Turd Back

240
Fri, Jul 15, 2011 - 10:39am

Turd back. Turd refreshed. Turd ready.

After giving the printer, the Sharpie and the ruler a few days off, The Turd is back with a vengeance. As you might imagine, I could lay all sorts of charts on you this morning but time limits me to these six. I will certainly have a more comprehensive wrap-up over the weekend.

GOLD

Looks terrific. First up, on the daily chart, you can clearly see how it has broken out of the "summer range" I had laid out. It is still susceptible to falling back into the range so it needs, now, to make another leg higher. I'll feel extremely confident that the doldrums are, in fact, over when gold moves past and closes above yesterday's intraday highs near 1595.

On the 8-hour chart, you can see the breakout past the early-May highs. I mentioned yesterday that a pullback to near those highs would be a good buying opportunity. It was. So far, so good.

And this 2-hour chart is very interesting. Longtime Turdites will note the familiar, "swiss stair"-type accumulation seen here. This is a compellingly bullish chart and indicates more advance to come. The next leg will take gold to 1600+. You'll know the formation has ended and consolidation has begun when the chart breaks down and through the previous stair's high. In this case, we'd want to watch for gold to trade down through 1575. Note that it stopped right there earlier.

All in all, gold looks great. It's poised to tackle 1600 and move on toward Santa's long-awaited 1650.

SILVER

It's almost time to get really excited about silver but I can't blame you if you already are. First look at this 8-hour chart. As you know, I've maintained for quite some time that silver must perform 3 steps before we can get aggressively long again. First, it had to get through the down trendline off of the peak in late May. Check! Then, it had to get through the down trendline off of the recovery high of 39.45 set on 5/11. Check! Lastly, it has to get through and close above that 39.45 level. Not yet but soon?

If you ever wanted to see a classic, textbook bottom, you have one here on this 2-hour silver chart. A steep decline and sharp reversal off of the second bottom at 33.50. A rally to 37 with a sharp pullback that stops right at the level of the top between the two bottoms, near 35. Then, a powerful rally. Like gold, silver pulled back almost exactly to the point I'd mentioned yesterday as a good entry spot. I hope you were able to take advantage of the opportunity. If not, don't despair. More opportunities await.

Let's watch silver very closely here. Once silver closes above 39.45, it will move very quickly toward $40. When it begins printing numbers that begin with "4", open interest will explode as big money will rapidly return to the pit. Once this happens, I expect silver to rapidly advance toward 48-50.

CRUDE

Just wanted to throw a bone to all of the crude-watchers. It is trying to form a reverse H&S but needs to be watched closely. Just as we need crude to rally again and get back above $100, it also needs to avoid slipping back below 94. Keep a close eye on this one.

OK, that's it for now. Thanks again for your patience in allowing me a little Turd downtime. Have a great day! TF

p.s. Be sure to check out Santa's latest:

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/7/15_Jim_Sinclair_-_Gold_Milestone_at_%241%2C764_Paves_Way_to_%2412%2C000.html

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  240 Comments

FalseParadigm buzlightening
Jul 15, 2011 - 12:09pm

It's coming just not yet

QE3 won't happen until the dollar has strengthened some and the markets have dropped at least 10-20+ percent.

Gil Two Gun Tobin
Jul 15, 2011 - 12:12pm

My business partner and I are

My business partner and I are the local coin shop (as of last month), and the last 3 days we have had pretty much nothing but people selling gold and silver, mostly silver and everything from commemorative coins to 90% and even a 100 oz. bar yesterday. We would like to see more buyers. One older gentleman came in and purchased ten (10) Roosevelt dimes and said "Hopefully I won't need them, but the way things are going you just never know." I thought that was kinda cute.

bullwhip29
Jul 15, 2011 - 12:14pm

@ MountainMan

Re: It happens today...

Or they try to thread the needle and give us results that are neither complete BS (which no one will believe anyway) nor ones that tell us the whole gruesome story, which may cause a few minor problems like a repeat of May 6 or the little speed bump we hit in fall 2008. I think this news will be a non event and will get lost in all the other noise.

Economical Disaster
Jul 15, 2011 - 12:15pm

Banker: If QE3 Happens: Gold to $5000-Silver to $1000

"One of the big US banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money."

https://www.economicaldepression.blogspot.com/

GS_PHYS FalseParadigm
Jul 15, 2011 - 12:16pm

@ SeverinSlade Your argument

@ SeverinSlade

Your argument is good enough. But, what if your so called correction did not happen or if it is not deep enough, then what?

Even in paper it is always good to be long for just in case. What are the numbers you are looking at when Gold/Silver corrects from these levels ? (1510/35)

Dr G
Jul 15, 2011 - 12:16pm

@SeverinSlade

Thanks for the well-thought response. Much appreciated.

I forget that many here are still trading paper for a profit, and often confuse the purpose of that with the purpose of stacking physical.

exiledbear Two Gun Tobin
Jul 15, 2011 - 12:23pm

Just a quick observation. In

Just a quick observation. In the last 3 days, I've been in three of the local coin shops that I haunt. All have seen a huge increase in sales.

Were there any lines at all to the counters? Were you able to get served fairly quickly or was there a wait? If there was a wait, how long was it?

FalseParadigm GS_PHYS
Jul 15, 2011 - 12:33pm

I have already stated my strategy

I agree with you. It is important to have some holdings for the long term which I do. I have core positions in all of my investments. Everything in excess is used for trading.

For example, I own shares of SLW, PSLV, AG, etc. I held several thousand shares of each recently and trimmed them down by about 75-80 percent. I still have a strong core position but am taking my profits knowing that there's a correction ahead. I also will use the proceeds to acquire more physical when the price drops.

As for my price target to be honest, I have no idea. The only thing I can say is I find it highly unlikely that there will be a SEVERE correction. In my eyes, gold will not ever get to the low 1400's or silver to the mid 20's ever again. But could gold come down to $1475 to $1525? Absolutely. That's my range for gold. For silver it's between $28 and 33.

I'm mainly just playing the news. I will accelerate my purchases the lower the price gets. Whenever I hear Bernanke say that QE3 is a go, then I go all in. I will use a good portion of my margin to buy paper silver (primarily AGQ) and will use the excess profits to convert to physical. All of my cash portfolio will retain full holdings in my mining stocks and in PSLV and CEF.

Silver Monkey
Jul 15, 2011 - 12:35pm

Every Dip is being bought

Reminds me of just before the last run up to $50, where every sell-off was met with heavy buying. This has to bullish for silver. No matter which way the debt ceiling goes (I say 99.5% chance they raise it), should be bullish for silver.

KEEP STACKING TURDITES!

Exergy
Jul 15, 2011 - 12:46pm

Sprott

When Sprott is adding significant physical...me thinks he knows something.

This announcement can only be viewed as bullish and will be received globally as such.

https://www.sprottphysicalgoldtrust.com/Investors/Press-Releases/Press-R...

Harvey thinks it's 6.6 Tonnes >>>>>

"Eric Sprott has just decidedto take out 213,800 ounces (6.6 tons) of physical gold out of circulation with yet another follow on offering in his PHYS physical gold trust. The twist: "Certain lead investors, including certain funds managed by Sprott Asset Management LP, will purchase 9,171,000 Units in this Offering." That's 37% of the entire offering going to Sprott. So much for Eric getting out at the top. One look at the premium to NAV shows why the sale makes sense: the difference between the NAV and the price is the highest since the March highs, despite paper gold trading at all time records." https://harveyorgan.blogspot.com/ I think it also sends a message to the EE that he has the capital to purchase the entire SILVER COMEX inventory if they piss him off and attack his funds. Harvey feels The EE are apparently shorting the Central fund ever since they announced a major purchase and it's NAV is nonexistent and Eric's is not....should be fun to watch if they try to crush his NAV too....my gut says NO ...and it is why he expanded the Gold side first... We shall see.

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