SD Midweek: There’s wild swings in many markets, and the week has so far been hard fought, but gold & silver have the upper hand. Here’s an update…
On Monday I said every inch on the charts would be hard fought this week.
Check out the gold to silver ratio:
Wow those gyrations.
We’ve gone from over 83 to 79 and back up to above 82.
I would like to clarify my “hard fought” statement like this:
The action so far this week is like watching a football game that ends up 63 – 59, as in all offense and no defense.
Even the stock market is playing along:
Down a few hundred points on Monday, up a few hundred points yesterday, and if we have some sort of puking today, the Dow could fall through and close below the 200-day moving average, which would be very bearish indeed.
It’s also wild swings in the commodities.
Check out copper:
That big, nasty bearish candle plummeting through copper’s 200-day moving average is just in the evening and morning pre-market hours.
Crude has been swinging less wildly intra-day yet still straddling either side of its 50-day moving average:
Crude looks set to open below the 50-day moving average, but overall, the trend is up.
And look at how far we’ve come. It was only several months ago that crude oil was in the low 40s.
Moving on to the precious metals, we can see clearly that there has been no defense.
Palladium has been run over for 10 of the last 12 days:
We’ll have to watch the 50-day very closely with palladium because it is turning down and in a hurry. If the 50-day crosses below the 200-day moving average, that would be what we call a “death cross”. As you can imagine, death crosses are very bearish.
Additionally, we’ve got a textbook rollover in palladium. We can make not of the three lower-lows starting from early December, continuing in early February, and now as we sit in early April, we’ve got another lower-low on the chart.
If there is a bright side, palladium is at risk of becoming oversold, but if that means all we’re getting is a bounce, then brighter skies may not be ahead, especially since palladium is down over 18% from its highs.
A bear market is commonly defined as down 20%. If palladium doesn’t turn the corner soon, this overextended correction is going to go full bear.
Note to cartel agents, trolls and shills: I told you to just smash palladium below the 200-day to really crush sentiment. Now, you can finish off sentiment with just a little more effort by forcing an official bear market.
Apparently platinum is looking to its cousin palladium as a role model:
Platinum is now down over 10% and joins palladium as being in official “correction” territory.
So for review: “Dips” are slight moves down in price of just a few percent or less, “pullbacks” are moves down of a few percent but less than 10%, “corrections” are moves down over 10%, and a “bear market” is down 20% or more.
Palladium and platinum are in corrections.
We want it to stay that way.
Moving on to gold, we can see the yellow metal has performed well:
It goes like this: Gold broke-out above its 50-day moving average on Monday, yesterday gold tested the moving average as support, and overnight and into this morning, gold has bounced off the moving average nicely.
We really want to see gold get above $1350 and stay there on the close. That could give us some momentum going into tomorrow and especially Friday when the BLS releases its Job Report.
Today, ADP said there were 241,000 jobs created in March on the private payrolls report, coming in line with the mainstream consensus (go figure) and now above 240,000 jobs created for four months in a row. No surprises there, and ADP doesn’t move the metals quite the same as the BLS Non-farm Payrolls Report does.
But if anything, four “solid” months of job growth makes it harder for the Fed to back out of a rate hike come June.
The over all point here is while gold looks good, we really want to see momentum going into Friday because we’ll need any edge we can get. The cartel loves to smash on the Jobs Report.
Silver is setting up to get above its 50-day:
Understand that even though governments stack gold, they hate talking about gold or recommending their citizens stack, western governments that is. But it’s not gold that really gets the government downright terrified – that would be silver.
Silver is power spread out between the people. And as such, the attacks on silver over the last year and a half have been brutal.
We’re making progress, but very slowly. I call it agonizingly slowly.
But look on the right of the chart – see that price? It was only several months ago we were at risk of losing $15 and going down to a $14 handle.
Since then, we haven’t even lost $16. The cartel knows there are limits, and with everybody thoroughly distracted by the cryptos, that is as I read once somewhere but don’t remember where – everybody who doesn’t understand math, everybody who doesn’t understand tech or everybody who doesn’t understand money is thoroughly distracted by the cryptos, so for now, the cartel has been able to keep the white metal in the range of $16.20 to $16.80, and at times, like right now, the very tight range of $16.40 – $16.60.
Getting above the 50-day moving average today or tomorrow to have momentum going into Friday’s BLS Jobs Report is also of key importance.
We know that his week is hard fought, however, so we’ll have to see how things play out.
Speaking of ranges, the yield on the 10-Year Note looks to be ready to enter the 2.8% to 2.9% range:
And if that happens, and if rates are indeed moving higher, then we should see added pressure on the stock market.
But really speaking of ranges, check out the dollar:
That range is the spike lows and spike highs, but not where the bulk of the trading has been.
But unlike gold & silver’s coiled springs, the dollar is more like consolidating for its next leg down. The tight range is not a bullish consolidation by any means.
Volatility is creeping up again:
On Monday I said 20 was the new 10, and it sure looks to be the case. If there’s going to be pressure on the stock market, we could see the VIX starting to spike again.
And sooner or later, the “flight to safety”, the “hedge against uncertainty”, the “flight to quality”, or whatever you want to call it will be on.
Translation: While sentiment may be terrible now, there is an amazing opportunity in the precious metals, and the set-ups are very, very bullish.
And if some of those people who don’t understand math, money or tech wise up:
Then we’ll know who ultimately steals the show: Gold and silver.
They always have and always will, it’s not a question of if, it’s just a question of when.
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.