Levels To Watch Today

476
Mon, Aug 8, 2011 - 10:19am

After a very interesting and exciting overnight, the metals are pulling back a bit this morning. This will present some opportunity if we interpret things correctly and are prepared.

As mentioned last evening, The POSX and the long bond are both up today on the bad news of the U.S. downgrade. That makes a lot of sense, doesn't it? However, as of this morning, the U.S. dollar is still the world's reserve currency and, consequently, it still receives the "flight to safety" bid. It's all short term nonsense and we're not too concerned with the short term around here. Today's short term trade in gold and silver are also of little consequence. Well, I shouldn't say that. They are of major consequence if you're looking to buy and add to positions today. In the long term, though, where gold is trading this instant has zero impact on where it will be one month from now or six months from now.

Let's start with silver. DO NOT FORGET THIS: Margins in silver are now quite high relative to gold and open interest is still down 20% from late April. This implies two things:

1) Buying tends to dry up after thrusts higher. We've seen this over and over again for the past three weeks. This lack of follow-through allows the monkeys to come in and easily beat it back.

2) The current silver longs are what we consider "strong hands" that aren't easily frightened and most have a cost basis back in the mid-30s.

Taken together, you get a silver market that is consistently moving two steps forward and one step back. Actually, it's more like three steps forward and 2 steps back! Expect this to continue into the near future. For today, silver is over $1 off its highs and has pulled all the way back to 39.10 as I type. The chart I'm posting below is already obsolete but I'll post it anyway.

Gold is where I'm most interested these days and, boy oh boy, are these charts interesting. First up, let's revisit the weekly chart that Trader Dan gave us a few days ago. Note that gold is now clearly above the top trendline, which looks to be somewhere between 1680 and 1685.

1685. Keep that number in mind. OK, now look at a 15-minute chart. 1695 looks to be your initial support but there's 1685, waiting to contain the downside for us.

Now look at an hourly chart. Remember how gold first touched that top channel line on the weekly chart back on Thursday? Do you also remember the old adage about "what was resistance is now support"? Well, you can see it quite clearly here:

And for good measure, here's an 8-hour chart which takes us back to the beginning of this move last month. Let's watch the upper boundary line very closely as it already has served to contain last night's rally.

I see that things have perked up nicely since I last checked 15 minutes ago. Gold is back to 1703 and silver is back to 39.47. I haven't made any trades yet today and I don't plan to. I am, however, watching that Sep silver spread of mine very closely.

Have a fun day. More later. TF

P.S. Time for another contest. Please post your guess for the Comex closing price of the September gold contract for this coming Friday, the 12th. The winner gets a hat!!

About the Author

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turd [at] tfmetalsreport [dot] com ()

  476 Comments

Violent Rhetoric
Aug 8, 2011 - 2:16pm

Nothing for the stock market

Nothing for the stock market to like in that speech. Higher taxes -> lower growth > sell.

Look out below

Shill
Aug 8, 2011 - 2:18pm

Bastards

Are nailing miners to the wall again.

murphy
Aug 8, 2011 - 2:19pm

And there go the miners

down the shaft for a beat down. Can't show the world they're the safe investment right now

JamboMamboBill
Aug 8, 2011 - 2:19pm

DOW officially at 10800's....

DOW officially at 10800's....

beinki
Aug 8, 2011 - 2:20pm

Gold Price contest entry

mmmm let's see, how about $1799.42

Eric Original
Aug 8, 2011 - 2:21pm

Bag O' Gold

Where do you get those face icons? Those are not "regulation" Turd Town icons, you devil you!

Eric Original
Aug 8, 2011 - 2:22pm

Dow is melting.  Think I'll

Dow is melting. Think I'll go run the dogs....

DefiniteMaybe
Aug 8, 2011 - 2:23pm

When the MSM Speaks, Do The Opposite

Okay, so I was checking out the "news" over at a MSM media site (MarketWatch) to get an idea of the what the sheeple were tuned into and what the groupthink analysts were recommending. Low and behold I came across this little nugget: https://www.marketwatch.com/story/3-trades-avoid-bonds-sell-gold-buy-blue-chips-2011-08-08

From the link you can surmise what the three recommended trades were: Avoid bonds, sell gold (?!?!), and buy blue chip stocks (?!?!?). Okay, the first trade makes sense, but the other two? WTF?! Sizemore states, "If you missed out on gold’s recent gains, you’re probably kicking yourself. Don’t. Once the dust settles, it is likely to be the gold bugs who are kicking themselves." Where's my wastebasket, I am going to hurl. Proof once again that these "analysts" are nothing but tools for the TPTB.

We are witnesses the great unwinding of the failed Keynesian economic experiment. It was a "fun" ride while it lasted, but we will shortly be entering a brave new economic world. Better buckle up ladies and gentlemen, it's going to be a (very) bumpy ride.

Now pass the popcorn please.

DM

Tecumseh
Aug 8, 2011 - 2:24pm

Obama's victory. . .

Either way, Obama wins. He either is able to force some sort of political victory out of the mess he built (on a foundation going back to FDR, if not Lincoln) and rallies voters to win in Nov 2012, or he loses the Presidency but leaves behind the economic, social, and political wreck that he fought so hard to achieve. His entire life has been about the destruction of the American Way of Life, circa 1957. The only question is the extent of the damage he will have accomplished during his Presidency. If he gets four more years, he can do even greater damage. Chaos leading to a Statist tyranny is what he wants.

ewc58
Aug 8, 2011 - 2:24pm

guys in fairness

the market is down nearly 500 right now. Miners getting sold off with everything else people can get their hands on...

debtless
Aug 8, 2011 - 2:24pm

1720.36 dayum.

1720.36 dayum.

ewc58
Aug 8, 2011 - 2:25pm

did i just say 500?

better make that 600...

22tlane Eric Original
Aug 8, 2011 - 2:26pm

Bank of America

Dow is melting and Bank of America is on flames.....I do not see how they make it through this time. While we are guessing....how long does Bof A have left?

JamboMamboBill
Aug 8, 2011 - 2:26pm

DOW 10700...

DOW 10700...

bbdgoco
Aug 8, 2011 - 2:26pm

Contest

$1698.52

Cleburne61
Aug 8, 2011 - 2:27pm

It's Official: Gold higher than Platinum

Guys, for the first time in 3 years...gold is higher on a per oz basis than platinum.

murphy
Aug 8, 2011 - 2:28pm

Obama

Good job chief that speech worked perfectly, you drove the DOW down another 200

Shill
Aug 8, 2011 - 2:28pm

This here's a full on crash.

This here's a full on crash.

snick Shill
Aug 8, 2011 - 2:32pm

with a wave of his hand ...

and alakazam! tripple-A is here to stay! ... ... sorry, couldn't control my exuberance after the speech ...

Tyler
Aug 8, 2011 - 2:32pm
tyberious
Aug 8, 2011 - 2:33pm

Tecumseh

@Tecumseh

Really, you believe all that crap! Try the Illuminati, Black Nobility, Council on Foreign Relations, The Trilateral Commission and the Bilderbergs. That is who are running and ruining the country, not fucking Obama. He's just a figure head. I just can believe ppl still just dont get it!

murphy
Aug 8, 2011 - 2:33pm

how about this today

Premier gold up almost 16% on no news after last weeks beat down

cuefrmesp
Aug 8, 2011 - 2:34pm

closing price

how about 1763.52

JamboMamboBill
Aug 8, 2011 - 2:35pm

PMs sale off on place folks !

PMs sale off on place folks !

Frontal Labottleme
Aug 8, 2011 - 2:38pm

SLW 32.88

Silver Wheaton's on sale!

silverbleve
Aug 8, 2011 - 2:39pm

$1763.49

$1753.49

I'll wear the hat everyday for a week and sleep with it on if I win. Thanks Turd! Man I wish I'd bought more gold. Silver is still on sale though! cheers.

Jasper Puddlemaker
Aug 8, 2011 - 2:40pm

Obama's ra ra session...

I don't understand. Did you folks actually hear him use words? I listened and all I heard was this:

Sound Effect - Wet Farts
SilverTree
Aug 8, 2011 - 2:41pm

$2010.53

MY REVISED GOLD BY FRIDAY EXCHANGE RATE

$2010.53

FogHorn LegHorn padow
Aug 8, 2011 - 2:42pm

Welcome padow!!

Sweet ride! Toys are what it used to be all about ie. "He who has the most wins " engraved on the old tombstone. Just My opinion, but I had the same question to answer, I chose to liquidate my stuff. I am trying to prioritize my holdings to suit my beliefs. Hope this helps.:-) ps.---TF seems my 1672 has already been taken, so I'll suck back and reload with 1673.43, eeza mina bessa guess capichee. --Edit-- on the other hand just read Eric Os response and thought that 67 imp ss rag in my garage is the last thing to go! For years I told anyone who' d listen that I was goin to be buried in it, in a very large deep hole. :)

crg 22tlane
Aug 8, 2011 - 2:43pm

but, but

We should ask Cramer. I bet he knows. Fucking moron said "buy buy buy" back in January.

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