Andrew's pitchfork analysis of USLV

Per prior posts, I am now on silver bottom watch again.  It's very difficult to call the exact bottom of these semi chaotic chart patterns but the indicators keep on piling up.  My original model for the gold miners ETF (ticker GDX) is still intact and in fact building a strong base at the support line.  Should that support break down in a significant way then all bets are off and a rethink is immediately required.  However, with all of the other signs I am seeing along with the loss of confidence in the administration and of the federal reserve I think the odds are high that the big metals pullback is likely very near an end.

So with that I wanted to show today's chart of USLV (3x silver ETF) which shows a bullish looking Andrew's Pitchfork pattern.  This happens to be an expanding pitchfork.  The important element of this chart is shown within the blue circle.  It was here that the chart failed to break back down through the center tine of the pitchfork.  Look at how the tine has been important in the formation of this chart since early November.  The chart would always pause coming up into that line from below or coming down into that line from above.  It was the epicenter of significant gaps on several occasions.  That line is meaningful.

The next test will likely be at the first red circle.  Note that a sudden rise from here will leave the chart with a small double bottom to work off of which is a good place to begin a reversal.  If the chart can break out of the pitchfork then the next resistance will be the topmost down sloping green resistance line which was involved in a false breakout at the beginning of the month.  If that can be broken out of here then the metals will pick up momentum as a safe haven as confidence is lost in the con of big government and its debt purchasing arm which is the federal reserve.  The confessions of Huszar which I reported on earlier today make it clear: the federal reserve is supporting Wall Street. 

Anything that restricts or threatens the ongoing bailout of Wall Street will result in a mass exodus from the Ponzi for fear of being left holding an empty bag.  I say again, the main value left in Wall Street today is the promise of $85 billion per month being pumped into the system via the transfer of dodgy assets from the government (treasuries) and the banksters (bad mortgages) to the balance sheet of the federal reserve.  All of these bad assets will eventually default and the federal reserve will in some way go bankrupt.  When that happens, the US dollar will also be exposed as worthless.  Wall Street will crash first and then the feds will go into high gear bailing them out yet again and this is what will finally lead to the global realization that the US dollar is a bankrupt debt note that is not worth the paper it is printed on.

I'll say it one more time since it is of such paramount importance to understand.  The main thing keeping this debt Ponzi rolling is confidence.  All of the value has already been sucked out of the system long ago. People simply haven't come to the realization that the value has already been stolen.  They look upon a forgery hanging on the wall and worship it as if it were the authentic masterpiece.  But social security is completely bankrupt and only being funded by debt at this point.  The other entitlement programs like medicare and medicaid never were funded, they were always transfer programs in order to buy boomer votes.  The dollar has had all commodity backing removed from it.  The coinage has all commodity backing removed from it including the penny.  The only real commodity coin left in the US monetary system is the lowly nickel.  It has not been replaced by silver colored pot metal yet for some reason.  The value of the metals in a nickel are worth more than 5 cents.  The nickel is in fact real money.  The rest of it is fake, counterfeit, forgery money.

So when the main stream media comes out in the not too distant future talking about all the reasons for the collapse except the true one, hopefully people will not wonder too hard about how it all could have collapsed so quickly such that "nobody saw it coming".  That of course will be just another cover story for the con men.  Plenty of students of the school of Austrian economy know that the coming collapse is inevitable and that the speed of the collapse will be due to the fact that the system is already bankrupt.  The king is naked and has no clothing yet people are too controlled by herd think to see it and to admit it.  Thus, when people finally wake up from the herd-spell, the realization will spread like wild fire.  It takes very little time and energy to unveil something that has already occurred.  The victims of Bernard Madoff didn't all get ripped off in a 2 week period.  They got ripped off over time. It was just the reveal of the crime; the mass realization of it that happened so quickly.