Saturday Charts

Sat, Aug 20, 2011 - 1:55pm

After a crazy and outrageously fun late week, it's time for a break. I'm trying to chill today and catch my breath but I'm having trouble relaxing. The metals, particularly silver, are poised to continue their relentless drive higher next week and I can't wait for tomorrow night so that we can get things rolling again.

As you know, gold has been making us a lot of fiat over the past six weeks and has, consequently, drawn most of our attention. This trend is changing so I want to start today with silver, instead.

If you're wondering about yesterday's rally, the answer can be found by looking at Thursday. I had told you to watch the 40.40 level very closely. Now you know why! When silver closed above 40.40 Thursday night, two things happened:

1) It frightened a lot of shorts and caused them to cover.

2) It inspired a lot of new, algo and TA-oriented longs to jump in.

The result was a $2+ up day. Now, if you think that was exciting, just wait till Monday. By closing above 42.30 yesterday, two very significant things happened:

1) The 10-day moving average bullishly crossed through the 20-day. Silver is now significantly above all four, main moving averages and all are pointing higher. This is very bullish from a technical standpoint and it will draw an even higher level of algo and TA-oriented longs into silver early next week.

2) Every single contract that was shorted since May 4th by The Forces of Darkness and their tag-along, smartypant buddies is now under water. As the techies drive silver higher, the pain of being short becomes increasingly unbearable. (Kind of like how we all felt being long back in May.) More short covering will ensue and you get a virtuous cycle of higher prices.

Therefore, expect more explosive moves and higher prices next week. The only potential negative is that option expiration for the Sep11 contract is Thursday. Whether or not this will serve to contain the advance is difficult to predict. One thing I do know, though: I'm very excited for Monday. Tuesday, too.

Gold was kickin ass and takin names early yesterday before coming in a little during the Comex session. The notice from Interactive Brokers about future margin hikes seemed to take some of the wind from gold sails. Though we must always assume the worst from the C/C/C, there is no justification at this point for further margin hikes. As discussed yesterday, the hike 10 days ago was brought about by an advance in gold price that had become disorderly. Since then, gold has only increased in price by about (not even 3%). It has been an orderly advance, too, with the only "disorderliness" showing up overnight Thursday. Again, the criminal C/C/C makes the rules and, obviously, they couldn't give a shit about what I think...but...unless gold rapidly accelerates early next week, I'm not too worried about another margin hike.

Here's the thing, though: I expect gold to rapidly accelerate early next week. The charts below look extremely bullish to me and, if silver continues rolling like I expect, gold could easily make a run at Santa's next angel of 1936. With enough momentum, it could also run toward 1950 and even 2000. IF that happens...particularly if it happens by, say, Wednesday...then you should very much be on the lookout for another margin hike. Got it? OK, good. Here are your charts:

OK, that's all for the metals. I'm going to take a lunch break and then get to work on some TA of select miners. If you appreciate all of the work that goes into this site and you'd like to buy my lunch, feel free to "feed me" through the "donate" button on the main page. The Turd is sincerely grateful for every token of appreciation he receives. TF

p.s. The Tech Team tells me that our two site improvements are almost ready. The "ignore user" feature is currently up and running. Private messaging will be available by early next week.

About the Author

turd [at] tfmetalsreport [dot] com ()


Chicken Little
Aug 20, 2011 - 2:37pm

Warning: Iceberg Ahead!

We have just been through the epic congressional struggles related to the “Debt Ceiling” and the downgrade by S&P. Now another economic iceberg lies dead ahead.

It is called the “Continuation Resolution”. For more than 5 months the US government has been operating without a budget. The administration submitted a budget. It was passed by the House but got tabled in the Senate. Since then, the government has relied on these temporary continuation bills to keep things afloat.

The next vote to extend the continuation must occur before September 30, 2011. This vote will require the co-operation of Democrats and Republicans. After the debt ceiling debacle, how likely do you think it will be that the two parties can get their act together on this one?

If we get another display of government disfunction, what will the effect be on the PO$ and PM prices? Will the EE engineer a PM beat-down in order to mitigate the effects over another display of gridlock?

I am not sure what to make of this one but depending on what Congress does, it could be very bullish for PMs.



Aug 20, 2011 - 2:37pm

Money Bomb Now! Please donate!

Hey guys,

Ron Paul money bomb now! I know he woke many of us up including myself. The greatest hope for America.



Aug 20, 2011 - 2:39pm

Yeah, what Beinki

and Foghorn said!

The Hat Tip
Aug 20, 2011 - 2:39pm

Thank you, Turd

Because of your analysis and insight, I've made some nice fiat during this run towards $44.

I will buy your next lunch by donating.

Thank you very much.

NC Fred
Aug 20, 2011 - 2:44pm

@ Turd

Thanks for the weekend update!

I have a question for you:

I missed the latest move but that's water under the bridge. I'm planning to buy (silver mini) Sunday night and HOLD for several weeks or months. That's a new concept for me (for futures) but ready to take the plunge after many, many frustrating days(over a 4 month period) of trying to time intraday moves with tight stops which has been ridiculous.

I realize the leverage risk . I have enough in the account to cover a move all the way down to $35. Below that, I would be close to having the account blown yeah....this is a major bet for me.

1. If silver gaps up on the open Sunday night (say 43.50 or higher) would you wait for a pullback for a few hours or maybe an overnight stink bid? If a stinkbid, what do you think would be reasonable?

2. Since I'm planning to HOLD for a good while is there any advantage to buy the Sept contract. If not, I'll buy December to avoid the rollover.

I fully understand your disclaimer and I am fully responsible for my trading. But, it would be nice to hear a voice of experience weigh in before I go "all in".

Aug 20, 2011 - 2:47pm

Old Timer

I'm 25, with 5 siblings and with parents who aren't doing too well after the divorce in 2004. Imagine selling the acrea lot house right before the boom! I stack and play options and haven't sold one piece since I started stacking heavily. Options, in my opinion, are key here for increasing the stack largely. If silver hits between 60 and 70 before January I will have tripled and maybe quadrupled my stack. I'm younger. Have more prospects. Healthier, most likely. Not married yet. No kids (I want them). I am terrified, mostly, about my family's and I future. I supposed I wish I was your age. You probably lived a decent life. Been able to see your kids grow with peace here at home and with minor worries when compared to what is coming. Stacked for decades. Truly, I try my best to live kindly and charitably towards others. I am happy with myself. No bad habits and no majors "oops" thus far. If I die, I believe I will return to peace that only Heaven knows.

Who knows! Whether it's better to be young or old!


- Ron Paul 2012

Tom L
Aug 20, 2011 - 2:49pm

Thanks Turd

Like you I can't wait for tomorrow afternoon. I've also been doing some TA on some miners to give to my sister to advise her on mining issues (I'll post them up on another thread). The wife will be back from Miami and the Singapore market will open. If we have another gap-up open like we did the weekend of the S&P downgrade there could be a lot of dead fund managers by the time of the CRIMEX open monday morning.

If the HUI pushes towards 610 on Monday that would really make me a happy happy camper.


silverwood Old Timer
Aug 20, 2011 - 2:52pm

Hey Old Timer, glad to see

Hey Old Timer, glad to see you had the foresight to accumulate the silver coins of the realm. When you were accumulating them their purchasing power was not too far away from their face value. Now what I find to be totally criminal in nature is our government's treatment of the so call capital gains you have experienced by simply saving those coins. They are saying that you will have to give the taxman his due because you were prudent and figured out a superior vehicle for saving for the future. Somehow tax gains on people like you on your US legal tender coins should be not applicable, but how can we fight this crime?

Aug 20, 2011 - 2:53pm

Silver has not yet been

Silver has not yet been remonetized, but it is becoming less demonetized.

Aug 20, 2011 - 3:00pm

Silver and Gold will pullback on QE3 official annoucment

This will be great opurtinity to buy but before it happens I'm sure we will see gold around 1900-2000 and silver around 50.

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