Busting Out The "White-Out"

377
Wed, Oct 3, 2012 - 1:50pm

Long-time Turdites will recall that I sometimes use a little "correction fluid" if I feel that recent Cartel actions have distorted the true technical picture. For fun, let's call this "White-Out Wednesday"!

So, what do I mean by "distorted". Below are the unaltered 2-hour charts:

The "distortions" are easy to spot. We have the attempt at a cascade last Wednesday when price was jammed lower, through what The Cartel and other shorts had hoped was a critical support level at $1750. Much to their collective chagrin, price immediately rebounded and the only remaining traces of the action are the long "tails" on the candlestick charts. Note, too, the obvious and brutal price capping of Monday, where price surged pre-open only to be summarily beaten lower, even after Fed Goon Evans admitted $1T+ in QE for 2013. Again, all that remains are the "wicks" at the top of the candles.

Using those particular highs and lows throws us off in our technical analysis because the actions these charts show was clear manipulation and not real, grassroots buy-and-sell price action. Therefore, it can sometimes be helpful to "remove" those actions with the help of a little "White-Out". When we do, look at the pictures that emerge:

Hmmmm. Well, now. Isn't that interesting? What we clearly see here are two charts making higher lows and pressing up against a well-defined resistance line. Though, it doesn't always work out this way, technical patterns such as those shown above typically resolve themselves by breaking in the direction of the diagonal trendline. This is because the diagonal line connecting either higher lows (in an uptrend) or lower highs (in a downtrend) is more "powerful" in terms of showing the underlying sentiment of the market. In this case, the higher lows show a powerful and gathering momentum against the resistance cap that is being imposed.

Note, too, that I have extended the timeline into the future. You can see that this overall pattern will resolve itself by Friday at the latest. Hmmmmm. Can anyone think of a "fundamental event" that will occur before the close on Friday that might provide the impetus for a breakout?

The BLSBS, of course!

Anyway, once again I am attempting to use past price and White-Out to predict the future. Take it for what it's worth.

As an aside, I've seen some chatter about the recent prediction a certain subscription analyst with a track record of rapid flip-flopping using pure TA. This guy consistently fails when predicting PM price because:

  1. He uses TA only and assumes that the metals are freely-traded and fair markets.
  2. He fails to take into account the overwhelming physical demand in London which is underpinning the metals markets and keeping The Cartels from effectively raiding the paper price.

Other than that, I'm sure he does a fine job and if you want to blow your money on his or some other BobbyP-type service, knock yourself out.

Moving on, we should discuss crude here, too, as price has fallen dramatically again today. What is going on you ask? I'm asking myself that, too, but I think I have the answer.

Ole Bibi seemed to leave everyone with the impression last week that Iran had not yet crossed the "red line" where an Israeli attack on their nuclear facilities was imminent. I've since seen the stories linked below posted on Debka, which I'm confident is sourced by The Mossad. Is it just me or does this all look like a smokescreen of disinformation? Sort of like The Allies trying to convince the Germans that D-Day would be waged at Pas de Calais and led by General Patton.

https://www.debka.com/article/22400/Israeli-politicians-getting-set-for-Netanyahu-to-call-a-February-election & https://www.debka.com/article/22394/Fordo-sabotage-enabled-Netanyahu-to-move-Iran-red-line-to-spring-2013

Remember, the U.S. will soon have an unprecedented three aircraft carrier battle groups in vicinity. See this:

https://www.zerohedge.com/news/third-us-aircraft-carrier-returning-unexpectedly-mideast-ahead-schedule & https://www.zerohedge.com/news/us-aircraft-carrier-stennis-now-en-route-join-enterprise-and-eisenhower-just-iranian-coast & https://www.zerohedge.com/news/4000-marines-headed-middle-east-part-peleliu-amphibious-group-dispatch

And then throw this log on the fire...We've been watching the Iranian rial melt down over the past week and this is fast becoming a full-blown crisis within Iran. The last thing the mullahs and the political leaders need right now is a full-on case of civil unrest. Tyrannical governments typically offer two responses in a desperate attempt to regain control:

  1. Violent repression and cruelty
  2. Start a war in order to create an adversary to blame.

https://www.marketwatch.com/story/iran-rial-sinks-on-sanctions-down-80-over-year-2012-10-02 & https://www.aljazeera.com/news/middleeast/2012/10/2012103113527747494.html & https://www.bbc.co.uk/news/business-19798655 & https://www.jpost.com/MiddleEast/Article.aspx?id=286450 & https://www.debka.com/article/22402/Iran-pumps-large-Bassij-militia-forces-into-Tehran-as-riots-flare

So, now, take a look at this chart. I'm still patiently waiting to buy but I don't think I'll be waiting much longer.

And I apologize for the relatively "late" post today. I was hosting the webinar over on TTM with James Turk. It seemed to go really well and Mr. Turk is sure a very nice and knowledgeable man. The show was about an hour long and included a few questions from the audience, too. It will soon be posted to TTM so that all subscribers will get a chance to hear a recording. This was just the first installment of what will become a regular feature of the service. At just $15/month (a paltry 50c/day!), I think most members are finding the site to be a remarkable value. You should consider joining.

In what has become the usual pattern, I see that the metals closed UP today on the Comex session but are once again being pounded on the Globex by the panty-waste sissies of The Cartel. Whatever. Just buy some more physical this afternoon as your show of defiance.

Have a great rest of your day!

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  377 Comments

Montecarlo
Oct 3, 2012 - 1:52pm

TurD!

My first top three

reefman
Oct 3, 2012 - 1:53pm

Turd, I really like your "white out" approach".

Turd, I really like your "white out" approach". In fact I like it so much that I have started to do that mentally myself when looking at these sporadic crazy nutzy charts.

StevenBHorse
Oct 3, 2012 - 1:54pm

Long and Strong

They have capped all week to keep a lid on the market until the BLSBS blows the roof off Friday.

Anyone pissing their pants thinking that another Feb massacre is nigh needs to pass the shit to the horse on their left.

Adding on any weakness this afternoon.

Good post as usual.

Neigh

Oct 3, 2012 - 1:54pm

Whaaaaat?

Did you three read Turd's post? I have been sitting here pressing F5 repeatedly waiting for a chance to be first! Turn my back for one minute and I miss. I guess I should go do some work.

Oct 3, 2012 - 1:55pm

Damn...

Lost it by a second. Oh well, here is your Turdville scene of the day, overheard at the Speak's bowling alley:

Bsong
Oct 3, 2012 - 1:59pm
Oct 3, 2012 - 2:02pm
reefman
Oct 3, 2012 - 2:03pm

I just went in on USO

I just went in on USO because it hit the bottom of the bollinger band.....

I believe it's going to bounce from here.

https://stockcharts.com/h-sc/ui?s=USO&p=D&b=5&g=0&id=p91...

¤
Oct 3, 2012 - 2:07pm

Crude Price / Infographic

Sub $90 oil just hanging there and primed to reverse course?

https://www.tasgall.com/web/2008/05/xtralargeposter2.gif

Go here for clickable/larger graphic

Big Buffalo
Oct 3, 2012 - 2:10pm

Iran

JAN: $1 = 10,000 rials

last week: $1 = 20,000 rials

today: $1 = 35,500 rials

When the shit hits the fan, it hits fast and hard. They are currently starting the barter.

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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