One of those busy macro charts comin' at ya. I am getting a bit tired of fooling around with the short term noisy picture of gold and want to again shift to the big picture where it is so quiet and where rational and monetarily sane people should be focused. Sometimes the trader in me gets interested in the short term, but this is where the real money is made - or preserved.So, despite the less than bullish short term potentials that have been shown on the blog recently, the big picture is much more instructive to what is really going on. If those who remain unprepared for the next inflation cycle are lucky enough, a decline to the noted support zone just above and below 700 would indeed be a gift. Support up higher would need to break first however, and that roughly corresponds to the daily support we are watching in the short term. But again, that is the noisy short term stuff.
What I find interesting in the big picture is the expanding volatility, represented by the MACD momentum indicator that has awoken from its slumber in a big way since well before Armageddon '08 began its eruption and on through today's Hope '09 festivities. This implies elephants stampeding in and momentum players being driven out. The MACD is actually a nice visual of a real bull market being played to the fullest. It is a picture of winners and losers with correct perceptions and bogus ones. It is a picture of a noisy struggle that will ultimately shake out with investors having made their beds based on their perceptions and based on who they choose to believe.
Meanwhile, the lower panel shows the 3 month t-bill interest rate, or what used to be an interest rate before the United States finished devouring all of its seed corn. Note the steady decline in the 'interest' in participating in the US as a going concern? When people (or entities, or global business partners) buy t-bills, they are concerned about solvency and they may also be concerned about inflation. This panel shows a long and ongoing march to the bottom while the chart of gold above is a reflection of what is probably the best monetary tool to avoid the devastating effects of this degradation.
First things first however; the short term must play out and perceptions must be sorted through. Winners and losers must announce their intentions before the real macro play kicks in for all to see.
Side note: Please do not read too much into the fork. I am just having some fun with it again lately.
Edit (10:59) Reader JC nails what I am shooting for:
Greetings Gary -
Always enjoy your stuff. The charts you posted today are the encouraging visuals we need to see. This is what makes one take a step back to get a birds' eye view of what is reality, for there indeed is much noise & confusion going on at the ground level. I think at this point the only factor of any relevance is the Acceleration Rate of already established trends.
Keep it coming.
Best, JC
