How 'Bout Some Charts?

The first trading day of the year certainly brought about some powerful rallies. As we've discussed in the past, trend changes can often be spotted in hindsight by looking for days where powerful, surprising rallies developed. Was today such a day? Only time will tell.

There's certainly a lot of interesting stuff going on. Let's try to take things one-by-one. First up, of course, is gold. As we've discussed since September, there has always been a possibility that gold could fall all the way down to its primary trendline. I had always drawn and speculated that that line was around 1550 or so. Well, after the close of last week and last month, take a look at this monthly chart. In the immortal words of W, "mission accomplished".

paper_1-3goldm.jpg

Again, a close inspection of this chart shows that gold tends to hug the lower line for a while once it reaches there. It has happened several times in the past three years. However, I fully expect this line to hold going forward so there would seem to be minimal downside risk at this point.

When we look at the shorter term charts, a couple of levels jump off the page. First of all, in the very short term, gold is likely overbought and subject to a decline tomorrow. 1605 will likely act as resistance and then 1585 or so will need to act as support. If support holds and then 1605 falls, gold will make a run to 1620 and then 1640 before pausing. Once those levels are bested, gold can begin to set its sights on the black line found on the daily chart. Once gold rises to that line, The Battle Royale will begin. Ideally, by later this month, gold will reach the line and trade up through it. It will then ride the line lower for a few hours/days and then skip away higher. At that point, I will get extremely bullish as gold will be headed to 1800 and then back to its old highs from September.

paper_1-3goldh.jpgpaper_1-3goldd.jpg

OK, now let's look at silver. Like gold, let's begin by looking at the monthly chart. Again, I've stated since September that the potential existed for silver to fall all the way back to the primary trendline. Back in September, the line was near $24. Today, it looks to be right at $25. Of course, the lows of last week could be the bottom. However, I have to think there is still a strong possibility that silver will make one, last push lower to touch this line. Time will tell. We'll keep watching the shorter term charts for clues.

paper_1-3silvm.jpg

Speaking of the shorter term charts, take a look at these two. First up, look at the hourly chart. Clearly $30 is an important level and one which the EE has tried to protect. Then, check out the daily chart and you really begin to get a sense as to why $30 is so important. IF silver can get convincingly above there, it will take out the downtrend line from the highs of early September. This would be a very important first step in the recovery/rally of the paper price. It may happen. I hope it does. However, I'm not convinced that the EE is ready for it to happen yet so do not be surprised if silver fails near 30 and slips lower. Let's watch this closely.

paper_1-3silvh.jpgpaper_1-3silvd.jpg

This would be a good spot to discuss some silver fundos. As I mentioned in yesterday's video, the latest silver CoT numbers are very intriguing. At the height of the silver rally back in May, the spec long position in silver exceeded 45,000 contracts. Today, that number has been nearly cut in half to about 24,000. In contrast, the bank long position in May was around 36,000 contracts. Today that number stands near 41,000! Clearly, these are extremely bullish statistics and exactly what I would be looking for, from a CoT perspective, at an important bottom. These numbers don't mean we are at the bottom but they do indicate that we are very close.

Now let's turn our attention to our old friend, Pigatha Christie. Take a look at this chart and have a laugh. Note that the POSX is almost exactly where it was a year ago. In fact, almost exactly a year ago, on the old blog I wrote about how the coming decline in The Pig would impact PM prices. It's a must read if anything to see how little some things have changed in a year, though certainly lots of volatility in between.

http://tfmetalsreport.blogspot.com/2011/01/dollar-shitcan.html

paper_1-3pig.jpg

At any rate, the dollar looks to be topping again in the area around 80-81. If Q1 2012 plays out like Q1 2011, we'll certainly be in for another fun ride in the PMs.

We probably should take a look at crude, too. Note a couple of important things.

  1. Crude is at it's own "moment of truth". If it can move through 104, it will almost certainly move toward 115.
  2. Note how similar the crude chart is to the silver chart. Similar, that is, until early October. At some point, they will re-sync. The question is: will crude trade down to silver or will silver trade up to crude?

paper_1-3crude.jpg

Finally, I suppose we should check the chart of the HUI. Before we do, however, I now have to post this link. I can't type "HUI" without thinking of this song as it sounds to me that the lyric actually says "HUI". (Frankly, it's just a gratuitous reason to post a video of Carrie Underwood. Mmmm.wink)

OK, back to business. Here's your chart. Note that the index stopped right near its bottom target of 480 last week. That should be it. Let's hope so because any drop through 480 and we'll have to look for 450 or even 400. The poor miner holders are already suicidal. A 400 HUI might push them over the edge.

paper_1-3hui_0.jpg

OK, that's all for now. I have to take LT#2 to her Tae Kwon Do lesson. I hope you all have a great overnight. Let's see what happens. Tomorrow should be a rather interesting day.

TF

268 Comments

Tyler's picture

Come on Ron Paul!

sorry I had to

SilverHawk's picture

STACK!

Just do it... stack 'em up!!!!

Boardwalk's picture

Second. . .

.. . . time I've been Thurd in as many days.  Wooo Hooo!

The dollar is set for a reversal you say?!

dollar-in-flames.jpg

cpnscarlet's picture

A New Global Economic Restructuring

Yawn. Nothing actionable in that video (last thread). I wouldn't say it has a religious base, but a spiritual one. PROBLEM IS...there are good spirits (angels) and evil spirits (demons). Don't know anything about this 'Theo Group", so maybe I'll do some research.

Could be something great, but the skeptic in me says 1) Hot Air, or 2) Get a ringside seat to see the Antichrist performing some "miracle" to save the planet so we make him our great leader. I'm betting on #1.

sixdollarsilver's picture

Cheers Turd

Choice chart work.

Be Prepared's picture

Movement is....

a temporary state of being.

Turd, Thanks for the Great Charts.... I know that it takes a great amount of work and effort to put it together for us.

I say "Movement is Temporary" because we are in a Year where many of the Rules that have previously defined our Government and our Civilization have been suspended, obliterated and positively ignored.  It's critical to remember that as we scan the horizon of the Precious Metals market.  T.A. is ultimately tied to the group dynamic of human behavior and its accuracy, somewhat, can be further correlated to its ability to understand a predictive outcome of whether the crowd is moving into the stadium or rushing out of the stadium....based upon events of similar duration and impact.  Oversimplified... I know...

My point is that I think we are at a point where most of our compasses are going to start to diverge from true north because it doesn't exist anymore.  MFiing Global exploding, Larger National Debt than GDP, NDAA...... all these type of events haven't happened in a similar vein for over 2 generations and they are colliding into each other in unexpected ways, so the North Magnetic Pole's strength has faded.  So what ever "Movement" Up or Down will not have an identifiable path beyond the short term horizon.  I think we can all understand the "Long" term horizon for Precious Metals, but its that time in-between and that duration in-between the "short" and "long" that will skin us alive if we are not prudent to understanding...."There are no rules....except There are no rules!"

Don't start this year believing that all of what you have know last year is a basis to guide you through this year.  Take your experiences and your plan and move forward....but the path less travelled is still more rocky ahead!

clueless one's picture

OT: sorry...but I need a little clarification...if you please..

but 1st...THANKS, TF/Mods...for everything you do, everything you say...and for standing up for the Joe Schmo's of the world.  Much love, guys.

so..

a ZH comment linked an article regarding BofA and them calling in loans on small businesses.  Basically, pay up...no more payments. 

I'm not with them, but I've got a mortgage and two smaller loans right now with a pretty big bank, thankfully zero credit card debt.  Although my bank is never mentioned in this whole mess of leverage and such...not sayin' they're clean, but at least they've not made ZH as of yet...

Is this where we're headed???  Wifey absolutely will not sell the house and rent, still have equity believe it or not, and will not have her comfort zone infringed upon in any way.  At least not by my doing....I'll bet she'll get a wake up call eventually...so I just sit back and deal with it the best I can to keep things civil.

I'm all ears on opinions...this kinda bugs me a bit.  Cuz' there ain't no way in this world that I've got coin to pay it off if they come callin'...

por favor..?

thx.

Brotha Bob's picture

Thanks Turd

thanks Turd. Wow what a day. Sunshine and applesauce!

I guess the y/e tape painting did not work to well.

This weeks CoT report shall be interesting, since it will cover the drop and bounce. Curious to see net change in the banks dirty shorts, if any. They sold last week. Maybe buying this week? Just a thought.

beardeus's picture

"Needing help"

Just reposting this from last thread. Please ignore if you shared your wisdom with me, us, earlier. Thanks!

"Hey guys. I am wanting to invest in some mining stocks, 2-3. I am a small timer and would actually be selling a small, small, percentage of my stack. I think the profits will be amazing in the miners. Especially the junior miners. I have heard this time and time again " Rick Rule - How to Make 50 to 100 Times Your Money in 2012" (http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/1/3_Ric...) and I don't want to miss it. We've already seen some real winners (Arian went from $6 to $60).

I was wondering if anyone had a list of a few, tickers, with a relatively low price per share. Mainly stocks under $10. Please only list companies that are ACTUALLY mining and are listed on the bigger exchanges.

Considerables so far:

ASM

GPL

SVM

Thanks."

Vote Ron Paul!

Shill's picture

Thanks for the update

Thanks for the update Turd.

Not in the mood for the Internet today so I just relaxed and watched.. PM's  looked great as did most commodities, market wise, well I am not buying it. Show me a move up over 2% in the 10 year T then I might consider entering a strong  position other than that it looks like the same old same old to me.

TTYL.....

cpnscarlet's picture

Just Looked - Didn't take too long

THEO GROUP - A bunch under a leader couple "channeling" 12 archangels.

Therefore - HOGWASH. Either morally (bunch of charlatans) or spiritually (they're being duped by demons). I vote for the former.

Part of me wishes I had a big lack of ethics like these people so I could take a bunch of rubes for a ride and make an easy buck too.

If anything they are saying comes to pass, time to head for the hills.

Turd Ferguson's picture

No more QE?

MODERATOR
Sneed Hearn's picture

Loan Issues

@clueless one  Loans that have not matured (i.e. come due) or are not in default generally may not be accelerated.  A mortgage is a good example of that if it is a fixed term, 15 or 30 years. So long as you make the payments you should be fine. A maturing business loan is a different matter entirely as the bank has no obligation to renew it. You may have been rolling it on maturity for years but the bank has no obligation to keep on doing so unless a loan agreement or the like requires that.

¤'s picture

Thanks...

...for the update/charts.

The wild card in the POSX (and mostly everything else)  would be any naval skirmish or conflict if one should unfortunately happen over in the Strait or elsewhere. We might hit 85 before we see 75 if that happens.

http://www.tfmetalsreport.com/comment/111237#comment-111237 

http://debka.com/article/21615/

Dr G's picture

Stack up the physical. Don't

Stack up the physical. Don't worry about the prices too much, it's always a great time to buy if you can spare the cash.

Speaking of which, I'm hoping to make a little extra physical money myself with the Iowa caucus. Just bought shares on intrade that Paul would win the caucus. Could make some nice coin and roll that into silver if it happens. Fingers crossed!

clueless one's picture

@ Sneed Hearn

Thanks for the clarification!!!

arcticfox's picture

Interesting

Gold has long been touted as one of the most reliable investments out there, and lately many investors have been buying it as if positive returns on the metal were guaranteed. However, all that could change in 2012 if the Chinese government gets its way. According to GFMS, a global economic consulting firm specializing in precious metals, the Chinese market absorbed around 22 million ounces of gold in 2011, meaning that it took between 30 and 35 percent of all newly-mined gold off the market[1]. While this might mean good things for value in terms of scarcity of the metal, the long-term effects are slightly harder to predict. To further complicate things, a London trader who has a history of accurate-but-difficult-to-confirm predictions recently reported that the Chinese government is attempting to reach contract agreements with multiple gold mining companies to buy all of their gold output on a long-term basis. The report has not been confirmed, but if it is true and the Chinese government succeeds in this effort, it will have a detrimental effect on global gold markets, which are heavily leveraged and have only a small fraction of the amount of gold necessary "to meet the contractual obligations of existing contracts." Should the availability of newly-mined gold go down, gold markets like COMEX would likely have to close out many short positions and dramatically reduce sales volumes on paper contracts for gold. The result would certainly be higher gold prices, but it could also result in "outright debt default of one or more…national governments," bank failures, inflation and possibly even seizure or shutdown of major global market operations, warn analysts.

http://realestate.bryanellis.com/5856/market-news-chinese-moves-in-gold-sector-could-turn-markets-economies-upside-down/

Monedas's picture

All for Ron Paul if he can get the nomination !

Against disloyal family members going chicken shit public....like Reagan's kids, etc. !      No Turd Party vote for me ! If you can't win the nomination.....man up and man down !        Shill, unto thy own self don't be a shill !  Buy, buy, birdie, buy, buy !    Hoarders havin' fun "Tue" day !  I can be silly and giddy if I want too ! Yayayayeyeyeohohohnananalalalalololodadadahohoho !  Sing along with.... Monedas 2012  Comedy Jihad Gratitude From The Strong Rich Hands Cartel ! Thanks For Throwin' In The Towell ! devil   PSA:     http://trololololololololololo.com/

beardeus's picture

@ Dr. G

Why don't you buy these?

Ron Paul to be Republican Presidential Nominee in 2012

Last prediction was: $0.41 / share
Today's Change: buy-arrow.png+$0.08 (+28.1%)

A win in Iowa would mean a HUGE percentage increase and even if he places second, this should still be up substantially.

Edit: Hmmm... I haven't researched Intrade much. No liquidity. No shares.

Be Prepared's picture

I hear the "Tom Tom" of the War Drums, but...

I am skeptical as to the motives.  It's obvious OBummer has been positioning his administration into a showdown with Iran, but I am tired of "Dear Leader" putting my brothers and sisters in harms way for the purpose of bolstering his chances for a 2nd term.  Finalizing extreme sanctions against Iran is leaving them boxed in a corner with very little way out...other than to retaliate.....  This is not a great situation for anyone right now, except for Haliburton and their next $8 billion no-bid contract.

It might be a good time to be long Oil..... 

Mudsharkbytes's picture

What a measly trillion dollars looks like (repost, sorry)

I don't usually do this but since it seems a new thread was started as soon as I posted this - 

This is from:

http://www.pagetutor.com/trillion/index.html

Using $100 bills:

$100

In $10,000 packets:

$10,000

One million:

$1,000,000 (one million dollars)

One hundred million (fits nicely on a pallet):

$100,000,000 (one hundred million dollars)

One billion:

$1,000,000,000 (one billion dollars)

One trillion:

$1,000,000,000,000 (one trillion dollars)

Note that the pallets in the above are DOUBLE STACKED!

Ircsum's picture

Volumes

Thanks for the charts & analysis, Turd. Great to see the rally in the metals today but the volume in both gold & silver is at the same piss-poor level as the previous 6 sessions, so I hope we're not premature in breathing sighs of relief.

SRSrocco's picture

JAN 2012 SILVER EAGLE SALES....3,197,000

SILVER EAGLE SALE UPDATE

Well, it looks like the US MINT dropped all its last week DEC 2011 sales on JAN 2012.  They just updated their figures just a few minutes ago and here is what it looks like:

So the US MINT decided not to add anymore sales to DEC 2011 to make an even 40 million.  But, 2012 looks like a good start with 3.2 million already in the first few days of Jan.

Patrancus's picture

I am taking charts with a grain of salt

I am taking charts with a grain of salt in 2012 for no other reasons than the dastardly manipulations of TPTB and I am trying to not lose focus on regular systematic accumulation of physical. By spending my time reviewing this chart or that chart, it tends to cause uncertainty and delay on my part in deciding if the time is right to buy, when in all actuality for this particular time and place in the annals of American human history, the time to buy all the time has never been more apparent, and timely. Hang the charts and stack.

steveo's picture

steveo here, newby from

steveo here, newby from December, glad to find this site.

I focus on copper, gold, and my specialty, copper priced in gold.   But also Forex, since this ALL is really about currency wars, competitive devaluation, and ES and TF futures.

Here is my opening view on things.    Waiting to get big long, was mostly flat over the New Years except for a handful of options.

http://oahutrading.blogspot.com/2012/01/2012-back-in-saddle.html

SRSrocco's picture

Welcome STEVEO....

Sounds like you got a good grasp on things.... do you own any PHYSICAL Gold or Silver?

Mudsharkbytes's picture

Just TRY to keep from upchucking your dinner

Be Prepared's picture

Welcome as well... Steveo

Big shout out for our newest Turdite, Steveo!

Be Prepared's picture

@SRSrocco - They robbed us...

of our 40 million prediction just to move those sales to January 2012.  The EE couldn't show a banner year and break the big 40....it wouldn't look good for "Dear Leader" and our "FRN" paper.  :-)

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