide the temporary relief via tax cuts today is nothing great.
But back to the original question: If DC is still filled to the brim with swamp creatures, and if the Deep State is firmly in control, then, to borrow a phrase from a Demon in an Old Hag’s Body, “what difference does it make”?
Like I said before, I’m not convinced the President is a bad guy, but we all know what would happen if he were truly a great President and did what truly needed to be done.
Which I why I still think the nation is the Titanic, no matter who is Captain, and no matter how many hands on deck are bailing water. I see a very violent time coming where millions of Americans will shed blood on the streets before the dust settles, the smoke clears, and before, hopefully, the Patriots will have come out on top, and the Constitution will have survived.
I can only call it like I see it.
So for the fundamental question of the week: What would have been better – (A) collapse and a rebuilding sooner than later, or (B) false hope and a worse problem to deal with later?
I choose “A”.
Back to the opening video of our President and some concluding thoughts: Imagine a guy who has stepped on a landmine, and he’s been blown-up from the waste down, his legs are blown off, and he’s lying on the ground crying out in shock (sorry for the visual, but I need to make a point). Are you going to say, “Holy crap man, you’re screwed up, they blew your legs the hell off. Oh crap, you’re so screwed!”? Of course you wouldn’t. You would apply tourniquets, stop the bleeding, treat the shock, and try to offer hope while the guy is still conscious.
There is a point here.
There is overwhelming evidence that the economy has stepped on a landmine and gotten its legs blown off. Worse yet, instead of applying tourniquets (because there’s not enough stub), and since there’s not chance to stop the bleeding, what is done is to talk about all the great things in the economy (even though they’re lies, and instead of perhaps saying some prayers and facing the sad reality head on)?
Well, that is what I see right now, and it’s exactly the wrong thing to do. It’s not like the President doesn’t know how messed up the economy truly is. So for it to be “the greatest ever”, which he only doubles-down on and triples-down on as the weeks drag on, the message I’m getting is that there must be something very, very wrong with the economy.
Another question: Why has anything good from the President lately all boiled one to one single thing, and that single thing is the great state of the economy?
I mean, what ever happened to the wall (which I argue is designed to keep us in, not to keep illegals out), repairing relations around the world, bringing the troops home, and making government smaller?
Oh yeah, what ever happened to “I’m going to get rid of two regulations for every one we create”, and what ever happened to the “infrastructure spend”?
Does anybody remember those promises?
Surely, whether other politicians support the President or hate the President, it’s hard to imagine congressmen and congresswomen not seeing cash registers in front of their eyes ringing for their home states if there were to be a massive infrastructure spend.
The problem is, the way I see it, is that these are serious economic issues that are simply being sugar-coated as if everything was fine.
Everything is not fine.
I won’t even get started on the mixed signals of the economy either.
On second though, yes I will.
From flipping on the dollar policy, four times this year alone (twice in the last two weeks), to high gas prices are bad but high home prices are good, there are fundamental economic forces that are increasingly being subject to micromanagement, not from just the Fed, but now also from the government, and from the top-down, and that is what the American people exactly voted against.
Let’s move on.
That’s enough constructive criticism for one day.
The charts are a hodgepodge of timeframes, because they all are paint-by-numbers anyway, and they all paint slightly different pictures.
Here’s a time-frame that doesn’t get used very much, but it was necessary to capture all those years – behold, the 2-day “longest stock market bull run in the history of America”:
Who knows where the top is?
I take that back.
Somebody knows where the top is, but they’re not going to tell us.
Just like several people knew that after Roosevelt unConstitutionally confiscated gold in 1933 that he would revalue gold in 1934 from $20.67/oz to $35/oz.
It’s called a racket.
It’s called corruption.
In modern day, we call it the swamp, and we call it the Deep State, but no matter what you call it, unless you basically sell-out and lie, cheat and steal, or somehow stumble your way to the top, Forrest Gump style, then you are not going to know.
And if you are not positioned properly, you will lose.
I plan on winning, but I did not plan on digressing, so let’s get back on point.
Listen for about a good solid minute or so of Jim Sinclair talking about the markets (should start at 20:33, listen until 21:39):
Anybody remember this little nugget?
Last month Dr Alan Greenspan, former Chairman of the Board of Governors of the Federal Reserve System, spoke at our inaugural investment summit on gold and central banks #globalinvest18 pic.twitter.com/Ixfth3dhlt
— World Gold Council (@GOLDCOUNCIL) May 14, 2018
Amazing how moments of clarity can hit you like the smell of a fart in a car with rolled-up windows.
A little whiff of awkward reality can be quite impressive, can’t it?
Back on track.
Did you catch all those truth bombs Jim Sinclair dropped in that minute?
There were a lot.
But I’ll narrow it down to three points that every single investor, no matter the asset class, needs to understand:
- ALL markets are rigged 24/7
- You better know the riggers, or you better have a “direct line to the inside” if you want to know the direction or the timing
- Market movement is based solely on what “they” want to do and “when” they want to do it
Jim is talking about gold specifically in that clip above, but what he says applies to the markets and the market rigging in general. In other words, what I am telling you is that “they” will pull the plug on the economy in general, and the stock market specifically, at the time of their choosing.
“They” being the corrupt, evil, globalist insiders and those privy to what they are doing.
I don’t have a line to the inside. I’ve said it before, Ol’ Half Dollar is just a nobody, and if you don’t have a direct line to the inside either, the best thing to do is have your ticket and take your seat before the train leaves the station if you know what I mean.
Back to the “flavor of the day” and to “make other things, equities and the dollar look better”.
They sure have equities looking pretty darn good now, don’t they?
It may be a massive double-top, and it may not be au natural, but look at that beaut:
All-time record high to finish the week, and going out on the highs of the day.
Of course, we still have volatility spayed, neutered and effectively sterilized so as not to reproduce:
The VIX could seriously fall below 12 again, and I don’t know about you, but that sure looks like the making of lower-high and lower-lows to me.
Mind you, we have all this talk about impeachment, we have a stalemate in the trade wars, we have currencies blowing-up around the world, yet there’s the VIX, and nary it raises an eyebrow.
Has the ESF stepped in and decided enough was enough of the strong dollar policy?
Because the dollar looks like the dollar has topped out here:
For good measure, the dollar fallen below its 200-week moving average.
That’s a major moving average, and traders trade off of it.
Yes, all markets are rigged, all of the time, but traders still use technical analysis to attempt to trade the markets, and the DXY is certainly starting to look bearish.
Interestingly, the yield on the 10-Year Note has been in a very tight range all week:
I had to use size “1” font on the parallel lines that I added, or the candles would have been covered-up. That’s a tight range, all things considered. Remember, on Wednesday I spelled out many factors weighing on the bond market right now. There are a lot of forces pushing and pulling on interest rates right now, but it is highly suspect that the yield doesn’t budge one single bit. Regardless, I don’t think there are any bond traders out there that have any nails left because if you’re into bonds, it has been a nail-biter.
I have figured out why I’m so hostile today.
It just dawned on me.
It’s like the high school nerd (us Gold Bugs & Silver Bugs) that gets the date to the prom with the prettiest girl in school (gold or silver), but on the dance floor, the school bully (the cartel) pushes the nerd over and onto the dance floor.
We, the school nerd, are right at that point in time where we are standing up.
We brush off the front of our rented tuxedo, punch the bully square in the nose, grab the girl by the hand, and run out of the gymnasium and lay on her one of the most romantic kisses ever.
But before the adrenaline, and before the kiss, there is the anger required to punch the bully square in the face.
There is where I find myself.
That is where we find ourselves at this moment in gold & silver.
This is a temporary state of mind.
We know how this scene plays out, and in the end, we get the girl, but the bully is not just going to turn his head down and walk off of the dance floor in shame.
It requires action on our part.
Before we get there, however, let’s check Dr Copper’s vitals:
Hey, look at that!
As Harvey Organ would say, we’ve got a pulse!
What about crude oil, is it still lookin’ like Ol’ Half Dollar’s $80 year-end call is holding up?
Well, it sure looks that way to me:
Today’s candle is what you call “testing” the 50-day moving average. Not only that, but we have an absolute ton of room to run to the upside on the RSI, and we have a bullish divergence on the MACD.
If you’re rooting for $80 crude oil too, I’d say it’s lookin’ good for the home team.
I’ll adjust my shopping, my driving, and may other oil price-affected behaviors when we get there, but for now, what I see is the floor being raised in gold & silver, if for no other reason than the rising cost of production.
Spoiler Alert: There is nothing the cartel can do about it because the miners can’t sell at a loss and make it up on volume.
Which is one of the many reasons why I think the bottom is in.
Yeah, I know – there’s the whole “the Chinese are controlling the gold price by shorting COMEX paper gold futures in order to maintain the dollar price of gold at a soft peg to the dollar/yuan currency pair” thing, but I just don’t know.
You know what they say about bottoms: If it looks like it hit the bottom, if it thumps like it hit the bottom, and if it bruises like it hit the bottom, it must have hit the bottom!
Okay, they don’t say that.
I just made it up.
What they say is something about looking like a duck, but I’m not sure exactly what it is they say.
So to me, I’ll just say it looks like we have hit the bottom.
Need further reasoning?
The two simplest reasons would be that the dollar appears to have topped out and is now falling, and oil appears to be rising again.
There are other reasons too, and we all know them by now, such as that massive spec short position in both gold & silver, and while that is technical in nature, there are the fundamental reasons too, which, for example could be the seasonality of the metals, and the fact that if we are turning the corner, September begins next week, and, seasonally speaking, so does the rise in gold & silver prices.
So we’ll see.
If you’ve been following palladium at all, you know we’ve been looking to see if palladium would lead the charge higher.
As of today, palladium has solidly left the extreme smashing of last week completely behind it:
In fact, I’ve got a last of $931. Making a quick calculation off of the $815 spike low, palladium is now up nearly 15% off of that low.
Platinum is having a hard time punching through $800:
But the trend-line over the last several trading days is still up.
If you haven’t already, check out the article I wrote about platinum yesterday, and the potential arbitrage play with gold that I wrote about. Before price is in a “confirmed” uptrend, now is a great time for anybody looking to diversify into other metals.
Well, I was not calling for the GSR to climb into the mid-80s again:
Though here we are, and if you’re looking to add to your stack of silver, now is also an excellent time.
Here’s the thing – silver outperforms gold to the upside, and to the downside. That “selling” last Wednesday saw silver overshoot gold, though gold has since begun to recover first. This is all par for the course. It’s exactly what we want to see. In other words, if we are rallying here, which I think we are, then gold needs to turn first and start the rally, which gold has.
OK, enough of the theory, let’s see what that looks like on the chart:
Gold outperforming silver because it has begun the rally.
Again, assuming the rally has begun, we will look to see silver catching up to gold and outperforming gold to the upside.
Regardless, as we sit here in late 2018, whether a Gold Bug, a Silver Bug, a little bit of both, or a whole lot of neither, things are really about to get exciting.
Yeah, I know, “How can you say that Half Dollar, silver is still under fifteen stinkin’ bucks”!
Yes it is.
However, is still think that as soon as silver puts in a close above $17.50, that we will be above $18 within mere days. From here, that would be a 20% move off of the lows, and there would be serious momentum too because of all the short covering from here to there, and with the open interest on the COMEX at all-time highs in silver, I don’t think it is going to be the cartel naked shorting into the short covering.
We’ll know soon enough.
On the weekly gold chart we can see a relatively strong candle:
Volume is not through the roof, but the buying was on volume, comparatively speaking.
Yes, it is only one week, and yes, we have fallen so far from where we’ve been, but fundamentally, and technically, things are looking good here.
On silver’s weekly chart we can see silver’s turn is oh so subtle:
But we are up on the week, and we’ve been down for so many of the last several weeks that at this point it almost seems unbelievable, but if we have bottomed, and if gold is doing exactly what it should, which it is, then silver is doing exactly what it should be doing as well, which it is also.
That “death cross”?
Oh, yeah, that death cross on the major weekly moving averages.
I don’t think it matters at this point.
For more than a year now those lines are basically sitting one on top of the other, so they will be smoothed out over time and the separation will be much more evident once the break-out happens.
If the lines on silver’s chart looked like they did on gold’s chart, and if there was a death cross, then yes, I would be more than a little concerned, but the whack-a-mole that is silver has been whacked so hard lately, the circuit board is fried and the plastic moles won’t even pop their heads up anymore, so no, I’m not concerned at all about silver’s death cross last week.
If the rally has started, the 50-day moving week average will start pointing north again.
On Wednesday, I called it “climbing a wall of worry”.
That’s exactly what they call it.
Everybody is worried that the rally won’t stick, and nobody wants to believe the rally is real, and nobody wants to think that prices are climbing higher.
I think we have bottomed, and I think we bottomed last week.
So if you haven’t already, go grab your climbing gear.
We’ve got our work cut out for us.
– 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.