Monday, December 6, 2010

Early Monday

Fabulous start to the week in the PMs.
Overnight, gold, as predicted, did settle back to the Friday, Comex-close level. Feb11 gold reached a low of 1409.80. It is now 1415.80. March11 silver, however, only hit 29.48 and it is currently 29.84. That silver is now trading through and clear the 11/9 high of 29.40 is extremely exciting. From their lows of 11/16, gold is up 6.39% and silver is up an astonishing 23.54%.

For clarity and context, let's take a look at the other three "commodities" we follow:

The Jan11 soybeans will resume trading in Chicago at 10:30 EST. They had an overnight close of 1301. The corrective low of 11/17 was $11.75/bushel. This means our rally from those lows is 10.72%.

The March 11 wheat stands this morning at $7.89 with an 11/17 low of 6.56 for a gain of 20.27%!

The Jan 11 crude is at 89.20 and its low of $80.28 was on 11/17. A gain off the lows of 11.11%.
I think crude is a very important signal going forward so lets take a moment and look at a weekly chart:

If you look closely, you'll see that crude is at a very important moment in time. Last Friday, it made a weekly high above the weekly highs of last January. The $93 level from last May is now clearly in sight. If/when it bests that level, what's next? Your guess is as good as mine but, if it can close the gap between 95 and 97, I'd sure say it looks like $110 is in the cards, at a minimum. Why is this important:
1) Gold and silver will certainly tag along on the upside
2) Crude above $100 stifles any and all signs of economic improvement/growth worldwide
3) No growth only guarantees QE3, QE4, QE5...
So, let's watch crude and see how much higher it goes. Oh...and don't give me that crap about "crude can't go higher because of slow global economies". That's yesterday's nonsense. Crude is going higher and will continue higher because it is, primarily, a dollar-denominated asset. Period. End of story. Just like wheat, soyas, cotton, etc.

Lastly, you must always be vigilant on days like this. We've made new highs on both PMs so, if successfully attacked by the EE, they are both subject to the dreaded "outside reversal day". Again and in short, the ORD is a technical warning where you trade above yesterday's highs but close below yesterday's low. The low on Friday in gold was 1385.30, so it would take some work but never underestimate Blythe and Her Monkeys. She may not try it today as 1385 may be too far away but she'll definitely try her tricks again someday soon. Of that you can be certain.

More later. TF

We are rolling! Feb11 gold is 1420 and March11 silver is 30.03. Great stuff but lets not get too excited until after the Death Star closes at 1:30. Gold in particular could benefit from a few more dollars. Again, the intra-day alltime high was on 11/9 at 1426 even. I'd like to see us best that level and, if possible, close above it. We'll see...


  1. Can anyone offer advice on Silver purchases in the UK, specifically coins vs bars?

  2. Hey Turd,

    Great blog, I have become a regular follower from my roost here in Reno. On another note I was wondering if you are a Boston College fan as I saw a post on using your moniker! If so good luck to your Eagles, they will need it against the Wolf Pack.

  3. Turd;Will JPM's copper buy in have an affect on silver going forward?

  4. TF,

    Any thoughts on the supposed European bank run scheduled for tmrw, as it would relate to PMs?

    I'm thinking EURUSD down but will PMs react in your view?


  5. And P.S....I'm asking because I'm considering clearing out my gains from Dec options trades in AGQ, GDXJ and SLW before OpEx next week and moving to Jan calls

    Thanks again

  6. Doug: Nope, not me. Other Turds lurk in the mist.

    zzz: Only to the extent that "Dr Copper" pulls up just about everything when it rallies.

    Pick: Hard to say. I suspect the "run" is mostly internet hype but we'll see.
    And on your options, I'll never argue with anyone who is "buying time". Expiration will always be your worst enemy.

  7. BetPharaoh: Your questions has come up before so I've been scouring past notes for your answer and I can't find it. Nuts.

    Anyone? Anyone? Can someone please help the Pharaoh?

  8. BetPharaoh: Start with James Turk's Hopefully that will lead you where you're looking to go...

  9. Turd,
    A silver Eagle for you as a donation for your wonderful blog! Happy Holidays!

  10. My monthly purchase goes to my GoldMoney account, as I prepare to leave the U.S. and head for residency in beautiful Costa Rica mid next year. I figure I will spend the crisis with beautiful women, wonderful weather, and great surf. Makes things not seem as bad :)

  11. Eric Sprott Interview, Globe and Mail, Toronto:

  12. Chris: you da man! The Turd had heard many wonderful things about Costa Rica, particularly the Hotel Del Rey. Sadly, The Turd has never been as Mrs. Ferguson will clearly never allow it. The Turd doth, however, enjoy it vicariously through friends.

  13. Many people believe that when oil reaches around $90 the economy will temporarily decline until demand destruction lowers the oil price.

    If this occurs, what will PMs do?

  14. Rob: I disagree. I ask that you please re-read the my post.

  15. Bummer Turdy, fortunately I haven't settled down yet and look more and more forward to relocating amidst all this garbage. I will be sure to send post cards though! Loving that silver just topped thirty! You have any idea where are next solid resistance is at? I'm thinking tomorrow should be a very interesting day for PM's...

  16. Hard to believe after that bumbling idiotic interview with The Bernank on Sunday that gold and silver aren't skyrocketing. Still not a bad showing from silver today.

  17. Chris: The $35 area is the top from 1980. Before we get there, maybe 32? 33? Here's some help from Trader Dan:

    As you can see, there's nothing except future EE-created BS between here and 35 or so.

  18. "The $35 area is the top from 1980"

    I misspoke. The $35 area is the final peak from 1980. On the chart you can see where it should get a little sticky between there and 38.

  19. I see what your saying, thanks for the chart. This is getting very interesting, and exciting!

  20. That was quite a takedown executed just minutes ago.

  21. And Blythe strikes again at $30 damn...

  22. 29.50 is the new line in the sand.

    Crazy how its pinging off that level like a superball.

  23. Yes, let's hope the BoS keep their collective foot on Blythe's neck.

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  25. To BetPharaoh,

    cheapest I found in the UK for silver was

    The best value are not the UK coins, but the Austrian, Canadian, Mexican & US coins.