There He Goes Again

At some point, I guess I've got to stop and decide whether or not it's just wishful thinking.

About two weeks ago, I gave you this:

http://www.tfmetalsreport.com/blog/2658/rally-cometh

I'd been itching for a gold rally but, until now, it hasn't developed. In the post above, I called for a rally in the HUI to 560-580 and it made it to 560 before falling back to 500 last week. A sharp rally has it back to 538 tonight and it still looks like 580-600 is in the cards. That would be about a 10% rally from here.

paper_10-24hui.jpg

But what's got me really worked up is the latest CoT survey. Remember how I always say that the only consistent way to make money trading the metals is to sell when all looks rosy and buy when all looks dreary? The tough part is to get yourself to actually follow that discipline as it goes against basic human nature. Put a different way, history has shown that you want to buy with the banks when the specs are selling. Additionally, you should sell when the specs are strongly buying. Now, back to that CoT survey. Note these week-over-week changes:

Large Specs long: -3901 contracts

Large Specs short: +3623 contracts

Small Specs short: +1878 contracts

The speculators (those consistently wrong) continue to rotate away from long to short.

Commercials (banks) long: +2592 contracts

Commercials short: -6733 contracts

The commercials (those consistently right) are covering shorts to and some are even going long.

Now, chew on this for a moment. The dreaded and evil BoA puts out a report that warns of further U.S. credit downgrades before year-end.

http://latimesblogs.latimes.com/money_co/2011/10/us-credit-rating-debt-downgrade-warning-merrill-sp-moodys-fitch.html

Hmmm. Do you recall what happened from 8/7 to 9/6? How about a $250 gold rally, primarily caused by massive bank short-covering, all of it following the initial U.S. downgrade from S&P. Think of that CoT survey again. Could the banks be trying to front-run the next downgrade?

So, let's just go ahead and put it on the record: I'm expecting a 10% rally in gold before 12/1/11. This gives us a minimum target area of 1780-1840. Let's split the difference and call it 1810 or about 10% UP from where we stand this evening. That type of rally corresponds with where we are on the charts, too:

paper_10-24gold8.jpg

Soon, we will burst through the tough resistance around 1700 and begin mounting this assault on the backs of continued bank buying as well as the short-covering of the misguided specs. If December plays out similar to Decembers past, gold will then finish the year somewhere between 1750 and 1800, continuing the trend of 20-25% annual returns.

I wish I could be as enthusiastic about silver but I'm not. Though I still expect a stellar 2012, the remainder of 2011 will find silver continuing to struggle with high margins and a pit bully named JPM that doesn't appear ready to begin covering its massive short position just yet.

paper_10-24silv.jpg

So, there you go. Once gold closes above 1705, my confidence in this forecast will grow considerably. At that point, I'll look to buy some Dec11 calls. Maybe buy some outright or spread some 1700s vs some 1800s. We'll see. I'll keep you posted.

TF

9:50 am EDT UPDATE:

WOPR is in charge this morning as the PMs are being sold because of this headline:

http://www.zerohedge.com/news/ecofin-meeting-cancelled

Down goes euro. Up goes dollar. WOPR sees dollar up. WOPR sells gold and silver. Yawn.

Perhaps some human buying will emerge soon. At around 1630-35, the hourly chart holds the promise of a little reverse H&S bottom of off last week's test of support near 1600.

paper_10-25amgold.jpg

Hang in there and enjoy the ride. More later. TF

485 Comments

TheGoodDoctor's picture

First?

First?

Vincent's picture

Thanks TF!

Thanks TF!

Kumanari's picture

mahalo

mahalo   burning food..... gotta go

ferretflat's picture

Sounds Like

Sounds like we shoulod just keep stacking the physical

Tesla's picture

Silver OI (-1,125 total contracts) spot up $0.93

Daily Settlements for Silver Futures (FINAL)

Trade Date: 10/24/2011

Month

Open

High

Low

Last

Change

Settle

Estimated

Volume

Prior Day

Open Interest

OCT 11

31.355

32.000

31.355

32.000

+.447

31.620

5

4

NOV 11

31.560

31.605B

31.560

31.560

+.448

31.630

88

84

DEC 11

31.390

32.040

31.230

31.750

+.451

31.644

28,891

60,070

JAN 12

31.360

31.910

31.360

31.750

+.451

31.660

249

203

MAR 12

31.475

32.035

31.360

31.695

+.453

31.684

2,201

13,071

MAY 12

-

-

-

-

+.453

31.700

1,011

2,971

JLY 12

31.680

31.775

31.565

31.775

+.452

31.708

97

2,711

SEP 12

31.980

31.980

31.730

31.730

+.452

31.708

15

1,340

DEC 12

31.530

32.095

31.530

31.650

+.451

31.703

128

11,404

JAN 13

-

-

-

-

+.444

31.676

-

1

MAR 13

-

-

-

-

+.453

31.641

35

752

MAY 13

-

-

-

-

+.454

31.599

-

141

JLY 13

-

-

-

-

+.455

31.546

60

2,307

DEC 13

-

-

-

-

+.452

31.474

-

7,912

JLY 14

-

-

-

-

+.452

31.291

-

267

DEC 14

-

-

-

-

+.452

31.194

-

1,312

JLY 15

-

-

-

-

+.452

30.939

-

185

DEC 15

-

-

-

-

+.452

30.804

-

558

JLY 16

-

-

-

-

+.452

30.579

-

27

Total

32,780

105,320

Last Updated 10/24/2011 06:00 PM

Tesla's picture

Gold OI ( -1,684 total contracts) spot up $26

Daily Settlements for Gold Futures (FINAL)

Trade Date: 10/24/2011

Month

Open

High

Low

Last

Change

Settle

Estimated

Volume

Prior Day

Open Interest

OCT 11

1646.2

1657.8

1638.8A

1650.4

+16.4

1651.5

313

645

NOV 11

1639.6

1662.0

1638.7

1654.0

+16.0

1651.6

239

744

DEC 11

1643.0

1663.3

1636.6

1651.4

+16.2

1652.3

109,518

259,314

FEB 12

1643.2

1664.3

1639.0

1656.0

+16.3

1654.3

2,084

53,029

APR 12

1649.0

1666.4

1643.1

1660.7

+16.3

1655.9

421

15,421

JUN 12

1650.0

1662.0

1642.7

1660.0

+16.2

1657.4

457

18,731

AUG 12

1664.1

1664.6

1658.1

1658.6

+16.3

1659.1

204

7,561

OCT 12

1654.5

1669.4

1654.5

1663.6

+16.3

1660.9

79

5,954

DEC 12

1654.9

1668.3

1654.9

1666.3

+16.3

1663.1

1,087

14,988

FEB 13

-

-

-

-

+16.3

1665.3

-

3,393

APR 13

1668.9

1668.9

1668.9

1668.9

+16.3

1667.7

1

281

JUN 13

-

-

-

-

+16.4

1670.8

2,010

11,029

AUG 13

-

-

-

-

+16.5

1673.8

-

45

DEC 13

1684.2

1684.2

1684.2

1684.2

+16.7

1680.4

1,261

12,260

JUN 14

-

-

-

-

+17.0

1693.8

-

7,672

DEC 14

-

-

-

-

+17.4

1708.5

170

9,057

JUN 15

-

-

-

-

+17.8

1727.7

-

6,015

DEC 15

-

-

-

-

+18.2

1749.2

178

6,888

JUN 16

-

-

-

-

+18.6

1771.0

-

54

DEC 16

-

-

-

-

+19.0

1795.0

70

2,462

JUN 17

-

-

-

-

+19.6

1822.7

-

112

Total

118,092

435,655

Last Updated 10/24/2011 06:00 PM

TheGoodDoctor's picture

That was my first, first.

That was my first, first. Anywho, Turd or someone else, would you be so kind as to explain how the heavy blue line on the 8 hour Dec. gold chart became support after it was originally resistance? I'm a little confused by that. Is that because of where the two lines intersect? Like because you are on the other side of the original pennant formation?

Admittedly, I am not that great with the charts yet. Thanks in advance.

Stoxxman's picture

Silver ...

Sure wish I could make my nifty gold chart work here  

silver.png Courtesy of MineralSTOX.com | An AllPennyStocks.com company
AG-5Y-LG.png

http://pennystockjournal.blogspot.com/

(And a special thanks to those who post for no reason at all ... Pfffft)

¤'s picture

Thanks for the updates

I'm feeling the bullishness also.   Oil is telegraphing something going forward and fairly soon.

The EU gets it's business within order in a week, maybe two.

And the Fed. does likewise in some small measure or a obvious backdoor manner that isn't so small.

That's my guess going forward short term.

No charts all over the place saying so either.

Zing! (not directed at the big guy btw wink)

¤'s picture

Doc

fwiw...that was my first time seeing your first, first.

So that's another first....just sayingwink

Shill's picture

10% Move sounds good here

10% Move sounds good here Turd, think I'll grab a few GDX calls. Dec and Out. But I am holding my Puts as well, even though they are hemorrhaging.

As we all have learned nothing goes up in a strait line forever.

Bstone's picture

@Doc

That was my first time seeing your first post saying someone was first, being another first....So that's another first.

Sorry, got a little humor out of that, how long could this go for, haha.

Tesla's picture

Doc - Resistance overcome and then

tested without a breakdown then becomes support!

Heres an in depth explanation of the whole concept brother:

http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:support_and_resistan

¤'s picture

World power swings back to America

World power swings back to America

The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labour gap with China in a clutch of key industries. The current account might even be in surplus.

World power swings back to America
The making of computers, electrical equipment, machinery, autos and other goods may shift back to the US from China. Photo: AP
 

Telegraph readers already know about the "shale gas revolution" that has turned America into the world’s number one producer of natural gas, ahead of Russia.

Less known is that the technology of hydraulic fracturing - breaking rocks with jets of water - will also bring a quantum leap in shale oil supply, mostly from the Bakken fields in North Dakota, Eagle Ford in Texas, and other reserves across the Mid-West.

"The US was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day (b/d)," said Francisco Blanch from Bank of America, comparing the Dakota fields to a new North Sea.

Total US shale output is "set to expand dramatically" as fresh sources come on stream, possibly reaching 5.5m b/d by mid-decade. This is a tenfold rise since 2009...

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8844646/World-power-swings-back-to-America.html

TheGoodDoctor's picture

James Turk Report - Why Gold

James Turk Report - Why Gold Will Go Above $11,000

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/24_James_Turk_Report_-_Why_Gold_Will_Go_Above_$11,000.html

With continued uncertainty surround the gold and silver markets, James Turk, Founder & Chairman of GoldMoney put together the following piece exclusively for King World News.  One of the primary reasons why Turk wanted to release this to the KWN readers globally is because he is often asked what is his basis for predicting $10,000 gold and higher in his King World News interviews.  The following extraordinary piece is what resulted...

This made me laugh at the the thread the other day calling out Turk and the other "cheerleaders" on KWN. This piece makes it almost seem as if Mr. Turk were reading the blog here. Or perhaps just a rebuttal to the naysayers. Hmmmmm. laugh

Economical Disaster's picture

The making of computers,

The making of computers, electrical equipment, machinery, autos and other goods may shift back to the US from China..

Only if we all are under communist rule, making $1 an hr, free housing with military checkpoints on the street..or FEMA CAMPS.

That's where we are heading. Yup I can see it.

¤'s picture

Angela, Nicholas and the dancing circus monkey

European Circus

European Circus

24 Oct 2011

The quote of discredit that Berlusconi and his administration has reached in the E.U. is over the top. Italy is paying for the shameful activities of that political disgrace. I wish the magnificent italian people will be able to get rid of that dictator as soon as possible. Had to draw something about this issue.

Brotha Bob's picture

Turds Rally

Thanks TF. Much rather you give us a rally, then show us your bottom. (yes, more bottom jokes, could not resist). Things are starting to improve. A rally as predicted would be a welcomed sign, especially for my ETF calls.

The charts are looking better. But, this market will be driven by news from Big Ben's Printing Press, French Banks, Greek Haircuts, and German Refusal to Fund. Things that no chart can show you.

I sitting on the sidelines, until some real news happens

I don't care if it rains or shines as long as I got my stack of silver dimes.

¤'s picture

Click the numbers in chronological order

http://www.fsmitha.com/h2/map23eu.html

(go to the website if this site doesn't allow the interactive part)

Europe and the Middle East, 1939 to 1942

(the dotted red line represents the boundary of the Soviet Union, June 1941)

Map of Europe and WW2, 1939-42

¤'s picture

The Middle East 1945-21st century

home | 1945 to 21st century

The Middle East, 2000 C.E.

Map: The Middle East

¤'s picture

60 year GDP chart by Prez. administration

GROSS U.S. NATIONAL DEBT as a PERCENTAGE of GDP

The GROSS national debt is the public national debt plus the money that the
government owes itself -- money from the Social Security Trust Fund, et cetera.

Credit market debt as a percentage of GDP

SS121's picture

Silver is in total control, SO thorough.

Published fiat price is totally irrelevant as to what is really going on.  Silver is crushing every single fiat currency right now.  The pressure is getting very painful.  El Diablo is trying to ignore it, but when the minions can't take it anymore they are going to act.  Silver wins.

The minions say- focus on our world of Silver charts and fiat prices.  (It's their world and there is no victory there).

Silver says- Seek knowledge, wisdom, and understanding.  Patience.

¤'s picture

Euro Backstop to Be Leveraged to One Trillion Euros

10/24/2011

Rescue Plan Details

Euro Backstop to Be Leveraged to One Trillion Euros

German Chancellor Angela Merkel faces a second vote on the rescue fund on Wednesday.
Zoom
DPA

German Chancellor Angela Merkel faces a second vote on the rescue fund on Wednesday.

Chancellor Angela Merkel has provided German party heads some details of the planned euro rescue package set for approval by European leaders on Wednesday. They include a Greek debt cut of up to 60 percent and leveraging the bailout fund to one trillion euros. The measures will be put to a full vote in German parliament on Wednesday.

Info
For reasons of data protection and privacy, your IP address will only be stored if you are a registered user of Facebook and you are currently logged in to the service. For more detailed information, please click on the "i" symbol.

German Chancellor Angela Merkel has told German lawmakers that the financial strength of the euro rescue fund, the European Financial Stability Facility, is to be leveraged to €1 trillion ($1.39 billion), and that a Greek debt cut of up to 60 percent is planned, opposition leaders said on Monday.

The type of leveraging planned remains unclear, with a number of versions being discussed. It emerged earlier on Monday that the controversial measure to increase the firepower of the €440 billion rescue fund will be put to a full votein the German parliament on Wednesday, rather than just a vote by the budget committee as initially planned.

Given the intense public debate on boosting the EFSF, Merkel's center-right coalition decided to seek a broader mandate than just budget committee approval.

In a meeting with leaders of her own coalition and of the opposition parties, Merkel also said that the intended recapitalization of European banks would amount to some €100 billion, with German banks accounting for around €5.5 billion of that, to meet the increased core capital requirement of 9 percent and prepare banks for the writedowns resulting from a Greek debt cut.

Opposition Unsure about Support

The details of the plans were given to reporters by Greens party leaders Cem Özdemir and Jürgen Trittin after their meeting with Merkel.

The measures were discussed by EU leaders at a summit in Brussels on Sunday and are expected to be agreed to at a second summit on Wednesday evening aimed at containing the European debt crisis.

Frank-Walter Steinmeier, the parliamentary floor leader of the biggest opposition party, the center-left Social Democrats, said he didn't know yet how the SPD would vote on Wednesday because the details of the leveraging plans weren't known yet. He said the SPD's position would hinge on whether Germany's portion of the EFSF guarantees would remain at €211 billion despite the leveraging.

Leverage proposals include the EFSF providing partial guarantees of bonds issued by euro-zone states, or creating a special purpose vehicle to attract funds from major emerging countries.

http://www.spiegel.de/international/europe/0,1518,793719,00.html

Bay of Pigs's picture

Hazey

Thanks for all this news info you post. I don't know how you do it, but it sure saves me a lot of time searching around the net for it.

So it looks like wednesday now before we get to see if the EU/EFSF Bazooka gets fired. Sell the news or do the PM's finally catch a bid?

¤'s picture

Paint the town red

653px-%22I%27ll_paint_the_town_red%22%2C

"To begin with, 'I'll paint the town red", by Grant E. Hamilton, The Judge vol. 7, 31 January 1885.

Cartoon from the magazine "The Judge". "Democracy" is portrayed as the devil holding a bucket labeled "Bourbon Principles" and a paintbrush (in which appears a profile caricature of Grover Cleveland), both dripping red paint with which he plans to "paint the town"; he is standing on a wall overlooking a view of Washington, D.C. showing mostly government buildings, some already flying red flags: "Pension Dep't", "White House", "U.S. Treasur", "War Dep't".

Date

31 January 1885(1885-01-31)

redwood's picture

DPH

Love your maps, esp. the one with chronological sequence - a good quick review of history.smiley

RedRover's picture

30 day & 6 mo. silver symmetry w/ kitco app, iphone & a mirror.

Built this photography idea off a comment, several weeks ago,
discussing a desire to see inverse charts to gain insight/perspective.
Here's a possible solution, many of us can use. Cheers!

+ 6 month Silver:

 

donnojackshit's picture

$1800 Gold would blow Ivars Charts

From your lips to God's ears TF.

If we realise this Gold target, then Ivars calls, unless my eyes have misunderstood those tiny short term squiggles will have been refuted?

¤'s picture

Gold Rush, Ghost Towns Documentary parts 1-3

Syndicate contentComments for "There He Goes Again "