peter degraaf concludes that while it's better to be "in with the mob," technical analysis still has some value, even in manipulated markets. i hope he doesn't bet too heavily on that:

It took blatant manipulation in July 2008 to hammer the gold price down - well below the 200DMA where bulls could always count on support in the past. This waterfall-like price drop was caused by 3 US 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, or very lucky, or 'in with the mob'.

In conclusion: Technical analysis works in markets where there is no manipulation. It also works most of the time, even in manipulated markets, in view of the fact that the manipulators also read the charts. Historically manipulations are doomed, as supply-demand factors rule in the end. The banks tried to hold the gold price at 35.00 in 1968, and during one day in April they sold 4,000 tonnes in a vain attempt to hold the line. They failed then, and they will fail in the future.

http://www.gold-eagle.com/editorials...