Step One Completed

The first step in confirming a bottom is finding one. We found one last week and the action today looks to confirm it.

In the previous post, I asked you to watch for a break out and UP today and we've gotten it. First things first, however. Remember, any gains made while the metals are closed or on holiday are almost always clawed back once trading resumes. Almost always. And we saw this again today. The good news is that, once again, the old adage is holding...namely, "what was resistance becomes support and vice versa".

So, now what? Again, I must caution you against expecting too much, too soon. Though we have been base-building for over a week, we still need to overcome some additional resistance before the bottom is clear to everyone and the shorts begin to aggressively cover. Silver is still slightly ahead in this process and should continued to be watched for clues. For now, as you can see below, silver has clearly broken through the downtrend lines on both the 4-hour and 12-hour charts. This is undeniable and an obvious sign of the bottom to this correction/pullback. Closing above $32.25 is our first goal, followed by a close above $32.60 or so. Once that happens, the mealy-mouth, panty-waste spec shorts will begin to cover and price will extend toward the area around $33.35, where they will make their next defense.

The gold chart also shows a clear base and breakout on the 4-hour chart. It shows this on the 12-hour chart, too, but a case could still be made gold needs to clear $1720 first. OK, that's fine. $1720 is our pivotal level, anyway, so watch that area closely. A close above there and gold will jump toward $1730. The area between $1730 and $1740 might present some challenges but, ultimately, besting $1755 will become our next main goal.

I only wish to discuss one "news" item today and it's something that I don't think is getting enough press. Our old pal, KosherDakota made a speech yesterday that is being overlooked.

I began to ridicule this knucklehead a few years ago as it seemed he was trotted out to give the "hawkish" or "dovish" monetary policy view every time a little additional MOPE and SPIN seemed necessary. Here are a couple of samples. First, from August of 2010, three months before the announcement of QE2: http://www.minneapolisfed.org/news_events/pres/speech_display.cfm?id=4525. Before you know it, ole KosherDakota was all in favor of "bond buying" by The Fed: http://blogs.wsj.com/economics/2010/11/30/feds-kocherlakota-wants-inflation-expectations-increase/

But then, by the end of QE2, he was trotted out to assure the markets that QE could be bad and was perhaps gone for good. There might even be a rate hike just around the corner, maybe as soon as late 2011: http://www.minnpost.com/business/2011/05/fed-president-sees-possible-rate-hike-2011-economy-slowly-improves. And here we was in late June of 2011, dissenting at the FOMC and calling "stronger easing measures" the "wrong approach": http://wtbx.com/news/articles/2011/jun/27/tax-code-hurts-stability-feds-kocherlakota/

So, what happened yesterday? Chuklehead The Clown was back in the news! He was speaking in Duluth and he openly stated that:

"The U.S. economy is recovering from the largest adverse shock in 80 years–and a historically unprecedented shock should lead to a historically unprecedented monetary-policy response".

He went on to add that:

“Given how high unemployment is expected to remain over the next few years, these inflation forecasts suggest that monetary policy is, if anything, too tight, not too easy".

You can read all about it here: http://blogs.wsj.com/economics/2012/10/30/feds-kocherlakota-fed-may-not-be-providing-enough-stimulus/.

Even the left-leaning and progressive (Keynesian) website Slate has an article about it today: http://www.slate.com/blogs/moneybox/2012/10/31/narayana_kocherlakota_s_duluth_speech_a_masterpiece_of_intellectual_rigor.html

Intellectual rigor my ass. This guy just flips and twists in the wind. For now, he is simply being trotted out yet again to foreshadow the next direction of Fed policy. We should now fully expect a formalized increase in the projected 2013 QE∞ plan when the FOMC next meets in December, regardless of the SPIN and MOPE that comes out on BLSBS day or from O'Bomney.

To that end, I've received several emails wondering what I expect from the metals if Romney is elected. The answer is simple: MORE OF THE SAME. Those that fear a downturn in price because of a Romney-imposed austerity or firing of The Bernank are delusional. Let me state this very clearly as a reminder for all eternity:

QUANTITATIVE EASING CANNOT END. NOT THIS YEAR. NOT NEXT YEAR. NOT EVER. IN 2013, THE FED WILL PURCHASE OVER $1T OF NEWLY ISSUED AND REFUNDED U.S. GOVERNMENT DEBT. WITHOUT THE FED PURCHASING MBS FROM THE PRIMARY DEALERS, AUCTIONS WOULD FAIL AND INTEREST RATES WOULD RISE DRAMATICALLY. THIS WOULD RAPIDLY ACCELERATE THE DEMISE OF THE GREAT PONZI AND THIS CANNOT BE ALLOWED. THEREFORE, IT MATTERS NOT WHOM WILL BE THE NEXT PRESIDENT. QE WILL CONTINUE UNABATED, REGARDLESS. ALL OF THE TALK ABOUT THE BERNANK AND SPENDING CUTS IS SIMPLE POLITICAL SPIN TO GET VOTES, SIMILAR TO THE PHRASE "BORROW FROM THE CHINESE".

Lastly, I leave you with another great article from Jeff Nielson at BullionBullsCanada. http://www.bullionbullscanada.com/gold-commentary/26018-the-great-gold-scam

Have a great day!

TF

264 Comments

Istack's picture

Expectations

Higher silver prices are right over the next hill

     

murphy's picture

OMG !! Dedicated to JPM and Blythe

#2 Turd

Revelation's picture

Happy Halloween!

pidgin's picture

Can someone explain to me why

Can someone explain to me why the f. is AGQ up so little today with silver even up more??? Supposed to be leveraged afaik

The Watchman's picture

From Ted Butler-$100/oz SILVER

The real reason I can get away with labeling JPMorgan as crooked and have the bank remain silent is because a 33% market share by one participant in any futures market is against every concept of commodity law and US antitrust policy intent. Do you remember past days of the discussion of position limits and how disappointing it was when the CFTC ignored thousands of public requests for a position limit of one percent (of either world production or total open interest) and established a formula instead calling for 2.5%? The agency further wimped out and sided with the CME in goosing the formula to as much as 5% for markets the size of COMEX silver (how convenient). Please think of those proposed numbers – 1%, 2.5% and 5% and compare them to the 33% that the crooks at JPMorgan now hold in silver. And just so I’m clear, without JPMorgan’s manipulative position in silver, the price would now be well over $100 right now. It is not possible to make that assertion in any other market. - Silver analyst Ted Butler...27 October 2012

Sal Gallo's picture

This Post deserves an appropriate first comment

Hope I was able to accomplish that.  I will take anywhere in the top ten, twenty or whatever.  Keep up the good work in these uncertain times Turd we do appreciate it. 

The Watchman's picture

Happy Halloween

Dr G's picture

Yes, Happy Halloween to all.

Yes, Happy Halloween to all. Love this post. A comex close above 32.25 for silver would be a gem, but I don't know that it will happen today.

I'm glad Turd added a portion about the election. I fully agree. Where the metals go has ZERO to do with who the President is. So much would have to be cut to get the US to be fiscally sound that it is impossible. Not unlikely, but completely impossible. Not won't happen, but cannot happen. 

hammerman's picture

turd or turkey ?

turd... startin to get the feeling you are dodging the question..  or i missed ur answer... what do you think will happen wif da PM 's short term wif romney/ryan in charge?  they only propose to cut the rate of increase not the actual spending in DC...  

Dr G's picture

@hammerman: nothing. I'm not

@hammerman: nothing. I'm not Turd (duh!), but the answer is the same. Nothing. Short-term the metals will do what they do for a million factors. Buy the rumor, sell the news, whatever.

Dr G's picture

Can someone explain to me why

Can someone explain to me why the f. is AGQ up so little today with silver even up more??? Supposed to be leveraged afaik

AGQ gives performance based on the London silver fix. Did the big move in silver happen after London fix? The answer is yes, so there is your answer.

AGQ does NOT track silver 1:1. It only tracks the London fix (and silver only has 1 of those), so it makes it an extremely poor vehicle for holding.

worldend666's picture

Republicans Good For Stocks.... Not....

http://www.bloomberg.com/news/2012-02-22/stocks-return-more-with-dem-in-white-house-bgov-barometer.html

“The BGOV Barometer shows that, over the five decades since John F. Kennedy was inaugurated, $1,000 invested in a hypothetical fund that tracks the Standard & Poor’s 500 Index (SPX) only when Democrats are in the White House would have been worth $10,920 at the close of trading yesterday.

That’s more than nine times the dollar return an investor would have realized from following a similar strategy during Republican administrations. A $1,000 stake invested in a fund that followed the S&P 500 under Republican presidents, starting with Richard Nixon, would have grown to $2,087 on the dayGeorge W. Bush left office.

¤'s picture

Kocherlakota...

...knows full well that 5.5% unemployment isn't going to happen for quite some time and that the QEternity is going to go on and on no matter what.

Besides the Fed mandate that has been expanded to ensure QEternity, a Fed unemployment target rate of 5.5% virtually assures it.

Everything else about it is somewhat orchestrated Fed noise because some form of QE or monetary stimulus has been going on for many, many years whether it was announced or acknowledged as being such.

http://en.wikipedia.org/wiki/Quantitative_easing

http://en.wikipedia.org/wiki/Monetary_policy#Unconventional_monetary_policy_at_the_zero_bound

Turd Ferguson's picture

Dodge this!

MODERATOR

What the fuck are you talking about? Don't fucking show up here and imply that I'm somehow "dodging" something after I clearly laid out everything above.

Sure, maybe a Romney win could cause a 24-48 hour, fake-out selloff in the metals. Who cares? The real movers of the market KNOW that QE is endless and to infinity, regardless of the election. Therefore, IF that dip developed, you should buy it.

Sorry for the harsh tone but it gets a little frustrating around here. I put my ass on the line here every freaking day with bold predictions of future price action. It seems I rarely get credit anymore when I'm right (see the previous post and every post over the past 10 days or so) and consistently get troll-bashed when I'm not. Again, what the hell do I ever "dodge" around here. Give me a break!

Response to: turd or turkey ?
worldend666's picture

Ouch :)

ow ow ow :))) What a flaming

harlan07's picture

@pidgin

Remember that the NYSE was closed on Mon-Tue, but silver traded down during those two days, so today's price represents everything that has happened since 4:00 Friday.

ReachWest's picture

What is Kocherlakota's Secret Fed Code-Name?

Thanks Turd. Onward and upward we move from here.

For fun - here are a few Anagrams for Kocherlakota. I'm confident that the FED uses this shill due to some covert code worded meaning ..
 
Karaoke Cloth
A Tackler Hook
Carat Elk Hook
Aha Clerk Took
The Koala Rock
Kraal Hot Coke
Ache Talk Rook
Cake Lark Hoot
Racket Ah Look
Chart Ale Kook
Cloak Kart Hoe
Lake Hat Crook
Alert Oak Hock
A Croak Elk Hot
Leak At Cork Oh
 
Feel free to pick your favourite (or find some others). Think I'll go with "Karaoke Cloth". (Sounds like a filthy rag of some sort).
ivars's picture

The last GSR got looks like

The last GSR got looks like this:

That is it. Its a top (  bottom in silver) - sorry , these are yesterday's news, but I could not get to computer earlier.

HeNateMe's picture

Turd Getting Scary

Just in time for Halloween.  I always want to remain on your good side Mr Ferguson.  kiss

I follow you every day.  You are my favorite precious metal guru.  Sinclair is a close second. 

Just don't want you to feel unappreciated.  We don't say it often enough, I know.  We all get caught up in our own lives and minds.  But thank you Turd!

HeNateMe

Mr. Fix's picture

...Still No Power...

Lots of gas stations are out of gas 

no end in sight 

Lots to do.....

The news keeps getting worse, not better.

This is FAR from over. I Pads still suck,

but it works.

Be back tonight.

KEEP STACKING !!!

Lots to fix..........

Mr. Fix.

PS,

Turd,

You can not please everyone...Just ask Mrs. Fix !

Thanks for all you do!

Mr. Hyde's picture

Give 'Em Hell Turd

I love it when Turd says it like it really is...it is his site. A bunch of assholes think they can show up and fill the comments with bullshit and trash Turd after he lays his balls on the line day after day... and every so often Turd says Dodge This...translated...fuck off assholes.

Maybe the assholes should take Turd's advice and read the last few weeks, he has been spot on...hey assholes...hit the donate button instead wasting everyones time with your sorry comments.

Revelation's picture

Is Silver Money?

http://www.financialsense.com/contributors/ryan-jordan/silver-peoples-metal

"Gold & Silver are Money. Everything else is credit"

J.P. Morgan

The Watchman's picture

MINING Stocks are showing STRENGTH

Yamana Gold (AUY) up 7%

Aurico Gold (AUQ) up 3.85%

Silver Wheaton (SLW) up 2.9%

VERY good Sign

Zoltan's picture

@Turd Don't Let'em Get Your Goat

trades smades..

 
0

any guarantees turd.....

(First and only post up until a couple weeks ago)

TF "To that end, I've received several emails wondering what I expect from the metals if Romney is elected. The answer is simple: MORE OF THE SAME."

Will give them the benefit of the doubt that it is a reading comprehension problem, and not just plain old trolling.

Z

hammerman's picture

dodging...?

cmon turd... you knows you da man wif many of da turdites...  buts sums of us gotta keep you tuned up for da big show...  RELAX...  you too uptite dis early in the war.   I'M so proud of you anyhow... turd da man... not a dodging fool!

rl999's picture

sheesh

Bank Issues Gold Card — With Real Gold

 
 
ht sberbank visa infinite exclusive nt 121031 wblog Bank Issues Gold Card With Real Gold

Sberbank-Kazakhstan

MOSCOW — American Express may call one of its cards the Gold Card, but a bank in Kazakhstan is announcing plans to issue an exclusive new bank card it claims is the world’s first made entirely of gold, diamonds and pearls.

Sberbank-Kazakhstan announced plans to issue a limited edition Visa Infinite Exclusive cards, made with pure gold, 26 diamonds, and inlaid mother of pearl, according to a press release posted on the bank’s website.

The bank also produced a video highlighting the card’s luxurious components.

fats's picture

Hat Contest

I hope I win a hat on the 9th - so far, so good.

peckerwood's picture

i am rubber, you are glue

just kidding!  everybody take a breath.  we are all on the same side - well most of us.

Thanks Turd for everything you do.  Best wishes to all who weathered the storm.

SilverSurfers's picture

Nakota Lakota Dakota Turkota

Nakota Lakota Dakota Turkota Scapling Party?

Please Mr Ferggy, I dont wanna go.

Range 32.25 to 32.50 now ..... 

tranquillity's picture

Dodging

Feels like dodging anything in a hat that size would be impossible.

Funny accusation though hammerman since what you are accusing Turd of dodging is explained explicitly in the post above!

Fucks up with that! My guess is you are a Troll =)

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