Regular readers know that I am not a proponent of technical analysis, based upon the simple/obvious fact that most of the (long list of) assumptions on which “T/A” is based are hopelessly invalid.
At the top of that list are “free and open markets” and “perfect information” (for investors). Anyone believing those fantasies has probably been ingesting powerful narcotics. Thus T/A has become a device for manipulating the Sheep – rather than any sort of legitimate tool of analysis.
This does not mean however that we should simply completely ignore it. The fact that so many of the Sheep allow themselves to be guided by it means that we know how it will be used (against us). We’ve seen many examples of this over the past year and a half. The bullion banks would wait for any “technical break-out” in the sector – and then pounce on the market, creating a bearish “reversal”, and negating any positive optics in the sector for the Sheep.
As the Manipulators of T/A; both the bankers and the propaganda machine love to throw their “bearish indicators” at the market whenever possible – despite knowing that those “indicators” were 100% contrived (by themselves). Conversely, if the propaganda machine wants to “control the message” (an important goal), then it is also forced to acknowledge positive T/A, when it’s staring them in the face.
So we see today, as Bloomberg acknowledges that gold has (quickly) run up above the “200-day moving average” (the average price over the past 200 days), for the first time in approximately six months. The reason why pushing through these technical thresholds still retains some significance is because as gold (and silver) blow through these barriers it provides the bullion banks less leverage/propaganda to use in driving prices down – thus their capacity to counter-attack is seriously eroded.
It’s possible that silver could also cross this technical threshold as soon as today. That leaves just one more technical objective: the so-called “Golden Cross”. This is where not only the current price, but also the shorter term moving-averages push above the long-term (200-day) moving-average.
Now here’s what makes obsessing about such technical indicators so silly in the first place. All that this (bullish) T/A is telling us is that recent prices have been higher than less-recent prices. Nothing more! And no one needs “technical analysis” to tell them that…
“Gold Bulls Strongest In Nine Months As Hoard Builds: Commodities”
…Gold closed above its 200-day moving average on Aug.22 for the first time since March, and that may be a “shot in the arm” for prices to rally toward $1,700, CMC Markets U.K. Plc said in a report that day…