Michael Noonan – Our pace for posting commentaries will slow down for August by design over the next few weeks, and for the last week of August, there will be no posting due to vacation time. This week, focus will be solely on the charts. There is so much going on in the world and with the Bread and Circuses election in the United States, the sum of which is enough to send the price of precious metals considerably higher, but the reality is price is still under the control of Chinese buying at bargain prices while the West’s central bankers try to keep alive the Ponzi scheme facade regarding gold and silver.
The globalists behind the fiat curtain have been exposed for their financial and political chicanery to keep the vastly underwater banking system “alive and well,” yet the public has no unified voice to be so shocked by the extreme theft by the bankers and their political hacks, so the game plays on.
Gold and silver reflect the only reality that exists in this sea of deceit, the U S strong-arming the vassal political union called the EU with no backbone or popular support, the ongoing disruption and war in the Middle East, the US using NATO to saber-rattle against Russia, forever provoking Putin and casting blame on Russia for much of the ills that go on around the world when only US fingerprints are to be found everywhere.
There are many articles that discuss the almost inevitability of WWIII with the US not only provoking Russia but China, as well. When the financial house of cards can no longer be held, the go-to alternative has always been war to get the public minds off the source of all woes, the elite’s moneychangers and their ongoing theft from the people.
More thought needs to be given to what practical role gold and silver would play once the fiat Federal Reserve “dollar” loses its status as a reserve currency and receives the recognition it deserves, a third-world nation with a worthless paper fiat currency. How will precious metals holders benefit, and to what use will their holdings be placed?
How may PMs holders are there in Venezuela, and how are they faring? We will look for some answers in future articles. In the meantime, despite the ongoing calls for gold and silver to take off, imminently, the charts do not support a runaway market to the upside.
Straight lines are frequently drawn to represent support or resistance when, in fact, both are the function of an area as opposed to a fixed price point. The two horizontal lines on the weekly gold chart originated from prior failed swing highs. Price broke above the lower one but fell just short of the upper resistance line. Yet, price was contained within that area.
The purpose is to take note of where price has failed previously, and then watch the development of how price reacts on a subsequent retest. It is the basis for simply being prepared to respond at support/resistance areas. For example, one can make a huge mistake buying new positions at an area of resistance because a reaction is more probable than upside continuation.
The wide range, poor close bar of 4 weeks ago was a red flag event. It was a message from the market that sellers overwhelmed buyers and pushed price down with buyers unable to sustain the rally, and the selling reaction occurred at a resistance area, answering the how question of the character of price development. Last week was a retest of 4 weeks ago, and we then mentioned how volume was peaking at the high of the rally, another red flag.
A more detailed picture emerges on the daily chart. The early July high was an overlapping of 4 TDs, a sign of a battle between the opposing forces of buyers v sellers. After the 4th day, price broke lower making those 4 overlapping bars an area of resistance to be watched on any retest. The retest came last week.
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Michael Noonan is a Contributing Writer for Shift Frequency
SF Source Edge Trader Plus Aug 2016
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