What We've Learned Today

What a terrific, interesting day we've had.

We've learned/confirmed a lot today. As I type, crude is UP almost $3 and above $92. Copper is up over 8 points at 445.50. The grains all have double-digit gains. The CRB Index is up almost 6 points and is breaking out of its recent 6-week range. Of course, with that as background, gold is up....uhhh....errrr....oops, gold is down $10. Huh? How can that be?

If there was any thought that the "correction" over the past four weeks was organic and natural, fuhgeddabouddit. Its all bullshit. If you've needed further proof, I submit todays action in the PMs as exhibits #1 and #1A. The oh-so-obvious, reverse H&S bottom that will form on any move through 1345 in gold is causing the Evil Empire to throw as much new paper at the Comex as monetarily possible. Silver, too, is surviving against EE selling so heavy that it should be down over $1.00. The fact that it isn't is testament to its fundamental demand.

Look at the battle as it played out over the last 90 minutes or so on the Comex. Real demand spikes price around noon eastern. The battle to beat it back begins. At first, the PMs grudgingly give back ground. Then, as the close approaches and buyers begin to pull bids (which they are always going to do in volatile, crisis-driven markets like this), the consistent EE supply of paper finally begins to accelerate the downtrend right after 1:00. The "market" closes at 1:25 and the buyers go home. Not Blythe, however, as she keeps supplying her worthless, unbacked paper metal and price instantly collapses. A few buyers re-emerge for about a half hour or so to pick up some bargains but once they step away for good at around 2:30, down we go again. Expect this to continue the rest of the day. Here are one-minute charts of gold and silver that depict graphically these events:

As you might expect, I'm extremely confident in the aptly named "Turd's Bottom". However, since its clear that this entire "correction" is nothing but EE-inspired bullshit, don't expect Blythe to give up without a fight. Crude, copper, the grains...everything is conspiring to make Blythe's task impossible but she may be about to get a break. Check out these charts of copper and crude:

Both have moved within striking distance of breakout points. In fact, they are so close that if they don't break out tomorrow or Wednesday, they'll certainly pull back and consolidate. It will be this moment when Blythe will attack...sort of like how I described today's action only writ large.
Let's say copper pulls back toward 440 or 436 and crude pulls back toward 90, this will likely cause a lot of gold bids to be pulled. Blythe will utilize this weakness to put the fullcourt press on the PMs. I guess what I'm saying is: don't be surprised if we see some mid-week weakness.

Turd's Bottom is in, of that I'm certain, but logic and these charts tell me a semi-retest is coming. I'm expecting gold to trade down to 1320 and silver to 27.20. That should do it and I'll be a buyer at those levels. However, the monkeys will keep the pressure on so, if those levels fail, we may get a full retest at 1310 and 26.50. Not sayin we will get a second look at those numbers, just sayin we might.

That's it for now. Keep the faith. Don't get spooked by this volatility. Buy the dips. We will win. TF


8:00pm EST UPDATE:
Just a couple of quick things to follow up on this evening.
Gold is trading higher and is once again approaching the critical 1345 area. I've got a last of $1338.60.
Silver is up 0.07 and copper and crude are flat. It seems gold is actually playing some catch up.
Only one quick chart to share and that's of the CRB. I mentioned above that the index broke out today from the confines of a six-week range, Graphically, it looks like this:

This is one year chart. Note the significance of today's breakout. Because many of the components are so fundamentally strong, I believe its the real deal, not a phony, one-day pop. Time will tell but the index sure looks to be moving toward the 500 level and there is no way the PMs stay down at present levels in that environment.
Its eerily quiet across the board tonight. There's a 1MM+ person rally scheduled for Cairo tomorrow and I get the feeling that the entire world's on edge, waiting to see what happens next. ZH posted a link to an absolutely terrific, live Middle East Twitter feed. Seriously, what we all do without ZH? It's truly indispensable. http://www.mibazaar.com/egypt.html

More later if anything crazy happens otherwise I'll check in again tomorrow morning. Turd out.