Precious Metals Update (Gold / Silver) Equities and Futures

First of all,  we not only called the 2011 top in GLD, we had even called the following trend well over a year in advance and at the best area to open a position.

I remember this well because GLD had been a stable/reliable buy for the last couple of years at the 150 day moving average, but in it's "apparent strength", the upside volatility changed the character and that most often calls a top and we stayed out of gold long, but had a monster 3-day trade (short in GLD, I think it was over 100% in 3-days and the biggest move gold had made in years in such a short period).

I also remember very well because a fund manager that runs his own newsletter that many of you probably know, mocked me for sending him a 3C chart of GLD (which he asked my opinion of)  and for telling him, "This is either an intermediate trend top or a Primary trend top". He was a notorious gold bug (there was NEVER a bad time to buy gold according to him) and one of his funds was gold only so he asked, I sent him the evidence and I have no idea what he did later, but at the time he mocked me and GLD fell shortly after to what became a -34% loss (when you are leveraged up, it can be nearly double that for a fund).

I'm not knocking him for disagreeing with me, I'm not saying a fund manager was wrong and I was right in some cheap victory lap because I'm wrong a lot too, that's part of the deal if you're going to be in this industry. My main point is the same as it would be with AAPL longs before 2012's top, LOVE YOUR SPOUSE, LOVE YOUR DOG, LOVE YOURSELF...

BUT NEVER, EVER FALL IN LOVE WITH AN INVESTMENT.

 I like some of my power tools, they make a job easier, but in the end, they are just a tool and a means to an end. A stock or an asset is the same, but falling in love with it blinds you to a realistic view, if you are so blinded by your love that you would mock someone's opinion, you are in no shape to analyze the asset from a neutral POV and the danger there is that your analysis becomes, "Goal sought", meaning you look for the information that justifies your opinion and ignore that which is opposite your opinion. This "Goal seeking" analysis is very subconscious, very subtle, so you ALWAYS need to be on the lookout for it because there's so much information, the market will give you whatever you want to prove any position you want to take.

As for gold and silver, I'm withholding longer term opinions at this point until data is more clear about it, short term Gold has been a victim of the QE-OFF or Taper -On" sentiment with better economic data this week.  As mentioned earlier, GLD or SLV are both in my view, short term, "Counter trend trades" as of now.

That said, lets look at the charts.

 GLD 15 min because this is a trend that I can see clearly, GLD was headed down, much like the market and any upside from here is "counter-trend" which means two things

1) Counter trend moves tend to be sharp, stronger than a normal bull move...
2) They are counter-trend, the market will return to the trend so this is not some reversal in the asset, at least not from the point of view of what we are looking at above.

GLD 5 min shows the most recent leg down with distribution and a small head fake move, they don't need to be big, they just need to hit an area where there's volume. The recent divergence here is a relative positive, it's weaker than a leading positive, but it's there.

The 2 min chart shows accumulation at the lows.

However it has been gold futures that have been more telling...

This is the Gold 1-day chart, as I said, right now I'm not concerned with longer term positions, but I have already stated in the last week that I think there's a decent chance gold is getting ready to come down and build a stronger base to launch a larger move from, but other than shorter term trades (whether a call option on a quick bounce or a short swing trade to lower support) I wouldn't get too involved in longer term positions.

The Gold 60 min chart shows the last leg down is inline (3C is confirming the price trend), until a recent relative positive and then a small leading positive on this timeframe.

Gold 30 min shows more detail with a stronger leading positive divergence...

Gold 15 min shows even more detail and while gold "could" come down to form a small "W", actually it would be a third low, and give itself more support for a larger move, thus far it looks more like it is ready to launch on a shorter term bounce, which is why I prefer the leverage to make the risk:reward equation balance out better.

GLD 5 mins also looks like it's ready to rumble.

The gold 1 min chart has shown great signals, it was in line as of this capture, so an intraday pullback wouldn't be surprising and could be useful tactically.

Silver, one of the most manipulated assets out there, even as JPM has been in court over Blythe Masters' manipulation of the silver market since JPM inherited a large short when they absorbed Bear Stearns back in 2008, but just think about that for a minute.... JPM took over BS and with it their silver short, Blythe was manipulating silver to keep their short from getting crushed as recently as 2011. While I can't say whether JPM wanted out or not, I imagine defending that short was exhausting as Gold was running and the physical correlation of value of actual supply of both metals above ground was getting really out of hand. THE POINT BEING, IT COULD TAKE YEARS TO UNWIND A LARGE POSITION.

SLV 2 hour looks similar to my initial feelings about Gold possibly basing, silver's 2 hour looks like it wants to do the same long term.

 However for our purposes, the 10 min chart shows me a trend I can count on and work from, this was clearly in line, 3C was confirming price action.

The 1 min shows accumulation of intraday lows.

The 3 min with the typical relative divergence first that later develops in to a stronger leading divergence, the chart suggests a near term bounce.

 While the 10 min is still "in line" and kind of caps the amount of strength or accumulation in SLV, we know that we have a positive out to 5 mins so it looks like institutional money is involved, albeit not deeply, so I'm guessing this is a sentiment changing or rather "improving" move aimed straight at retail traders.

Silver Futures

 The silver daily futures again confirms what we are seeing in other places for gold and silver regarding the probability of a bigger base forming that can support a larger move for both metals.

The silver futures' 30 min chart shows a recent positive divergence that is leading.

 The 15 min chart simply elaborates on the details of "where" accumulation occurs and as usual, smart money is buying at the lows that they are likely creating to via market makers/specialists, HFT's etc. so they can buy low (low risk) and sell high right to retail.

As of this capture, the 5 min chart had just accumulated a low and was in line, right now it looks like an intraday pullback is likely.