3:45pm Central:

Segment 4 – Anthony Cherniawski, Chief Investment Officer –

CLEAR CHANNEL DALLAS – KFXR/1190-AM And Streaming Live @

Good afternoon!

This afternoon I wish to start with Gold. Gold futures are down over 21 points as I write and have most recently dropped just below 1677.00. You will note that the charts attached is an end-of-day chart which doesn’t show intra-day action. I am looking for a decline below 1662.00, which may trigger a panic decline of over 500 points. Our charts show multiple bearish patterns, whith the least bearish pattern pointing to 1251.00 as the next target.

This kind of action in gold and silver shows a potential liquidity problem, which first shows up at the periphery of the markets. By “the periphery,” I mean the smaller markets that are most affected by liquidity flows. This morning Fedex reported that global deliveries are down substantially. This is highly unusual during the Christmas Season. Package deliveries are one of the best early indicators of an economic slowdown. In this case, the rate of decline indicates a high probability of a netive GDP in the first quarter of 2013.


Despite the increase of liquidity injections by QE4, the bond market is softening considerably. Today the Long Bond is down again (not shown in the chart). Should it decline beneath mid-Cycle support, there may be a substantial decline in bonds.

The scenario as I have described it so far is alarming, since it shows that liquidity is being absorbed faster than it is being injected. Ben Bernanke may be hiding another banking crisis in the making.


The SPX may be the last place to look for the liquidity crisis since the leverage is still positive. However, today may be an important pivot, which may bring back the margin calls once the SPX goes back below its 50-day moving average at 1414.36. Today’s probe higher stopped at the 78.6% retracement level, which is considered to be the maximum normal retracement.

This week is “quadruple witching” options expiration, which may increase market volatility considerably.


The Euro completed a double zigzag correction. Zigzag corrections are a good indicator of markets attempting to buy time. In this case, the second zigzag appears complete. Today is also a Cycle Pivot day, which allows for a reversal in the next 24 hours.

Good luck and good trading!


Anthony M. Cherniawski

The Practical Investor, LLC

P.O. Box 129, Holt, MI 48842

Office: (517) 699.1554

Fax: (517) 699.1558

Disclaimer: Nothing in this email should be construed as a personal recommendation to buy, hold or sell short any security. The Practical Investor, LLC (TPI) may provide a status report of certain indexes or their proxies using a proprietary model. At no time shall a reader be justified in inferring that personal investment advice is intended. Investing carries certain risks of losses and leveraged products and futures may be especially volatile. Information provided by TPI is expressed in good faith, but is not guaranteed. A perfect market service does not exist. Long-term success in the market demands recognition that error and uncertainty are a part of any effort to assess the probable outcome of any given investment. Please consult your financial advisor to explain all risks before making any investment decision. It is not possible to invest in any index.

The use of web-linked articles is meant to be informational in nature. It is not intended as an endorsement of their content and does not necessarily reflect the opinion of Anthony M. Cherniawski or The Practical Investor, LLC.

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