Precious Metals

My Preciiiooouuusss !

I had to throw that in there, I can see a lot of the physical buyers getting their physical in the mail or however and holding all day, rubbing it against their cheeks calling it their "Precious". Every bubble, yes  I said bubble in a precious metals post (it doesn't mean we are near the top of it), generates a lot of emotion.

I remember with housing I identified the bubble in 2003 and thought 'd wait it out, of course it went on for 4 more years. Any way, all bubbles create a lot of emotion and with every bubble I've documented back to the Dutch Tulip Mania in the 1630's where a single tulip bulb could cost more then 10x the yearly income of a skilled craftsmen, all because of a rare disease that struck tulips and caused very unusual and beautiful colors and patterns, every one ALWAYS says, "This time it's different"

With housing, my friends who were trying to get me to "flip houses" with their housewives, they said, "There's no more real estate in Florida, they have built all the way to the Everglades, prices can only go up", they were wrong.

Any way, maybe it's my short memory, but the PM bulls seem even more emotionally attached to the trade then the housing bubble, convinced Fiat currency is dead, which would mean the Central banks would pretty much have to disappear, and I don't think that's going to happen. Why do you think PMs have been locked out of legal tender for 4 decades?

While this chart doesn't appear to be inflation adjusted, simply nominal terms, it does show you that Gold has been in a speculative bubble before and not all that long ago, during the period of the late 1970's stagflation.

Any way, here are the charts...

 GLD 1 min is showing some positive attributes.

 The 5 min hasn't reached it yet, it's still n a leading negative from yesterday

 GLD 10 min however didn't see much damage and is still in line, meaning distribution wasn't so strong as to make it to the longer, more important 10 min chart.

 And the 15 min looks good still, so a pullback, a consolidation? It could be either, the difference being a pullback moves through price levels and a consolidation moves through time, they both serve the same purpose, shake out weak hands.

 SLV 1 min is showing some early promise.

 The 5 min went from confirmation to a leading negative divergence.

 However, like GLD, the 10 min SLV is still in line after some accumulation 2 days ago.

And the 15 min is still leading positive. You know how  feel about trading the PMs and the risks involved, which can creep up with little to no warning, but from what  see so far, these both look like they have some longer term upside and are simply consolidating now, which logically, would make this a good place to buy if you understand the risks of COMEX margin hikes, JP Morgan and others manipulating prices, etc.

I said GLD would make for a good long term buy at the 150 day moving average, I don't like how it got there, but I have maintained this view for 6 months or so, and GLD did get there. I also said because of the parabolic sell off that sent GLD down to the 150 day m.a., I would prefer to see it consolidate along that moving average for a week or two, so don't rule that out. The average is rising, but we could pullback to the 150 and that would certainly be a low risk/high probability trade.