http://www.xtranormal.com/watch/8285688/
The week is off to its usual crazy start. Contrary to some opinion, from here its all about the USDX. Many are confounded by the recent positive correlation between the $ and the PMs. I'm not and neither is Santa. He explains it best:
"Dear CIGAs,
Gold today is a perfect example of what our present markets are about.
The US dollar pulls back to the underside of a box formation and falls away. That is a classic bearish formation and the algorithms sell the dollar heavily.
Gold and gold shares injured by the Euro holders of gold liquidating as the euro rises draws a negative technical picture, and the algorithms sell gold and gold shares.
Algorithms have no mind.
Algorithms are exercises in advanced mathematics.
Algorithms will turn and buy gold the instant the fundamental guys say enough.
Algorithms are exercises in advanced mathematics.
Algorithms will turn and buy gold the instant the fundamental guys say enough.
What has injured the field will benefit the field. For me, on my speculative side, it is an opportunity in calls on the various gold shares that have performed well over the last year as the sheeples sell and the option professional try to take them out at pennies.
On an unrelated topic, what if your town goes broke? What do you do with your garbage? I make a lot of mulch, and have a really well placed burn pile. Think about it.
Margin rates move higher, always, in a bull market. It is good, not bad news for price. Some day the public may learn that, but do not hold your breath. Some day commentators in our gang may learn that. Do not hold your breath for that either."
And then, he also adds this:
"Dear CIGAs,
Look, it is only natural to be concerned when markets react, but have no fear because the price of gold has significantly more than $1444 to go on the upside.
We live in a market world run by algorithms which are mechanical sociopaths reflecting their conscious-less creators, owners and operators.
Gold, as the saying goes, never promised us a rose garden, but it will insure you against the madness. Do not give up your insurance because of your emotions.
Use your intellect to survive. What influenced the price of gold last week has none."
So, understanding that this positive correlation is only a temporary, algo-based phenomena, we need to watch the USDX for signs of future PM trends. As we discussed last week, the USDX found support at the November lows of 78.47. It then broke that support and now is struggling to recapture that level. As the old adage says: "broken support becomes resistance" and vice versa. Look at this 12-hour chart first:
The 78.47 level is there for all to see. Now look at a 1-hour chart:
In the end, both of these charts look like crap. Sanity will soon return and if/when the USDX trades down to 77-77.50 as I expect, the PMs will rally sharply and all concerns for a continued correction can be thrown out the window.
Lastly, I've been mentioning copper so often that I'm being asked to add it as a chart to the right. My interest in copper is only temporary so I don't plan on adding that chart soon. However, look at copper on a 1-hour basis. It, too, is struggling with the same adage as the USDX. First things first, let's hope that today or tomorrow we can close back above the 434 level and begin moving back into the range of the previous two weeks. From there, a move back above 438 will put us squarely back into the range and continue to lessen concern for further PM correction.
Again, we have either seen the bottom or are close to the bottom in both gold and silver. I won't be surprised if we trade down near 1320-25 in gold and 26.50-65 in silver early this week but we don't necessarily have to. Either way, gold will trade at $1600 on or before 6/10/11. More later. TF
ps. We bottomed at $27.08 in March silver on Friday so watch that level this morning. Also, look at that USDX...it looks like an EE-enhanced PM chart!
10:45 EST UPDATE:
Look at the dollar go! Its puking faster than a coed on spring break. Copper is back to 436. Crude is no help at all and must be watched very closely at $88. After a LBMA PM fix takedown, gold and silver have rebounded.
With the assistance of Turdite "Citizen Doctor", I've been able to move the latest video to YouTube. Thanks, Doc!
http://www.youtube.com/watch?v=9FGVtJRWP6k
ps. We bottomed at $27.08 in March silver on Friday so watch that level this morning. Also, look at that USDX...it looks like an EE-enhanced PM chart!
10:45 EST UPDATE:
Look at the dollar go! Its puking faster than a coed on spring break. Copper is back to 436. Crude is no help at all and must be watched very closely at $88. After a LBMA PM fix takedown, gold and silver have rebounded.
With the assistance of Turdite "Citizen Doctor", I've been able to move the latest video to YouTube. Thanks, Doc!
http://www.youtube.com/watch?v=9FGVtJRWP6k
Doug Kass Calls For Gold $250 Lower
ReplyDeleteI never liked Doug Kass very much.
Yes, dd, he sure did. Here's a link to a very interesting ZH article on this:
ReplyDeletehttp://www.zerohedge.com/article/doug-kass-calls-gold-250-lower-puts-pop-news#comment-898514
To me, he's just another chart reader trying to call a top during a correction. However, he could be right and I could be wrong so...
Another interesting zerohedge article, with charts (I love charts!)
ReplyDeletehttp://www.zerohedge.com/article/main-fx-and-commodity-charts-upcoming-week
They imply that in this correction silver will move back to it's 200dma, which puts it about 22$.
Not saying they are right, but it's an interesting chart (did I say I love charts?)
$22 sure seems like a stretch but what do I know...I'm just a Turd.
ReplyDeleteHi Turd,
ReplyDeleteI've been following your blog for a few weeks now and have found it very interesting (I make sure to click on the adverts on my way out, too ;-))
I was wondering if there's a book an Technical Analysis you can recommend? I've been picking up bits and pieces via context, but I think it's time I put in some serious study.
I also am a firm believer that the USDx is the index to follow, as it currently serves as a primary driver for the algos.
ReplyDeleteI wrote about this topic and tried to give a simple explanation of what the dollar index means throughout the history (as it was created in 1971 when our completely fiat currency arrived after the breakdown of Bretton Woods).
Read about it here:
http://thehardrightedge.com/2011/01/21/the-dollar-index/
If the dollar index falls through 78, which it just touched in the high 77's 10 minutes ago... then it usually trends towards new lows which will be in the low 77 range as its primary target. This should help commodities in general, along with gold and silver and shares along with miners because all of them will be valued higher on a weaker dollar. It is hard to suppress manipulation when inflation is coming faster...
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Scott J
really want to jump in, but hmmmm
ReplyDeleteEUR/USD up to 1.3640 on tightening Eurozone debt spreads and talk of a change to the bailout mechanism
ReplyDeleteUSDX falling. 77.50 - 77.80 on the cards if we get another EUR spike
Carlos: Anything could happen, of course, but I just don't see it. The OI in March silver continues to grow and grow. Now some of that is new paper shorts that the EE is creating but still, the demand for silver is so great and supply so tight that a move down to $22 seems highly unlikely.
ReplyDeleteJim: I would start here. It's expensive but worth it:
http://stockcharts.stores.yahoo.net/teanoffimajo.html
You have a future as an Xtranormal cartoon "artist" TF.
ReplyDeleteRegarding Adsense, (I'm assuming TF is using Adsense.) only click the ads once. Google tracks the IP address of those who click on the ads and if the same person clicks on all the ads more than once, Google will close the account and say "we don't owe you any money."
@ Carlos.
ReplyDeleteOnce we start going there will be no turning back. Be patient, it will all be worth. No need to force anything, enjoy everyday life as it is for now. It won't necessarily be beaches and booze when silver goes up... as it is truly a sign of inflation.
Silver will be going up soon as the USDx continues to tank. Be patient, enjoy life.
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Scott J
the dollar has continued to tank, but silver tanking with it. i thought turd meant that silver will go up when the dollar bounces off its support. why i got no idea.
ReplyDeleteYes, but have you contacted your bullion dealer today? What is their price to you? What's the premium? Here in Toronto, both the bullion dealers I use have not adjusted their pricing. Hence, the premiums are going up. I truly believe it's all about the ounces you own in your possession. The paper price means nothing and soon sometime in the future the paper price will mean sweet fuck all. If the paper and physical price stay connected and we get a drop to $23 the physical will be sold out in a flash.
ReplyDeleteBoth PMs and the USDX could be tanking because of liquidity flows into stocks.
ReplyDeleteDo you really think the forces of evil are ever going to let PM's rise due to fundos alone?
Everyone, please be patient.
ReplyDeleteThe manipulation of the PM markets will always confound you, of that you can be certain.
Silver and the dollar heading south together is a temporary phenomena.
Mining stocks look good today what's this mean with the down spot price today. Last few weeks they followed the metal down.
ReplyDeleteyes very weird
ReplyDelete70% of my junior miners are green today (between 2-11%) despite the drop in paper silver. It almost looks like they've just had enough of the BS and are going to trade as they should based on fundamentals of supply and demand. It's kind of refreshing after last week's pounding.
ReplyDeletePassionate demand for physical right now, lethargic demand for paper.
ReplyDeleteMy theory: The big-money players (BoS's?) who drove up the price in Oct-Dec are after COMEX cash settlement premiums. They're not interested in holding positions and exposing themselves to the volatility of the PM market. Get in (mid-Feb), drive up the price 15-20%, get that 20% premium, get out. Rinse, repeat in May.
If true, then both parties (investors, EE) have an interest in creating a lower base (say, $25?) from which to ascend. If we're at $30 come mid-Feb and the buying frenzy starts, there could be unanticipated consequences.
The following article makes it appear that some big-money folks are even loading up on GLD puts in the short-term.
http://www.zerohedge.com/article/doug-kass-calls-gold-250-lower-puts-pop-news
I think this is going to have a happy ending, but maybe not for another few weeks.
The late friday afternoon miners sell off that was done for whatever reason (Doug Kass twitter?) is being unwound. All the smartypants that sold are now thinking "uh oh, maybe not. get me out".
ReplyDeleteNice to see those guys eat it for once.
It is possible that the Comex is on the verge of flaming out, and they are just trying to get the price as low as possible before they have to settle in cash??
ReplyDeletemark--
ReplyDeleteI've been thinking something along those lines. We've got all this crap all over the internet about armageddon at the COMEX when we get to delivery of these March contracts. Just makes me think it probably won't happen because the EE will do whatever is required to avoid it. We'll see the most amazing manipulation, above and beyond anything we've seen before, between now and March expiration.
Just one possible scenario rolling around in my head....
Remember the bears said you have two months after the disastrous CFTC meeting to accumulate physical silver. Listen to da bears!
ReplyDeleteBy the way, what happened to the silvergoldsilver site. It looks like it's been suspended, which is bizarre and could feed conspiracy theories:
http://www.silvergoldsilver.com
they've been able to do this every step of the way. originally, h. organ expected this comex default in december. now, march. won't happen then either.
ReplyDeleteobviously the cftc nor any other body is interested in putting a stop to any of the shenanigans they pull. they are one.
unfortunately this market is akin to playing poker with a player who carries a firearm while at the same time you aren't allowed to and has all the extra cards he may need up his sleeve to boot. the closer that player is to losing his stash, the closer he is to pulling the piece out of the holster. he's not going down without a fight.
Silvergolddilver has had overwhelming demand after vid. #1 being sold-out weeks on end then new year site upgrade and now.....hmmm maybe vid. #3 caught the wrong eye, haha. So what is the take on the options and futures expiring the 27/28. They want to suppess the price until then? Should we be looking up after? Or is this just not that signifigant?
ReplyDeleteI'm not chasing anything today. As Turd says be patient here. Let the manipulation play out to your advantage. If you have a small portfolio and are almost fully invested. Hang tight. If you still have a cash position then wait to see a true turn with volume and higher highs in the miners and the etfs. No reason to chase this here if you already have a good position. AND there is no reason to sell here.
ReplyDeletegold always goes down b4 FOMC so I think i will wait till wednesday to possibly jump in
ReplyDeleteYeah, I put in some SLW last Thursday and Friday. I could do a little bit more but I'll just wait. I got more than enough exposure, at lower prices, as it is.
ReplyDeleteI did a little play with buying some AGQ when silver bottomed at 27.20....mostly of interest because there must have been huge volume, the displays were delayed and my order took a long time to execute.
ReplyDeleteSilver has now been bouncing off 27.20 for 2 days, maybe this is "the" bottom? Or at least a good enough bottom to make some further day trades.
......or not. I tell you, it's like freeking magic, I make a prediction, and the market goes the other way....anybody need me to predict the opposite of tomorrow's weather?.... :-p
ReplyDeleteAnother after-hours takedown. What a gutless wonder!
ReplyDeleteslv just dumped 2million
ReplyDeleteHello $26..
ReplyDeleteah, yes, patience is rewarding
ReplyDeleteIs there blood yet? Panic? This is getting more and more interesting. A fake rebound wouldn't surprise me neither. Can't wait to load up the truck, but the lower the better of course!
ReplyDeleteI just posted a new note. Looks like we'll all get to see if 1330 and 26.50 are going to hold. Keep your fingers crossed!
ReplyDeleteof course co_dan. they skulk around like a predator waiting for the right time they can inflict the most damage and do the takedown.
ReplyDeletei believe they've become so desperate that the bludgeoning will not stop until they say it is going to stop and they are ready for the price to move upwards. this is paramount at this time and far more important to them than any perception that we operate in a fair market.
the last two entries into jesse's site confirm.
http://jessescrossroadscafe.blogspot.com/
Like clockwork. Pull the bids and down she goes. Classic Waterfall Pattern for Blythe.
ReplyDeleteTime to call the dealer. Silver on sale once again. BTFD.
Btw, tnx Turd for your amazing high quality blog! It's awesome being able to discuss these sick moves in PM's with passionate people all around. Your posts are much appreciated!
ReplyDeleteHow low will silver need to go before dealers refuse to sell at this price? Or will premiums simply continue to rise? I bought silver and gold 3 days before India's 400 T. purchase in '09, been a metal head ever since. Thanks for the education, Turd.
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