CME To Smash Gold and Silver
By Warren Bevan Printer Friendly Version Bookmark and Share
Nov 7 2011 11:02AM
The markets were wild this week and in the end ended up at least 2% lower in the US. Two huge down days, two large up days then Friday saw modest weakness into the weekend.
To say the markets are schizophrenic is an understatement and weíre sitting on the sidelines in the swing trading portfolio, although these wild gyrations are setting up some pretty sweet charts that may give us a great chance to make some quick profits in the very near term.
The big swings were caused mainly by the Greek wavering on a potential referendum. I donít know whatís wrong with these guys over there but they caused huge markets disruptions and look set on continuing the mayhem until something certain is set.
Late Friday night the Greek Prime Minister survived a vote of confidence by a margin of 153 to 145.
Letís look at the charts which look great, but the CME has thrown a wrench into the spokes late Friday night so please keep reading to hear more about that.
Gold rose only 0.66% on the week but did perform admirably with a couple solid days in the mix. I apologize for the chart being a bit complex this week. I normally try and keep things as simple as possible here but itís not in the cards this week.
We had a breakout from a W pattern and now weíre forming an uptrend channel with higher highs, which is awesome.
Looking back to the breakdown in September from the double top gives me an uptrend line which looks to me to be the next target for gold, and itís likely to be hit in no more than a week and a half.
From there, around $1,840 by the time we get there, we should be expecting a consolidation and perhaps, if we get lucky enough, a handle of a cup and handle pattern will form, which would then propel gold well past the coveted 2k area.
All in all itís shaping up to see a nice run into the end of the year and Iíd expect a price over 2k by years end if we get lucky and the above plays out.
The GLD ETF volume was perfect. Low volume on down days and strong but not outrageous volume on up days. Perfect bullish action as it should be.
Gold is acting in textbook fashion these day which is odd.
One thing to note is that Monday November 7th, Indian markets are closed so we could see weakness with their lack of buying, add to that the manipulative antics over at the CME which I talk about later and weíre sure to see the gold chart messed up a bit in the short term.
For the CME to make this move with the known lack of buying out of India on Monday just seems a little to perfectly choreographed to me.
Silver didn't fare quite so well and dropped on the week to the tune of 3.64%. While the week was down, the chart is very constructive. Silver recently broke out of the triangle Iíd been talking about here and now is coming close to a resolution in the much larger triangle which will lead to a much larger move.
The large triangle is getting tight here so we are going to move one way or the other within a week or maybe a little more, but not much.
Iíve been known to read charts wrong at times as charts like to do that to a fella but this one looks really good for higher prices and soon.
Get your silver on sale now as itís going to be at least ten times higher as I talk about later, and for me that is a layup, it should go much higher