Friday Fun

Looks like closing above $1818 was as significant as I suggested it would be but I doubt you're here for a history lesson. You're likely looking for insight as to where we go from here. As you might expect, I have a few thoughts. Let's get started.

I was telling Mr Hyde late last night that I didn't think Santa's next "angel" was going to offer much resistance. Anymore, the levels aren't that far apart on a percentage basis and there seems to be some history that shows every other level to be challenging. With $1849 behind us (Dec gold hit 1881 earlier today), let's wait for the next one, instead. Given that I'm expecting a short-term peak next week, probably somewhere between 1936 and 2000, the 1936 angel seems to be worthy of watching. Here's why:

Take a look at this first chart. It's a 4-hour gold. Note that the angles of ascent are steepening. This can only continue for a little while longer as, eventually, the trendline goes straight up and that's as far as it can go. It's not parabolic yet, however, and I don't expect a significant peak today...not ahead of what will be a very interesting weekend. Early next week, though, we could get our peak. It is critical to understand this, though: I'm only talking about a short-term peak, similar to nine days ago. If a dip develops, it will simply offer you an opportunity to buy. Just like last week's pullback stopped right on schedule at 1725, the next dip will do the same. IF I'm right, you'll have a choice to make:

1) Enforce some sell discipline on yourself to lock in some profits and look to buy the pullback.

2) Look the other way and wait for the market to rebound.

paper_8-19amgold4.jpg

Reinforcing this opinion is the whole "orderly vs disorderly" idea I postulated last evening. The move from the lows of last week had been orderly and calm. This type of advance is sustainable. Last night into this morning has been disorderly, like early last week. Volatility extends markets into short-term overbought or oversold territory and this is where we are headed by early next week. You can see the onset of the disorderly action on this 15-minute chart.

paper_8-19amgold15.jpg

In short, absent a margin hike or The Second Coming, I expect gold to be firm all day. There will be dips but dips will be bought. Ask yourself: Would you like to be long gold or out of gold over the weekend? Exactly. Using charts to predict headlines is challenging to say the least but these charts suggest to me that early next week will see another $50-100 advance in the price of gold. From there, maybe another 3-5% dip? We'll see. The key is to assess these eventualities so that, when they occur, you can act with discipline and not emotion.

Silver looks great, doesn't it? As background, I suggest you pause for a moment and read this from Trader Dan:

http://traderdannorcini.blogspot.com/2011/08/silver-stuff.html

As Dan says, the first key closing level today is about 41.50. A close above there will draw the 10-day moving average through the 20-day. This is a bullish crossover and would portend higher prices next week. The next number to watch is 42.30, which is the intra-day high from earlier this month. A close above there today would be bring a response Monday that is similar to today's reaction to yesterday's close. All in all, my $44 by Labor Day pick is looking pretty solid right about now. It may even be a tad conservative. Watch today's close very closely. It will be your clue for next week.

paper_8-19amsilv.jpg

Lastly, both silver and gold have moved into significant backwardation this morning. This is an extremely significant development and, if it continues, is indicative of very tight, short-term supplies. A few loyal Turdites questioned the significance of the "Venezuelan Decision" when I posted the news Wednesday evening. Let me set this straight. It is extremely significant. Why?

1) The Venezuelan gold is on deposit at the Bank of England.

2) The Bank of England supplies the gold for the GLD.

3) I believe the GLD to be an empty, fraudulent shell game of fractional bullion banking.

4) It has been speculated that there might be only 1 ounce of gold for every 100 ounces of paper gold.

5) The withdrawal of 8% of GLD's gold from the BoE would cause a massive supply squeeze.

6) This massive supply squeeze would reveal itself by backwardation in the gold market.

7) See the paragraph above.

8) IF I'm right and GLD is exposed as the scam I believe it to be....well, let's just say that gold is going a little bit higher from here.

9) Money flows out of GLD and back into the rightful place...the miners.

That's it for now. Equities are rallying and the PMs are falling as I type. This is not a surprise nor is it unexpected. The prices as of 10:20 a.m. are of no consequence. Let's see where we are at 1:30 and 4:00.

TF

387 Comments

Bezalel's picture

Crazy market

What a crazy market! I thought it was going to plunge again today, but instead it's flat or up.

I'm still holding my silver and gold miners (and CEF and PSLV). I'm not sure what to do about my oil & gas explorers that have been hurt. I thought that "peak oil" and possible hyperinflation would help them, but if a recession means low prices and low demand, they could be toast.

Olivanders's picture

First?

First!!!

Or not...

worldend666's picture

Mentions of the silver price

Mentions of the silver price from google trends

Gold price

Exponential gold looks to have begun

Einherjar's picture

hopefully we get started...miners will finally follow

1.gif
speconomist's picture

Bull trap!

It's a Bull trap! Be extremely careful!!!

.

ScottJ's picture

Comex Expiration Next

Comex Expiration Next Friday.... if they have any control in current market condition, there should be some negative pressure.  If the world problems send gold and silver higher in the face of comex expirations, you can expect a massive currency devaluation in the immediate future, resulting in much higher gold and silver prices compared to all fiat currencies on their last leg.  That, coupled with the fact that there the Bernanke is Reporting live from Jackson hole next Saturday, the "conditions" for QEIII/Global Stimulus must be prepped for the explosion.  Thus, think accordingly.  I would expect gold/silver to shortly "correct," but then again, it really isn't warranted unless we get some extreme stabilization in the economic world (haha... wish this wasn't so funny), or an engineered raid.  By the looks of early action today, raid it is.

On a side note, financial oppression leads to political oppression, and the people in America are unfortunately dangerously close to being aware of this first hand.  Violence is not the answer, logic and reasoning is on a mass awareness campaign. 

Ron Paul has recently said "they are preparing America for Violence, no doubt about it."

Act with reason and care, not fear and selfishness.

--

And just in case you want to understand that Europe is in this together with the United States and the rest of the western "democratic world," I present Nigel Farage and his clips over the past few years.  A true man of integrity.  If you ever want to see the Euro Political Class be called out on a public stage, this man is for you!

-

Be safe out there, mania is coming.  People are "thinking about boarding the train..." ...

Scott J

SilverTree's picture

  HAPPY DAY

 

HAPPY DAY

padme's picture

consider the problem with GLD

what will be the alternative?

Two Gun Tobin's picture

Thanks Mr. TF

Its a big day in Two Guns world.  I got my 12 hams delivered, bought myself a Birthday gift a day early,  2-10oz bars,

and then silver takes off.  I'm a FOAGQ, so I feel pretty good today.  The one thing that would top off the day, would

be my bright shiny yellow hat coming in the mail!   I'll be waiting at the mailbox all day. Keep your fingers crossed!

Shill's picture

Europe's Debt Crisis: Expect

s1lentslayer's picture

Buying Physical Advice

Do I buy a new 1oz gold coin on a dip this morning or do I wait for a dip next week that will be lower than today?

tyberious's picture

Stu Thompson

  1. Gold is up 26% from the 1478 low. Silver is up 28%. Sadly, silverbugs think this is some kind of nightmare. Live the dream. Live the reality. You're beating gold. Enjoy that victory.
  2. Pretending that silver rules gold, however, gives the silver bugs a 100% chance of ending up like the bond bugs. Financially obliterated. The gold bull ends with gold shaking hands with the dollar and the bond. The silver bull ends with the banksters dropping a firecracker into the silverbug jar. There won't be any survivors. Only those who transition to gold or operate real pgens to zero on silver will exit the final stage silver bull... financially alive. The rest: No.
pbreed's picture

A Positive post for the day

There has been a lot of glom and doom if nobody complains I'm going to try and do a positive (OT) post daily.

There are cool alternatives for oil being worked on:

http://www.technologyreview.com/energy/38335/?mod=chfeatured

The NASA Dawn mission is no in orbit around the asteroid vests, some really cool pictures:

Cool picture:http://www.nasa.gov/images/content/576342main_pia14322-43_946-710.jpg

Web Site:http://www.nasa.gov/mission_pages/dawn/main/index.html

And completely random Happy Happy Lobster...

http://www.nydailynews.com/ny_local/2011/08/18/2011-08-18_so_whats_for_lunch_not_this_lobster.html?r=news

Shill's picture

DXY

73.70

stoneeh's picture

"Lastly, both silver and gold

"Lastly, both silver and gold have moved into significant backwardation this morning."

I don't see any backwardation in gold. Looks more like the perfect contango structure to me with almost every further out contract getting more expensive. Also it's normal for the futures contracts to lag a little behind the spot price on sharp price movements. Where do you get your data Turd?

MonkeySmoke's picture

Suggestion and comment...

@s1lentslayer--As many of the greats, Champan, Turk, Sinclair, etc. have stated on many occasions, it is best to buy when you have the opportunity, should the opportunity disappear.

Turd, Thanks for all the efforts. I have stated several times that I am not a trader, however, what all you traders do impacts to value of my physical holdings. I love to read what you and Trader Dan have to offer in regards to your insight. I have a great deal of respect for both of you and look forward to reading your commentary on a daily basis. Once gold hits $2k I am going to take a small profit and make a donation and---"Feed the Turd, because Turd knows his shit!" That has become my knew favorite saying, much to wives dismay. Turd knows his shit!!

All you trader types out there keep up the great work and thank you to each of you for sharing your knowledge. It is a pleasure being able to visit and read how the Big Boys do it!!

dmanson's picture

Nice Job Turd!

Turd, you are the man!! Your timing on these calls is uncanny! My only regret is not following you sooner when I had more fiat to play with... Thanks for showing us all the light!

Monedas's picture

Today you know you can buy it !

That's a certainty ! You would risk that certainty hoping to save $40 USD.........and risk paying $100 more ? The time for these cute parlor games has ended ! If you can buy it.....buy it ! Monedas 2011 Evo Morales preparing to nationalize Bolivian miners or is he having a libertarian epiphany ? Hee hee hee !

tmosley's picture

Sad day for me.  I found out

Sad day for me.  I found out that I have a large windfall coming to me in November.  I have no idea what it will buy me when it gets here.  If I had it today, I would buy PMs 100%.  I fear that by the time it gets here, silver may have doubled or more, and same with gold, especially if the fraudulent GLD and SLV are caught with their pants down.

Oh well, What I have is probably enough for most anyone.  But damn if I wouldn't like more :)

WYO Silver's picture

Bank of America to Rick Perry: "We Will Help You Out"

2007 Bilderberg attendee Rick Perry gets a little love from a BAC gent.  Watch the guy wearing the glasses in the video.

I'm thinking Ron Paul in 2012.

See story here:

http://www.zerohedge.com/news/bank-americas-dead-drop-rick-perry-we-will-help-you-out

Mikey's picture

If you want to use credit buy

If you want to use credit buy what you want today and pay it when you get your windfall.

ewc58's picture

Nice summation on the meaning of Venezuela

The potential domino effect is a game changer. See you in the Winners Circle (note the golden trophy).

Thanks for keeping us in the pole position Turd. Love ya, the Pit Crew

RockinJohnnyT's picture

Interesting

Tesla's picture

Thanks Turd - TGIF = Turds Got It Figured (out)

Poor Ruprecht and Blythe

Shame2.jpgwitch.jpg

Corsair's picture

Awesome job Turd!

Your timing on new posts is tremendous equals your ability to forecast price movements.

Thanks for everything! 

Mikeyk23's picture

Alternative investments to GLD and SLV

O.k. seeing as there has been a lot of mention of the fraud that is the GLD and SLV, what alternatives do we have to invest in outside of holding physical off course?  In order to seriously take advantages of the price increase i.e. options, there doesn't seem to be a viable vehicle in which to invest in? any thoughts? and PM equities are being taken down with the market

Dr Durden's picture

Algo's gone wild! It's

Algo's gone wild! It's Friday, time to let the robots loose!

I was on Liberty Safe's site today. They proudly display "Made in USA" all over their website and in their ads.

Take a wild friggen guess where the safe I was looking at is made.....

...China.

Fucking assholes.

murphy's picture

@ tmosley

Why not go to JPM's Chase or Bank of America and ask them to give you a loan against your collateral funds in November. Maybe JPM could give you the physical directly and you could cut out the fiat middleman. yes

silver foil hat's picture

Why does Kitco show this?

of particular note is the $ USD Silver 'fix'. But why the negative in Platinum and strange #s in others? Is this a signal?

  Click Here for Historical London Fix Prices  
    LONDON FIX

Gold

Silver

Platinum

Palladium

 

Aug 19, 2011

AM

PM

-

AM

PM

AM

PM

 

$ USD

1.21

1.21

752.5000

-0.55

6.37

6.36

0.79

 

BP GBP

1126.91

1113.72

25.4270

1132.90

1119.85

452.30

452.75

 

E Euro

12.22

7.13

29.3054

1307.50

1288.20

522.00

520.85

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