Looks like it's time to add a new acronym.
As discussed here ad nauseam for the past several weeks, our current battle is against the spec shorts, both large and small. These momentum-following, bandwagon-jumping leeches were the primary culprits in driving price all the way down to $1528 and $27. After the initial squeeze on Thursday, the heat was turned up even higher on Friday. Overnight and earlier today, these HFTers tried to push things back down but have since been stymied on the Comex. Let's hope this continues but don't expect them to give up easily.
Over the weekend, Trader Dan pointed out that gold had moved back above its 10-day moving average. This is step one in alleviating the pressure and flipping the WOPRs to "buy" from "sell". Step two will be getting above the 20-day near 1615. He's right about this. Remember, many WOPRs are programmed to run off of technical signals so moving back above key moving averages will help to halt the barrage of sell orders generated by the downside momentum. http://www.traderdannorcini.blogspot.com/2012/05/gold-continues-its-bounce.html
I'm seeing chart resistance in that general area, too. Gold held support quite nicely earlier today near $1585 and has since rebounded nearly $10. I suspect that we'll continue to drift around here between 1585 and 1600 for a while, maybe into tomorrow or even Wednesday. I suspect, though, that another surge is coming that will drive price through resistance of 1600-1605 and take it up near the 20-day that Dan mentioned, near 1615. Chart resistance will enter again near 1625.
In silver, price has clearly broken out of the nasty and brutal downtrend channel that had contained it for days. Now, it just needs a spark to begin spooking the weak-handed shorts. It may simply be that gold strength will spill over into silver and drag it higher. Regardless, I firmly believe that the recovery process has begun and I expect silver to begin basing between 29 and 30 very soon. From that "staging area", silver will eventually mount a breakout move toward Battle Royale II.
That's it for now as it's almost 11:00 am EDT. You need a new thread and I've got a bunch of other stuff to do. We are about a week away from launching the new, subscription podcast site. I'm really excited about how it is turning out and I can't wait to offer it to you. Besides near-daily podcasts from yours truly, the site will also offer webinars and conference calls with some of the biggest names in metals. There will be plenty of in-depth interviews, too, where members will be able to submit questions. (That should be fun ) Anyway, I'll have more details as we get closer to launch and I hope you'll consider supporting the site. Revenues generated there will allow me to keep TFMR completely as is (FREE) and they will also help fund a possible "Turdapalooza".
Have a great day!! TF