Thank you Ben, for this eye opener

An interesting week is behind us, a trendsetting one. For gold and the stock markets it was. The next upcoming declines, the consequences from the partially hefty losses of the markets with their future downtargets/turning points are pretty easily to be fixed now.

The S&P 500 closed with the hugest down week since 13 months. The weekly close of 1592.43 is now activating the next lower GUNNER24 Downtarget of 1548 index points worked out in last week’s issue. As a survey, in the following illustration, marked with blue color you find again the summary of the very most important conclusions and instructions for action of the last issue – this is how it was to come now…:

As to the precious metals the drama is going on. Lower and lower these investments are falling.

Here actually we experience a classical liquidity crunch for the Large and Small Specs. These players have to close now panic-struck their long-investments designed for many years because the expanding losses are eating up their still existing liquidity. Better even up now with high losses than to get Margin Calls was the motto of the past weeks and newly last Thursday.

Since the break of the 1522$ and the 26$ respectively at the beginning of April 2013 these distress sales of the perma gold- and silver-bulls as well as their increased entering into short-positions led to the situation that the osses in gold and silver have expanded more and more rapidly. With the break of the 1322$ support mark on Thursday, the liquidity crunch newly expanded. The spiral of the increasingly severe panic-struck sell-offs has not come to an end yet! I suppose that the sell-off won’t finish before the middle of August, maybe the beginning of September.

Actually most rarely the counterparts of the Large and Small Specs, the Commercials i.e. the Big Boys have liquidity problems thus not really having to worry about possible losses with their positions. On the contrary: Since they determine the precious-metal market with their nearly unlimited liquidity the Big Boys have been in a fat plus for months with their gold- and silver-shorts.

And above all they are clever! They are going to start buying now – in large quantities! They’ll have to buy now. The Code of Commercial Conduct is demanding so. They’ll have to because since Thursday gold and silver trade below their production costs!

Being gold below 1300$ and silver below 20$ the purchase is cheaper than the stuff can be picked up from under the earth. Since Thursday the Big Boys have got the $-sign in their eyes! They have with respect to the long-positions! Whereas the “little under-capitalized bums” will have to keep on unloading their longs for the next weeks more and more positioning themselves to the “wrong” side – the short-side (key word liquidity crunch) - the Big Boys will go long increasingly step by step, collecting up as collecting can gold and silver beyond the production costs.

They have to do so unobtrusively with pretty small tonnages for otherwise they would stop the vicious-sell-off abruptly, you see.

So far we got the ascertainment of the actual situation in both camps. Let’s go now to the downtarget of this vicious-sell-off circle.

An important calculated downtarget in gold was reached on Friday – the 1274:

Last Tuesday gold closed at 1366.90 thus releasing an other sell-signal because the important Support Angle in the weekly time frame was broken. On Thursday gold cracked through the 2010 Support Angle in the weekly time frame stopping at the 1274 horizontal support.  

Above you see the ruling weekly 13 candle up for the week closing. The most important recognition leading to the determination of the end of the decline is this: The 4th double arc is likely to press gold down until the temporal influence of the 4th double arc ends. This is not going to occur before 8th of July.

I suppose, feel, that the 4th will be resistance till the middle of August pressing down gold by then without mercy. The lower line as well as the upper line of the 4th and the space between the upper and the lower line of the 4th are forming the monster resistance from which anytime – at least until the middle of August – the next sell-off waves will start.

Friday showed a little bounce with a weak volume. Therefore you may not expect more than a dead cat bounce. Either it ends up at 1310, the lower line of the 4th (a very probable price mark) or it is going up to the important 1322 – monthly horizontal resistance. A back-test of the 2010 Support Gann Angle – that is naturally providing hefty resistance now – at 1338 can almost be excluded for next week!

Well, where’s the gold drama finishing in terms of price?

Since the GUNNER24 Forecasts of 04/21/2013 in the monthly chart we know indeed how important the XX22 in gold is. There was the April 2013 low at 1321.50, the long lasting horizontal support (first square line support) entailed by the 1522 etc.

1322 less 50 makes 1272. That’s pretty close to the actual Friday low which is 1268.70. So we can record that the actual decline in the monthly time frame is orienting itself to 50$ of increment. So each 50$ beneath the important 1322 a support is present. So underneath the 1322 it is 1272, 1222, 1172 and 1122. Merely theoretically each of these horizontal supports is able to finish the decline forming the several-year low and every significant break of this horizontal support will lead to the further acceleration of the downtrend.

In the monthly 4 Candle GUNNER24 gold will produce a new monthly sell signal if June closes below the first double arc, below the 1322. We’ll have to work on this assumption since the time is putting out down-pressure maybe till the middle of August. This potential June closing price below 1322 will activate then officially the upper line of the first double arc as the next downtarget in the monthly time frame. This one is situated at 1148 for September! Reaching the 1122 horizonzal support will be possible as well since the market declines in 50$ steps, you see!

For validating the possible downtargets we also have to consult the determining monthly 8 Candle GUNNER24 Up Setup. With its signals it decides much more the future course of the market concerning the existing supports and backings since gold is indeed situated in a long lasting bull market:

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