Other Technical Indicators

218
Tue, Jan 10, 2012 - 6:50pm

As you know, I like to poke fun sometimes at the chartists and the elliotts for relying so heavily upon their squiggly lines that they fail to see the forest from the trees. At the risk of seeming hypocritical, I thought I'd show you some charts that include those squiggly lines this evening as I continue my search for tradable bottoms.

Before we begin, a recap of today and a repost of the charts I included as an update to the earlier blog. To simply summarize, yes today was great. Both metals broke free of their recent downtrends and looked good doing it. However, keep in mind that today was a Tuesday and "Happy Tuesday" often results from The Cartel covering some shorts in an effort to "paint" the CoT survey that took place after the close this afternoon. Because of this, do not be surprised to see the metals give back some of today's gains tomorrow. Additionally, let's be sure to check the OI numbers from today when they are released tomorrow. If new money was driving today's gains, we will see a nice increase in OI. If today was primarily a Cartel short-covering event, the OI will be relatively flat. Regardless, the gains in price are real and both metals suddenly have a much improved technical picture. Let's see what the rest of the week brings. To really get me excited, silver needs to close above $30.50. Gold needs to first close above $1650. Then it needs to break the downtrend line from the highs of September. That line is currently near $1680.

OK, now let's look at two, other technical indicators as we search for a bottom. First, a disclaimer:

Look, we all know that the metals are blatantly and selfishly manipulated by The Cartel. In fact, my ability to accurately forecast price is primarily due to my understanding of this manipulation. However, as you know, the major spec money in the pits is driven primarily by HFT algos and technical indicators are some of the primary factors that cause the algos to switch from buy to sell and vice versa. So, technical analysis indicators are occasionally quite helpful in that, in the closed-loop of single market trading, if all participants are looking at the same information, price forecasting almost becomes a self-fulfilling prophecy.

So, here we go. Let's look at two of the major indicators and see if they are telling us anything. First up,

MACD

Definition: https://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:moving_average_conve

Now look at these pretty charts. The blue line is the one you want to watch. Note that the blue line often bottoms shortly after price bottoms OR tops shortly after price tops. What you are looking for are price trend changes that are signaled by the blue line crossing over the red line. Look closely. Maybe print these off yourself. Notice that, recently, the blue line crossed UP through the red line in both gold and silver. This is good news!

And the other technical indicator we need to review is the...

RSI

Definition: https://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:relative_strength_index_rsi

The RSI only gives you only line to follow. When the line reaches way up over 70, the commodity is generally considered to be "overbought" and subject to a decline. Conversely, when the line is down near 30, the commodity is considered to be "oversold".

First, on the gold chart, note that lows in the RSI have generally occurred one week before lows in price and a couple of weeks prior to price trendline breakouts. Also note that the RSI itself will breakout from downtrends and, when it does, it usually portends higher prices. In silver, we get a similar picture. Pay special attention to the longterm RSI trendline. It has been downsloping since May and it just broke out back at the first of the year. This is a very encouraging development.

Again, secondary technical indicators are not the be-all-end-all that many chartists make them out to be. However, they can occasionally be helpful when looking for trend changes in price...kind of like what we are currently doing. When you combine the RSI, the MACD, the price charts and the OI numbers, you begin to get a sense that we have seen the bottom in both metals . Let's now just patiently wait for price to confirm these developments.

TF

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turd [at] tfmetalsreport [dot] com ()

  218 Comments

Dr G
Jan 10, 2012 - 6:56pm

Sweet! Good stuff, Turd.

Sweet! Good stuff, Turd. Santa has a "feeling" that gold will make a nice move in the next 48 hours (now 40 hours). We shall see if his feeling is correct, but the technicals are starting to show that a big move good be in the pipe.

I still purchased today--I've cut back a bit but am purchasing about twice a week at this point. Not big purchases, just my weekly amounts. If the price is right I do a big purchase.

Bsong
Jan 10, 2012 - 6:56pm

Thanks Turd

This is the area I'm eager to learn. Economy and political insanity have kept from giving the TA its Due.

JavaJedi
Jan 10, 2012 - 6:57pm

Thanks

I too have watched MACD and RSI, but until I started lurking around here, I didn't have the bigger picture of OI and just how badly manipulated all of that stuff is.

Thanks for the wake up call, Turdville!

bernard
Jan 10, 2012 - 6:58pm

Again, love watching the

Again, love watching the action as big sellers come in to knock silver under $30. They are losing the fight. It's going to be an awesome year. If you guys didn't see the letter I wrote to the CFTC in the other thread, it's posted below for convenience. Feel free to send from your own emails :)

to: PosLimits[at]cftc[dot]gov,
JSommers[at]cftc[dot]gov,
GGensler[at]cftc[dot]gov,
MDunn[at]cftc[dot]gov,
BChilton[at]cftc[dot]gov

To all of you supposed "regulators" who I am currently employing through my tax dollars,

I am beyond upset with your administration's inability to address and stop the naked leveraged short selling of silver. I would like to thank Bart Chilton for insinuating the truth of the situation. But to the rest of you-- what cometh of your investigation (or lack there of)? I am disgusted with your organizations seeming subservience to these commercial banking interests. Don't you dare forget that you are all employees of myself and the rest of the American public. I demand that you quit dilly-dallying and get back to work. How much easier could it be for you? Does the whole entire investigation need to be handed to you on a silver platter? Ha! If you continue to kick the can down the road and look the other way, you are setting yourselves up for an embarrassment of epic proportions. Don't you people remember your purpose? Let me spell it out for you: serving and protecting the interests of the American public. I am writing this email to you all, so as to remind you that the victims of the silver manipulation are not faceless. We are people, American citizens... perhaps the only true patriots-- who wish to see a return to sound money. Either way, your lack of prosecution of the large commercial shorts (JPMorgan and HSBC) is akin to being complicit in this scheme of driving the metals lower. Do you not understand what is going to happen? Let me spell it out for you. Every nuclear event in the precious metals markets simply results in physical metal transferring from Western to Eastern vaults. Is this what you want? What will we do when the Chinese have it all and all we have left is our funny money? The implications are terrifying. Again, as a citizen, a tax payer, and therefor YOUR EMPLOYER, I demand that you respond to this email in kind. Recognize that silver investors have been bled out numerous times the past year, and we demand justice. If you guys seek to ignore or poo-poo this email like your drone did to Andrew Macguire when he spelled it all out for you, I will be doing all in my power to see that you people are removed from your positions as regulators, as it is obvious that you are all POWERLESS to protect the public from these "nefarious market forces". I look forward to hearing your response. Compare Silver Prices | Compare Gold Prices
Be Prepared
Jan 10, 2012 - 6:59pm

The Path.... The Rocky Path

First-a-licious again, but it's really more important to focus on how to navigate all the craziness ahead. The Path we find ourselves on is a boulder-filled rocky path. I look out on this year and much is unknown, but what I do know is that I need to expect the unexpected. Personally, Silver & Gold in the short term will whip-saw all around us so I am ever so glad Turd is on the job giving us some lights to navigate this dark patch.

atlee
Jan 10, 2012 - 7:05pm

nice chart work

Nice chart work Turd. I love you better as a "market strategist." Whether you or your audience is trading or not it is good info and helps keep a bead on the pulse of the market.

Bay of Pigs
Jan 10, 2012 - 7:16pm

Well done...

Great analysis TF. Well thought out and balanced. Very helpful.

Economical Disaster
Jan 10, 2012 - 7:20pm

Hundreds Threaten Suicide At Microsoft Supplier Plant

SEATTLE, Wash. (CBS Seattle) – Some 300 Chinese Foxconn employees who manufacture X-box 360 machines said they would throw themselves from their Wuhan, China, plant if demands for lost wages were not met.

China Jasmine Revolution, an activist revolutionary organization with a name borrowed from the Tunisian revolt that set off the Middle East unrest, reported that employees made their demands for a wage increase for 100 employees on Jan. 2.

Management at Foxconn — the world’s largest contract electronics manufacturer and a crucial link in the supply chains of Apple, Dell, Nintendo and Song — responded with an ultimatum. Employees could quit with one month’s compensation awarded for each year with the plant or go back to working.

Many employees quit, but Foxconn allegedly dishonored the agreement and awarded former employees nothing.

Around 300 workers returned to the plant in an uproar, and staged their protest on the plant’s roof on Jan. 3.

Wuhan’s mayor intervened through hours of negotiations, walking them back from the roof’s edge until 9 p.m. when workers agreed to return to work, according to China.com.

Calls to Foxconn were not immediately returned.

A Microsoft spokesperson wrote CBS Seattle a statement saying, “Microsoft takes working conditions in the factories that manufacture its products very seriously, and we are currently investigating this issue.

https://seattle.cbslocal.com/2012/01/10/hundreds-threaten-suicide-at-mic...

agrock
Jan 10, 2012 - 7:20pm

In The First Few Days Of 2012, US Mint Sells More Silver Than In

In the first few days of 2012, the US mint has already sold 4.3 million ounces in silver coins. This is more than in all individual months of 2011 except for January and September, when the mint sold 6.4 million and 4.5 million ounces. Is the retail love affair with physical silver coming back with a vengeance?

https://www.zerohedge.com/news/first-few-days-2012-us-mint-sells-more-silver-all-most-months-2011

silverstool
Jan 10, 2012 - 7:28pm

Beautiful

Turd, yet again you cut through the BS and lay it on the line. This level of analysis usually comes for a fair price and I would like to thank you for being generous enough to share this with like minded individuals. A timely reminder to dip into pockets and feed the Turd!

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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