"NFTRH has gone from 'not bullish' to bearish on silver. How could I be bullish with a chart like this?"
I am reminded of the prominent analysis calling that downward sloping channel (black lines) a massive 'Bull Flag' targeting 70+. It's called a downtrend channel. Period.
As for gold:
"When gold lost the EMA 160 at around 1650, technical damage was done that could take some time to undo. When impulsive moves happen, they often indicate more activity to come in the direction of the impulse."
So gold is making a bear flag rise over the last few days on holiday trading. Silver is prepping to seek out a target at 26 (there is also an epic target lower at 20, that I am not yet actively managing). This could bring the analysis to 'bullish' sooner than expected. I was prepared for a bounce and then resumed bearishness in January, but:
"If precious metals, commodities and stock markets continue down right now – no Santa, no holiday joy – then it is going to hurt in the short-term, but a quicker path to panicked policy making would be in play, which would be bullish for the precious metals."
One problem however, is the strength in the broad markets. If the PM's continue down but broad markets levitate, policy makers would probably enjoy seeing the gold bugs put back in the hell they came from.
In the event however, that SPX goes to the 1340-1360 target and the precious metals remain pinned (indicating true austerity on the part of policy makers?), then the broad markets would be an epic short at that point. If however, this is all just holiday maneuvering in favor of official keeping up of appearances, the precious metals will be an epic buy.
There are always opportunities. The interesting part is in divining and defining what they will be. Right now, I lean toward an epic opportunity in the precious metals sector, precisely because gold and silver look like they are about to break down and the pain is such that a total psychological washout is possible. Meanwhile, HUI holds the 480 to 500 zone (for now).
Amid the holiday cheer, Ben Bernanke and friends get to sit back and enjoy the picture that is shaping up. Broad stocks are rising, precious metals are declining and there is no real obvious pressure to panic on policy. Mmmm... nice and comfy.
Gold bugs have seen this scenario all too often. Trouble is, the gold bug generals are always on the bull call and the gold bug worker bees always seem to stay in line as directed. If precious metals bulls (I am of course, one) can find a way to have their convictions but keep an independent view, they can get through this. If not, they end up spending huge portions of their lives being miserable on the way to one day being right. To me, it ain't worth it.
To summarize the above, there is bullshit in play, but none of us has the right to simply show up and win each battle simply because we are convinced we are right. As I have said before, this is war and you do not survive in this war by blindly following all orders. You survive by knowing who and what you are, but also by making adjustments and managing risk.
We could be setting up for pain first, but real bullishness sooner than I had expected. We'll just have to see how the holiday and post holiday trading shakes out.
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