There He Goes Again

485
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:

https://www.tfmetalsreport.com/blog/2658/rally-cometh

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.

https://latimesblogs.latimes.com/money_co/2011/10/us-credit-rating-debt-downgrade-warning-merrill-sp-moodys-fitch.html

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.

TF

9:50 am EDT UPDATE:

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

https://www.zerohedge.com/news/ecofin-meeting-cancelled

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

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  485 Comments


Oct 25, 2011 - 10:28am

Humans Taking Over?

That's a nice little blastoff right there.

Looner
Oct 25, 2011 - 10:29am

So did that just happen?

Is the ticker broke?

¤
Oct 25, 2011 - 10:30am

Get this...Obama wants to

Get this...Obama wants to roll over any private college tuition loans that are outstanding into govt. backed secured loans...wtf!

C'mon....really? Talk about election year handouts. More QE in all kinds of stealthy ways. Can anyone imagine the amount of student loans that must be out there potentially?

And gold goes higher......

ewc58
Oct 25, 2011 - 10:31am

Ongoing REE developments going in the background

Ford and Avalon Rare Metals Latest to Join Rare Earth Trade Group

October 24, 2011 -- The Rare Earth Industry and Technology Association (REITA) announced today the group’s newest members who will join REITA’s other prominent industry and academic organizations in addressing global supply chain issues for rare earth products. The new REITA members are Ford Motor Company and Avalon Rare Metals Inc. of Toronto.

Rare earth elements have applications throughout the motor vehicle industry from windshields to catalytic converters. Of particular importance are rare earth permanent magnets which are used for powering many of the hybrid and other advanced electric vehicles being offered today.

Avalon is a Canadian-based mineral development company focused on the rare metals. Its flagship advanced heavy rare earth project at Thor Lake, Northwest Territories, Canada, will have a bankable feasibility study completed during 2012. Avalon is planning to produce separated heavy and light rare earth oxides, as well as niobium, zirconium and tantalum by-products by late 2015.

“Ford and Avalon typify the breadth of critical Clean Energy supply chains that REITA members represent” said Keith Delaney, REITA’s Executive Director. “From rare earth resource companies and processors - downstream to the Original Equipment Manufacturers of advanced auto, lighting and renewable energy applications - we are working to create internationally competitive and diverse supply chains for rare earth products for Clean Energy”.

Green Lantern
Oct 25, 2011 - 10:31am

Not sure what it is, maybe I

Not sure what it is, maybe I woke up on the wrong side of the bed, middle age or whatever, but I can't seem to get excited about a possible bull run of $250.

Obama is going to pull a Harry Truman and use his unconstitutional presidential powers to help the sheeple with their college loans, mortgage refinancing and put veterans to work. More empty promises based on the bad credit of the USA.

USA continues it's imperialist agenda unabated to free us from evil terrorists who use tin cans filled with explosives to achieve their military objectives. A Turdite from Canada, like many world travellers, has figured out that we already live in a police state and the sheeple smile because Uncle Sam is keeping them safe. The constitution is now just a historical document behind a glass panel to show your kids when you visit the museum.

In 2011, college applications increased. More loans and more BA's, BS's and MBA's from goverment controlled schools so hopefully momma's son can go work for the corporate-military complex as marketing manager. work a year, take out more loans to buy that dream house. Brings tears to my eyes. Of course, we have forgotten how to use our hands and build things, work the land, fix things because our hope is we can pay somebody else do it.

The revolution in the country is a group that is still working on agenda and misses the bullseye by at least two circles of the real problems in America. And a bunch of slick political candidates that IMO aren't relevant.

Even in the precious metal community, we are still having debates over whether or not markets are manipulated something that every investor back to the turn of the century took for granted occurs in the market. Now we are so freakin' programmed to believe that everything is rosey, that we have to debate it.

Get my point. American's and citizens of the world are sleep. The American dream has been corrupted. Our finances, politics and everything we believe in is part of a program. The USG propaganda machine has been feeding people so much of the blue pill, they will never escape from the matrix until doom is upon them.

I continue stacking patiently and waiting and will continue. But for today, can't be excited about a possible 250 run when this world is going to the dumpster and the sheeple walk around in a state of somulence. We are living the reality of Truman from the Truman show movie. The world is a stage and we are the actors. The directors and producers pull the strings. Turnign the computer, the news off and going out and buying a pack of cigarettes and I'm gonna smoke the whole pack and maybe a few Stella Artois beers for lunch. And when my wife comes home and asks me how my day was, I'll tell her WONDERFUl as usual. The worlds looking up.

The Truman Show Trailer
ewc58
Oct 25, 2011 - 10:32am
Hammer
Oct 25, 2011 - 10:33am

Italy under pressure to come

Italy under pressure to come up with a debt plan by tomorrow plus Sir Mervyn King (BOE) says the Eurozone plan is no solution and will only buy a couple of years' time.

Silvio Berlusconi's government is under increasing pressure after demands from Germany and France that he present a firm plan for increasing growth and cutting borrowing by tomorrow's summit in Brussels.

The coalition Government in Italy also voted down a plan to raise the pensionable age.

Tom L
Oct 25, 2011 - 10:38am

Note the move in gold

Is not in concert with the 30 year bond yield. There was a spike down in yield at the same time that gold broke out? That to me says there is more damage being done to the USDX vs. the world trade.

1 hour chart:

https://stockcharts.com/h-sc/ui?s=$TYX&p=60&yr=0&mn=1&dy=0&id=p01132990878&a=246876772

15 minute chart:

https://stockcharts.com/h-sc/ui?s=$TYX&p=15&yr=0&mn=0&dy=6&id=p73198402868

Maybe Turd's right and humans are re-entering the market. $1685 gold and rising... during the CRIMEX? Say it ain't so, joe.

Ta,

ivars
Oct 25, 2011 - 10:39am

Very short term prediction

This will be one of the hottest commented day in recent memory of this site. Stay tuned:)

Tom L
Oct 25, 2011 - 10:39am

Trader Dan's Post

This morning's action in WTIC vs. the S&P now makes Dan look a little foolish, not b/c he is (Dan's excellent), but b/c the S&P is down while WTIC has continued to rally.

Gold and Bonds and Oil up? Sounds like war or sovereign debt implosion to me.

Ta,

Hammer
Oct 25, 2011 - 10:41am

There has been another major

There has been another major hiccup in the eurozone's plans to announce a final rescue deal in Brussels to try to end the turmoil in the euro area.

The Polish presidency of the EU has confirmed to the BBC that key meetings have been postponed.

The EU's 27 finance ministers and the 17-nation Eurogroup will not now meet on Wednesday, although a full emergency heads-of-government summit will happen.

This could mean a delay to final announcements on solutions

seems to be the cause

https://www.bbc.co.uk/news/business-15451328

pforth
Oct 25, 2011 - 10:43am

Of course gold is up today...

Gartmann recently flipped to long on gold and everyone knows that he has a perfect gold trade record ;)

LaMachinna Tesla
Oct 25, 2011 - 10:43am

Tesla/Victor

Thanks! Sick, sick, sick of all this kwap! Feel better now that I barfed it out - Thanks again.

Have a good, screamin' eagle day comrades

LaMachinna ivars
Oct 25, 2011 - 10:46am

whad up, Ivars

pls do be a good turdite and share........

¤
Oct 25, 2011 - 10:48am
Tyler
Oct 25, 2011 - 10:50am

keep the posts coming

so much info to keep track of and find. great to have a lot of it here

Shill
Oct 25, 2011 - 10:50am

Just too touch a little on

Just too touch a little on the Case Shiller BS

Here is an article showing just how underwater average American households are and which states are experiencing the most severe problems:

https://viableopposition.blogspot.com/2011/06/how-underwater-are-america...

If households can't afford to spend, America's GDP growth, which relies largely on increases in consumer spending, will ultimately begin to shrink.

Bstone
Oct 25, 2011 - 10:51am

Gold and Silver Rocket!!

One thing that makes my day is seeing Gold go straight up, hopefully that rocket has enough fuel to reach the moon.

Looner
Oct 25, 2011 - 10:54am

Didn't we have a huge boost last tuesday?

Right about this same time?

Dr Durden
Oct 25, 2011 - 10:55am

Standing ovation

Goes to Green L. You may have woken up on the wrong side of the bed, but you, my friend, are indeed awake. I love how there's this brief opening in the storm clouds and everyone starts to get all chipper like the power and mAgnatude of the storm has died. It makes me feel better to witness this to know I'm right with my positons and intermediate goals than at $300 surge in gold and a $30 jump in silver. If u want to be a successful stacker/investor, you have to understand the feeble nature of the human mind.

Harald
Oct 25, 2011 - 10:55am

Being on the same side as

Being on the same side as Gartmann is troubling to say the least.

SilverWealth
Oct 25, 2011 - 10:55am

charting

short term charting is quite unimportant at this juncture.

Price is gyrating wildly in accordance with each new managed news blurb around the Euro-Trash.

KISS

Mickey
Oct 25, 2011 - 10:59am

Mickey

getting ready for London Close-its a toss up as to which way PM will move right now.

Shill
Oct 25, 2011 - 11:00am
MollyRatchet
Oct 25, 2011 - 11:03am

@ Ivars ..

Ok my good man .. what are you seeing ??

MR

¤
Oct 25, 2011 - 11:06am

I would like to see short term charts....

...that include all of the "what if's" that were are presently going through or the one's we might go through in the next week or even tomorrow. Maybe even by the end of the day.

A chart for if MENA explodes, or one if the EU does nothing and the IMF bails them out or if they bail them selves out or if the EU splits apart or if Germany says screw it all or if Italy falls apart or if the Treasury statement on China prompts a retaliatory Chinese bond sell off or....

A wait and see blank chart might be the most interesting one of them all.

ewc58
Oct 25, 2011 - 11:07am

What does that mean Ivars?

Fyi, you've already given many of us PGDN finger cramps with some of your epic charts. Can you lighten up with the lengthy charts you're dropping into Town? Feel free to just give us the link to the ones you want us to see, with a description of what you're showing on that chart. This way, each of us can decide if we want to click to see it.

In other words, keep giving us your opinions, etc. here, with the option to view the chart in question via a link. Is that a fair approach?

Thank you

ivars LaMachinna
Oct 25, 2011 - 11:08am

@LaMachinna

Well, this was predicted . HERE:

Well this was my short term prediction from September 27th, based on charts -but with a margin for error bigger than 1 pixel i manage to draw on the screen:

https://www.tfmetalsreport.com/comment/36189#comment-36189

It said about these topics:

Gold 1800:

2) Gold, on the contrary, seems to be posed for relatively steady growth till 1800 in November, around which level it should fluctuate for few months (+- 50 ?) .

Silver 40:

1) Silver may fluctuate around 30 USD (+- 3?) for 1 month or so, then move up sharply about 5 USD to 35-40 and drop again, now to little higher level of 33-35 +-5, and not change much anymore this year. So the bottom will be kind of close from time to time during October.

The immediate reason, as we see now, is Greece's coming default . The reaction will be overdone, since, when the Greece will disappear from Eurozone's problem list and banks will be disclosing whatever they have to, the blip will end.

In Silver and Gold, , it will take till January 1, 2012 for it to drop back from elevated levels (max 40, may be some spikes) to 33+-3 USD.

exiledbear
Oct 25, 2011 - 11:08am

Boooooiiiiiinnnngggg

What happen? Did someone set us up the bomb? Main screen turn on.

Hammer
Oct 25, 2011 - 11:09am

The Telegraph Bad economic

The Telegraph

Bad economic news from the US - consumer confidence has slipped to its lowest level since March 2009, when the country was in the midst of recession.

The Conference Board's sentiment index fell to 39.8 from 46.4 in September, new figures showed. That was well below economists' forecasts.

Anxious consumers, reluctant to spend because of a weak jobs markets and falling house prices, will put a further drag on the US economy.

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