Monday, November 29, 2010

Re-visiting November 16

Below is a re-post of a blog entry from Tuesday evening, November 16. I re-post it tonight to prove(?) the idea I put forth that evening:
"I took some time tonight to review the charts of several of my favorite commodities and I found that they all have something in common.
After reviewing gold, silver, wheat, soybeans and crude, I found them all to about 1-2% away from what would be looked-back-upon as very logical bottoms. I find this quite interesting from a correlation standpoint.
We've all observed the PMs getting smoked for the past week.  No doubt we've seen the entire commodity sector get smacked around pretty good. But would you have thought their charts looked so similar, not only on the upside the past six weeks but back down this past week, as well?
This draws me to a conclusion in which I am quite comfortable. What we have seen in the past week is a wholesale selloff of risk assets. Nothing more. The five commodities listed above are related only to the extent that they are dollar-denominated. For example, wheat has an entirely different set of fundos than gold but the wheat chart is almost identical in terms of percentage move.
As this relates to the PMs, it is further proof that we are simply seeing a price correction. Not a top. Not a new paradigm. Not a Wave 1 of Bear 1 of...blah, blah, blah Elliott nonsense.
Gold will probably test today's lows and may even see 1320 but I am supremely confident that that is as far down as it will go.
Silver will test
25 again but no way it goes much below 24.75 before rebounding sharply.
Crude's gonna find a ton of support between
80 and 82.
Wheat may see
$6. If it does, holy cow! The chance of a lifetime to buy. Very tight global stocks and a long, cold winter guarantee it won't go any lower.
Beans between
1160-75 are a steal.

My point, again, is that all these commodities are within the same % of very substantial support.
The change in sentiment that has caused this correction is very near the point where it will flip back.
Keep the faith. Buy this final dip. Much fun lies ahead."



OK, so what is the point? Well, I think I'm being proven correct. All five commodities were experiencing a simple correction; a temporary move away from "risk assets". Nothing more significant was happening. This is proven by the fact that all five stopped and reversed course almost exactly where predicted. 


Gold: Had hit 1329 on 11/16 and double-bottomed at 1330 the next day. Now 1367. +2.86%
Silver: Same thing. Hit 24.98 on 11/16 and 25.02 on 11/17. Now 27.17. +8.77%
Crude: Made a low of 80.28 on 11/23. Now 85.89. +6.99%
Wheat: Hit 6.18 on 11/17. Now 6.50. +5.18%
Beans: Traded down to 11.75 on 11/17. Now 12.35. +5.11%


As this relates to the precious metals, these rebounds prove to me that the down move from 11/9 thru 11/17 was, however painful, just a simple price correction within the ongoing, secular bull market. Only if silver and gold make new closing lows below 24.98 and 1329 should you begin to get nervous that something more significant is happening. These numbers now provide a very telling "line in the sand" for us bulls. Until then, keep the faith. Buy all dips. Hold your ground. Rest well. Much fun lies ahead.

43 comments:

  1. Remember to click Turd's ads!

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  2. Lovin the blog man, keep up the great commentary!

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  3. gold and silver just popped up

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  4. Getting a little antsy waiting for Harvey's update...

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  5. I'm sure Harvey is triple checking all his numbers....this is potentially the day... as you all know if it's obvious COMEX can't deliver, buy buy and buy more physical...

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  6. Pouring a glass of scotch...waiting for Harvey's post now...Turd, please figure out a way in which we can help support your site.

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  7. Hey Turd,

    Great work and nice blog. Congrats.

    Bay of Pigs

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  8. Turd I think you can have an Amazon ad and from any purchases of books etc that we make by clicking on it,you get a small commision from Amazon.

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  9. Greetings from Norway..This is by far the best blog about PM's I've ever come across, and I would happily donate as well to keep this site going.. Keep up the good work "Turd"!

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  10. Turd,
    Thanks for the great work on the blog. Thanks to you and Harvey's reports, my knowledge of the inner workings of the COMEX has exploded over the last couple of weeks.

    Preliminary Metal Futures report is up at:
    http://www.cmegroup.com/daily_bulletin/Section62_Metals_Futures_Products_2010230.pdf

    Open Interest for Dec10 Gold: Down 43294 to 16118 contracts
    Open Interest for Dec10 Silver: Down 11957 to 5251 contracts

    Delivery Notices for today at:
    http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsReport.pdf
    Gold: 5016
    Silver: 56

    I am new to this whole COMEX-watching, so I have no idea if these numbers are significant at all, or how accurate the preliminary numbers are, but that seems like a lot of paper short-covering with nearly all of it being rolled over to Mar11.

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  11. @ Ninja Report

    5251 silver contracts are not much of a stress to the bankers. Looks like CRIMEX will survive December. :-(

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  12. This comment has been removed by the author.

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  13. Looking at the monthly numbers on the Year-to-Date delivery notices report at:
    http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf
    16118 and 5251 look like big numbers, but not the overpowering assault of a physical squeeze.

    I will be eagerly watching to see what the final numbers and the seasoned pros have to say tomorrow.

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  14. Turd,

    Been keeping up with the blog since the start - great work.

    I'm concerned about another 2008-style drop in dollar-denominated prices next year as the Euro weakens. I know ol' Benny will try his best to keep it from happening, but I really do think another unraveling and escape to USD "safe haven" is inevitable. What do you think long-term?

    Thanks

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  15. You know, I did a google search for Blythe Masters and there happened unto a page with lots of photo's of her. I couldn't help but notice, she looks ALOT like the Borg queen from some of those Star Trek - Next Generation movies/shows from the 1990's. Without being silly... I know it is just fiction... but I found the irony just a little amusing.

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  16. This is the most brilliant idea! I told all my peeps about it. This is my favorite Site now!

    We are like Turd's Band of Monkeys. Eat your heart out Blythe.

    You can train your Monkeys so we could be a big Force against the EE.

    What's next Turd?

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  17. Bizarre, 825 and silver shoots up like a rocket, did someone just blow up?

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  18. Jesus H. Mother of god!!

    What up Turd?

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  19. Ninja's charts and Harvey's charts are Greek to me. I am in the Medical Field and am totally lost except for someone else's conclusions. Can anyone supply a dumbed down lesson on how to read this stuff? :-)
    Thanks !

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  20. The mongol hordes are charging Masters front line. It's going to be a bloodbath.

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  21. If we take out 28.20 a all out push will be made for 29.34...Masters final line of defense!

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  22. Well, isn't this fun? Looks like I got the top end of my "1375-85 by tomorrow" prediction. Its already a great week and its only Tuesday.

    Let's try to work from the top:

    Debi: I made $13 yesterday! Seriously, I think thats great.
    George: Thanks for the tip.
    Ninja: Great stuff. Thanks.
    Debi: Next is a close above 1385 in gold. Would signal that a move back to 1424 is coming...quickly.

    James: Though another 2008-style global margin call is possible, I rather doubt it could impact gold. As you're seeing this morning, gold is regaining its status as the one, true global currency.
    RMc: Blythe does certainly look the part.
    Cali: What we're looking for is how many December futures contract holders "stand" to take actual, physical delivery of the metal vs how many just simply roll their positions into 2011. Many of us believe that the Comex does not have nearly enough actual silver to physically settle all of the "paper" silver they create in suppressing the price. If enough entities stand fro delivery, we could get a breakdown of the Comex and a huge price runup in silver. I'll try to create a specific blog post on this later today.
    Derek: No so fast. We're currently at 1386 and there's still $34B in POMO coming this week.

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  23. dd: Let's get past 28.20 first. Gold looks terrific, however. All those fresh shorts that the EE created last week to paint that double-top are now underewater. HAHAHAHAHA

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  24. Nothing short of an outright Irish or Spanish default is going to stop PMs now.

    Lucky for us the Euros are dead set on avoiding a default, virtually assuring ECB bonds or ECB's version of QE.

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  25. I know Turd...I'm learning to be patient...not very easy...

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  26. I've been reading your blog and enjoyed it so much I thought I'd share my own technical analysis of silver. I trade technically full time, intra-day, and recently observed that during this orderly correction from the recent high that @ H4 time frame silver formed a near perfect cup&handle pattern. If todays move were to close above $27.91 then I would look to see the handle projection of $29.38 (The recent high). For those who are technical you will note that this would imply a 'double top' (which is usually bearish) and you should look to see technical traders respect this signal.

    I expect the EE to paint this as clearly as they can.

    However, in reality you will likely see a pullback to very strong support around the $28.00 area and then a strong move on to the 'cup' projection @ $30.82 area. I personally see this being a reasonable short term target (prior to the next March delivery dates). However an overshoot cannot be ruled out.

    I hold a long term long position in physical silver. Don't take this as investment advice, please do your own research or feel free to disagree with my analysis.

    I agree with Turd that this is market is under the influence of a lot of 'non technical' factors. However its nice that technically silver is matching up with these factors and is a bullish outlook.

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  27. @california womanl
    Havrey's posts were greek to me too when Turd first turned me on to them. A little self-education later, and it is starting to make sense.

    Here is a great page I found that goes over a lot of how the COMEX works and the terminology involved:
    http://about.ag/futures.htm

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  28. @Turd - Where's the tip box?
    @ Ninja - Great info.
    @ Sgt. Iria I am long physical Silver. I got Shock and Awed back in 2003 and got most of my hoard. I am now trying to learn how to paper short if need be. Would put options be the best and what Site is good for this?

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  29. Ninja, nice link.

    Check this guy out he helps translate COMEX into plain words http://agaupm.com/ . Harvey's is a great resource just assumes your in the know on how things tick.

    BTW If your spending your hard earned on PM's you should learn exactly how the COMEX works!

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  30. Hi Turd,
    Like someone mentioned above...I do not work in the financial services industry. I am a paralegal and have an online business so I am trying to learn as much as possible here as I simply am worrried for our country and the well-being of my own family and trying to prepare the best I can. I found ZH about 2 weeks before you created this blog and I JUMPED on your blog the very first minute you started it. I appreciate the time you take to help educate us. If there is a country left after all of this, it's going to take as many of us as possible who have prepared to rebuild it.

    Ok.. so saying all of that.. I wanted to ask: Do you mind addressing (maybe in some future blog post) your thoughts on owning mining shares and maybe even other commodities and which ones you recommend. I don't have alot of money but I am trying diligently and consistently to buy silver as I can and to discern some of the best stocks out there to own. I currently have about $10K invested in mining shares (not much..I know) and some days the shares seem to skyrocket and other days they plummet. Sometimes the rise & fall seem to follow the dow and sometimes the rise/fall is in spite of the dow. I don't really get it but I am a patient and mature investor so I don't panic and sell anything but I would absolutely love your profile/perspective on owning mining shares, ag shares, & oil/nat gas... etc, shares. The ones I've chosen to buy in to to date seem to be doing 'ok' but I'm not sure how to find out what the best of the best might be long term.

    Please forgive my simpleton mindset. I am desperately seeking out the best of the best online to learn from (congratulations..you're on the top of the list) and hopefully to prepare for the storm over the horizon. I would be one more who would happily make a donation if you put in that tip jar!
    All The Best To You!

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  31. Here something to help you visualize what's happening in the silver pits as I type...

    http://www.youtube.com/watch?v=6037mSpUUWU

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  32. Right: At the risk of sounding like some pompous-ass professor, there are no stupid questions so please don't ever hesitate to ask.
    The driving force behind starting this blog was to share my little corner of expertise(?) with the world, to help prepare as many as possible for what I'm certain is coming. If I don't post a "miners blog" by the end of the week, please remind me. As you might imagine, I have some very strong convictions in that area.

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  33. Boom. 28.11 silver.

    Final numbers are up for Open Interest from yesterday:
    Dec10 Gold: 15195 Contracts = 1.5 million oz.
    Dec10 Silver: 5428 Contracts = 27.1 million oz.
    Looks like a pretty heavy dent in bullion banks, but they are on pace to survive to Feb/Mar.

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  34. Oh..thank you SO MUCH! I think alot of us who are just learning feel very late to the game and are playing catch up with preparing. I know that's my case. But I'm awake now and trying my best. My strategy is to stock food, silver and mining/commodities stocks with the limited resources that I have. Oh..and prayer.. ...lots of prayer. :]

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  35. silver headed north. broke through 28.20 and firing higher

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  36. Wow Turd! Great call on today's action. Its nice to have a friend with a crystal ball. But lets see where this goes and hope it holds strong. Currently 1389 and 28.26.
    Great commentary and thanks for everything!

    Schnitz

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  37. Watch "Ninja", I suspect his motives. He's too new, too knowledgeable, and too eager to post info that the COMEX will survive. And then he repeated it.

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  38. First post - I'm VERY grateful for this resource Turd! I watched you on ZH and now this concentrated format is great. Will be happy to contribute by clicks or donations. Hiho Silver!

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  39. Wow! Silver is above 28.25 and Blythe is NOT happy.

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  40. From ZH:

    Surge In GLD December $145 Call Volume

    http://www.zerohedge.com/article/surge-gld-december-145-call-volume

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  41. Bruce, about which I have posted last week or the week before - is back and is talking of 2045 as of end of February.
    And 1900 "in short order" ... the beginning of 90 dollar legs.

    Just sharing what that guy shares with us.
    He was of similar help for me as is Turd since weeks. Just that Turd is here every day. And Bruce comes only occasionally - to share "it won't go lower than ..." or "2045 is my target as of February."

    This PM bull is indeed astonishing.
    As is the drama unfolding for the western world.
    While 99.99% of population is still clueless out there.

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