Originally posted by Soren K. Group on Marketslant.com
Update 10:55 am: like clockwork, the hourly and 4 hour charts that warned of overbought risk proved good guides. Gold pulled back $5.00 since this post. Now to watch the rest play out.
4 hour VBS says slow down. a little...
Original post 9:35AM
Why Gold up $11.00 is Still Not a Breakout.
No Whammies: First to get it out of the way... We are knocking on wood, because while we have not seen what Gold can truly do in this cluster-uck of a global situation, we must remember that governments are always looking for new ways to undermine the renewed confidence in Gold's remonetization. Even as Gold climbs and undermines confidence in FIAT currencies globally like a snowball rolling down hill reinforces its own descent, Supranationals are keenly aware of its potential to undermine national control over money.
Governments Rule: They are now battling this war on 2 fronts. The Bitcoin effect which reminds people that money is money because people agree it is so, and not because a government declares it to be so. There was a time before nation-states when money was borderless and universal. But nationalism and monetary controls created captive tax bases and monetary cattle for politicians to milk and if necessary slaughter with inflation or depression. Bitcoin has re-awoken the public to the notion that money is universal. Pre-Bretton woods, that was still so. Gold was money. The USD backed by Gold was the currency.
The Wall is To Keep You In: Make no mistake about it. Governments are building walls around their citizens. walls to keep domestic consumption inside them. Walls that let corporations benefit from global pricing, essentially creating arbitrage for these companies to buy cheap elsewhere, and then sell to the domestic sheep their Governments keep penned in. Governments Can Stay Irrational Longer than We can Stay Liquid. So, do not underestimate the power of the incumbent politicians to keep those pesky alternatives to FIAT subdued and in their proper place.
- Gold: they can do whatever they want to keep it in check. Confiscate, manipulate, sever deliver-ability, CUSIP it, loan it, increase FRB and rehypothecation. The list goes on.
- Bitcoin: Same idea. Listing on an exchange opens the spigot for FRB and futures selling. Infinite shorts on limited supply that took Gold down, is coming to BTC.
Another way is to deny BTC deposits unless higher hurdles are met by US banks to "know their customer". What cannot be destroyed or co-opted will be controlled. BTC is about to come to daddy and the FED is going to try to tame it. Or at least regulate US ownership.
Government has put all its eggs and controls in one basket after the TBTF 2008 disaster. The border collies that herd our monetary risk actually consolidated things in even fewer baskets using exchanges , a la Fannie Mae, to keep a closer eye on things while increasing systemic risk. And with that exchange power comes exchange oversight and loss of autonomy in a crisis.
VBS UPDATES - Gold Warming Up.
Gold is in a momentum sandwich now. Volatility is overbought short term, nowhere intermediate term, undervalued long term.
- The 60 minute was triggered hours ago and may be overbought. = POOR RISK REWARD UP HERE. Do nothing
- The 4 hour says we are NOT in a breakout yet, but a 4 hour breakout will likely be extremely powerful if it comes and propel us to August highs. = NO SIGNAL, POSSIBLE OVERBOUGHT FOR NOW Buy a signal when it comes
- The Daily looks to be headed for a momentum trigger if we close above $1289.= RISK REWARD TRADE SIGNAL ON CLOSE ABOVE $1289 - Risk- reward below
- Meanwhile the Monthly is waiting for the go ahead to confirm what the smarter hedge funds are likely already doing, getting long for 2018 allocation flow. - SIGNAL PENDING November Close. MACRO ALREADY BULLISH
So one can imagine this scenario as possible if not likely: We close above $1289. The market pulls back or drifts. If the hourly gives a signal higher again, it will drag the 4 hour along for the ride. Then we will have a serious breakout play in terms of volatility and hopefully follow through in direction.
- Bullish- Buy call spreads. Bearish- Buy puts in a rally. Long term bullish- be long already and be ready to swing trade this market like a mofo.
Gold is doing what we have said it would do since last month. And so far, while November may almost be over, we are seeing the signs of it being a worthwhile place to pin on your charts as the beginning of the next significant surge higher. So, if November is memorable, Then 2018 will likely be unbelievable.
HOURLY - Needs to Chill
Gold has had a nice run and Volatility is due for a break or "inhale". Do not be surprised if we pull back a bit.... next chart gives confirmation that we should be careful
4 HOUR - Key to Next Move
This chart says we are NOT in a momentum based buy breakout yet and warns of an over extension and subsequent pull back while the hourly catches its breath. Then we see a breakout set up
DAILY - Risk Reward Trade is Here
The Daily chart says a settlement above $1289 gives the go ahead for a nice set up to be long risking a print under $1289 with a 3 day target of $1313.00
MONTHLY -This is What a Break out Looks Like
This holy grail of charts has already given us the buy signal based on what hedge funds use to "punt" Gold on the long side. On our own system, a November close will determine if the momentum has the ability to increase upwardly. If it does, then we will have 2 compelling, complementary systems saying buy dips to $1255, and buy rallies above the August high. Last time we had a potential widening on the VBS with the market above the Fund Indicator (Yellow line) was August/ September 2009. That signal sent the market up relentlessly for 3 years from approximately $1000 to $1700, assuming you bought and sold when the "Fund Activity" indicator advised as much.
That is a breakout. And while we have called for $1700 as a target recently, that is not the projected target. We have to handicap our own system, if not the global power structure that can keep a damper on things if needed. The original signal set up is $50 one way technically still unknown... then $200 in either direction thereafter. There will be volatility. The monthly chart Bolinger band outer boundaries tell you where it will begin
Suffice to say, if $1200 is the new base area, and we MAY be getting a signal come November end that another 2 year rally is to start.. at what price do you think that puts Gold ?
- Why We're Buying Physical Gold with a $1700 Target - SKG
- Gold Macro Analysis: A November to Remember
- Gold Likely to Reignite Above $1294 Spot