One More Day

369
Thu, Aug 30, 2012 - 10:28am

Well, it's Thursday. This can only mean two things: 1) Just one more day until The JacksonHoleDown and 2) College football season begins tonight!

For all intents and purposes, here's the only thing that seems to matter right now:

8/31/12 Speech--Chairman Ben S. Bernank
Monetary Policy Since the Crisis
At the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming
10 a.m. EDT

I suppose I could wax philosophic and even poetic about momo algos and Cartel capping but what would be the point? For today, I'm confident that we will simply trade back and forth between 30.60 and 30.80 in silver and 1660 and 1670 in gold. <yawn>

Look, I don't have a crystal ball for Fed-speak. The only person who knows what The Bernank will mutter tomorrow is The Bernank, himself. (Well, and maybe his butt-boy, Hilsenrath.) However, I can tell you this:

  • The fundamentals for the metals are overwhelmingly positive
  • The charts look poised for another leg higher

Might I be wrong? Of course. However, I'm confident that any Cartel-inspired Fed gaming tomorrow will be met with considerable bids for physical metal at discounted prices. This unceasing physical demand will continue to provide a floor for paper price and, consequently, any dip tomorrow must be bought.

That said, they may not be a dip to buy. Look at these charts. First, here are the daily charts showing that, after the runup last week, prices are simply consolidating in the zone where you would expect them to:

But now look at these 4-hour charts that include the 4-hour Relative Strength Indices. Remember, RSI is simply a measurement that allows you to assess the degree to which a market may be "overbought" or "oversold", in the short-term. The sideways action this week, though enfeebling and frustrating, allowed us the time to work off some RSIs that had worked well into the short-term overbought area. Note that, on the charts below, the RSIs have now retrenched back to the levels last seen before the big blastoff two weeks ago. This is a very positive sign that the markets are poised to move higher again and I would expect that move to begin very soon.

Have a great day!

TF

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  369 Comments

tobydaniel Colonel Angus
Aug 30, 2012 - 1:22pm

lol, no hysteria

As I mentioned in my second sentence, tomorrow will offer good deals on those who want to buy silver. I just hope people don't blow their wad of cash today. Also, if I had my head in the sand, I would not consider buying tomorrow. Yes, silver at these prices will be laughed at a couple years from now, but still, its almost certain that we will get annihilated tomorrow. History repeats itself over and over and over again. Im not about to rewrite history. So with that said, why not buy more for your money tomorrow instead of less for today? Opportunity cost anyone? I know at least some basic economic principles. However, I did not learn much from going to Point Loma Nazarene University. What a joke that education was. Not one mention of the Federal Reserve in 4 years of business school! lol.

On another note, I know I will be hated for saying this on this board but the cartels have close control of silver. If they did not, silver would be way the heck over 100 dollars an ounce. Want proof? Take a look at the basic supply and demand for silver. Unless we shoot to 100 dollars an ounce, they still have almost full control. Im not buying Bill Murphy's statements. He seems like a great guy but Im not buying the hype. With less silver on earth than gold, how could silver trade so low with the cartel loosing control? NO WAY JOSE!

Terabyte
Aug 30, 2012 - 1:25pm

@Silverwood

All at one time, in different segments of the market? Including the Euro?

With all respect, in my opinion that's a bit much to believe.

Gold Buffalo
Aug 30, 2012 - 1:30pm

Bill Gross on QE3

PIMCO
Gross: Today’s core inflation # of 1.6% YOY is another justification for QE3. #Bernanke stresses dual mandate and 2% target rate.
8/30/12 11:56 AM
tobydaniel ag1969
Aug 30, 2012 - 1:36pm

To be honest

Its because Im human. Heck, I want this rally more than anyone else on this board. I saw the mainstream news bashing silver and that got me excited thinking that they were in trouble. I am torn though. The mere fact that there is more gold than there is silver that has been mined keeps haunting me because of the fact of supply and demand. I cant make up my mind on that issue alone. On one hand, I see the price go up while the news is bashing silver which is positive in my mind but then the whole supply and demand issue comes up and makes me realize that this is probably a suckers rally like the may smack down last year and the one in February of this year and so on. Max Keiser was on last year saying we were winning against JPM and were loosing control of silver. Um, nope! Until it actually happens and we EXPLODE up to 100 bucks and way beyond, I have trouble believing these rallies. Charts are garbage too. The reason? Because there is more gold in the world than silver!!!! Oversold overbought... who cares? Supply and demand alone should shoot this thing past the price of gold. It all comes back to supply and demand. Thats it.

ScottJ
Aug 30, 2012 - 1:37pm

God bless the telemprompter

It's all scripted folks, not that many of you already aren't aware.

See 1:50-2:10 for the vote results. Boehner reading from the playbook (teleprompter) to fulfill his honorable role as official speaker of the teleprompter...

The real question is why don't we just replace politicians with talking computers?

The Republicans' 2012 Teleprompted Convention Part 2

The Political Machine triumphs because it is a united minority acting against a divided majority." - Will Durant

Nigel Black
Aug 30, 2012 - 1:40pm

gotta love CNBS

They are now stating that China (not Wall St.) caused the 2008 crash:

https://www.cnbc.com/id/48814165

Gotta love propaganda, oops, I mean the MSM.

Hawk
Aug 30, 2012 - 1:42pm

Try not to go broke everybody

So many wrong opinions about the metals above, tempted as I am to act like a school teacher and correct each, ill only address a couple of points.

1) Silver is rolling over after the September options expiration earlier this week, with this the large shorts will roll over their shorts first; into December causing price to fall further as they are "double short"; this action aims to capture some new dumb money long stops which they cover into and then cover further into momentum types that sell the lows. They complete this process almost every month and the result is they scalp out a few cents on their short positions.

2)Ill also address price forecast's as many have felt fit to give some targets above, as to where and how far the metal will fall or rise tomorrow, these are all guesses and none of you know, you should be mindful of the fact that J.P Morgan increased their short positions significantly when price was still @ $29.30 and one imagines on the subsequent run up nearly $2 dollars higher they shorted more. Why did they do this? Only two possible reasons,

Firstly they are confident they can cause spec longs to capitulate on any No QE3 news. Or alternatively they have no choice but to add shorts to cap price, because had they instead bought as well or done nothing there wasn't enough "free market offers" to meet increasing demand on the bid this appears to be true as the specs were record short in the high $20s and thus were unlikely to keep adding fresh shorts as they became further underwater.

Always remember that if they see an opportunity to game price and cover some or all of these new short additions profitably they will and as for every long there is a short it will take longs to capitulate from this recent run up or new money to be convinced to go short again, thus you are looking for either "technical damage" to induce new shorting or take out long stops below a line considered by many to be support.

Good luck and try not to go broke

~HAWK~

ag1969
Aug 30, 2012 - 1:43pm

@TD

Not only supply and demand, but also how much freakin money has been printed since 1980.

FortyTwoIsTheAnswer
Aug 30, 2012 - 1:50pm

Cramer on Gold

How Cramer's Playing Gold

Every investor should own some gold, Jim Cramer said Wednesday.

https://www.cnbc.com/id/48834598

Yikes!

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