You GATA believe

Bill Murphy of GATA recently said that one of the things whistleblower Andrew Maguire learned is that the banking cartel often raids the shares first as a "dog whistle" to their friends that a raid in silver is coming. So, when I checked the markets this morning and saw the DOW was down only 1.5% (like all week, pretty much), silver was flat, and that the mining stocks were down almost 5%, I said wtf and bought a lot of ZSL on margin. I was rewarded handsomely. Thank you, f#cking criminals!

Now for some fun with charts.
Let's check up on the 144-day moving average for gold (for background, see here). The good news is that the 144-day MA is still near the lower 1.5% boundary of the brown regression line I drew 2 months ago. I had calculated that, if the 144-day MA hews to the brown line, then it should be around $1600 by Thanksgiving, which would mean gold would have to average$1620 every day until then. I have no reason to change that prediction, and because we've been below the brown line for awhile, it's looking like gold still has plenty of upside. I do predict we will test ~$1600 soon, but I just don't see a 2008 cratering happening again.
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Here's the weekly chart we've been looking at, and it did not disappoint. Gold finished above the the "thin blue line," and as expected hit the top of the channel. I think we go below it soon, but I don't see a test of the lower channel in the works. I have a gut feeling there's an overshoot of the upper trend channel in the works, by the end of the year.

What about silver? Last week I drew a trend line (blue) that I very speculatively thought might be an important level to crack before I'd feel confident silver isn't going to test $35-36 again. Interestingly, since then, silver has touched that trend line two more times and failed to break it (see black arrows). I will keep my eye on this. I think it's important because, as you can see, this trendline starts at the low point in silver last August (right where it began its explosive move), connects to the January low point, actually holds (pretty much) through the May atrocity, and finally is emphatically broken in mid-June.

Thus, as much as all the silver naysayers (like that dolt Moriarty) point to the cartel-engineered collapse in May as signaling an unrecoverable blight on the silver market, the real "correction" didn't happen till several weeks later. I feel justified in saying that, because as much as silver fell in January and especially May to touch the line, remember that that line signals a rate of growth of 8% per month! And the fact that we're still touching that line after almost a year is remarkable. Jesse's Cafe had similar thoughts, on how silver has outperformed just about every major asset class even year-to-date.

Finally, here's a chart of the CCI commodities index that I posted back in June. I had said, if we touch the orange 233-day MA (which at that time was approaching the horizontal red/green support line), I'd feel confident about an aggressive play. Well, it didn't get that low back then, but it sure looks like it's headed there now, as the CCI has fallen and the MA has risen since June.


Louis Cypher said...

Very Nice GM. I have some good stuff to post from Bill Downey and Martin Armstrong but I don't want your post to get lost in the shuffle. Can you re up this again tomorrow?

Heron said...

Nice, indeed. And with today's silver smash, we are just about three measly dollars away from $36. Come on, Blythe, you know you want it...