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Groundhog Day

-- Posted Friday, 6 April 2012 | | Disqus


          It was a down week in US markets but many of the leading stocks held up very well or even moved quite a bit higher in a few cases.

          Gold and the rest of the precious metals were also hit quite hard on more of the same, which is, talk that quantitative easing is no longer needed at this time. 

          It’s Groundhog day all over again as it’s a mirror image of when gold was hit a few weeks ago.

          I don’t believe there is no QE, and see no evidence of that as the Federal reserve is still funding something like 60% of the US debt.

          They are printing new money to buy this debt.  That is QE in my books.

          As it’s a long weekend that I desperately need I’ll be short and respect your time and mine as well.

Metals review

            Gold only fell 2.31% this past week but the manner in which it fell was once again pure manipulation and a total repeat of what occurred back on March 13th. 

          Once again at the exact same time that talk of no more QE occurred a copious amount of gold was instantaneously dumped on the market with no effort at all to get the best price for the sale.  Gold dropped over $20 before I could even throw out a tweet about it!

          While it is very frustrating getting my pockets picked over and over again by the same pickpockets I am still up large over the past decade and I can wait it out until the blow off top comes in the years ahead.

          As for the mining stocks they’re hurting as per what seems like usual and I don’t mind as I know I own some great companies which will show me many many multiples on my investments over time but what bugs me most is that subscribers get hurt and sometimes don’t have the patience or faith/knowledge/understanding to stick with this major trend.

          For now the 61% Fibonacci level is holding up well enough here after being pierced slightly in an attempt to overrun the longs.  There is definitely strength buying this weakness and that is evidenced by the strong support shown here at the $1,625 area.

          Last week I was quite confident that a bottom was in but I did not foresee another major round of manipulation occurring.  My crystal ball broke a few years ago and I just never replaced it yet!

          We’ve got to hold this level or risk moving to test the $1,600 level and then the $1,575 level.

          Volume was heavy in both the GLD ETF as well as the futures market as would be expected on such a fierce forced move lower.

          Right now things remain looking pretty ugly but that can change in a few days.  We’re definitely in oversold territory here but it doesn’t mean we can’t go lower, especially with a push of tonnes and tonnes of gold being sold at the same time.

          Yes, it’s sick but its life for now and we are winning the war, but have been bloodied so far in 2012 after losing a couple key battles.


          Silver faired better than gold only falling by 1.52% this past week.  The $33 area is a very strong resistance level and could not be beat, and even if it had been the blatant takedown of gold gave silver zero chance of holding up for the week.

          So we get another chance at sale prices for physical gold and silver here and that’s not necessarily a bad thing in my books, although it’s frustrating.

          Silver has support at the $31 level and slightly below that at the Fibonacci retracement level.

          Volume was heavy on the move lower in the futures market as well as the SLV ETF.

          A long weekend to try and forget about this past week’s moves in gold and silver is just what the doctor ordered.


          Platinum fell 2.17% for the week and remains within it’s wedge pattern although the lower level was pierced on an intraday basis but that is very healthy as it closed the day back above the lower level of the wedges pattern which gives it even more validity.

          While last week it looked to me as if we were nearing the resolution of this pattern higher, Wednesday spared no mercy to any precious metal.

          Volume was heavy on the way down and then also as the price was pushed back above support.  I think we should hold this level here in platinum and slowly work around in the wedge until it’s resolution is seen and I still think that will be higher.


          Palladium looked to have found its bottom last week as the measured move lower from the head and shoulders pattern was hit along with the 50% Fibonacci retracement level.  But it wasn’t meant to be once gold was hit, nothing could hold up.

          We’ve so far held the 61% retracement level and are on our way back above the 50% retracement level where I believe the true support to be, not this fake support level that was forced upon palladium and other metals this past Wednesday.

          Heavy volume was seen on Wednesday's move lower in the futures market but it was followed up Thursday with quite strong volume as well as it snapped back.

          What's most interesting is that the PALL ETF saw only mediocre volume on Wednesday’s move lower while Thursday’s move higher saw very heavy volume.

          This tells me traders think the low is in and are pushing the price higher now and I couldn’t agree more with them.

          Whether this is indeed the low I can’t say as we just never know when a huge amount of precious metals will be dumped on the market in order to take prices lower still but for now the low looks to be in for palladium at least.

Fundamental Review         

            President Obama just signed a bill which contains stricter regulation when it comes to lawmakers who profit from their decisions and there are many who do.  It’s not fair that those in power can use inside information to conduct what has so far been legal insider trading.  Many members have literally made millions off of this.

          The problem stems in my view from the lack of pay that they receive.  First off, there are too many of them to begin with but let’s begin at the top.

          The president makes a measly 400K a year.  Really, while all his expenses are covered, this still isn’t a whole lot of money for the President of the US.  Why they don’t try and attract the top business minds in the country by offering a huge salary, even as high as $1 billion a year is beyond me.

          If we had true business people running the country they would quickly eliminate the massive amount of waste and true inactivity that is so pervasive throughout.

          Give him a bonus for performance of maybe 10% of what they eliminate in unneeded spending and maybe even a larger bonus for maintaining the standard of living or even improving it, and I assure you it would improve immensely if the red tape were burnt all together.

          Let the citizens do as they please within reason and success will succeed while failure will fail.  Isn’t that what freedom is all about anyhow?

          I won’t go into a huge rant but I think I’ve got the point across.  We need true leaders, not hot air blowing speech givers who need a teleprompter 24/7.  A true leader should be able to have his notes and speak from the heart and feel the crowd and emotions and thrive off it and give the truth whether it be good or bad.  We can handle it.

          John Paulson has seen his gold fun lose 13% in March.  I can sympathize with him as most of my mining shares are also down as I’m sure of you all know.  He still calls gold his best long-term bet and I agree.

          The good news is that many mining shares seem to have been sold out already and are not falling dramatically after this past weeks raid on gold.  This is great as it says it’s time to buy as the bottom has been hit or is very near here.

          I’ll leave it here this long weekend and I wish you a Happy Easter and a restful few days off, I know I’m grateful for it.

          Warren Bevan

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-- Posted Friday, 6 April 2012 | Digg This Article | Source:

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