Tuesday, January 11, 2011

Blythe Wants Crumpets

Its another all TA Tuesday here at Planet Turd. Playin your favorite 1-minute, 3-minute and hourly charts!

You all know by now that I firmly believe that TA is currently useless in both gold and silver. The fundos are so strong and the manipulation is so great that TA will lead you astray if you rely upon it. The chartists who utilize daily charts to call tops are simply trying to make names for themselves and garner recognition. Ignore these fools.

However, I do believe that there is value in reviewing the short-term charts. These charts can still, quite clearly, give you an indication of support/resistance levels as well as trend. Anything from 3-hour on down to 3-minute can be helpful. 1-minute charts are only good for spotting the footprints of Blythe and the Flying Monkey Brigade.
OK...with this in mind, I think we are on the edge of a nice pop/rebound UP in our precious PMs. First, look at this 3-hour USDX:
There simply doesn't seem to be a lot of enthusiasm for breaking this pig out higher. It looks to be tired and rolling over. If it does, this will certainly help the PMs.

Crude is looking OK, too, and this is significant because more than a few metal algos are programmed to follow developments in the crude pit.
With those two as a backdrop, now consider this 2-hour Feb gold chart:
You can bet your booty that the EE would like to keep gold below 1385 and 1390 but a USDX decline and continued oil rally will blunt their efforts. Once through 1390, we'll be at 1405 real quick.
Now look at silver:
Looks almost identical to gold. A move back UP through the psychologically significant $30 level and we'll be back at $30.80 in a matter of hours.

So, in conclusion, everything looks good for an overnight and mid-week rally in the PMs. I expect it. However, this comes with the caveat I mentioned above...even my short-term TA can be thrown out the window if Blythe attacks with sufficient firepower to overwhelm the bid and chop price in minutes. Let's wait and see what happens. The key to all of this is the USDX. Watch 81 on the March, which equates to about 80.75 on the cash. The cash USDX is the price that appears on the chart to the right, along with cash gold and silver.
It could be a very interesting evening/overnight. Keep the faith! TF
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12 comments:

  1. reefmanJanuary 11, 2011 at 4:14 PM

    Lookin' good, lookin' good! It's about time this train left the station. Goodbye "20's" I hardly knew ya!

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  2. Pining for the FjordsJanuary 11, 2011 at 4:40 PM

    Exactly reefman! In 2008 I was advising my retired parents to start investing in physical, dealing with all the "but its so expensive" emotion. One of the things I said to them was "Listen, this the last chance you will ever have to buy gold at triple digits in your lifetime". +450$ per ounce later they are glad they did. Goodbye 20's is right- and may we never see it again!

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  3. Bill.Sarah.ConnorJanuary 11, 2011 at 4:54 PM

    That will be a story for the grandkids...

    "I remember back on '1.11.11 day' when I made my last purchase of silver when it was still selling for a measly $29.50/oz!". "No Grandpa, it couldn't have sold for so little, could it? Really you bought all that silver for $29.50! Gee you were smart back then Grandpa...what happened!!! Haha!"

    ReplyDelete
  4. cbottlebobJanuary 11, 2011 at 6:07 PM

    Japan buying EU bonds when it could be buying Gold and Silver,there,s just no understanding some folks.

    ReplyDelete
  5. reefmanJanuary 11, 2011 at 6:17 PM

    LOL! Yep!

    @cbottlebob,

    Japan is trying to reduce the value of their currency so that magic Keynesianism will do it's magical stardust wonders and increase their exports thus making them Keynesian rich!

    ReplyDelete
  6. reefmanJanuary 11, 2011 at 6:19 PM

    A brilliant liar, John Maynard Keynes

    "By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

    ReplyDelete
  7. DanielJanuary 11, 2011 at 6:39 PM

    Tomorrow is another day and the MSM will find another bad story about the euro. Just an estimation of the amount of ammo they have:
    There are 17 countries (factor 17) with average rating AA (factor 2 to BBB), for each you have outlook negative and outlook neutral (factor 2), for each you can issue a warning and you can downgrade them (factor 2) and you have three rating agencies (factor 3), this makes
    approx. 17*2*2*2*3=408 shots just to go to BBB.

    So the USDX is safe this year :P

    ReplyDelete
  8. DavidJanuary 11, 2011 at 7:37 PM

    Hi Turd, all,

    Thanks for this blog, it's great - i'm learning every day.

    I have a beginner's question to you or anyone on this blog, related to yesterday's post (Sprott). I hope you'll forgive me.

    I bought Sprott silver hoping it's the closest to the real thing (money is in registered account so I don't know what else to do).
    - What mechanism ensures that the price of the share (approx .33oz) fluctuates with the price of the physical ? I believe I bought my shares from an anonymous seller on the TSX who was selling at best price, not the trust itself. Would that explain the spread between trading point and NAV ?
    - I understand in this case that the price can only go higher than the physical, as if it went lower people would buy and ask for delivery of the physical. Seems to be great in case of a panic.
    - Delivery option - ie assurance it's physical - seems to be guaranteed only when you own more than 1000oz (they store 1000oz bars).

    Thanks for sharing the knowledge :-)

    ReplyDelete
  9. unum mountaineerJanuary 11, 2011 at 8:09 PM

    welp, 2011 is pretty much picking up where 2010 left off. back, forth, and around the massive structural issues of all the major currencies and their respective economies continue to flash some major red flags. I guess after a while, from a psychological aspect you come to accept and adapt, and you kinda tune it out. You see the slow motion destruction for what it is and you take a long hard look at your Plan B, Oh shit plays.

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  10. Turd FergusonJanuary 11, 2011 at 8:12 PM

    David: No time to answer no but don't let me forget to get back to your questions.

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  11. unum mountaineerJanuary 11, 2011 at 8:14 PM

    Asian trading is staying right on point. 1380's in au and ag right in line at 29.40-.60. Also, don't forget, the next release of the approximate purchase amount and tentative outright Treasury operation schedule will be at 2 p.m. on January 12, 2011. Kinda a ritual for me to have a neat laphroaig the night of new POMO release schedule.

    ReplyDelete
  12. AnonymousJanuary 11, 2011 at 8:24 PM

    USDX just got kicked in the nuts, < 81

    ReplyDelete

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