Monday Evening Charts

I thought I would start a new thread with some fresh charts. Today's action in the metals was helpful but it appears that we still have some work to do before we can get excited about a rebound.

First, if it seemed that the metals were sluggish all day, it's because they were. Remember that, post-MFG, much of the speculative buying has been forced out of the Comex. So, for rallies to develop, we need some combination of these three things to happen:

  1. Cartel short-covering.
  2. Cartel new long establishment.
  3. Large spec (hedgie algo WOPR) buying.

Not much of #1 taking place right now as the recent CoT shows. Not much of #2, either. And, as long as gold remains below its 200-day moving average (near $1680), there's not much of #3. Put it all together and we're left with a day like today...a meandering drift higher that is easily subject to Cartel-inspired reversals to hold things in check. Absent some headlines to jam gold sharply higher, you have to expect this type of trade to continue. The charts seem to confirm this as the area between 1670 and 1680 shows quite a bit of resistance. Put it all together and it looks like gold will be stuck in this $1640-1680 range for a while longer.

paper_3-19pmgoldd.jpgpaper_3-19pmgoldh.jpg

Rather remarkably, silver looks a little bit better. Turdites will recall the seemingly endless battles that often center around the $33 level. Well, here we are again! Today's action was a very positive first step as silver was able to move up through and hold above $32.80, which is a number many of you will recall from earlier this year. If we can now build upon this tomorrow and extend these gains through $33, I think we can start feeling quite confident that the "right shoulder" is in for silver. Keep your fingers crossed!

paper_3-19pmsilv12.jpgpaper_3-19pmsilvh.jpg

Many have asked that I update the crude oil charts and today seems like a fine time to do it. Not only do the charts look pretty good, the war drums are growing ever louder. Soon, the U.S. will have 3 aircraft carriers in the Persian Gulf area and reports surfaced today that the Russians have inserted some troops into Syria.

As you can see on the charts below, after breaking out in mid-February, crude inevitably fell back and tested as support the level which had been resistance, near $104. Several attempts were made to break it down but price rebounded on each occasion. Now crude has clearly broken through the downtrend line from the late-February highs. At this point, it looks almost inevitable that crude will soon re-test the $110 region and, should that level fall, crude will soar toward $115.

paper_3-19pmcrudeh.jpgpaper_3-19pmcrude6.jpg

With a tip of the hat to our pal Trader Dan, I present to you the two charts below. Do me a favor and print them off. Hold them up to the light and compare them. Maybe some of you are even resourceful enough that you can plot these two together on the same chart. Note the incredible correlation of the two since late 2008. Coincidence?? Please. And please ignore all of the douchebag, hypocrite politicians and pundits who want to blame high crude oil and gasoline prices on the "evil speculators and oil companies". Are they going to blame the S&P rally from 666 to 1400 on ExxonMobil and Chevron, too? What a load of crap. As all of you know, the $10T+ that has been created, loaned, margined and spent over the past 3+ years is solely to blame for the rise in price of everything that is denominated in dollars. In fact, consumers should be grateful that gasoline isn't $5.00/gallon at this point, given that the S&P is at 1400. Oh, well, just wait...between the impending wars and the refinery closures that Jim Comiskey pointed out last week, gasoline will get there soon enough.

paper_3-19pmcrudew.jpgpaper_3-19pmes.jpg

Lastly, the founders of The Screwtape Files have long been followers of this site. Though they are sometimes critical of some of the uber-bullishness of the PM community (occasionally justified), several of the posters there are long-term precious metal bulls. Over the weekend, one of them sent me a link to a research piece he/she wrote on gold and gold miners. After reviewing it, it seemed logical to post it here, too. Take a look, I think you'll find it interesting. (Though I have to admit, the avatar of the blue-eyed lemur, or whatever the hell that thing is, kind of freaks me out.)  http://screwtapefiles.blogspot.com/2012/03/gold-and-its-miners-look-ready-for-big.html

That's all for now. Let's hope we have a peaceful overnight.  TF

151 Comments

tmosley's picture

Could it be?

Did I read the whole article and still get first?

Edit:  I did, amazing!  I strongly agree that the run up in oil is mirrored in pretty much all other risk assets.  One need only price in gold to account for all this silliness.  When you do, you will see that we are having extreme deflation in many sectors of the economy, brought on by economic stagnation.

The natural result of this is going to be falling production of EVERYTHING and a lower standard of living for everyone that doesn't own PMs, or is leveraged long on other fungible commodities (ie NOT Natgas, which can't easily be transported overseas). 

Nick Elway's picture

Second?

I often disagree with her, but Jeanne d'Arc  is good reading!

"For silver, if you really must insist on playing with fire and giving all your money to brokers and your counterparties, my favourite of all investments, the situation is regrettably also pretty bullish."    Nice!

Odin's picture

Third

Break out week? (for silver)

Be Prepared's picture

The Economy that no one will take on....

Animal Sacrifice's picture

5th

Fifth

SilverWealth's picture

Turd

Turd there are no real trading ranges in this stuff imo. You are too hopeful.

Wait for the waterfall attack and then respond. If its a criminal market how does a chart reasonably contain it? We are nearing a last leg down I think and Tuesday is moving day so should be an expansion day with some volatility and price movement.  A chart will not contain the movement.

GDX unable to bounce. Like an old man attempting to mount Jessica Alba. As much as it tries, no banana.

If we do get a good criminal spike tomorrow I think we will get a turnaround and some real buying to finally come in. IMO

dropout's picture

Thar She Blows!

The Greek Island of Santorini getting ready to explode.

Greek debt holders take over a 75% haircut.

The CME (at their request) vacates their European derivative clearing operation.

Russian military in Syria? False flag? 

Iran blocked from the global banking 'Swift" clearing house.

Obammy signs yet more dictatorial power into law.

DHS makes a contract deal to purchase 400 million rounds of 40 cal pistol ammo. Why so much?

I could go on and on and... Why? Grab what ever PM's your remaining fiat will allow you and take physical delivery.

Because when this humungous, puss filled financial, militarist, fascistic, bubble blows ~ the resultant fall out will cover anyone not prepared with putrid, smothering, GGOS! (great gobs of s--t)      

exiledbear's picture

I'd like to point out a bright spot

That I think almost everyone is missing. Paper platinum traded higher than paper gold today for the first time in many many moons.

Platinum has always commanded a higher price than gold. Not to say there won't be more weakness or sideways action in gold, but I think we're building a base here for higher prices in all the PMs. Actually, for the past few months, I think you would've done better if you had bought Pt, instead of Au or Ag.

Goes to show you that the easy paths are all mined and the path to profit is NOT obvious. If it's obvious, it's not profitable, or at least won't be profitable right away.

iceman321_2k2's picture

Silver is so amazing... .99999 pollution free

You gotta love the white precious metal... which is now eco-friendly!

By using only water, oxygen, air products and a catalyst, the company has invented a new technology that processes any complex sulfide silver ore and concentrate with zero-emissions.  According to Brian McConnell, CEO of Royal Silver Company, the new technology will change the way metals are produced in the twenty-first Century.  “As far as we know, we operate the world’s only zero-emissions, poly-metallic smelter.  Complex sulfide ores go in, pure metals come out, without a molecule of contamination released to the environment.  Our process can be used in other mining districts around the world, which is why we patented the process in the USA.  We have a large-scale plant waiting in the wings here in Bolivia, ready to go into service once we increase our cryogenic oxygen plant capacity.”

http://wallstcheatsheet.com/investing/silver-goes-green.html/

arkel's picture

Keep buying...

Let me know when the purple line at least hits the green line. Until then, I'm gonna keep buying. Now going back to my hibernation.

Dr G's picture

@exiled, if gains were your

@exiled, if gains were your thing then yes, you would have done better with Pt than Au/Ag. But if you are stacking and prepping for the future, Pt could be risky. Has it ever been money? Will it be in the future? Will Ag?

Who knows. AAPL has been more profitable than any of the above, thus far in 2012.

Dr G's picture

Sweden going cashless. A

Sweden going cashless. A quote from the article says that "less cash in circulation" makes things safer for the people.

Yeah, safer for the government to extend it's control over our lives.

Link: http://www.cbsnews.com/8301-202_162-57399610/sweden-moving-towards-cashless-economy/

GuerrillaCapitalist's picture

NSA Super Computer Data Mining on Steriods

Repost from bottom of last thread, since this is vitally important for wide dissemination.

This is even more disturbing than the latest Executive Order or the NDAA. This system currently under construction reportedly has the capacity to capture ALL telephone calls, the entire contents of email, all web searches, the deep web, everything digital.  Scares the hell out of this old soldier. It also really makes me mad as a Jeffersonian constitutionalist.

http://www.zerohedge.com/news/%E2%80%9Cwe-are-far-turnkey-totalitarian-s...

Mantis's picture

New Currency for a new world order

A New Currency for a New World Order. It was designed by children from all over the world. Ah bless.

http://www.futureworldcurrency.com/Default.asp

Looks like its made of gold ?

Dr Jerome's picture

OutLookingIn

I found a picture of your post above...

What I cannot figure out is how so many things can go wrong and not cause the system to collapse already. Oh, I almost forgot. The MSM has not told the people that that system is collapsing yet.

lamare's picture

Judge ruled against Dutch Central Bank about gold pension fund

I'm just reading (in Dutch) that the Dutch central bank has lost a case brought against them by a Dutch pension fund. Some time ago, they forced a pension fund to lower it's gold investments from 13% to 3%.  Now the judge disagreed with the central bank and therefore the pension fund will now probably claim damages of at least 10 to 11 million euros. A google translation:

http://translate.google.com/translate?hl=en&sl=nl&tl=en&u=http%3A%2F%2Fnieuws.goudmarkt.nl%2Fpost%2F2012%2F03%2F19%2FDNB-door-rechter-teruggefloten-inzake-goud-belegging-pensioenfonds.aspx

This could be a very important verdict, because the Dutch have LOTS of money in their pension funds. If all of these funds were to increase their gold investments from 0-1% to 5-10%, then you would get a LOT of money entering the gold market. I have no idea how much money you would be talking about, but it may cause a domino-effect.

Mantis's picture

Sweden going cashless

Why stop there, lets have have a microchip implant. Better still make it mandatory.

Honestly the NWO agenda is so transparent

ClinkinKY's picture

@ Dr G--Sweden Going Cashless

Sweden going cashless. A

Sweden going cashless. A quote from the article says that "less cash in circulation" makes things safer for the people.

Yeah, safer for the government to extend it's control over our lives.

Link: http://www.cbsnews.com/8301-202_162-57399610/sweden-moving-towards-cashless-economy/

And the scary part is that all Swedish  "Digital Account Nos." will  begin with 666. (I'm not really a Revelations prophet, I just play one on TV:) Still some disturbing news.

achmachat's picture

@ClinkinKY

you know who played a Revelations prophet on TV this year? Edward James Olmos.

:-)

¤'s picture

Ag

Thanks for the update.  $33 almost.

TomorrowMaybe

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paulindoon's picture

Re: Silver is so amazing... .99999 pollution

Hey iceman321_2k2: Thnx for the link. I have sent a copy to the CEO of Arian Silver (http://www.ariansilver.com/s/home.asp) for his perusal. FYI, AGQ.V is POSSIBLY looking at building a propriety mill to refine the silver they are mining out of their San Jose mine in Mexico which presently is being custom milled for them.

BostonMatrix's picture

Chart overlays

Great work TF. Charts overlaid as requested. S&P in red because, well, people are gonna have to get used to seeing it that colour sooner or later.

I really wish I could remember who it was that wrote a really convincing [to me anyway] piece of analysis sometime towards the end of last year which came to the conclusion that both metals would consolidate for a year after their major high / beatdown; (Ag's being at the end of April 2011, Au's being in Sept - as if you need me to remind you), then would breakout. Seems like it could be looking that way at the moment with Ag gaining a bit of momentum recently while Au has remained a bit cooler. I'd love to find it and post it here but have already wasted a stupid amount of time trying to find it but to no avail.

Keep on keepin' on.

Timber Tim's picture

TROLL INFILTRATOR

TURD, LOOK DEEP INTO MY EYES, DEEPER!

NO DEEPER!

REPEAT AFTER ME.

"GOLD AND SILVER ARE NOT MANIPULATED"

Turdle GG's picture

Turd, anything new from Winston?

thanks Turd.  More good info from the London Trader over at KWN.  

Can "Winston" confirm or add to the London Trader's comments?

Chris P. Bacon's picture

Here ya go

Damn....a dollar short!

Poly's picture

Patience

Many macro and long term themes presented in these comments justifying a push higher.   All true for the most part, but unfortunately, when dealing with the immediate term, maximum pain is normally first experienced. 

Firstly, the Dollar is now in a new Intermediate Cycle and likely has a strong 6 weeks ahead of it.  The obvious head winds from a stronger dollar go without saying.  As for the PM Miners, well they just look horrible, and while capital rushes head first into equities, do not expect this sector to fire again until the cards come crashing on the equity house.  Capital always floods the best performing sectors/asset classes, until of course its no longer best performing.

Don't rush a trade here (non day traders), gold (and Silver by correlation) have some unfinished business to the downside, IMO.  That's evident by its cycle, it still has some 6-8 weeks before it will find its cycle low.  By all means hold a solid core position to capture the upside bull market surprises.  But for now, I suspect the coming 3rd speculative wave of this bull market will not begin until its bucked even the die hard gold/silver bugs.

cpnscarlet's picture

JT at KWN

Wow! Turk actually sounds calm and reasonable today. Should I be worried??? No mentions of "strong action" or a "reach to 50". Now given his performance, that means we should see 68 Ag by the end of March!

Punk-Assets's picture

Back in early American

Back in early American history Spaniards and colonials would gold plate platinum coins and pass them off as gold.

http://64.60.141.198/cgi-bin/lot_auc.php?site=1&sale=5&lot=4247&lang=1

(you may have to copy and paste the url)

Platinum is not in the human DNA like gold. And when its clear that our economy is in the shitter yet again, guess what metal is going to get tossed to the side for real money?

Bingo!

Its happened twice in just a few years and it'll happen again soon enough.

Sex, drugs, rock n roll...and gold.

Day after day, year after year, millennia after millennia 

What do you want in your perma pile when the music stops?

I Run Bartertown's picture

@ Poly Buck us?

No, Buck them!

BTW, 140 of these come to just a bit over 10 oz.

Good way to get increments of 10 oz, but highly divisible for when you need to come to Bartertown. 

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