Thursday, December 9, 2010

Eyes on Silver

Lots and lots of noise out there this morning regarding the EU and their bailouts. So far, its all smoke and no real fire.
Your first hint that something significant is up will come from watching the PMs vs the $. As you know, over the past week or so, we've seen a return to a direct inverse coupling between the PMs and $. If that coupling untangles and you begin to see the PMs and $ move higher together, I think you can take that as a sign the EU situation is getting serious. Until then, let's patiently watch and see what happens.

Silver looks great this morning. Here's a little reminder from yesterday of what I'm watching:

"Again, note all the support near $28. If we can get rolling tonight, we should see 29-29.20 pretty quick. From there, imagine a pullback to 28.60-80 and you have the makings of a reverse head-and-shoulder bottom...a very bullish short-term technical feature." - "Silver Quickie", 12/8/10

We did, in fact, reach a high of $29.05 in the March11 before pulling back to $28.57. Can't ask for more than that, huh? More importantly, this chart looks better by the minute.

We've got about 75 minutes left on the Death Star so, hopefully, we can finish strong. Currently we are at 1390.20 and 28.78. Crude is about 0.80 off its lows, too, so for now all is well.
Keep a sharp eye on that PM/$ coupling. This is very important, indeed.


  1. Suggest to have an eye on the HUI too.
    Which so far does - nothing at all.
    Which confirms that we are rangebound - 1370 support 1398 resistance.
    Everything is possible here. With the most likely outcome resistance to be sold and support to be bought.

  2. Check this out, New post from KWN says Gold to go up $150 an ounce in 5 weeks! That they dont want to manipulate Silver below $28 because of too much buying pressure, and that the Asian market is buying on every dip. And that they are laughing at us because of how obvious the manipulation is! I'd say the cat is just about out of the bag.$150_Higher_Within_5_Weeks.html

  3. So what makes the neckline...29.25?

  4. A couple of posters have made reference to things I've said which is based on McClellan's work, so here is a more complete exposition FWIW. To explain:

    The McClellan Market Report bases its market views on cycle analysis and time-lag analysis of money flows between financial market sectors. Regarding gold, they use a basic idealized major cycle of 13 1/2 months trough to trough. But in the real world, cycles don't occur with the precision of a Swiss watch. So as a turning point approaches they use their oscillators and stochastics to try to fine tune their prediction. And of course random real world events can influence when turning points actually arrive. That being said, they see a major cycle low for gold due the first week of January as of the latest report of Dec 1. The next MMR is due out Dec 22.

    In addition, their time lag work shows that oil lags gold by 4 months. That is, whatever significant action occurs in gold is echoed in oil 4 months later. Gold had a significant surge from August into October. So oil should have a surge in price from December thru January, which we have already started to see.

    Their cycle work also indicates that January should be a crappy month for the stock market in general, but decent after that until mid-year. So those are their current views.

    I have found their work to be pretty accurate and informative. So taking their work at face value, here is my big picture view with my own spin. As oil surges past $90 toward $100 and perhaps higher, oil sector stocks pull money from other stocks which causes the January funk. In addition, commodity oil pulls hot money away from the gold/silver sector, helping to form the major cycle low. I'm thinking this might be more of a choppy bottom low spread throughout January rather than a definitive spike low.

    The way I'm going to approach this is, regarding physical purchases, to break my pot into three or four portions and buy on every significant dip until I'm all in and then sit back and not worry if I didn't get the lowest tick. I'll be watching Turd's views for these levels. And I'll be all in by February regardless. For stocks, oil should do well but PM miners probably won't look good until after January. For the stock market in general it looks like "sell in May and go away" will work this year. The good news is that this secular bull market in precious metals is so strong, even if your timing is the worst, you probably won't be under water in a PM position for more than two or three months at most.

    As an added note, the MMR is fond of pointing out that bottoms are sometimes things you fall into, and sometimes things you just rise out of. Meaning that a "bottom" might just be a flat spot in a chart that precedes a launch, as long as it aligns with a cycle bottom. It has noted that gold in euros is in an ascending wedge with overhead resistance at about e1040 and is moving sideways into the apex. A flat bottom?

    Some posters have mentioned options. I believe that everyone should do what they want with their own money. Just keep in mind that the seller is always smarter than the buyer and has time working for him instead of against him. But maybe you'll get lucky.

  5. Love the blog, Turd. Apologies for the elementary question, but I sold all of my SLV for a nice profit today and would now like to move into a "safer" ETF. PSLV? CEF?

    thanks very much...

  6. Hammy: Trader Dan posted this yesterday. I'm certain you'll find it interesting.

  7. dd: yes but I'd like to see us move thru 29.25 and head up to the 29.60 level. This would put us back above the 11/9 highs of 29.40 again, too.

  8. Gold is moving back toward its daily high with 20 minutes to go. Very nice.

  9. Turd - I don't trade the HUI, as I don't even own an US equities account. Only trading markets and brokers which I can access 24/5.
    But I use the HUI as major input for shortterm and especially overnight/day-to-day decisions.

    Mediumterm I expect the HUI (of course) to go considerable higher.

  10. Something else ... Blythe and her monkies are often more active in pre and after markets. We should consider "after market" more important than before the regular close.

    Easier to accomplish their intentions.
    Today just another example.
    Tomorrow Friday possibly another one.

    And again - da HUI did not confirm the futures "strength" which likely just was "sucking in of greedy bulls".

  11. Yesterday, having had a walk with my dog, I thought that possibly the best results would be to trade the close of london and open of NY (approximately 2 hours ... usually short PMs) and the close/after market of NY (again 2-3 hours - again short).
    Outside of these windows do the opposite - go long PMs.
    Something to have a closer eye at possibly.
    Add a bearish bias 1-2 weeks before expiries.
    Add another bearish bias a few days ahead of FOMC and POMO announcements - and a positive after these events.
    Guess that system would work quite nicely.

  12. Here, hammy. Read this:“fixed”-it’s-rigged

  13. I closed my Chase bank account today, and thought you guys might enjoy the message I sent in response to their questions:

    "Dear Mark XXXXXX,

    Thank you for taking time out of your busy schedule to contact us.

    To close your account via e-mail and your account balance is $50 or less please send a secure message including the following:
    - How /where to send the remaining funds
    - Current mailing address
    - Reason for account closure

    Please note: If there are any outstanding checks or authorized ATM/debit card transactions are presented for payment, or any direct deposits or other automatic/recurring debits or credits are presented to this account, the items will either be returned unpaid, or could possibly re-open the account. This may prevent the account from closing properly. "

    There are no funds, so there is nothing to return. (I moved all funds months ago)

    Mailing address: This is not any of your business seeing as I am ending my relationship with your bank. If you really need to know, look it up, it's on file.

    I want to close the account for several reasons:
    1) I've had to speak to the support management a couple of times and it is more akin to speaking to a robot than a person.
    2) I am disgusted by JPMorgan's manipulation of the PM markets, and my goal is to give them zero of my business.
    3) Your bank has worse ethics than a rapist.