All The Fuss

269
Tue, Aug 30, 2011 - 9:36am

The PMs shot higher this morning after the Chicago Fed Goon was interviewed by LIESman on CNBS. The metals catapulted higher when The Goon admitted that more QE is likely because the economy is in such terrible shape. Really? NO! Whodathunkit?

Because this is a full-service PM site, here is a link to the full "interview":

https://video.cnbc.com/gallery/?video=3000042403

Could LIESman's head get any shinier? In a sort of Pinocchio fashion, LIESman's head gets more more shiny the more he shills and pimps for The Fed. Maybe we need to develop some sort of "Shiny Head Index" to help us all calibrate the degree to which LIESman is propagandizing? I can see it now. "Today's LIESman SHI is a 9. Be very cautious and take everything with skepticism". Hmmm. Have to give that one some thought.

Anyway, back to business. Gold is attempting to hold its gains but is already about $10 off its highs. I'm inclined to do some buying today as I expect the metals to be firm the remainder of the week, ahead of the BLSBS on Friday. Signals that the NFP (non-farm payroll) number will be lousy are already appearing. Namely, this "interview" today and the fact that President O'bottom pushed back his historic "jobs speech" to next week. Again, the logic is: Lousy job report = lousy economy. Lousy economy = more QE. More QE = much higher PMs.

As you know, I'm very excited about silver but I'm trying to pick my spot to enter. Open interest tumbled all of the way back toward 115,000 yesterday which is extremely bullish and pushing me to act in haste. The area around 41.25-41.50 would seem to be the right price as silver looks primed to mount an assault on 42.30 again. Once through there, it will spring toward 44 and, beyond there, 46.

Here are a couple of other interesting items to ingest. First, this guy does an excellent job of summarizing my thoughts toward Venezuela and its gold repatriation. Though El Commandante would certainly and understandably prefer to have his gold in his hands, at its heart this is an act of "financial war", a move to further destabilize the financial system of "the West".

https://www.resourceinvestor.com/News/2011/8/Pages/Gold-Politics-and-Venezuela.aspx

Here's more on "The End of The Great Keynesian Experiment":

https://news.goldseek.com/LewRockwell/1314546712.php

And here are two, interesting reads from KWN. First, here is John Embry of Sprott Asset Mgmt:

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/29_Embry_-_Incredible_Physical_Gold_Demand,_Premiums_Exploding.html

Eric also interviewed Louise Yamada. There are lots of amateur chart-readers in the world, myself included. Louise Yamada is a professional. As a general technician, she has no peer.

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/24_Louise_Yamada_-_Gold_%26_Silver_Still_Solid_But_Avoid_Stocks.html

OK, that's all for now. Gold is 1828 and silver is 41.38. Let's see where we go from here. TF

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  269 Comments

22tlane Eric Original
Aug 30, 2011 - 10:28am

Thanks Eric

I was looking at the America the Beautiful coins. Think that is the route I will take. He has seen so many of my american eagles that I needed to go bigger for his excitement. Plus when his sisters see that 5 oz coin....I think I know what will be on their list. Stealth stacking through my kids is the best. Thanks again.

TruBlu11
Aug 30, 2011 - 10:28am

Yep. Ugly looking H&S growth on shoulder

I think Turd has to pull the trigger soon on his silver 41.25-41.50 entry point...... or will lose the opportunity for a long, long time, if not forever........

Mudsharkbytes 22tlane
Aug 30, 2011 - 10:32am

@22tlane

My son loves his Maple Leafs. I found him one at the LCS that was a 2000 commemorative in a plastic holder inside a presentation case for him for his last birthday. He doesn't care about the presentation case but he loves the coin.

But I agree those turtles look nice, if you can find one.

'course if you got the money for a 5 ouncer, go for it.

tburk Strongsidejedi
Aug 30, 2011 - 10:32am

Get In-Stay In

Agreed, Strongsidejedi, nothing to do but to get in and stay in, and not try to time it at all. The future seems knowable for PMs.

On another topic....PSLV NAV is too high, SLV is a scam. Any other way to play Silver other than CEF?

Tom L
Aug 30, 2011 - 10:32am

@Maravich

Absolutely. That 598.7 level on the HUI just will not fall easily. There needs to be a close on the 10 or 15 minute chart for me to consider it in the rear-view, and then I'm still looking over my shoulder until I see a 60 minute close.

First bit of heavy resistance for SVM is the 50 DMA @ $8.67 or so. It should run to there today.

Ta,

Hard Rain
Aug 30, 2011 - 10:34am

@Eric Original - Thank You

Eric,

Just wanted to say a quick thank you for being so generous with your time and knowledge. I have had a few questions and you have answered promptly and with great insight.

I know you have done the same for others here.

You are a great asset to this site and community.

All the best to you.

Rain

¤
Aug 30, 2011 - 10:36am

TomL

SVM is looking like we hoped and figured it would.

All of you out there that have been talking up SVM and following it closely and wondering...."When?!?" Looks like we've arrived at that point and it's right now.

My dad called me earlier at 9:00 a.m. asking me about Yamana Gold AUY. And I gave him the thumbs up. We shall see.

AUY barely budged throughout all of the recent market turmoil the past few weeks and the sell off in gold last week early on barely had a effect.

Besides having lots of gold production and nice properties, I'm thinking takeover target. M&A have to occur at some point soon I would think. GoldCorp seems overdue for a acquisition.

I can't help but think that some short covering has to take place soon in these miners.

Silverman
Aug 30, 2011 - 10:36am

    Gold Stocks Inch

Gold Stocks Inch Closer to Major Breakout

In recent commentaries we’ve discussed the relative strength of the gold stocks and in particular the relative strength of the large miners. This relative strength comes at a time when the sector is nearing a potentially historic breakout. We’ve written about this breakout before but now the gold shares are closing in and it could only be a matter of days. GDX, our proxy for large-caps is now, after almost a year of trading in a tight range, only 3-4% away from new all-time high territory. Meanwhile, ZJG, the Canadian junior gold ETF, though lagging behind, is in great position to follow GDX to new highs.

To get a feel for how the gold shares could perform after the breakout, consider one of the most classic breakouts. In late 1982 and 1983 the DJIA broke past 1000. This came after a 16-year consolidation. The retest came in early 1984 and the gradual move back to 1300 formed a cup and handle type pattern that facilitated an explosive move from 1300 to 2700 in just two years. The cup and handle lasted about 16 months.

The large cap gold stocks broke to new all time highs in late 2010. The breakout move, though small has formed a very bullish consolidation that has lasted almost one year. Tight consolidations are bullish. In this context of sustained new all-time highs for the first time in 30 years, an ensuing breakout after tight consolidation would have hugely bullish implications. Interestingly, its actually the junior golds that look more like the DJIA post-breakout. We use ZJG as it includes only gold companies and is more reflective of the junior gold sector than GDXJ. As you can see, ZJG is likely forming a cup and handle pattern. Look for a breakout in this market shortly after the breakout in the large caps.

Here we go. The table is set. Unlike in 2008, the fundamentals for this sector are outstanding. Unlike in 2008, we have trouble in the sovereign credit. Unlike in 2008, Gold is accelerating and Silver is not far off its parabolic high. Unlike in 2008, the gold and silver stocks are holding up while the rest of the market falters. A simple way to take advantage would be to invest in a gold mutual fund, GDX or GDXJ. However, picking the right stocks and employing market timing tactics will produce better returns and in some cases, reduce your risk. If you ’d be interested in professional guidance then we invite you to learn more about our service.

Good Luck!

https://www.kitco.com/ind/Trendsman/aug292011.html

Tom L
Aug 30, 2011 - 10:37am

Oil again

Just bought more seriously undervalued PGH OCt $13's at $0.15/ea. If oil goes plaid, and it looks like it wants to, this stock will move quickly back to that level.

Ta,

Corsair
Aug 30, 2011 - 10:38am

@22tlane

Agree with Eric O. When my 12 yr old saw the 5oz ATB set (Glacier/Gettysburg) she wanted to trade her 1oz Austrian Phil for it.

It's okay to laugh at your child, right?

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