There He Goes Again

Mon, Oct 24, 2011 - 7:55pm

At some point, I guess I've got to stop and decide whether or not it's just wishful thinking.

About two weeks ago, I gave you this:

I'd been itching for a gold rally but, until now, it hasn't developed. In the post above, I called for a rally in the HUI to 560-580 and it made it to 560 before falling back to 500 last week. A sharp rally has it back to 538 tonight and it still looks like 580-600 is in the cards. That would be about a 10% rally from here.

But what's got me really worked up is the latest CoT survey. Remember how I always say that the only consistent way to make money trading the metals is to sell when all looks rosy and buy when all looks dreary? The tough part is to get yourself to actually follow that discipline as it goes against basic human nature. Put a different way, history has shown that you want to buy with the banks when the specs are selling. Additionally, you should sell when the specs are strongly buying. Now, back to that CoT survey. Note these week-over-week changes:

Large Specs long: -3901 contracts

Large Specs short: +3623 contracts

Small Specs short: +1878 contracts

The speculators (those consistently wrong) continue to rotate away from long to short.

Commercials (banks) long: +2592 contracts

Commercials short: -6733 contracts

The commercials (those consistently right) are covering shorts to and some are even going long.

Now, chew on this for a moment. The dreaded and evil BoA puts out a report that warns of further U.S. credit downgrades before year-end.

Hmmm. Do you recall what happened from 8/7 to 9/6? How about a $250 gold rally, primarily caused by massive bank short-covering, all of it following the initial U.S. downgrade from S&P. Think of that CoT survey again. Could the banks be trying to front-run the next downgrade?

So, let's just go ahead and put it on the record: I'm expecting a 10% rally in gold before 12/1/11. This gives us a minimum target area of 1780-1840. Let's split the difference and call it 1810 or about 10% UP from where we stand this evening. That type of rally corresponds with where we are on the charts, too:

Soon, we will burst through the tough resistance around 1700 and begin mounting this assault on the backs of continued bank buying as well as the short-covering of the misguided specs. If December plays out similar to Decembers past, gold will then finish the year somewhere between 1750 and 1800, continuing the trend of 20-25% annual returns.

I wish I could be as enthusiastic about silver but I'm not. Though I still expect a stellar 2012, the remainder of 2011 will find silver continuing to struggle with high margins and a pit bully named JPM that doesn't appear ready to begin covering its massive short position just yet.

So, there you go. Once gold closes above 1705, my confidence in this forecast will grow considerably. At that point, I'll look to buy some Dec11 calls. Maybe buy some outright or spread some 1700s vs some 1800s. We'll see. I'll keep you posted.


9:50 am EDT UPDATE:

WOPR is in charge this morning as the PMs are being sold because of this headline:

Down goes euro. Up goes dollar. WOPR sees dollar up. WOPR sells gold and silver. Yawn.

Perhaps some human buying will emerge soon. At around 1630-35, the hourly chart holds the promise of a little reverse H&S bottom of off last week's test of support near 1600.

Hang in there and enjoy the ride. More later. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Oct 25, 2011 - 5:36pm
Economical Disaster
Oct 25, 2011 - 5:40pm

Here you go..Gets rid of the flu

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* Cart FAQ *
dakota15 ewc58
Oct 25, 2011 - 5:40pm

Adam Gefvert talks out his

Adam Gefvert talks out his ass, especially when it comes to SVM. Take what he says with a huge grain....

SilverWealth ivars
Oct 25, 2011 - 5:43pm

on charts

so many geniuses on internet boards. Many are truly bright and some just like to try and impress others though why this should be important out here in the ether is beyond me.

In times like these imo, charts behave as mirrors of the news. They lag the news. Chartists want always to deny this because they are so emotionally invested in their chart. In some cases charts will predict the news. This is not one of those cases. I doubt that any large body has an inside track into the Euro-Trash conferences. Its all guessing and gambling and the news is doctored and massaged on the hour.

Only until there is a strong reaction to concrete decisions made regarding Euro debt and Euro-trash banks will the chart then put in either a trend change or a sell off.

Oct 25, 2011 - 5:54pm
Last Rebel
Oct 25, 2011 - 6:04pm

Off topic-skip if you

Off topic-skip if you wish

JBC brought up bacon so here's tonite's menu:

Venison stew with:

Chopped bacon, taters, carrots, onions, celery, peppers and green beans on top.


Baked cinnamon apples

Sorry if my drooling shows up on the screen!

CarlC Economical Disaster
Oct 25, 2011 - 6:09pm

@Economical Disaster re vaccines

You do realize that the number of physicians you may have talked to lends no support to a discussion based upon facts?

It sure is easy to come on an internet forum and espouse things like, "Well, I have talked with 75,000 physicians and 120,000 epidemiologists and 99.9 % of them agree with me". That doesn't lend to a fact based discussion does it? How can one gauge the veracity of your assertions?

Instead, why don't you try to refute the established literature and published studies? Please cite some randomize placebo controlled trial that has been published that validates your assertions. Until then, your baseless assertions are just that ... baseless assertions.

And just another tidbit ... again you demonstrate your lack of understanding of the molecular units of the different influenza viruses and how vaccines are targeted. If the vaccine targets H1N1 and the predominant strain is H5N1, the N1 subunit in the vaccine conveys increased immunological response to the H5N1. This is basic immunology and virology. You may still have 'type of flu response' but may be more limited in duration and severity since your immue system can mount a quicker more complete response.

You demonstrate the danger of coming on an internet forum and espousing baseless assertions. Eventually, you will run up against people that actually do know what they are talking about and can refute your points.

Oct 25, 2011 - 6:25pm

Chief Golden Light Eagle Shares his Dream

Chief Golden Light Eagle Shares His Dream
Economical Disaster
Oct 25, 2011 - 6:41pm


I don't want to get into a pissing match with an uniformed kid. I'm 52, lived in 3 countries, been around the world, even dealt with Christopher Reeves before he died...met with thousands of INFORMED scientists, doctors etc. in the field, owned a medical company for over 10 yrs.. Don't tell me you're more informed then me.

"You demonstrate the danger of coming on an internet forum and espousing baseless assertions. Eventually, you will run up against people that actually do know what they are talking about and can refute your points." Go refute the millions of articles:

Google it, 3.2 million hits on "dangers of vaccines". GO EDUCATE YOURSELF!

Oct 25, 2011 - 6:41pm

Evening Tom, Cramer is buying

Evening Tom, Cramer is buying Banks and Retail. He says banks are ready to explode upward, on thin air of course. Good call Tom we may be heading down.

Still holding XLF Nov puts.

Oh and Jim is buying GLD Not miners lol GMAFB

Oct 25, 2011 - 6:45pm


The Flu vaccine? Really?

Seems like this thread got taken over by a subject that does not pertain to anything precious metals, I understand politics, banking, etc........but flu vaccine, LMAO!!

Especially with the huge spike in Gold and Silver today, you would think everything would be about that.

Not being a sour puss but just saying, it's getting old from my view.

P.S. I took the flu shot once...........and got sick. ha ha, I just had to throw that in there.

Bay of Pigs
Oct 25, 2011 - 6:47pm

QE and the William Dudley

Hey DPH, maybe this is why gold and silver went up today? (I found his quotes from the speech yesterday).

"The actions we have taken recently will be helpful in supporting growth and jobs," Federal Reserve Bank of New York President William Dudley said. "The Fed is doing--and will continue to do--everything in its power to promote jobs and price stability."

But Dudley said, "I do not think that monetary policy is all powerful," explaining that "to get the strongest possible recovery, we need reinforcing action in areas such as housing and fiscal policy." The decision last month to sell $400 billion in its short-dated holdings and buy a like amount of longer- dated bonds "should provide some additional support for growth," Dudley said.

Dudley left open the possibility he'd support the Fed buying mortgage securities beyond what it is doing now. "Clearly we've indicated our interest in supporting the mortgage market," the official said. Given how the economy and financial markets evolve, "we could potentially do more in that direction," Dudley said, in reference to a potential expansion in mortgage buying.

I Run Bartertown
Oct 25, 2011 - 6:48pm

Carl C Vs. Econ D

I've spoken to only 2 doctors about it, and they didn't agree. For me (and others have mentioned it) it's enough that the .gov is pushing it so damn hard. They are evil people. If they think injecting me with something is good, I'm inclined to disagree - on sheer principle.

Oct 25, 2011 - 6:58pm

Bstone, Gold looked awesome

Bstone, Gold looked awesome today ( flu ) Silver just as nice ( vaccine ) Hopefully it keeps up ( flu ) over night in Asia ( vaccine )


Tom L
Oct 25, 2011 - 7:03pm

@Shill BAC and Cramer

Here's the hourly chart updated with the close. The S&P better rally tomorrow that's all I'm saying.

BAC to $SPX Hourly chart.$SPX&p=60&yr=0&mn=1&dy=0&id=p07576783175&a=247039388

Cramer went short on the close.


Oct 25, 2011 - 7:04pm

@RaRaRasputin ... Happy Birthday !!!

May you ALWAYS have Good Fortune & at least the Bare Necessities in Life.

Bare Necessities
Oct 25, 2011 - 7:08pm

Little nose dive in the RSI

Little nose dive in the RSI there Tom in the SPX

Oct 25, 2011 - 7:16pm
Oct 25, 2011 - 7:20pm


Funny......well played sir, well played. Yes, let's go Asia!!!

Oct 25, 2011 - 7:38pm


I see it starting to move a bit. It's going to move significantly one of these nights soon if the Japanese follow through on their announced intervention.

First operation tonight?

Economical Disaster
Oct 25, 2011 - 7:40pm

Last Post On Shots..Go Get Yours Today QUICKLY!

Children may be vaccinated with anthrax to test if they can survive bioterrorism attack

By Daily Mail Reporter

Last updated at 4:28 PM on 25th October 2011

The Obama administration is considering whether scientists should inject healthy children with the anthrax vaccine to see if it would protect them from a bioterrorism attack.

A working group of federal advisers endorsed testing last month and the National Biodefense Science Board (NBSB) will meet on Friday to vote on its recommendation.

But critics have called the plans unethical, unnecessary and dangerous and children should only be vaccinated in the face of an actual threat.

Read more:

Oct 25, 2011 - 7:40pm
Oct 25, 2011 - 7:46pm

Silver price to regain

Silver price to regain bullish momentum – GoldMoney

ED, you have a lot of knowledge in this area, ( vaccination ) make for a nice thread from you, I am sure many will visit.

Oct 25, 2011 - 7:46pm

Germany holds all the cards and everyone knows & resents it

Eurozone debt crisis: talks break down as Angela Merkel rejects rescue deal

Rows between Europe’s leaders threatened to undermine attempts to rescue the eurozone as it emerged that a make-or-break summit will not address key aspects of the deepening crisis.

Angela Merkel, pictured with EC president Jose Manual Barroso, at the weekend's eurozone summit, where no final decisions were made. Photo: EPA

9:02PM BST 25 Oct 2011

As Germany raised fresh objections to the proposed rescue deal for indebted eurozone countries, the International Monetary Fund signalled it was considering stepping in - a move that could lead to British taxpayers paying to support the single currency.

Amid mounting Coalition tensions over Europe between the Conservatives and Liberal Democrats, David Cameron will today travel to Brussels, where European Union leaders have promised to hammer out a deal to resolve Europe’s debt crisis.

But officials admitted last night that many of the details of any deal will not be resolved tonight and will have to wait for another meeting of EU finance ministers at the weekend.

The gloomy outlook worried financial markets. The FTSE 100 index closed down at 5525, and shares in Germany, France and the US all fell.

The single currency rescue effort was left hanging in the balance last night as Germany and Italy both challenged aspects of the likely deal.

Related Articles
Oct 25, 2011 - 7:54pm

Check out the Sarkozy comment

Eurozone debt crisis: can the European ideal survive?

Whatever grand plan leaders come up with to solve the eurozone debt crisis, it will create as many problems as it solves.

8:53PM BST 25 Oct 2011 "You don’t like the euro, so why do you want to be in our meetings?” asked the French President of David Cameron at the weekend, adding for good measure that he had “had enough” of British interference. The language may have been undiplomatic, but Mr Sarkozy did rather put his finger on the nub of the problem Britain faces in responding to the eurozone debt crisis.

So far the Coalition government has gone along with Europe’s pained march towards fiscal union, even though this runs counter to the eurosceptic instincts of its Conservative hierarchy.

There are, essentially, two justifications for their approach. One is that the apparent alternative of disorderly default and break-up would almost certainly plunge Europe, and very possibly the rest of the world too, into prolonged depression. Whatever satisfaction those such as William Hague derive from being proved right about the folly of monetary union, it cannot be in our economic interests to see the project end in catastrophe. Ergo, they must support what in opposition would have been anathema – ever closer union.

The other justification is that by...

Oct 25, 2011 - 7:59pm

EU rescue plans hostage to raw politics & history

EU rescue plans hostage to raw politics

Europe's debt crisis has taken a deeply political turn as parliamentary battles rock Italy and Greece and once again cause simmering dissent in Germany, vastly complicating the search for a workable solution.

Silvio Peruzzo from RBS said the Italian government is likely to 'implode' before its mandate ends, risking 'an ever more severe deterioration of the crisis in Europe' Photo: PA By Ambrose Evans-Pritchard

10:45PM BST 25 Oct 2011

Italy's coalition was scrambling to head off collapse late on Tuesday after deep rifts on austerity measures dictated by Brussels for a Wednesday deadline, when EU leaders reconvene for yet another crisis summit.

"I remain pessimistic," said Umberto Bossi, Northern League leader and key ally of premier Silvio Berlusconi, who had warned earlier in the day that the government was in danger of collapse.

Mr Bossi said his party had offered a compromise on fresh austerity but could not accept EU demands for a rise in the retirement age to 67. "The people would kill us," he said. The pension reform is the EU's tacit condition for intervention to shore up Italy's bond markets.

Silvio Peruzzo from RBS said the Italian government is likely to "implode" before its mandate ends, risking "an ever more severe deterioration of the crisis in Europe".

The warning came as French President Nicolas Sarkozy told an Élysée breakfast meeting held behind closed doors that "Europe has never been so close to explosion"...

Oct 25, 2011 - 8:01pm
Oct 25, 2011 - 8:04pm

some german news from Spiegel

Risky Business

Merkel Gambles on Parliamentary Support for Euro Backstop

Chancellor Merkel's conservatives have bowed to pressure for a full vote in parliament on Wednesday over controversial plans to boost the euro rescue fund. Broad backing would help Chancellor Angela Merkel in EU talks on rescuing the euro, but it's a risky gambit, given the unknown number of rebels in her ranks. By Florian Gathmann and Philipp Wittrock more...

Cold-War Style Spying

Russian Couple's Arrest Could Mar Diplomatic Ties

German investigators have arrested two suspected Russian undercover agents -- a married couple believed to have been spying on Germany for over two decades. The case could hurt relations between Germany and Russia. By Holger Stark more...

Oct 25, 2011 - 8:05pm

SF they excepting silent

SF they excepting silent bids?

That is cool, yet the IRS thing has me red flagging it.

(No offense IRS your doing a stand up job Americans are lucky.)

Oct 25, 2011 - 8:10pm

This is one of those days

This is one of those days that I look for, DJIA way down, gold in A big up day, "PANIC" or SHTF.


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Key Economic Events Week of 4/15

4/16 9:15 ET Cap Util and Ind Prod
4/17 8:30 ET Trade Deficit (Feb)
4/17 10:00 ET Wholesale Inventories
4/18 8:30 ET Retail Sales (March)
4/18 8:30 ET Philly Fed
4/18 10:00 ET Business Inventories (Feb)
4/19 8:30 ET Housing Starts and Building Permits

Key Economic Events Week of 4/1

4/1 8:30 ET Retail Sales (Feb)
4/1 9:45 ET Markit & ISM Manu PMIs
4/1 10:00 ET Construction Spending (Feb)
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4/2 8:30 ET Durable Goods (Feb)
4/3 9:45 ET Markit & ISM Services PMIs
4/5 8:30 ET BLSBS

Key Economic Events Week of 3/25

3/26 8:30 ET Housing Starts (Feb)
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3/28 8:30 ET Q4 GDP final guess
3/28 10:00 ET Pending Home Sales (Feb)
3/29 8:30 ET Personal Income (Feb)
3/29 8:30 ET Consumer Spending and Core Infl. (Jan)
3/29 9:45 ET Chicago PMI
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