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Jim Sinclair continues:
“Technical analysis, when looked at, is really everybody looking at the same thing. So the sellers are chasing each other trying to find the bid. I believe that what started all of this is purely political in nature. I firmly believe there is no political will on the planet anywhere, but especially in the Western world, to invite a severe deflation.
As the deflationary forces continue to surface you will see the absolute opposite. I firmly believe you are more apt to have QE to infinity than you are to welcome rising unemployment and declining business activity.”
When asked about the technical damage in the gold market, Sinclair stated, “It isn’t really longer-term. The technical damage right here and now is something that from today’s lows could be corrected in a few days, easily repairable.
You’ve got support between $1,549 and $1,577. You’ve also got it overlaying $1,519 to $1,572. There is every possibility that you’ve seen the absolute worst of this as we’re talking now.
The most important thing is volatility. One thing this shows you, and it increases continually, is this is the wildest chop we’ve ever been in, in the history of trading gold, in terms of ups and downs. It means to me that gold is going to rise to prices even higher than I expected....
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“I don’t see gold trading significantly lower than it is trading at right now.”
When asked what his father Bert Seligman and legendary trader Jesse Livermore, who were business partners, would be thinking on a day like today, Sinclair replied, “If this isn’t a sign of capitulation, I’ve never seen one. Today I think that’s just what you’ve seen.
You’ll know very soon. It will depend over the next few days whether or not this supposed technical damage is not technically repaired.”
When asked how Bert and Jesse would play gold right here, Sinclair commented, “They were momentum traders. They wouldn’t seek to be the first ones buying or the last ones selling.”
When asked what Bert and Jesse would look for to indicate a turn in the gold market, Sinclair said, “An upside that erased the activity, or in the parlance of TA (technical analysis), a move above the 200-day moving average.
They wanted 80% of the middle. They didn’t care about giving away 10% to somebody else on both sides. They would look for a defined decline in the momentum of the downside before they would start operating on the positive side.
In those days momentum was actually part and parcel of listening to the level of the voices on the trading floors because you didn’t have all of the statistics so fast and so accurately (as you do today). So if selling came in and the sound of the voices were to pick up, that would be a sign that momentum was increasing. It actually had a lot to do with not only reading the tape, but listening to the action.”
This was an extremely important and timely interview with the man whose father was business partners with Jesse Livermore. Sinclair discussed the recent gold action in great detail, what it means for the listeners globally and where we are headed from here. The KWN audio interview with Jim Sinclair will be available shortly and you can listen to it by CLICKING HERE.
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
Jim Sinclair - Why Gold Was Smashed Today & What’s Next
With gold trading down over $60 and silver lower by more than $2, today King World News interviewed legendary Jim Sinclair. When asked about the action in gold, Sinclair stated, “Statements made by Mrs. Merkel, in Germany, this morning, would have us believe that both the US Fed and Germany’s influence on the ECB would result in a willingness to accept a severe deflation, rather than willingness to accept a severe inflation. The selling (in gold) sent some of the fundamental guys out of their positions in gold, which affected the technicals.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
December 14, 2011
