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.

paper_1-10amsilv_0.jpgpaper_1-10amgold_0.jpg

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!

paper_1-10pmgoldd.jpgpaper_1-10pmsilvd.jpg

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.

paper_1-10pmgoldw.jpgpaper_1-10pmsilvw.jpg

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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  218 Comments

Be Prepared · Jan 11, 2012 - 3:48pm

Where do We Stand Compared to China?

I wonder how many Americans have any percentage of their savings in gold and, if so, what percentage? It's obvious where China's going.... and maybe it's obvious where America is going.

zman · Jan 11, 2012 - 3:54pm

Anyone see Dana Bash of CNN

Anyone see Dana Bash of CNN talking about Ron Paul, she said she was "scared of him". The Paul camp is asking for her dismissal. I hope Bash gets fired.

GoldMania3000 · Jan 11, 2012 - 4:12pm

Getting close?

Euro falls to new 16-month low against dollar

By The Associated Press | Associated Press – 23 mins ago

Fears that Europe's largest economy may be stalling pushed the euro to a 16-month low against the dollar Wednesday.

The German government estimated Wednesday that the country's economy contracted at an annual rate of 0.25 percent in the last quarter of 2011. The exact figure will be released next month and could be revised.

Traders are concerned that if Germany falls into a recession it would be an ominous sign for the rest of Europe. Germany's economy would have to contract in two consecutive quarters in order to be in a recession.

The euro fell to $1.2697 late Wednesday from $1.2790 late Tuesday. It dropped as low as $1.2661 Wednesday afternoon, its lowest point since Sept. 10, 2010

Be Prepared · Jan 11, 2012 - 4:17pm

Job Opening and Labor Survey (Jan 2012)

Things are looking real rosy.... almost as many people fired as were hired.

  • Hires, total separations ,and employment all remained below pre-recession levels in November 2011.
  • In November, there were 4.1 million hires, which was 16 % higher than the trough in October 2009.
  • There were 4.0 million total separations in November.

Full JOLTS Report here

ClinkinKY kliguy38 · Jan 11, 2012 - 4:21pm

@ kliguy38--SCOTUS

With all due respect, if you honestly don't see any difference between Roberts/Scalia/Alito/Thomas and the other 5 then it's you who hasn't learned much over the last three years.

boatman · Jan 11, 2012 - 4:23pm

@jhnewman

tho i wish it was just UP from here i agree with your analysis exactly....it has been mine for weeks.

thesandbox · Jan 11, 2012 - 4:27pm

silver rounds

holiday rounds on sale just got an email from Monarch if anyone is interested....looks like they have about 2400 left. https://www.monarchpreciousmetals.com/index.php?page=shop.product_detail... edit....also not much else in their inventory and strange as the email stated they were not available in time for the holidays....quite a delay I would say assuming they were ordered for pressing quite some time before the holidays

beardeus · Jan 11, 2012 - 4:29pm

College

Should I go Accounting or Agribusiness?

Either way, who here thinks evil of me for taking my extra student loan money and buying physical with it... because that's what I'm doing! Heck, maybe I'll never stop going to school!

Pegasus Nick Elway · Jan 11, 2012 - 4:32pm

The NDAA vote tally

Democrats & Liberals respect Liberty too! My Senators: Jeff Merkley (D) and Ron Wyden (D) both voted NO on the NDAA bill, as well as all 4 Democratic House Reps. That's 100% of Dems in my state voting against the loss of our Civil Liberties. The only Representative to vote yes, was the Republican, Greg Walden!

Oregonians are very self reliant and independent thinkers, and have great respect for the Constitution and the Bill of Rights. Peter DeFazio my House Rep. has voted along with Ron Paul many times against the Fed, against the bail outs, against restrictive gun laws and for other Libertarian issues. Try keeping an open mind when you make sweeping negative generalizations about Dems & Libs, as there are those who actually represent their constituencies best interest, whether Democrat, Republican or Independent.

Hold over · Jan 11, 2012 - 4:37pm

(No subject)

https://www.youtube.com/watch?v=70cgPOptnJM&feature=related

Ron Kaufman’s firm, Dutko Worldwide, represents and works directly with an organization chaired by Bill Clinton, the Global Fairness Initiative (GFI), whose board includes AFL-CIO President John Sweeney and is dedicated to promoting “a more equitable and sustainable world for all people.” A press release describes the substantial connections between Dutko and GFI, with a Dutko official being quoted as saying, “Dutko Global Advisors is proud to support the work and mission” of GFI “because its work is fundamentally about nurturing the virtuous cycle of free and fair trade, the creation of economic opportunities, and harmonious relations worldwide.”

https://www.canadafreepress.com/index.php/article/1446

Boston.com | 11/29/2011: One of Mitt Romney’s top advisers [Ron Kaufman] works for a lobbying firm that once represented Solyndra, the now-bankrupt solar energy firm that has come under scrutiny for the federal loans it received – and has been criticized by Romney himself.

 Andrew Card, is probably the most successful Massachusetts Republican on the national level since Governor John Volpe became the secretary of transportation in 1969. Card, a former state representative from Holbrook, has worked his way up — all the way to the White House. Card’s brother-in-law is Republican National Committee member Ron Kaufman, who supports Romney.

FriedEggs · Jan 11, 2012 - 4:40pm

@ KR

The illuminati program is designed for women... and men to self-destruct. 

.

This X-Generation - anyone born after the 80's - is not being brought up by our parents, but by the illuminati controlled mass media.

Again, what can be perverted will be... what can be manipulated will be... 

This is what 'they' are trying to program to us (lies):

'hot man' + 'hot woman' + 'hot sex' = happiness

.

Fried(e)

silverstax Katie Rose · Jan 11, 2012 - 4:43pm

@Katie

"If you love your daughters, keep them out of the military. Period."

Couldn't agree more. And while we are at it, if you love your sons, keep them out of the military as well. No sense in being killed or maimed for "Love of Corporation" right?

Maximillion · Jan 11, 2012 - 4:44pm

@jhnewman

I'm really glad I didn't follow your advice last time (though I only trade Silver), as the latest rise has provided a nice fiat float to ride out any temporary down blip.

agrock · Jan 11, 2012 - 4:46pm

Skyscrapers

Is this just a slow newsday or anyone else make this correlation before? Up go the skyscrapers, down goes the economy, report shows LONDON — An "unhealthy correlation" exists between the construction of skyscrapers and financial crashes, according to a new report from Barclays Capital. The construction of the Empire State building in New York in 1930, along with towers in Kuala Lumpur in 1997 and Dubai in 2010 have all been followed by economic crises, the report noted. https://www.msnbc.msn.com/id/45957217/ns/business-world_business/#.Tw4Cq2-8qWc

Be Prepared · Jan 11, 2012 - 4:47pm

Archer Daniels Midland to cut 1,000 jobs

Archer Daniels Midland to cut 1,000 jobs

January 11, 2012 (ST. LOUIS) -- Agribusiness conglomerate Archer Daniels Midland Co. announced plans Wednesday to cut 1,000 jobs, or about 3 percent of its total workforce, with the majority of the positions being salaried staff.

The move will cut about 15 percent of the Decatur, Ill.-based company's corporate staff, CEO Patricia Woertz said in statement.

Archer Daniels Midland reported $2.03 billion in profits for the last fiscal year alone, but a volatile global market for crops has made for unpredictable revenue. Corn and soybean prices have seesawed violently this year, hitting near-record levels only to plunge again in a matter of months. Such swings can quickly wipe out profits, so Archer Daniels Midland is looking to cut as much overhead costs as it can.

Woertz said the job cuts will help the company be more competitive in the modern food industry. Archer Daniels Midland expects to save about $100 million in annual expenses from the cuts, along with other cost-cutting measures. The job cuts will cost between $50 and $75 million during the third quarter of the company's current fiscal year. <Rest of the Article>

_______________________________________________________

​Increasing taxes on Corporations really seems to be working for Illinois.... they are cutting their presence in the state and reducing tax liabilities by laying people off. Do you still believe unemployment is headed lower... in real terms?

beardeus · Jan 11, 2012 - 4:47pm

@ FriedEggs

This is one thing that I agree with you about. Your theories on Ron Paul I do not.

Definitely has the media become vile and demented at best. To think that YOU, all of us, succumb to some sick perverts fantasies or thoughts when we support their films on the big screen.

I was told a long time ago by a religious man to take my wife to see a good movie. He also reiterated that rarely are there ever good movies that come out. Therefore I rarely visit the movies.

Also, according to Aaron Russo, the Rockefellers funded/created the women's movement so that they could double their taxable servants and so children, no mothers at home, could be indoctrinated by the state earlier.

You say bullshit? I say you're a jackass for being so deceived for believing otherwise.

HeNateMe · Jan 11, 2012 - 4:51pm

@ALL

My favorite movie is Sunset Boulevard.

HeNateMe

Smiddywesson GoldMania3000 · Jan 11, 2012 - 4:53pm

Where to from here

Hat tip to Peace Silver for the article on the Euro hitting a 16 month low against the dollar. The forces in Europe and in silver are tremendous. Something has to give, and I would bet it's the dollar.

For those of you who are calling for lower prices, you just might get it, because if the Fed and ECB don't intervene to prop up the Euro, it's all over, collapse time will come. That means they will sit on PMs and equities to pick up bargains.

But after four years of kick the can, how likely is that? Is there ANY cost too high to kick the can? Calling the collapse is a tough thing to do because it can only happen once, and TPTB are likely to step in and devalue before they let that happen.

Devaluation is close, but probably not so close as to prevent this upswing.

Smiddywesson Be Prepared · Jan 11, 2012 - 4:57pm

ArcherDanielsMidland

First MFGlobal and now Agribusiness is cutting back operations, meaning supply. All we need is some crappy weather and we will all starve. Actually, the countries the US ships food to will starve.

GoldMania3000 · Jan 11, 2012 - 5:01pm

Rickards

has been very adamant that QE on both sides will occurr. Deflation in Europe = QE. High Dollar in US=QE. he's been right so far. let's watch closely to the EUR/USD exchange. Then don't forget they may repeg the yuan--it's been going up. if they devalue then USD follows.

not my analysis-rickards. but like i said he's been right about timing, etc 

Slick agrock · Jan 11, 2012 - 5:05pm

Skyscrapers

Do you think its just a coincidence?

or is it just what happens when the bills come due?

Maybe sorta like JPM and MFG and the paper charade?

cpnscarlet ClinkinKY · Jan 11, 2012 - 5:08pm

@ClinkinKY - Don't bother.

@ClinkinKY - Don't bother. kliguy38 is so much smarter than the rest of us. He knows that if any of us disagree with his opinions, it's only because we've been totally duped by TPTB and brainwashed with everything from Capn' Crunch to fluoride. We can never be right, since any time we think we are, it's only because the bankster masters allow us to think we are.

Funny thing is, any time you put a reasonable question in front of him, he just blames our brainwashing for asking such a stupid question and he never answers it. Oh well, I guess it's because he knows we're brainwashed and can't understand the answer anyway. All hail kliguy38, the real elite in Turdville.

/sarc off/

Colonel-Angus · Jan 11, 2012 - 5:22pm
ClinkinKY Colonel-Angus · Jan 11, 2012 - 5:29pm

For entertainment only

Enjoyed both clips immensely:)

Economical Disaster · Jan 11, 2012 - 5:58pm

Romney Would Arrest Dying Man And Doctors Who Provide Med. POT

Gov Mitt Romney meets a medical marijuana patient Oct 6
T · Jan 11, 2012 - 6:04pm

the difference between Romney and Paul

 This video of Romney shows all you need to know.

Mudsharkbytes · Jan 11, 2012 - 6:13pm

No difference between 'em - essentially

I keep reading about how "we've gotta do everything we can to prevent another four years of Obama".

Well, if that means you think if it comes down to it you have to hold your nose and vote for Romney because he's the lesser of two evils, news flash, it won't make a scintillas worth of difference which one of those bozos get elected.

Fact of the matter is, since the first Bush, I don't think there's been any substantial difference between any of the presidents. They pretty much all have done the same thing - spend, lie and go to war whenever possible. Romney will gladly follow suit. As for Obama, I don't see any difference between him and Bush II, with the exception of skin color and he's a little less tongue tied.

I have a theory, based on zero evidence other than circumstantial, that within a few weeks of winning the presidency, the president elect is brought before the people who REALLY run the show and pretty much given his instructions as to what he's expected to do if he doesn't want a "Kennedy" pulled on him or his family while in office. I came to this theory simply because regardless of what they say they're going to do, president after president continues to do the same damn thing the last guy did - over and over - ad nauseum.

https://www.kathyross3d.com/images/AdNauseum.jpg

Truly, if its a Romney / Obama race, I'm staying home on election day. There's no reason to vote for either of them that I can see.

Edit: Posted this a few days ago - pretty much sums it it as far as I'm concerned:

https://whatreallyhappened.com/IMAGES/change.jpg

ClinkinKY Mudsharkbytes · Jan 11, 2012 - 6:20pm

@ Mudsharkbytes - No difference between 'em - essentially

So, if you (or anyone) is arrested for a capital crime you didn't commit and you have a choice of either pleading guilty (and being executed in 2012), or getting a continuance for 2 years (midterm elections), to give your attorneys a chance to gather more evidence (electing Ron Paul type politicians to the House and Senate) to allow you to avoid the death penalty (slow down the agenda of a Obama presidency) you would choose death in 2012?

Believe me, I don't see a huge difference between Obama/Romney either. But there is definitely a difference in the speed with which each of them would accelerate carrying out your death sentence. The more time available, the better the chances of avoiding the "death sentence".

agrock · Jan 11, 2012 - 6:24pm

another funny clip

and yes just for entertainment only...

https://youtu.be/lpulJykYCOI

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Key Economic Events week of 11/19

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