The Next Battleground for Gold Will Be At 1550 If the Cup and Handle Formation Completes

If and when gold breaks out of this cup and handle formation, which is a matter of probability and not certainty, the next real battleground in a new bull market will be around $1550. One of the more interesting variables will be the manner of any breakout, and the 'time' it takes to reach a minimum measuring objective.

This is quite appropriate as 1550 marks the major support level for the channel in which gold had been moving prior to the recent bear market.

A successful cup and handle formation, should this occur, would mark a bottom for gold and quite possibly a resumption of another leg of the bull market.

It will be interesting to see how the future movement of gold as a cross to the US dollar may unfold. If the money masters were wise, they would permit it to rise back into the old trend channel and seek to find a balance in the wagers with the available physical supply.

However, wisdom so often being overlooked by power and overwhelmed by it, we may have to consider that a 'break' in the market may precipitate this activation of the cup and handle and therefore the next move higher, and a challenge to 1550 that completes rather more quickly then might otherwise happen.

In seeking to extend control and overreaching, people sometimes bring about the very circumstance that guided the fear that led to their overconfidence and misjudgment.

O, what a tangled web we weave when first we practise to deceive!

Walter Scott, Marmion

And this is what continues to muddy the waters in too many markets these days.  That there has been and continues to be manipulation of prices of too many important benchmarks and assets is no longer a serious question for open minds.    There are still too many minds that remain stubbornly, or wilfully, closed to the necessity for reform.   It is not the original offense but the overreach and coverup that knocks holes in the edifice of established power.

Rather, what remains puzzling are the details: the extent of it, the actual players who are involved besides the usual suspects, and of course, any motivations that may exist then the mere greed for illicit and outsized trading profits.

Precious Metals and Stocks at the Close

Gold and silver were up a bit on a weaker dollar.

The stock market is waiting for AAPL.

Twitter is getting spanked after the close.

Stock and Precious Metals Charts - Comex Option Expiry - FOMC Meeting

Stocks pulled off a strong push higher into the close yesterday, taking back much of the losses they had been showing during the daily trade.

It is reported that we are in the 13th week of the selling of US equities by the 'smart money.'

Notice how nicely and neatly this ramp higher has been moving in the SP 500 futures just below.  I suspect that this is an operation designed to hand off equities to the 'non-smart money' ahead of another sharp decline in equity prices.  But only time will tell.  The big tickle tonight will be APPL reporting its numbers after the bell.

It is hard to handicap these markets with the lax regulatory oversight, the generally poor quality of the numbers not only from the trading feeds but also the corporate earnings reports.  So let's try and lean a little harder on the charts.

As for gold and silver, the FOMC will be meeting this week, and I doubt very much if they will raise rates.   But gold especially is the target of those financial engineers who seek to manage perceptions in the face of their serial failures, as well as traders who have lost their way in understanding the role that they play in interacting with reality.  And this is a dangerous divergence that is yet to be resolved.

This morning's economic news continues to reinforce the weakness in the broader economy despite the remarkable monetary and other support that the Fed has been extending to the largely unreformed financial sector that continues to distort capital allocation and act as a drag on the real economy.

I will try to update at the end of the day but I may not be in a position to do so.  So for now I will post the charts and information as they are as of 10:45 AM today.

The Arsenal of Hypocrisy

"The enormous gap between what US leaders do in the world and what Americans think their leaders are doing is one of the great propaganda accomplishments of the dominant political mythology."

Michael Parenti

America and Her Allies in the News by C. K. Michaelson of Some Assembly Required

On the world stage full of purported leaders who are dangerous fools, Turkey's Recep Tayyip Erdoğan has a special place. He charged the EU several billion dollars to let the EU force hundreds of thousands of terrified refugees into concentration camps in Anatolia, then upped the ante and said there would be no deal unless Turks were allowed visa-free travel throughout the EU. He also wants journalists who “disrespect him” jailed, and comedians who make fun of him extradited to Ankara for appropriate punishment - a condition that Angela Merkel found reasonable. Meanwhile his troops are gunning down women and children (suspected of being Kurds) fleeing Syria as Erdoğan pursues his genocidal war against the Kurds while trying to pretend that the slaughter of half a million or more Armenians a hundred years ago never happened. All with US President Obama – who has committed a few war crimes himself – pretends that the Armenians committed suicide...

Amusingly, the US now claims that it had understated the number of collaterally damaged dead civilians in US air strikes in Iraq and Syria, and that there had actually been 42. This does not, obviously, include the hundreds of thousands of dead and wounded civilians previously collaterally inflicted on Iraq, Afghanistan, Pakistan, Libya...

The circus over the – gasp! - Saudi involvement in, planning of and financing of both Ossma Ben Laden and the 9/11 attackers is hard to understand. (That some of the 9/11 hijackers lived with an FBI informant prior to the attack is not being much mentioned.) It has been obvious to all since the day of the attacks the the Saudis were deeply involved. That's what is in the 28 pages totally removed from the 9/11 report. Ask any of the members of the commission who produced it. On top of that there is not the “Document 17” which includes documentary evidence of the direct invoolvement of the Saudi Embassy in Washington DC in the tragedy. And Seymour Hersh's report that the Saudi government paid Pakistan hundreds of millions of dollars to hide Ben Laden seems to be another solid piece of reporting that will be ignored.

Why does the US continue to submit meekly to the Saudis? It is not the oil – we seem to have plenty. It is not their usefulness as an ally, they are scorpions in the bed. What to the Saudis have? Money. And a lot of blackmail material in the form of past dirty deeds and in the form of $800 billion in treasury notes that they use to threaten Obama.

Weekend Reading: Pride, Rationalization, and 'Cheap Grace'

"Cheap grace is the grace we bestow on ourselves. Cheap grace is the preaching of forgiveness without requiring repentance, baptism without church discipline, Communion without confession....

Cheap grace is grace without discipleship, grace without the cross.”

Dietrich Bonhoeffer

"Yet such in one shape or other is the way with the multitude of men everywhere and at all times; they do not see the image of Almighty God before them, and ask themselves what He wishes: if once they did this they would begin to see how much He requires, and they would earnestly come to Him, both to be pardoned for what they do wrong, and for the power to do better.

And, for the same reason that they do not please Him, they succeed in pleasing themselves. For that contracted, defective range of duties, which falls so short of God’s law, is just what they can fulfill; or rather they choose it, and keep to it, because they can fulfill it.

Hence, they become both self-satisfied and self-sufficient; – they think they know just what they ought to do, and that they do it all; and in consequence they are very well content with themselves, and rate their merit very high, and have no fear at all of any future scrutiny into their conduct, which may befall them...

And such, I say, is the religion of the natural man in every age and place; – often very beautiful on the surface, but worthless in God’s sight; good, as far as it goes, but worthless and hopeless, because it does not go further, because it is based on self-sufficiency, and results in self-satisfaction.

I grant, it may be beautiful to look at, as in the instance of the young ruler whom our Lord looked at and loved, yet sent away sad; it may have all the delicacy, the amiableness, the tenderness, the religious sentiment, the kindness, which is actually seen in many a father of a family, many a mother, many a daughter, in the length and breadth of these kingdoms, in a refined and polished age like this; but still it is rejected by the heart-searching God, because all such persons walk by their own light, not by he True Light of men, because self is their supreme teacher, and because they pace round and round in the small circle of their own thoughts and of their own judgments, careless to know what God says to them, and fearless of being condemned by Him, if only they stand approved in their own sight...

Yes, it is the ignorance of our understanding, it is our spiritual blindness, it is our banishment from the presence of Him, who is the source and the standard of all Truth, which is the cause of this meagre, heartless religion of which men are commonly so proud..."

John Henry Newman

The prayers of children, both in age and in the spirit, are full of needs, and sometimes ostentatious thanks and requests aloud to impress others. As we grow older, our needs are supplemented by requests for strength, and for the knowledge of God's portion for us, His will.

If we wish to grow, we pray that God will show us our shortcomings, the ways in which we have neglected to do His will, in bending our understanding of His commands to please ourselves instead. The times and places in which we turned aside from His call, not because we were defiant, but because we were blinded with distractions, and negligent in our own self-satisfaction and illusions of self-sufficiency.

If done well, we can find this examination to be an experience in growth, bearing in mind that growth is almost always a long process that is, at times, uncomfortable, and rarely cheap. But to take up that burden with His support is the path to life.

Gold Deliveries on the Comex For Friday, April 22

HSBC delivered 94,500 ounces of gold bullion at 1228.70 from their house account to the market on Friday.   I wonder if their house account includes their custodial activities.

In this case the biggest takers were the house accounts at Nova and JPM, and that big 'customer' at JPM who keeps standing for gold this month.

I just like to take the occasional note of these things.

Let's see if gold bottoms here for the short term and goes back up next week.