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Technical Analysis VS The Gold Banksters

By Stewart Thomson      Printer Friendly Version Bookmark and Share
Feb 26 2010 3:18PM

  1. I’ve referred to technical “lines in the sand” on price charts being perhaps better defined as “lines in the banksters’ sandboxes, drawn by their children, and obsessed over by most market technicians”.

  2. Yesterday we saw such lines in the sand apparent on charts for Gold, Silver, Oil, Dow. I highlighted those lines, and the games the banksters had planned to hit what I believed were massive numbers of stoploss orders to exit longs and enter new shorts.

  3. Take a look at this chart: Silver Volume Chart Notice the tremendous VOLUME that took place yesterday. Here’s a 2nd look, with the line in the sand highlighted. Silver Volume Chart #2

  4. Those who sold out yesterday or went short then got to watch gold and silver blast higher. If price were to break that line in the sand in the 15.70 area again, traders would likely ignore the breakdown, thinking they were faked out before, so they wouldn’t be made losers twice in a row.  Yet, now there’s a chart pattern that has developed that opens the door for lower prices. 

  5. Silver Head and Shoulders  The potential target is about 14.60. That’s IF the pattern activates with a failure of the neckline area, and IF price fulfills the projected technical target. That’s a lot of “iffing”. By the time Joe Blow technical analyst got short if the neckline failed, price might be well below there, making the profit on the trade negligible and more likely a LOSS, since the banksters would start whipping price around as soon as the neckline broke, gunning for the stoploss orders.

  6. Still, because the head of this pattern is a head and shoulders top itself, a phenomenon I refer to as “head and shouldering action”, it carries a bit more weight, and given that yesterday’s news that Asian central banksters might buy IMF gold has given a hypo needle of adrenaline to the gold community’s top price chasers, well, I have to be slightly concerned.

  7. My concern is not that gold might fall. Obviously you need to be a seller into this strength from gold 1090, per your pre-set sell orders, depending on the size of the pgen you are running.  My concern is that gold’s volatility is about to take a major leap. Our resident gold dealer used the phrase “Fireworks coming!” yesterday.  I think that sums up the situation as good as any. Your ONLY reason for selling ANY silver here and now would be because you are booking profit on a portion of the position you bought at lower prices.  If you are a silver bug and didn’t buy any silver after it fell in price a FULL DOLLAR, my question would be:  Why DIDN’T you buy ANY?

  8. I believe that yesterday’s downside fakeout was just a taste of the many such “April Fool’s” type events, coming in the major markets, in much greater size and velocity that what you just witnessed yesterday.   

  9. The EURO is likely doomed, according to Dennis Gartman. That’s a gold-positive event, if it were to occur. Perhaps the paperbugs can hire an old analyst from one of the former communist nations to paint you a picture of why the destruction of a major paper currency is gold-negative.  They’re good at that type of work.  In fact, I bet if ALL the paper currencies failed, they’d still find a way to label that a gold-negative event.  

  10. It will be very interesting to look at this week’s liquidity flows report for the Euro, to see if the banksters are of the same opinion as Mr. Gartman and the fundsters.  They have been building a massive long position in the Euro, and this week is going to be critical to see if they are still committed to their position.  You can pretty much assume they are, or the Euro would have collapsed as they bailed.  I’m not even sure the funds have enough cash to absorb all those positions if the banskters bailed. 

  11. My own view is they likely not only didn’t sell, but probably ADDED to their Euro long position.  As did I. I told you most of the story of Enron and Nortel.  You know Enron was one of the most widely owned stocks in America, and people had their ENTIRE pension money in there.  Nortel was THE most owned stock in Canada. I bought a modest position in Nortel as it fell from $6 to $2 and sold into $6.  While the public was wiped out as it tanked from $124 to $2. I doubled my money and booked it. That’s my Nortel story. 

  12. YOU don’t need to make a fortune in Gold. Because everyone is going to wipe themselves out, or at minimum, make themselves drastically poorer, with their charge into paperbug cash. I didn’t make a pile of money in Nortel, but everyone else was wiped out, so RELATIVELY SPEAKING, I DID make a FORTUNE.  It can be the same for YOU with GOLD, with much higher stakes for all players, unknown to most of them.

  13.  I wouldn’t get wildly excited about buying the Euro, keep the size small, but understand that a rally there could be PART of the rocket fuel that blasts GOLD much higher. The Gold Bears told you that when the Euro fell, gold would fall.  Wrong. If the Euro soars against the USD, even in the shorter term, do you think gold will just stand on the sidelines? I wouldn’t bet on that happening. 

  14. The Euro chart has some very interesting action, at the same time as the US dollar chart is showing the same type of action, only in reverse. The bottom line is the momentum is failing on the US dollar while price rises, and momentum is surging in the Euro while price has fallen. Here’s a look at the daily chart for the Euro: Euro Daily Chart You can clearly see the rise in momentum and stochastics while price has faded over the past couple of weeks.

  15.   Here’s a closer look at the trading action.  Euro Converging Supply and Demand Trendlines  Should price bolt over the upper line, the supply line, a massive fundster short covering rally is not guaranteed, but it is highly possible.

  16.  The GAME, of course, will be to see how many leveraged pinheads the banksters can whip in and out of their positions should price move over that line, before price moves substantially higher.  It’s already made one move over it and price immediately was pounded back down.

  17.  Lines in the technical chart sand tend to cause investors to act in greater size, to risk more, the more important those lines seem. This is a key point: While it’s TRUE that a breakout over a “key technical price point” is more likely to be lead to a big move than other technical events, it’s also true that because investors have more money on the line, they cannot stand as much movement  against them in price, so in the real world their odds of making money remain very LOW.

  18.  So, just as yesterday’s bankster game was to whip metals investors in and out of their positions in SIZE around the gold 1090 marker, today’s “line in the sand” game appears to revolve around the downtrend line on the Euro. “Jump in, we’re going to break out, no, wait, it’s failing, short it, the rally is dead!”  In, out, losses booked almost immediately after the positions are entered.

  19. I’ll follow up this update with more BULL lines in the sand. The banksters are herding the leveraged price chasing ants back and forth in their market pot, all the while turning up the heat. 

  20.  What about YOU?  Sit in your chair and look up at the ceiling. That’s Gold $1400.  Make note of that.  Next, look down at the floor. That’s gold $700. Now look at your accounts, your gold, gold stock, and gold-related items. Do YOU hold so much gold that if price fell to $700 you would start handing it to the banksters in a panic? 

  21. What about Gold $1400.  If price opened leaped to $1400 in an hour, would YOU be satisfied with the amt of gold you are holding now, then? I’ve considered both those questions very carefully, and answered it. With action in the market.


  23. Remember, most of your neighbours, even your own family, most of the people in the Western world stand to be impoverished in a multi-decade death of a thousand cuts game played by the banksters to complete the greatest wealth transfer of all time. From the public to themselves. You don’t need 191 tons of gold to emerge from this crisis vastly wealthier, relative to the average person. The moronic public will CONTINUE to ignore gold, as it makes it’s way hundreds, and then thousands of dollars an ounce  higher in price. 

  24.  Why?  Because their focus is on paying their debts and bills, and the money they have to pay those debts and bills is being devalued against gold year after year, and set to begin a whole new accelerated state of devaluation. 

  25.  I’ll post some charts and videos on the US dollar and other “lines in the sand” this morning. Lines in the sand are important technical tools, but don’t let them over rule liquidity flows when you look at a market, or you might not be around to draw your next trendline in the sand.

  26.   Question:  Is it a line in the sand? Or a line in the banksters’ sandbox? As I get ready to send this off at high noon today I’m a booker of profit into this strength in Euro and Gold, this “breakout”. Have you bet too much money on a technical line in the sand on either the buy or sell side? Buy weakness systematically.   Not breakouts over lines in the sand. Sell strength, but do it systematically, not ad hoc. Don’t sell lines in the sand breakdowns.Here come the banksters’ kiddies to the sandbox. It’s Playtime, and the question is:                                                         

Are You Prepared?

Special Offer For Kitco Readers:  Send me an Email to  and I’ll rush you my free “Gold and Silver Ratio Report”. How much silver should you hold compared to gold, and why silver may be set to exponentially outperform gold despite the apparent horrific short term technical picture. I’ll include the latest liquidity flows reporting, showing you the battle of the banskters and the funds.  The picture of who is taking what action may shock a number of you. 

Cheers, st.

Stewart Thomson
Graceland Updates
Feb 26, 2010



Risks, Disclaimers, Legal: Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line: Are You Prepared?