No new conclusions, but an update is due.
Gold and silver continue to look awful, as I predicted. The weekly three-line break charts that I've been using to gauge bull vs. bear cycles in gold ($INDU:GDXJ) and silver (GLD:GDXJ) continue to add weekly bars, also as expected.
I had a thought the other day that gold and silver may continue to fall even as the present bearishness increases, because most of the PM-bearishness that pervades the finance world seems to be of the short term variety. Everyone and his mother seems to be expecting (or at least not ruling out) a blast off in the long term. Perhaps the bull market won't recover until the long term bulls (like me, for example) start to change their tune. It'll take much lower prices, though, (and protractedly lower prices, I should add) for me to lose my confidence in gold's fundamentals. I liked costata's comment from my last post:
If the sovereign bond fails, a "forty story building" of derivatives collapses. Stick gold at much higher prices under it and the building holds up.Seems like gold at new highs is the long term path of least resistance for the financial elite to maintain their position at the top of the food chain. Not an ideal path for them (or the central banks would already be manipulating prices higher), so it will be drawn out, maybe on the order of a decade, but will we end up with some kind of financial "reset", with gold playing some kind of vital role? I still think so.
On the topic of sovereign bonds, weeks ago I noted the breakout from the bullish pennant in the 10-year yield vs. silver ratio. It's been up over 10% from my last post and looks to keep rising ...
... and rising, perhaps until the ratio hits the green dotted wedge, which has uncannily coincided with lows in gold:
Here are some more charts from the past few months updated. My target for the gold to S&P500 ratio looks like a good call so far. It really tanked hard this week.
On the daily chart, the major moving averages are nowhere in sight. The all-important 144-day MA is at $1336 now. The 200-day MA is under $1400 for the first time since the August 2011 fireworks. The lower part of the blue channel, by the way, is at around $1150 now.
If the major blue trend line below is broken on the weekly chart, watch out: I doubt the dotted red line will hold, as it's so close to that major trend line (which is a main reason why I've been saying if the summer's weekly closing low doesn't hold, $1000 will be tested, despite what looks like some solid bands of support before that level)