Breakout Coming? An Important 24 Hours Begins Now.

Wed, Jan 11, 2012 - 6:36pm

As we've gone through this week, I've tried to lead you to this point. We examined open interest and secondary technical indicators. Everything points toward a bottom and a breakout. Now the question is: Will price follow? We will soon know. The next 24-48 hours will tell the tale.

Let's just go straight to the charts. First is gold. I start with gold because, if the breakout occurs, I think that gold will be the driver and that silver will come along for the ride. First of all, here's an 8-hour Feb gold. You can clearly see the significance of the 1645-1650 area. Above there, and it looks like a bottom is in. In fact, it's a double bottom aligned with the panic lows of September. Below 1645 however and you are still rangebound and, of course, the possibility always exists for another test of the lows of the range.

So, if 1645 is so important, we can expect The Cartel to defend it. Are they? You be the judge. (Note the dark blue candles that follow the two encroaches today at 1645.)

I think it's likely that 1645 will fall, though. Go back up and look at the 8-hour chart again. Look at the severity of the attacks I circled. Those are $60 and $30 beatdowns. All we saw today were $10 beatdowns. Throw in the fact that total OI rose yesterday (a $23 up day) by 3000 contracts and it appears that The Cartel is resigned to letting gold move higher. In the end, they don't mind letting 1645 go because the real battle will be near 1700, when gold encounters the down trendline from the highs back in September. If The Cartel lets 1645 go, they'll simply fall back and begin their fortifications and battle plan for "main event", later this month.

So, here's the big deal. If gold breaks through 1645, you can almost be certain that silver will rally along with it and silver tonight rests at a very important crossroads. First of all, look at how aggressively the EE defended $30.20 today. Note that there three, different attempts to move through that area. Also note that each attempt was met with a big, blue candle in the very next hour. This is direct evidence of EE price capping.

So, why is 30.20 so important, you ask? Well, check out these next two charts and you'll see.

Clearly, silver is at a very important juncture. It will either move higher and through 30 and beyond over the next 24-48 hours or it will fail and be pressed lower, probably leading to a re-test of the $26 area over the next 10 days. What will happen?

Again, I believe that gold is the key. If gold breaks out through 1645 as I expect, it will drag silver with it. The EE will be forced to retreat and a double bottom near $26 will have been set. The EE appears resigned to this fact, too. Note that yesterday, a day when silver was up over $1, the total open interest actually declined by 300 contracts. This tells me that the EE was actively covering shorts yesterday in the rally and the primary reason they would do that is because they fear the breakout that seems to be just over the horizon.

So there you go. Watch things very closely overnight and tomorrow. Gold should be your key. If it can move through 1645-50 overnight tonight, that level should then serve as support for the inevitable raid in London and/or New York tomorrow. If gold then survives and moves on toward 1660 and 1670, it will, of course drag silver along with it and the all-important silver bottom will most likely be in.

I will be watching this all very closely and updating this post overnight and tomorrow. Stay positive and stay tuned.


10:10 am EST UPDATE:

First of all, many have commented that it's nice to see "the old Turd back". Not sure what that means but if it pertains to TA, please understand that the last 100 days or so have not been conducive to trading and forecasting. However, with this breakout, I firmly believe that the uptrends are resuming in both gold and silver. Additionally, these site changes I keep mentioning are designed to almost separate the TA from all the other stuff. Hopefully, the markets will continue to prove me right and you will once again see the incredible value of the forecasting that is supplied here.

Gold and silver broke out right on cue overnight and, after pausing near the Comex open, have moved higher still. This is very encouraging. From here, let's not ask for much. Let's simply hope that the metals hold onto these gains through the Comex pit session and close above those resistance levels we've been watching for so long. Namely, gold needs to hold and close above 1650 and silver closes not just above 30.20 but 30.50, as well.


p.s. Full Disclosure: I couldn't help myself today. As you know, the CME and JPM graciously decided to return about 2/3 of my MFingGlobal cash. Since it does not appear that a Comex failure is imminent, I took $1500 and bought a March $35 silver call this morning. Bad Turd. Playing with the criminals again. But, it is only $1500 so I figured...what the heck? As always, I'll keep you posted in how I do and what I might do next.

About the Author

turd [at] tfmetalsreport [dot] com ()


Jan 11, 2012 - 6:44pm


I ready thanks for the info

Jan 11, 2012 - 6:46pm
Jan 11, 2012 - 6:49pm


I'm ready...hardly even flinched during this last smack down. Time for a wee bit of vindication. I dunno, but something feels "different" this time round...

Jan 11, 2012 - 6:57pm

Bad Feeling

I have bad feeling with the dollar at breakout range that it's gonna drag down PM and stocks with it, one last really bad time after which gold will switch its correlation to equities. Why do I have a feeling this will happen? Because it has to happen this way, and with PM on a verge of a technical "breakout" after a $150 run in 2 weeks, perfect setup for a nasty smackdown. I smell it coming, be careful. Everyone's expecting it at 1700, not now. Food for thought

Vernon Wormer
Jan 11, 2012 - 7:00pm

God, I hope so!

Could use a little good news. Thanks Turd for all you do.

Jan 11, 2012 - 7:08pm


jhnewman's amazing Hidden Weakness Signal (from 2 proprietary, customized indicators -- used in combination !!!!!) says we're going down ~ scary

Dr G
Jan 11, 2012 - 7:10pm

1645 will be breached within

1645 will be breached within the next 45 minutes (before 7:45 Eastern). Then, a brief move down, followed by an up move to 1663 by London open. I feel it in my bones. EDIT: silver to 30.35 upon London open.

Jan 11, 2012 - 7:15pm

Thanks yet again, Turd

I will be watching this all very closely, also.

And to repeat from the previous thread, I am happy to see PMs moving contrary to equities and EURUSD. I hope it means something significant.

Jan 11, 2012 - 7:20pm
Jan 11, 2012 - 7:34pm

It would be nice to think

It would be nice to think that we could have a breakout within 24 to 48 hours. Harvey Organ is looking for a gold/silver raid because of the pm attack today.

Jan 11, 2012 - 7:45pm

We got those cockroaches on the run!

No recession, bullish economic news, copper up. PM's are the value play right now. Money is going to pour in and push it higher large. Next stop 31/1680

Dr G
Jan 11, 2012 - 7:50pm

An update to my post above. I

An update to my post above. I have 1644.30. It is a battle. One of my daughters turns 4 today. Back to the party!

Jan 11, 2012 - 7:53pm

Chinese are being pushed into equities by their Government

Should be supportive to PM's too. All signals are green for blastoff. Watch the cockroaches scatter when gold breaks 1650 and silver 30.50. Seriously - given the general markets and current sentiment - both should be trading much higher.

Jan 11, 2012 - 8:15pm

SO you've been stacking...

how are you going to protect your stash?

This is what I do in my spare time to insure my stash against zombie pilfering!


Volume Handloading Match Grade 5.56mm for AR-15
Jan 11, 2012 - 8:22pm

Oh noes! We didn't make the cut!

Homeland Security Is Monitoring The Drudge Report, The New York Times...

but not tfmetals? WFT? Hey Homeland Security, don't you love us too?

Hey everyone, time to break out the best of our conspiracy theories. ;)

Turdle GG
Jan 11, 2012 - 8:23pm

Best TA out there

Thanks Turd! That's your best post for a long time!

Jan 11, 2012 - 8:25pm

you made the cut

its just not reported....ALL blogs with any political substance are being monitored

Jan 11, 2012 - 8:25pm
Jan 11, 2012 - 8:32pm

Thanks TF

I know we are not supposed to be emotional about the PM prices but it is just so darned much fun to feel excited about them....and it's been a long time since we have had excitement....

Dr. G, what fun times...happy birthday to your precious 4 year old. I'll never forget when my son was 3 and about to turn 4, when I told him he was going to have a birthday, he burst into tears...he didn't want to turn 4! To this day he is ambivalent about birthdays. 40 is going to be really hard for him...

Jan 11, 2012 - 8:35pm

Write-In Campaign

I just sent some correspondence to my miners requesting that they retain their earnings in pms if they weren't already, and to consider paying dividends in silver/gold too. Wouldn't that be great!

Anyway, time to go pro-active. We can help ourselves, support Eric Sprott, and help break the Evil Empire if we all banded together and LET OUR VOICES BE HEARD!!!!

So, take a minute. Write your miners. Let them know what you think and what you'd like to see them do. We are their shareholders and let's all work together TO MAXIMIZE OUR PROFITS and take down the EE.

Why didn't we do this before? It's so obvious - so get crackin' guys and gals! This is something we can do and COSTS NUTHIN'. So no excuses.

KISS-Keep it simple. Here's one of mine, short and sweet (and slightly edited) to Endeavour. I also intend to follow up.

My husband and I both hold ____ shares of EXK stock in our IRAs. [More details of ownership]

I'm writing to let you know how much we appreciate the company's decision to hold its savings in kind (silver and gold) rather than selling into weakness at the end of 2011. Bravo! Now, if you could see your way to offering investors the opportunity of getting dividends in silver itself, I think you'd become the darling of many, many investors. Not that you aren't already.

Keep up the great work.

Irene [full name]
New York City

Brotha Bob
Jan 11, 2012 - 8:38pm

The EE was defending today

It was interesting to watch the EE defend today. Not major beat down, but certainly attempts to cap the prices. Harvey Organ had a post about France getting a downgrade. That ought to help the PMs, as the euro crumbles. Too many holes in that dyke.

Jan 11, 2012 - 8:44pm
Jan 11, 2012 - 8:48pm

Thanks Turd + request

Looking great on the PMs.

I know you had a look a little while ago, but at this critical juncture, do you think you could have another go at the POSX with your sharpie. Resistance @ 81.50 is looking more and more stout and failure at this level could lead to an increase in velocity should the PMs indeed breakout.

Big thanks for your efforts bro!

Smiddywesson Maryann
Jan 11, 2012 - 8:59pm


No matter how grim things get, make the time to be with your kids. I am a family only type of guy, and yet they grew up so fast! My youngest is a 15 years old, 6'3" tall and 195 pounds. His mom took him to his first mixed marshal arts class tonight. He loves gold and silver, and I love him, but they all think I'm too doom and gloom. (Normalcy bias)

Jan 11, 2012 - 9:06pm

Great Write-Up Turd Burgler !!!!

Sir Duke of Turd:

Great posts , i mean the last week and a half have been your best work, I have learned very much from you and hope you can keep on keeping on ~

With that said , why has Platinum been kicking ass lately ? Seriously If i could find ANY at a reasonable premium i would have scooped up a week ago. I think those premiums are indicative of short supply maybe. Mr. Plat was at one time last week 200 clams off of Mr. Gold no Online vendors had any. Seriously everyone try and find a 1oz Plat eagle. very difficult.

What is the Deal with Santa's Warning Yesterday ? Time's almost up on it no ?

Below is a pic of Turd's new SUV

Jan 11, 2012 - 9:07pm

Here we go turn it up, let’s

Here we go turn it up, let’s start..

Jan 11, 2012 - 9:12pm

I like this stuff TF

I like the way you're breaking down the details

I hope you're making some money & the mrs. is in an amenable mood

"I've tried to lead you to this point. We examined open interest and secondary technical indicators. Everything points toward a bottom and a breakout."

"Note that yesterday, a day when silver was up over $1, the total open interest actually declined by 300 contracts. This tells me that the EE was actively covering shorts yesterday in the rally and the primary reason they would do that is because they fear the breakout that seems to be just over the horizon."

captaj Irene
Jan 11, 2012 - 9:14pm

we are the list

The reason this site wasn't listed is because they don't want more traffic coming here and learning the truth, and buying gold and silver. And they don't want people to feed the turd. Thanks TF!

TransmissionRebuilder Planters
Jan 11, 2012 - 9:32pm

Where I come from...

Turd Burglar has a completely different meaning than what is suggested by that truck!

Can you imagine the reactions of the LT's if Mrs. F was to try to drop them off at at school in that thing?

On another note, thank you Turd for all you do here for us, it is appreciated.

Transmission Rebuilder

Maryann Smiddywesson
Jan 11, 2012 - 9:40pm

Smiddy, you are so right about time..

Kids can make us better if we take the time and effort. And if your son loves gold and silver you have taught him well! It does go by in the blink of an eye, doesn't it.


Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)

Key Economic Events Week of 4/29

4/29 8:30 ET Pers Inc, Cons Spend, Core Infl
4/30 8:30 ET Employment Costs
4/30 9:45 ET Chicago PMI
5/1 8:15 ET ADP jobs report
5/1 9:45 & 10:00 ET Markit and ISM Manu PMIs
5/1 10:00 ET Construction Spending
5/1 2:00 ET FOMC Fedlines
5/1 2:30 ET CGP presser
5/2 8:30 ET Productivity and Unit Labor Costs
5/2 10:00 ET Factory Orders
5/3 8:30 ET BLSBS
5/3 9:45 & 10:00 ET Markit and ISMServices PMIs

Recent Comments

by Mickey, May 19, 2019 - 10:21pm
by Ozymandias, May 19, 2019 - 9:21pm
by imfd, May 19, 2019 - 8:43pm
by lakedweller2, May 19, 2019 - 8:08pm
by zman, May 19, 2019 - 7:34pm