Friday Fun

387
133
Fri, Aug 19, 2011 - 10:25am

Looks like closing above $1818 was as significant as I suggested it would be but I doubt you're here for a history lesson. You're likely looking for insight as to where we go from here. As you might expect, I have a few thoughts. Let's get started.

I was telling Mr Hyde late last night that I didn't think Santa's next "angel" was going to offer much resistance. Anymore, the levels aren't that far apart on a percentage basis and there seems to be some history that shows every other level to be challenging. With $1849 behind us (Dec gold hit 1881 earlier today), let's wait for the next one, instead. Given that I'm expecting a short-term peak next week, probably somewhere between 1936 and 2000, the 1936 angel seems to be worthy of watching. Here's why:

Take a look at this first chart. It's a 4-hour gold. Note that the angles of ascent are steepening. This can only continue for a little while longer as, eventually, the trendline goes straight up and that's as far as it can go. It's not parabolic yet, however, and I don't expect a significant peak today...not ahead of what will be a very interesting weekend. Early next week, though, we could get our peak. It is critical to understand this, though: I'm only talking about a short-term peak, similar to nine days ago. If a dip develops, it will simply offer you an opportunity to buy. Just like last week's pullback stopped right on schedule at 1725, the next dip will do the same. IF I'm right, you'll have a choice to make:

1) Enforce some sell discipline on yourself to lock in some profits and look to buy the pullback.

2) Look the other way and wait for the market to rebound.

Reinforcing this opinion is the whole "orderly vs disorderly" idea I postulated last evening. The move from the lows of last week had been orderly and calm. This type of advance is sustainable. Last night into this morning has been disorderly, like early last week. Volatility extends markets into short-term overbought or oversold territory and this is where we are headed by early next week. You can see the onset of the disorderly action on this 15-minute chart.

In short, absent a margin hike or The Second Coming, I expect gold to be firm all day. There will be dips but dips will be bought. Ask yourself: Would you like to be long gold or out of gold over the weekend? Exactly. Using charts to predict headlines is challenging to say the least but these charts suggest to me that early next week will see another $50-100 advance in the price of gold. From there, maybe another 3-5% dip? We'll see. The key is to assess these eventualities so that, when they occur, you can act with discipline and not emotion.

Silver looks great, doesn't it? As background, I suggest you pause for a moment and read this from Trader Dan:

https://traderdannorcini.blogspot.com/2011/08/silver-stuff.html

As Dan says, the first key closing level today is about 41.50. A close above there will draw the 10-day moving average through the 20-day. This is a bullish crossover and would portend higher prices next week. The next number to watch is 42.30, which is the intra-day high from earlier this month. A close above there today would be bring a response Monday that is similar to today's reaction to yesterday's close. All in all, my $44 by Labor Day pick is looking pretty solid right about now. It may even be a tad conservative. Watch today's close very closely. It will be your clue for next week.

Lastly, both silver and gold have moved into significant backwardation this morning. This is an extremely significant development and, if it continues, is indicative of very tight, short-term supplies. A few loyal Turdites questioned the significance of the "Venezuelan Decision" when I posted the news Wednesday evening. Let me set this straight. It is extremely significant. Why?

1) The Venezuelan gold is on deposit at the Bank of England.

2) The Bank of England supplies the gold for the GLD.

3) I believe the GLD to be an empty, fraudulent shell game of fractional bullion banking.

4) It has been speculated that there might be only 1 ounce of gold for every 100 ounces of paper gold.

5) The withdrawal of 8% of GLD's gold from the BoE would cause a massive supply squeeze.

6) This massive supply squeeze would reveal itself by backwardation in the gold market.

7) See the paragraph above.

8) IF I'm right and GLD is exposed as the scam I believe it to be....well, let's just say that gold is going a little bit higher from here.

9) Money flows out of GLD and back into the rightful place...the miners.

That's it for now. Equities are rallying and the PMs are falling as I type. This is not a surprise nor is it unexpected. The prices as of 10:20 a.m. are of no consequence. Let's see where we are at 1:30 and 4:00.

TF

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  387 Comments

Olivanders
Aug 19, 2011 - 10:27am

First?

First!!!

Or not...

worldend666
Aug 19, 2011 - 10:27am

Mentions of the silver price

Mentions of the silver price from google trends

Gold price

Exponential gold looks to have begun

Einherjar
Aug 19, 2011 - 10:27am
Bezalel
Aug 19, 2011 - 10:28am

Crazy market

What a crazy market! I thought it was going to plunge again today, but instead it's flat or up.

I'm still holding my silver and gold miners (and CEF and PSLV). I'm not sure what to do about my oil & gas explorers that have been hurt. I thought that "peak oil" and possible hyperinflation would help them, but if a recession means low prices and low demand, they could be toast.

speconomist
Aug 19, 2011 - 10:35am

Bull trap!

It's a Bull trap! Be extremely careful!!!

.

ScottJ
Aug 19, 2011 - 10:37am

Comex Expiration Next

Comex Expiration Next Friday.... if they have any control in current market condition, there should be some negative pressure. If the world problems send gold and silver higher in the face of comex expirations, you can expect a massive currency devaluation in the immediate future, resulting in much higher gold and silver prices compared to all fiat currencies on their last leg. That, coupled with the fact that there the Bernanke is Reporting live from Jackson hole next Saturday, the "conditions" for QEIII/Global Stimulus must be prepped for the explosion. Thus, think accordingly. I would expect gold/silver to shortly "correct," but then again, it really isn't warranted unless we get some extreme stabilization in the economic world (haha... wish this wasn't so funny), or an engineered raid. By the looks of early action today, raid it is.

On a side note, financial oppression leads to political oppression, and the people in America are unfortunately dangerously close to being aware of this first hand. Violence is not the answer, logic and reasoning is on a mass awareness campaign.

Ron Paul has recently said "they are preparing America for Violence, no doubt about it."

Act with reason and care, not fear and selfishness.

Ron Paul On Detainment Camps In The United States

--

And just in case you want to understand that Europe is in this together with the United States and the rest of the western "democratic world," I present Nigel Farage and his clips over the past few years. A true man of integrity. If you ever want to see the Euro Political Class be called out on a public stage, this man is for you!

Video unavailable

-

Be safe out there, mania is coming. People are "thinking about boarding the train..." ...

Scott J

SilverTree
Aug 19, 2011 - 10:42am

  HAPPY DAY

HAPPY DAY

padme
Aug 19, 2011 - 10:43am

consider the problem with GLD

what will be the alternative?

Two Gun Tobin
Aug 19, 2011 - 10:45am

Thanks Mr. TF

Its a big day in Two Guns world. I got my 12 hams delivered, bought myself a Birthday gift a day early, 2-10oz bars,

and then silver takes off. I'm a FOAGQ, so I feel pretty good today. The one thing that would top off the day, would

be my bright shiny yellow hat coming in the mail! I'll be waiting at the mailbox all day. Keep your fingers crossed!

Shill
Aug 19, 2011 - 10:47am

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