Gold And Silver - More Downside Likely

Gold And Silver - More Downside Likely

In our previous article, we pointed to the unusually high volume day on 14 December, in both gold and
silver, posing the yet unproven possibility that said volume could be stopping volume, putting on the
breaks to the market decline. [See Gold And Silver - Central Bankers Send A Message, second and fourth

Today, we look at an update to see what the additional market activity is saying. The only chart to
review is gold because it is stronger than silver, and if there is a problem in gold, it is likely more so for
silver. The daily shows the Ease of Downward Movement, [EDM], and potential stopping volume from
previous chart, and subsequent market activity, since.

What should be noted is a comparison of the move down and the response generated over the past
several days. Just take the single day of 14 December, which is the last wide range bar down, and
see how many days this current rally has lasted, four days since the low. After four days of an attempt
from buyers to rally gold, we see a lackluster response, with not all ground lost being recovered. When
four days of effort cannot retrace all the previous value lost, we can say the market is in a weakened
condition.

Also, note how volume has declined as price rallied. This tells us that the number of buyers has been
greatly maybe even a new lower low.

Why, aside from the reasoning just put forth? When demand is weak, the market HAS to go lower to
find more demand. Over all, sellers remain in control. Where we always recommend starting one's
analysis from a higher time frame, let us take a look at the weekly, just for drill.

NO question here about how weak demand appears to be. The move from 1,700 down to the recent
low, second bar from the end, essentially took three trading days. The response rally, since, has been
just two trading days, last bar, and note how small is the bar compared to the decline. This higher time
frame supports the analysis from the lower daily time frame.

Next potential target would be somewhere at/near the September low. Caveat emptor.

Swiss Franc - At;Danger Point Support Area - Thursday, January 12, 2012
Gold And Silver - 2012 Off To An Interesting Start - Tuesday, January 10, 2012
Precious Metals - Review Of Annual - Wednesday, December 28, 2011
Euro Currency - Flip A Fiat Coin - Monday, December 26, 2011
Gold And Silver - Annual And Quarterly Charts - Thursday, December 22, 2011

Michael Noonan is the driving force behind Edge Trader Plus. He has been in the futures business for 30 years, functioning primarily in an individual capacity. He was the research analyst for the largest investment banker in the South, at one time, and he managed money
in the cash bond market for a $5 billion pension fund using Peter Steidlmeyer’s Market Profile.

Proficient in Gann, Elliott Wave, Market Profile, etc, Mr Noonan no longer uses any of those technical procedures. Instead, his primary focus is on developing market activity, relying solely on the information generated by the market itself, such as the interaction between price and volume, and how they relate to important price levels in the market structure. He incorporates proven market principles, such as knowledge of the trend, supply and demand, along with disciplined rules for to find developing high probability trade opportunities.