Silver to $44

460
129
Tue, Aug 9, 2011 - 9:53pm

In the past 24 hours, we can now count four, separate attempts at the 1770 level by the December11 gold contract. We can also count four, immediate Cartel actions to hammer price back down. However, the lows are getting higher and the pressure is mounting. Will the Forces of Evil be able to contain gold through the night and into tomorrow or will they again be forced to retreat to higher ground? I suspect we will know very soon.

Take a look at these three December gold charts. I've tried to draw the same trendline on each. Note the savagery of the beatdowns as gold eclipses 1770. Santa warned us weeks ago that The Cartel also knows that 1764 is a very significant level and will thus defend it vigorously. They have and they are. Will they be successful? You'll know by following the trendline I've drawn and watching the triangle close. If I had to guess, our Asian friends also see this chart pattern and they will make a run at putting the EE into a submission hold later tonight. We'll see. It will be great theater.

Now, what I really wanted to talk about this evening is silver. I've scoured the internet for the most reliable and accurate analysis of today's events. I of course found it at Trader Dan's site. Please take a moment to read it and then come back. Go ahead, I'll wait.

https://traderdannorcini.blogspot.com/2011/08/s-500-update-us-dollar-sacrificed.html

Ahh, glad you're back. OK, where was I? Oh yea...silver. I've lifted the most important chart that Dan posted and re-printed it below. (Thanks, Dan!)

Notice that the CCI has averaged one big drop per month for the past five months. Each drop has lasted from 4-7 trading days and has been followed by a rather significant rally. The current drop just finished its fifth day and, with all of the hubbub from The Fed today, is almost assuredly going to bottom tomorrow if it didn't already bottom today. Anyway, my point is...we're about to see another 2-4 week rally in all of the commodities. Yes, copper, crude and the grains are going to rally. More importantly, I think we can feel very confident that silver is not going much lower, if at all. In fact, I bet we saw the lows today, in the beatdown on the Globex. So, from here, what can we expect? Given that silver rallied almost 25% in July, during the last CCI rally, I think a reasonable target for silver is $44 before Labor Day.

Adding to the ammunition are the utterly amazing OI numbers in silver. The latest numbers are basis Monday and show a total open interest of just over 114,000 contracts. We almost certainly lost a few more today. For perspective, the last time OI was this low was late June...right about the time the CCI bottomed!

So, there you go. I may look like a complete fool by this time tomorrow. Rigged and manipulated markets can do that to you. But, I'm sticking with it. $44 silver by Labor Day.

Have a great evening!! TF

10:05 am EDT UPDATE:

I do not have a new post this morning for two reasons:

1) I want to leave this current post as the "main story" for most of the day.

2) I'm busy watching an epic and breathtaking battle in the Dec11 gold contract.

As I type, our side is winning but just barely. Watch the 1780 level very, very closely. Above there, The Cartel will be forced to give up and retreat to safer ground. It looks almost certain that this is going to happen. As I watch the order flow, the bids are very strong and unrelenting. The chart looks like it's about to squeeze them, too.

I've got a last of 1777. Stay close and keep your fingers crossed! TF

11:50 EDT UPDATE:

The global stampede of investors rushing into the safety of a 6000-year old currency has completely overrun The Cartel's defensive positions between 1770 and 1780. I have a last of 1789 in the Dec11. If headlines don't change in the next six hours, expect explosive gains in the overnight Asian trade, too. Personally, I'm darn glad I took off my spreads yesterday and went "open-ended". Looks like lots of gains to come!

Speaking of which, isn't it great to see silver participating...FINALLY! The chart below was printed before the recent surge through $39. Keep the faith. Silver looks great!

More as conditions dictate. TF

1:05 EDT UPDATE:

30 minutes to go on this historic day. Gold is $20 off its highs but I'm not at all concerned. In fact, the chart below might be one of my all-time favorites. All of the smarty-pant shorts who had faith that their evil Cartel buddies could hold the line at 1780 just got smoked! HAHAHA! Rather predictably, the "market" has given back the $20 it added on the back of the short's pain and that's OK. Nothing has fundamentally changed and its looking more and more likely that we'll head into the overnight session with " a lotta mo", just like Mr T!

Clubber Lang - Best Scenes! (From Rocky III, Mr. T)

Full update soon. TF

About the Author

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  460 Comments

AgeApe47Jive Dadson
Aug 10, 2011 - 8:46am

AgeApe47

Jim says they are derived mathematically and come from Jesse Livermore. Regarding these numbers if you back check them, they are a range of about + or - $20 bucks. Gold trading back and forth over 1650 for a week before heading north to the 1764 range where it now hovers (smack downs are frequent at these numbers.

AgeApe47Jive Dadson
Aug 10, 2011 - 8:46am

AgeApe47

Jim says they are derived mathematically and come from Jesse Livermore. Regarding these numbers if you back check them, they are a range of about + or - $20 bucks. Gold trading back and forth over 1650 for a week before heading north to the 1764 range where it now hovers (smack downs are frequent at these numbers.

DeltaCharlie
Aug 10, 2011 - 8:48am

Gold depletion, miners going up?

Got that feeling that gold and silver miners will do well today!!

matthenue
Aug 10, 2011 - 8:51am

awesome post!

Nice analysis and goes along with what i think

We can't really go much lower? so the risk is nullified

Just bought a new stack of physical!

Let's hope for $44!

Paladexewc58
Aug 10, 2011 - 8:51am

Chicago gun control

@ewc58, Rahm Emanuel should know better. Here's a nice editorial explaining why Jews, of all people, should NEVER give up their guns.

https://www.algemeiner.com/2011/07/07/gun-control-not-terrorists-with-gu...

ewc58
Aug 10, 2011 - 8:54am

pbreed, you're entitled to your opinion

and diversity of opinion is welcomed here. I generally post what in my opinion are important non-PM stories and links pretty early, prior to markets opening, so it doesn't disrupt the flow once we get rolling. Believe me, I'd much rather be discussing the relative merits of silver and gold. But this blog is not intended to be a vacuum either.

I feel the Team 6 tragedy and the questions about what actually happened are so serious as to be Front Page worthy. Some may disagree and I can appreciate that. No offense intended or taken.

Have a good trading day.

Paladex
Aug 10, 2011 - 8:57am

Gold worth more than Platinum

Sorry if this has already been pointed out, but the price of gold is periodically exceeding that of platinum.

https://www.kitco.com/charts/liveplatinum.html

Paladex
Aug 10, 2011 - 8:58am
ginger
Aug 10, 2011 - 9:00am

manufacturedopinion, Your

manufacturedopinion, Your post said what I was trying to say earlier. I'm on the same page as you ..in the same book. ..Here is an excerpt from Hubbartt's latest which just makes alot of sense to me when taken together with the TA (which I'm not good at but understand others' analysis of it) and charts. Hubbartt: (link follows)

  • There is a strong possibility of a strong short term blast to the upside now, fuelled by short covering. I am projecting that the rally could take price to around $1700-1800. From there, I think a substantial sell-off occurs, and I mean something much more painful than you experienced yesterday. Most investors have been caught flat footed on this rally. The metals rally is a solid month ahead of “seasonal schedule”.
  • Yesterday’s hit has likely ushered in a lot of shorting by hedge funds. The fuel is now there for a huge short covering blast higher, one that could get us to $1750 in the short term.
  • That price would slightly exceed my original short term $1700 target. Bull price target overshoots are always a possibility in the greatest bull markets. From there I see a smack down, and then the real deal rally you have all been waiting on for ten years should unfold into the fall.

https://www.321gold.com/editorials/sfs/hubbartt080511.html

Kumanari, your posts are like a scavenger hunt for meaning and clues to me. :D ..but worth the thought and energy required because of value extracted. ...I am working on that latest one. ...most probably I am making it more difficult than it has to be. ...hmm.. ...hmmmmm... ....(you and kliguy kind of drive me a bit nuts actually.. but in a good way and I can't help but seek you out. ..lol) ...I'm gettin' it ..I'm arriving... ...sometimes I just need to hear it over and over again. one more time?.. ..doin' the math..

latcho
Aug 10, 2011 - 9:02am

5 - 4 - 3...

POSX rescue time ! And we all know how that works.

...2 - 1 - slam
Bettin 10 'o clock NY ?

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