Long and Strong

Tue, Feb 28, 2012 - 4:24pm

Wow! Has does that feel?!? Pretty nice to be on the plus side of a $2 move, isn't it?

After such an amazing day, I'll try to keep this brief. First of all, silver has clearly broken through the horizontal and diagonal resistance which I had thought would give it quite a fight. That silver was able to defeat those levels so easily should give you pause.

So, what the heck is going on here? Silver is up over 30% year-to-date and it just plowed through what-should-have-been significant resistance without missing a beat. Why? How? Are we simply being set up for another takedown of epic proportions? On the flip side, is it safe to jump on board here? How much farther can this go?

I have a sense that we may be entering a completely new paradigm in silver. I'm not ready to make any bold proclamations...yet...but, by later this week, you may begin to get a sense as to why I am so optimistic. Could silver back off tomorrow or Thursday? Of course it could. Normally, you would expect it to. The $36 level is so important that, at any other time, I would be almost certain that a $36 test-as-support would be coming. However, as we are seeing play out, this is not "any other time". If silver does pull back tomorrow or later this week, think if it as a gift. You should be buying all dips until further notice. Miners, etfs, phyzz...I don't care what you buy, just buy the dip (whenever there is one).

Though up nearly $20 at one point, didn't it feel like gold was being held in check all day? It did to me. So, what happens next. Provided silver stays strong, which I think it will, gold will rally. Tomorrow will likely be gold's day. The charts seem to confirm this, too. After breaking through very stout resistance at 1765 last week, gold has consolidated above that level. In fact, it has even tested 1765 as support twice. It made its first attempt at 1785-90 earlier today. I strongly suspect that gold will defeat 1790 either overnight tonight or tomorrow. I still expect resistance at 1800 but after:

  1. The way silver blew through $36 today and
  2. The way gold blew through 1765 last week

I would not be at all surprised if gold erupted through 1800 and began running directly toward the upper end of its trend channel, near 1850.

Look, you may think that I'm letting my emotions get the best of me. I'm certain that there will be comments made to this post that will urge caution and claim that I'm simply chasing momentum. Let me assure you that that is not the case. Use your eyes and your brain. Draw from your own, hard-earned experience. Silver has steadily moved from $28 to $37 in nine weeks. Is that the end or is this just the beginning. I'll try to answer that question in the days ahead. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


silver foil hat
Feb 28, 2012 - 4:25pm
Feb 28, 2012 - 4:28pm
Feb 28, 2012 - 4:30pm

March silver OI

March12 OI fell to 7100 yesterday. Last year, 4500 March11s stood for delivery.

Feb 28, 2012 - 4:31pm

Still a shot for under $30

I was hoping to see the lower end of the trend before breaking out.. Any guesses if we will see under 30 again?

Feb 28, 2012 - 4:33pm

First Position Day


Do you have a take on today being First Position Day in Silver. Could it have been a short covering panic today?

Feb 28, 2012 - 4:33pm

To avoid distraction,

I didn't include this in my comments. I'm linking it here because, clearly, it's a pretty big deal.


Feb 28, 2012 - 4:33pm

Something has Changed

That was certainly an interesting day! I do get the feeling as I cruise through the comments here on Turdvilles Main Street and through the rest of the PM blogosphere, that something has changed. There is momentum in the comments and the articles as well as the price of the metals. Perhaps it's all group-think.. but I'm guessing not. There are too many other events taking place in the economy and the geopolitical spectrum to simply shrug this off. I think Turd is right on the money.

Here is another Turdville focused cartoon newscast - today we talk briefly about Silver prices, and then touch on the $325 Million Wire transfer made hours before MF Global went down for the final count.

Silver Moves up over 4%, MF Global Wires Out 325 Million to Little JP Morgan in Final Hours
Feb 28, 2012 - 4:34pm

Definitely some short

Definitely some short covering involved but I suspect that, when the OI numbers are released tomorrow, you're going to see a rather substantial jump in total OI.

Feb 28, 2012 - 4:34pm

Turd didn't miss this call...

@ Mikeyk23

I don't think Turd missed a call here. I've been sitting at my desk since May with silver stacked all around me wondering when it would start to recover. After some dashed hopes in August, and after realizing that it really didn't matter since the metals are my insurance policy and not my get-rich-quick scheme, I settled down. I play with my coins a bit each day and wait--waiting for a GSR of 30 to make a trade-in.

So I did not buy two days ago when Turd was being cautious, waiting for a smackdown that I might get an extra ounce or two. Alas? No. My stack just got more valuable, my resolve stronger, my mind more convinced that the house of cards will soon fall. And I'll be satisfied with that.

I really enjoy these days!

EBR Mod 0
Feb 28, 2012 - 4:36pm


watch to see if the EE uses a death star attack late tonight .... like 3AM eastern or so..

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