Peter Degraaf: Does manipulation render technical analysis obsolete?

9:20p ET Wednesday, January 21, 2009

Dear Friend of GATA and Gold:

Market analyst Peter Degraaf writes that technical analysis of a manipulated market like the gold market is still of some value insofar as it can help plot and predict the manipulation. He also acknowledges that the manipulators can make TA utterly useless. Degraaf writes:

"It took blatant manipulation in July 2008 to hammer the gold price down -- well below the 200-day moving average, where bulls could always count on support in the past. This waterfall-like price drop was caused by three U.S. banks that switched from being '2 to 1 long to short' in early July to '22 to 1 short to long' at the end of July. This type of action by banks that are not in the gold-producing business smells to high heaven. This is one time when technical analysis was of little use. Anyone who saw this coming was either very good, very lucky, or 'in with the mob.'"

Degraaf's commentary is headlined "Does Manipulation Render Technical Analysis Obsolete?," it credits GATA's work, and it can be found at Gold-Eagle here:

http://www.gold-eagle.com/editorials_08/degraaf012109.html

And at GoldSeek here:

http://news.goldseek.com/GoldSeek/1232608200.php

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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