Chart Porn 2/5/2012

*UPDATE: To maintain my unblemished integrity, I feel compelled to disclose that my Super Bowl protest was postponed till next year. Alas, I too gave in to the call of the herd, gorged myself on absurd amounts of unhealthy food, and partook in the exuberance of an event the sheer pagan excess of which presages the imminent disintegration of our civilization.

Special thanks to commenter Dr. Durden for the title suggestion, which I have changed from the usual "Sunday pre-game" in protest of the Super Bowl. If you're unlike me, and you actually care which group of mercenary thugs, oafish simpletons, and peacocking dullards proves better at a childish game than the other, then may I suggest you just check the score when the contest is over? (Rooting for a team has no effect on the outcome, you know… so why subject yourself to the corny commercials rigorously engineered to elicit the maximum number of retard smiles from the proud engine of the global economy, the semi-literate American consumer?). That said, I do recommend you catch at least part of the halftime show. It's a man's duty never to escape from reality, but rather always to look it head on, however ugly it may be. Tonight's decrepit performer, who at her best was a talentless, hysterically vain, self-promoting whore, has finally transmogrified into something meaningful: nothing less than the perfect symbol of her nation (she has surpassed even the globally broadcast military hoopla during the introductions carefully designed to bring fear into the hearts of our numerous enemies, whose pathetic resistance against the noble hegemony of American democracy shall never prevail!)

This will be an important week in the metals. My silver chart (now in color!) reveals two very important crossing points. The $36 level in mid-March and the $33 level in mid-May. But if silver rallies this week, making its way into the purple zone where it was rebuffed Thursday of last week, then it could very possibly go straight to the third important crossing point, the $42-$45 level as early as March. On the other hand, as seems likely, if silver corrects further this week, then this chart is telling me that the red downward channel will continue to exert resistance, such that a strong move in the near future becomes less likely.

Here is the 10 year yield measured in silver. Note we bounced off the blue dotted line once again. The overall downward trajectory seems on track (see light blue lines in purple channel) (note: updated, 2/6)

Here is the weekly gold chart, where as badly as last week ended, it never fell out of the channel that it had impressively entered the week before. The weekly close this week will be very important. Gold can fall out of the black channel during the week, but a weekly close below would be quite bearish.

Here's the daily chart with the Fibonacci moving averages (144 day, and 377 day, pink and green respectively), as well as the 200 day (yellow) and the 252 day (i.e. yearly) (brown). Note that they are all currently right around their lines of best fit, all of which share the same slope, also shared by the top two black dotted trend lines which go back further than this chart in terms of resistance (note: chart updated, 2/6).

Is gold trading like a safe haven? One way to determine this is to look at the ratio between gold and the CRB commodities index (of course gold is part of that index, but we can ignore that). The CRB goes up with inflation, so if gold goes up faster, then that (at least partly) means people are actually looking for a store of value in fear of future inflation (which other components of the CRB, except for the other precious metals, really are not). You will see that the three red horizontal lines represent three "tiers" over the past decade, such that gold's status as a safe haven is a step function of sorts. The 2008 financial fiasco raised it to a much higher level, and then the "debt ceiling" fiasco of last August took it another small step higher, where it has been trapped, despite 11 attempts to break the top red line (most recently Thursday).

Finally, the HUI. I'm watching the $530 level (red/green line). If that can hold we could break out of the white quasi-pennant formation soon. Otherwise, another test for support at the bottom white trend line is very much in the cards.