“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput






Monday, February 27, 2012

Gold encountering resistance near $1780

Based on what we have seen in the price action the last few trading sessions, gold is having some difficulty convincingly clearing the level near $1780. That has now formed as a technical chart level that will need to be taken out to set up the potential for a thrust to the $1800 mark. If the bulls can do that, the level near $1820-$1825 comes into play.

Downside support still remains untested near the $1750 level. You will recall that it was this level that kept the price from moving higher on the way up after gold stalled out there on several tests.

I will feel extremely confident that this market is going to move higher as long as we hold above $1725-$1720 on any possible move back towards those levels.

This market has had a sharp move off the lows near $1535 that was nearly unimpeded all the way to $1750. It then consolidated for nearly two weeks working in a range of some  $60 or so over that time period. The sharp spike higher through chart resistance  $1780 signalled the end of that particular range trade. It could be that the metal wants to base here a bit and gather another load of stem before moving higher. We'll see what we get in the next couple of trading sessions.




Silver looks to me like it was capped below major chart resistance at the $35.50 level on the continuous chart. Obviously the perma-bears know well the significance of that level. Shorts are digging in there and it will be up to the hedgies to dislodge them if they are to make this thing run to $39.