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

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  485 Comments

Tesla
Oct 25, 2011 - 4:28am
Victor123
Oct 25, 2011 - 4:32am
Eric Original
Oct 25, 2011 - 4:33am

I've got my Rally Cap on too, Turd!

Here's the thesis:

  • Gold, Silver, and Miners correlate with the Dow far more often than against it.
  • The Dow has crossed back above it's 50MA and is knocking on the door of it's 200MA

Can it really be that simple? Yes, sometimes it can.

Good Luck All

RenryReodePow
Oct 25, 2011 - 5:57am

Prompt site for singles !

Prompt site for singles !

silver foil hat
Oct 25, 2011 - 6:23am

From last thread / debate

My objective was to lay out GATA’s case in the time we had and to put Jeff Christian and I on the spot with predictions for the coming year. Frankly, the guy is a weasel and NEVER admits he is wrong. At The Silver Summit last year he was bearish at $23 per ounce. Course, that is all forgotten.

It sounds like we have finally discovered who The Wizard is! Pay no attention to the Silver price, or the (PTB) behind the curtain!

sixdollarsilver
Oct 25, 2011 - 6:38am

Tom L

Through 76 and POSX goes to 73.50 with a jiggle jiggle here and a jiggle jiggle there.

After that, 73 and ssspphhheeeeewwwwwwww...

Holding 76 looks quite important.

ivars
Oct 25, 2011 - 6:39am

@ donnojackshit Gold 1800, @Bay of Pigs silver 40, @Austrian oil

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.

Oil 100-I predict BRENT, not WTIC!:

I am predicting BRENT 1 Month, so the prediction was that since September 27th BRENT 1 M will stay within 105+-10 USD this year, which it so far did. Strangely, WTIC has gone up to narrow the gap with BRENT. Will that continue?

https://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&start=560#p34241

RaRaRasputin
Oct 25, 2011 - 6:49am

Clegg says Britain should lead, not leave, Europe

HaHaHa Comedy genius!

https://www.guardian.co.uk/politics/2011/oct/25/eu-referendum-vote-gove-tory-rebellion

Nearly half Cameron's backbenchers defied a three-line whip and voted in favour of a motion calling for a referendum on whether Britain should remain in the EU on the current terms, leave or renegotiate its membership.

RaRa

RaRaRasputin
Oct 25, 2011 - 6:52am

Deja Vu?

Hmm, Osama supposedly buried at sea .....

Gaddafi buried in secret location

https://www.guardian.co.uk/world/2011/oct/25/muammar-gaddafi-buried-libya

Jeez it's only midday here & I feel like I need a drink already

RaRa

Hammer
Oct 25, 2011 - 6:56am

Personally I ignore the

Personally I ignore the politicians. They are.....well..........politicians, just grandstanding to their voters to garner and maintain power and just tell voters what they want to hear in this present time (I am waiting for a politician who has the gonads to tell voters what they don't want to hear personally). but there you go. Just a sideshow in my opinion :)

I worry that each country's politicians might ramp up declarations of "us" against "them" and play the blame game for political expedience and indeed there are many cracks being seen in the old system of political harmony based on economics. I urge everyone not to fall into that trap and to maintain an open mind towards each other and to maintain respect and kindness..........i.e. do not fall into the blame game trap.

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