Busting Out The "White-Out"

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!


About the Author

turd [at] tfmetalsreport [dot] com ()


Beastly Stack
Oct 4, 2012 - 10:50am

What will be PITIFUL

The DOW drops 20 points off this rally and the metals get beaten back here!

The daily charts look very impressive,Moving my stops now and walking away!

Enjoy the show!

Sheetrocker ¤
Oct 4, 2012 - 10:53am


I remember a lot of hype about these new bills over two years ago. They were supposed to be released in Feb. 2011, followed by the smaller denominations.

They came up with this creasing problem, which had not been detected in extensive pre-production testing.


This whole story seems bogus to me. Could they be holding the new bills back for an outright devaluation, where you have a time period to trade old for new at a ratio of 4:3, 3:2 etc. Would this be possible?

Oct 4, 2012 - 10:57am


I'm looking for tomorrow, not Monday.

We'll see.

Oct 4, 2012 - 11:03am

The problem with friday

Is it is a weekly close, a pewb hair below 35, to set the bulls on edge, in the psycho screw.

Monday is the real deal. Lets see

Libero tmosley
Oct 4, 2012 - 11:04am

Mosley- It's all about the money!

You can't be serious...

Can't disagree with your belief more that, "Why did Philips "have to" move their plant to China? I'll give you a hint--United States over-regulation."

American companies move to China because the workers there make so little money and child labor flourishes. If US over-regulation stops US citizens from making $2 an hour and forces US children to attend school so they can't work in factories then I am all in favor of these regulations.

This over regulation garbage is a red herring. The US is heading towards third world status because US companies are not patriotic (they should be) and the evil that is Productivity has suffocated the American worker.

Oct 4, 2012 - 11:10am

New thread / Sheetrocker

I don't buy the printing problem excuse at all. They delayed the new $100 for a reason.

I'm pretty sure we'll recognize what the reason was all about at some point. I don't buy into the notion that they suddenly don't know how to print money any longer and can't overcome that supposed issue.

New Thread

Oct 4, 2012 - 11:12am



Edit: It's falling again, your QE3 borrowed tax money at work......

Oct 4, 2012 - 11:33am

The Big One

we break 1805 in Au to the upside, and new highs and blue skies.

Of course the bears would try to cap it here.

October dooms day month, and they could lose control, here and now.

They would also defend in the uppers 1800 trying to stop the run to new highs.


Trader Dan has said that OI has no real limit. Shorts and longs could just keep piling in.

RSI could get stuck at perpetual over-bought.

this is a very exciting time. JPManipulator concentration under the cross-hairs.

approaching key market level. Shorts piling in have temporal little affects.

could get very very disorderly to the upside, till 2400 ish in gold.

very very exciting time to watch the PM markets.

we waited a year, so enjoy it .... the trend is your friend.


Gold gapping up on the CRIMEX. LOL!!!!

Where is Richie on the Silver Rocket??? Bet the guy is having a heart attack, just now.

LOL!!! Silver is notorious for closing gaps, not gold as much. Cant have a better flag in silver, than gold gappin up, and not closing .....

Elton John - Rocket Man
Oct 4, 2012 - 12:47pm

Did Turkey Just Declare War On Syria?

Just out from the WSJ: Turkey's parliament has approved a bill authorizing the military to conduct cross-border operations in Syria, a day after a deadly shelling from Syrian territory killed five civilians https://www.zerohedge.com/news/2012-10-04/did-turkey-just-declare-war-syria

Oct 4, 2012 - 1:43pm

Its a go ...

In a form of self psycho therapy, I just discussed Turd's charts, gold gappin up, and PM market action, whilst feeding shrimp by hand to my two aquatic red-slider pet turtles.

They are now basking under the lights. Place your bets. They are NEVER wrong.


Jose Jimenez presents The Astronaut

so what ... 35.02 NY close ... 1793 gold ..... Mugambo Guru,

wwhhhhheeeeeeeeeeeee this investing is fun!!!

closing near highs of the day, so all should expect follow through tomorrow.

NOT, short bear raid to trigger stops, wont work, recovers, bang on monday.

Oct 4, 2012 - 2:41pm

@ClinkinKY: No reason you pay attention to me at all.

I noticed you didn't take me up on my bet a few threads back.

Oct 4, 2012 - 7:28pm

Yo Clinkin

recall something about a bet, no disrespect intended.

And you give your Obama reasons all you want, we need hear all sides. always ....

Price just sitting there. A tad under 35 .....

Hey, were the Chinese on vacation this week. Thought I heard something about that.

Jose Jimenez is gonna blast off, MONDAY. best guess.

maravich44 George Clooney
Oct 5, 2012 - 3:14am
ClinkinKY Puck Smith
Oct 5, 2012 - 4:41am

@ Puck T. Smith- ? Must have missed something

I noticed you didn't take me up on my bet a few threads back.

Oct 5, 2012 - 5:45am
Oct 5, 2012 - 11:40am

@ClinkinKY: Bet

It was something like this:

Whomever is elected, in one year:

1) The Fed will still be printing

2) The drones will still be flying

3) Millions of people will still be American prisons for non-violent, victimless crimes.

4) I will still have almost 40% of my income taken to pay for it all on pain of fine, imprisonment or death if I resist.

Care to bet an ounce of silver that I am wrong?

Those issues are far more important to me than birth certificates, immigration or abortion. Since neither candidate or party will address the issues that matter to me, why should I vote for any of them?

Obama is a statist thug who doesn't hide the fact, Romney is a statist thug who pretends he's not.


Oct 5, 2012 - 8:09pm

Sorry Puck....

...I like to gamble but I'm not stupid. My taking this bet would be akin to betting on a Clydesdale in the Kentucky Derby.

Now, if you wanted to make it reasonable we could agree on a bet that, if Romney wins, after 4 years the unemployment rate will be below 7% (hey B.O. already has it below 8% according to today's BLSBS report...snort).

Baby steps.



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