SD Friday Wrap: Are the charts really as bearish as the cartel’s painted them to be? Not really. Here’s why…
Editor’s Note: These charts were set-up before noon on Friday and do not include price action after that time, unless otherwise noted.
The cartel wants us to think the bottom is going to fall out of gold & silver.
Gold & silver have a floor, and they still have a bid.
So no, they’re not floating down the river and fast approaching the falls.
Where is that floor?
I don’t think it’s much lower than $1,500 in gold and $17.50 in silver.
That said, none of this, including this week’s “plunge”, was unexpected.
In fact, it’s easy to see, well in advance:
With all of the noise in the markets from then until now, I had turned bullish on gold & silver in the short-term.
That bullishness started to fade, bit-by-bit, and now I’m more bearish than bullish in the short-term.
The cartel wants us to think the bottom is about to fall out of gold:
Because sure enough, there’s that head-n-shoulders pattern.
There’s a catch!
A catch: The fundamentals.
You see, if the fundamentals matter, and I think they do matter, the cartel will have a hard time of really smashing gold & silver much lower from here.
Because when I look at the fundamentals, I see a demand for gold & silver.
Maybe it’s just me, but when I see stuff like this going on in the world:
- Impeachment inquiry in the House (uncertainty)
- An undisclosed U.S. systemic banking crisis (money printing/inflation)
- Very high tensions geo-politically (war, weaponized dollar)
- Declining silver output (supply shortage)
- An increase in industrial use (higher demand)
- Tariffs, trade and currency wars (currency risk)
I see a move into gold & silver.
And that’s not even all of the bullish fundamentals.
That’s just a sampling of them.
So I do think the downside is limited here.
But that doesn’t stop silver’s daily chart from lookin’ all sorts of scary:
For anybody doing the math, a drop in price from $19.50 to $17.50 means a sale of 10%+ off of real money.
The gold-to-silver ratio tells me to convert my soon to be worthless US dollars exclusively into silver:
I will continue to stack straight silver until the ratio falls below 75, but everybody’s situation is different, so learning what the gold-to-silver ratio is and what it can be used for are critical lessons for anybody who has invested in gold, silver, or both.
Platinum keeps holding the line around $940:
I do not think we have much more downside risk in platinum, in part because I think platinum will attract a flight to safety bid, and deep pocketed investors might begin to understand the opportunity for free gold that platinum is presenting, in much of the same way the gold-to-silver ratio will allow stackers of more humble means to convert their hard-earned silver into free gold.
Meanwhile, check-out palladium:
Palladium is on fire!
OK, “Hey Half Dollar, don’t you know the smashes in gold & silver are because of options expiration or to bring down open interest!”.
Yeah, I get that too.
But it’s not as cut and dry as that because the bullion banks can whip up unlimited paper, can literally use free money from the Fed that we’ll never know about or see, and they have time on their side, so yes, that plays a role, but it is not the only role.
For example, I think what is happening is that we are about to get taken to the cleaners during Golden Week.
Because the Chinese markets will be closed all next week, and this allows the cartel to be a bit more aggressive with their strong-arming because there is one less “market” they have to worry about.
And wouldn’t they just love to go in and smash on Friday to try and get some momentum going to the downside?
Side Note: How do you know the trade war has Deep State Globalist theatrics going on?
Well, I explained on Monday how the U.S. had the upper-hand on the psychological warfare front against China, yet the U.S. did not take it.
Look – war is not a fair fight – so when opportunities arise, you take them, and if this is in fact a trade “war”, then why didn’t the United States take advantage of the situation?
Crude oil is back down around $55:
It’s likely the shorts are piling on, but I do think they will be wrong because you do not collapse the American economy without higher gas prices.
Of course, I could be wrong too, but that would be a matter of my timing.
Copper is trying to find some near-term support at $2.60:
At this point I’m not looking to fall below $2.50, but instead, I think we see a higher-low in the making, and if you’re a chart hugger like that, higher-lows matter.
The stock market is still hanging around at the top:
Notice, however, the Dow is basically unchanged from a year ago.
For example, last October 3rd, 2018, the Dow closed at 26,828.
Let’s see here: Impeachment, Iran, banking crisis, Forgetabrexit, and the VIX:
Yield on the 10-Year Note has been straddling either side of 1.7%:
I think yield begins falling again as early as next week.
The dollar index looks like it’s breaking-out:
We may get a cup-n-handle chart pattern with the final move taking the DXY somewhere just above 100, but a strong US dollar is inconsistent with my understanding that maximum pain will be brought to the United States in the form of economic misery and financial ruin, so I would take the position that if we do break-out, it will be one heck of a bull-trap.
What’s the bottom line as we find ourselves here this beautiful Friday in late September?
Instead of allowing global market turmoil, the cartel chose to smash gold & silver.
Therefore, the pickings must be pretty slim for the cartel to source metal.
So they’re trying to make everybody think the bottom’s falling out.
I really don’t think there are any more weak hands like that.
The weak hands have already sold all of their holdings.
Sure, there are some at the margin, new entrants.
Which’s why the cartel can smash like they did.
But real stackers and other smart investors?
They know this weakness won’t last long.
So they will use it to their advantage.
Because we’re in a bull market.
The fundamentals matter.
So the bearish charts?
At one time, yes.
In late 2019?
– 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.