Step One Completed

Wed, Oct 31, 2012 - 11:51am

The first step in confirming a bottom is finding one. We found one last week and the action today looks to confirm it.

In the previous post, I asked you to watch for a break out and UP today and we've gotten it. First things first, however. Remember, any gains made while the metals are closed or on holiday are almost always clawed back once trading resumes. Almost always. And we saw this again today. The good news is that, once again, the old adage is holding...namely, "what was resistance becomes support and vice versa".

So, now what? Again, I must caution you against expecting too much, too soon. Though we have been base-building for over a week, we still need to overcome some additional resistance before the bottom is clear to everyone and the shorts begin to aggressively cover. Silver is still slightly ahead in this process and should continued to be watched for clues. For now, as you can see below, silver has clearly broken through the downtrend lines on both the 4-hour and 12-hour charts. This is undeniable and an obvious sign of the bottom to this correction/pullback. Closing above $32.25 is our first goal, followed by a close above $32.60 or so. Once that happens, the mealy-mouth, panty-waste spec shorts will begin to cover and price will extend toward the area around $33.35, where they will make their next defense.

The gold chart also shows a clear base and breakout on the 4-hour chart. It shows this on the 12-hour chart, too, but a case could still be made gold needs to clear $1720 first. OK, that's fine. $1720 is our pivotal level, anyway, so watch that area closely. A close above there and gold will jump toward $1730. The area between $1730 and $1740 might present some challenges but, ultimately, besting $1755 will become our next main goal.

I only wish to discuss one "news" item today and it's something that I don't think is getting enough press. Our old pal, KosherDakota made a speech yesterday that is being overlooked.

I began to ridicule this knucklehead a few years ago as it seemed he was trotted out to give the "hawkish" or "dovish" monetary policy view every time a little additional MOPE and SPIN seemed necessary. Here are a couple of samples. First, from August of 2010, three months before the announcement of QE2: Before you know it, ole KosherDakota was all in favor of "bond buying" by The Fed:

But then, by the end of QE2, he was trotted out to assure the markets that QE could be bad and was perhaps gone for good. There might even be a rate hike just around the corner, maybe as soon as late 2011: And here we was in late June of 2011, dissenting at the FOMC and calling "stronger easing measures" the "wrong approach":

So, what happened yesterday? Chuklehead The Clown was back in the news! He was speaking in Duluth and he openly stated that:

"The U.S. economy is recovering from the largest adverse shock in 80 years–and a historically unprecedented shock should lead to a historically unprecedented monetary-policy response".

He went on to add that:

“Given how high unemployment is expected to remain over the next few years, these inflation forecasts suggest that monetary policy is, if anything, too tight, not too easy".

You can read all about it here:

Even the left-leaning and progressive (Keynesian) website Slate has an article about it today:

Intellectual rigor my ass. This guy just flips and twists in the wind. For now, he is simply being trotted out yet again to foreshadow the next direction of Fed policy. We should now fully expect a formalized increase in the projected 2013 QE∞ plan when the FOMC next meets in December, regardless of the SPIN and MOPE that comes out on BLSBS day or from O'Bomney.

To that end, I've received several emails wondering what I expect from the metals if Romney is elected. The answer is simple: MORE OF THE SAME. Those that fear a downturn in price because of a Romney-imposed austerity or firing of The Bernank are delusional. Let me state this very clearly as a reminder for all eternity:


Lastly, I leave you with another great article from Jeff Nielson at BullionBullsCanada.

Have a great day!


About the Author

turd [at] tfmetalsreport [dot] com ()


Nov 1, 2012 - 12:20am

Clinky, it sucks to wake up and realize we have given our future

to the bankers. That is Their Dream and they have spent a lot of money to destroy our minds and get us to go along. Sad thing is that they have used OUR LABOR to fund YOUR GRANDKIDS destruction. We all played along to one extent or another.

But it is NEVER to late to wake up for what you belive in and get real.

Yeah, it hurts to do that, and that is what they count on ;)

Take care, and get local. It's the best you can do for your grandkids.

Karankawa, the (obama infiltrater to destroy America troll)

The Watchman
Nov 1, 2012 - 12:25am

Gold and Silver Have not even Started their BULL RUN

Courtesy of Chris Vermeulen

If you own physical gold, gold mining stocks or plan on buying anything related to precious metals before year end, you might like my analysis and outlook.

Since gold topped abruptly a year ago (Sept 2011) with a massive wave of selling which sent the price of gold from $1920 down to $1535, technical analysts suspected that type of damage which had be done to the chart pattern could take a year or more to stabilize before gold would be able to continue higher.

Fast forwarding twelve months to today (Oct 2012). Gold looks to have stabilized and is building a basing pattern (launch pad) for another major rally. The charts illustrated below show my big picture analysis, thoughts and investment idea.

Weekly Spot Gold Chart:

The weekly chart can be a powerful tool for understanding the overall trend. This chart clearly shows the last major correction and basing pattern in gold back in 2008 – 2009. Right now gold looks to be forming a very similar pattern.

Keep in mind this is a weekly chart and if you compare the 2009 basing pattern to where we are today I still feel it could take 3 – 6 months before gold truly breaks out to the upside and kicks into high gear. The point of this chart is to provide a rough guide for what to expect in the coming weeks and months.

Weekly Chart of Junior Gold Miner Stocks:

If you follow gold closely then you likely already know junior gold mining stocks can lead the price of gold up to two weeks. Meaning gold mining stocks which you can track by looking at GDX and GDXJ exchange traded funds will form strong bullish chart patterns and generally start moving up in price before physical gold.

The chart below shows the junior gold miner ETF with a VERY BULLISH chart and volume pattern. Remember that gold stocks are a leveraged play on gold in most cases. For example, if gold moves up 1% we typically see GDX and GDXJ move 2-4%. Because they act as a leveraged play on physical gold smart money and big institutions start accumulating these investments in anticipation of gold rising.

GDXJ has formed a tight bull flag and the volume levels confirm there is big money moving into these investments. The first price target on GDXJ using technical analysis for a measured move points to the $32 area. Looking forward twelve months with gold trading above $2000 we could see this fund more than double in value.

While most traders focus on GDX gold miner fund, I prefer the GDXJ fund because its almost identical in price performance BUT it pays you a 5% dividend…

Gold’s Seasonality:

It’s that time of year again where gold tends to move higher. Below you can see where we are and what the price of gold typically does in November.

Gold Investing & Trading Conclusion:

Looking forward one month (November) and factoring in the recent pullback in gold to known support levels along with strong buying of junior gold mining stocks, I feel gold will take another run at the $1800 level and for GDXJ to test its previous high of $25.50 at minimum. If both those levels get taken out then a massive bull market for precious metals could be triggered.

Nov 1, 2012 - 12:38am

Sort of OT

Does anyone here believe in the theory that the US is still operated in a state of martial law which was declared during the civil war and never repealed. The basic theory is that we keep congress and the elections as a cover, but the real administration of the country is done by executive order under martial law. Lincoln died before he could repeal martial law. Subsequent presidents keep the "option open" by never doing the right thing and legally restoring constitutional law.

Nov 1, 2012 - 12:43am

@ prius_driver

It's a study worth your time.

The Death Ceiling
Nov 1, 2012 - 12:55am

@Darth Smoker

Thank you for your reply, yes Maloney gives nice simple overviews of fractional banking, I often recommend him to people that currently know nothing of the subject.

I get all that, or at least I thought I did. I know nothing of the inner workings of the BofE, the technical detail of how exactly QE is deployed. I had presumed credit created from bond and asset purchases would eventually filter through the economy and be multiplied by the commercials. An obviously smart and well informed guy is telling me that the multiplier theory is inaccurate, in the form that it is generally understood by economists. It has piqued my interest. Further down the rabbit hole, or just a dead end?

Best to constantly question your assumptions.

The Watchman
Nov 1, 2012 - 1:18am

Silver Bulls ARE Beginning Their RUN

Well, and what about silver? Surely when gold rises, we can expect silver to advance as well?

Featured is the daily silver chart from 2005 – 2006. Notice how the 50DMA rose above the 200DMA as it produced a ‘Bull Cross’. The rally that followed moved silver from 7.50 to 15.25, for a 100% increase.

This silver chart highlights the next time this pattern presented itself. It was November 2007. Silver was trading at 14.50 and the subsequent rally took price to 21.00, for an increase of 45%.

This silver bar chart shows the next time price produced a ‘Bull Cross’ (in April of 2009). Price rose during the subsequent rally from 14.00 to 49.50, for an increase of 250%. At the right of the chart you can see where price is just now completing its latest ‘Bull Cross’. For a close up look we present the next chart.

Here is a close-up look at silver’s latest ‘Bull Cross’. Will we see a 100% increase like we did in 2005? Or a 45% price rise like 2007? Or how about an increase of 250% just as in 2011? Time will tell. (In the event that silver matches the 2011 performance, price would top out at $130.)

In the meantime the silver bulls can take comfort from the fact that the RSI (at the top of the chart) is at previous support levels, while the CCI (at bottom of chart) is repeating a bottoming pattern (see blue boxes).

At the same time SIL, the silver producers ETF is carving out a bullish ‘cup with handle’ formation. A breakout at the blue arrow will be the trigger for the next rally. The green arrow points to the by now familiar ‘Bull Cross’.

This chart courtesy SRSrocco and shows a dramatic increase in the number of Chinese 1 ounce silver Panda coins. Every Panda removes an ounce of silver from the market.

This chart courtesy Casey Research, (based on information from the CPM Yearbook), shows silver investors moving out of ‘paper silver’ and ‘digital silver’ (black bars), into physical silver (orange bars). As more and more investors opt for physical silver, this trend will make it increasingly difficult for traders in ‘digital silver’ to dictate the price at which physical silver is bought and sold.

Finally – one last chart!

This chart courtesy shows the seasonal tendency for gold to produce a rally after the October lows.

By Peter Degraaf

Nov 1, 2012 - 1:40am

Only 1200 miles away Katy Rose

Free market fixes things like this.

I'm old, but I made my way though collage with an old truck I bought cheap. Of course goverment would never allow me to do the same thing today.

The Gold and Silver market have been awake to this for 10 years. Of course there is manipulation, and it will last until a kid in America can have the right to form his own business at the local level.

Humanity will march on. Hense this Blog and expressed well here. I don't support people, I support the idea. And if they don't stand for it I don't vote for them.

Adam Kokesh speech

You want America? Stand up for it.

Learn what it is about, appreciate what was done for you to do so. Join reality.

Or give it up for your kids. The people in Afhganistan have stood for their kids rights.


Nov 1, 2012 - 2:00am


screwed either way, happy Halloween!

Nov 1, 2012 - 2:09am

I don't recommend anyone leaving comments there... matter how many layers of anonymity you think you have, but this nevertheless gives me some hope.

TOTUS Facebook status update:

Barack Obama · 13,173 like this October 22 at 10:23pm ·
  • Like this if you're voting for me in November. 1) Despite the hundreds of millions of users supposedly on FB, only 380K or so liked the update. 2) I literally had to HUNT for the minority of specifically/actively supportive comments, most were either sarcastic, or straight-out hostile 3) There were nuggets like this one: Patrick McGee Wow! Lmao!! Reading these posts just makes me realize how much trouble our country is in... Half of these arguments are full of misspelled words and improper grammar. Arguing over two men who will do the same thing no matter what. And oblivious to what and who is really running our country. Most of you people have no clue how our fractional banking system works or understand the fact that we are all SLAVES to the federal reserve. Shit, you all probably think that it's part of our government when it's actually a privately owned bank! TURN OFF YOUR FUCKING TV AND READ A GOD DAMN BOOK YOU IGNORANT FUCKS! Grrrrrrr!!!! about an hour ago via mobile · Like · 5

I am beginning to wonder if a 'collapse' as such will ever come about without actions on the part of the populace (even if only mass-level passive resistance of refusing to CONSUME and withdrawing from the paper/digital money system). And of course whether massive enough concentration of such resistance is likely/possible. But in the end, I think it really IS becoming more likely by the day. Despite all of our experiences to the contrary, I think this is more than just my own 'blue car syndrome' -- there are opinions being expressed that were simply unthinkable only a few years ago. Bart 'Hulkamaniac' C.'s editorial, wacky and potentially hypocritical as it may be, is just another manifestation of this, along with Bill Gross advocating gold on CNBS and a myriad other examples.

Of course, there is plenty of reason to be skeptical of ANY positive sign (why are they being ALLOWED to say these things? is it just another layer of control over us? are we really just being shepherded from abattoir chute A to a different, but nevertheless still chute B?), I am of the mind that this is truly 'their' lack of omnipotence beginning to show. The canvas painstakingly thrown over reality and painted/projected by every medium imaginable (MSM, education, 'national identity') is beginning to fray, and the rips will soon become apparent for all to see.

Being prepared (physically, fiscally, immediate survival-wise) is a necessary, but I think not quite sufficient, condition of making it on the other side, if there is such a thing. Making a plan, creating connections, building networks along several different dimensions will be equally, if not more important. While trying to reach out to like-minded folks can be hazardous and time-consuming, doing the same for those not yet able or willing to see even downright dangerous, it is also, I think, a very necessary part of preparations.

Nov 1, 2012 - 2:37am

Pew: Obama's Early Vote Average Collapses 26 Points over 2008

As the CorruptMedia hyperventilates over the juicery released by Quinnipiac today showing Obama winning all of America’s 12,458 electoral votes and Queen for a Day, the one poll they’ve intentionally ignored is a bombshell from Gallup showing Romney winning early votes by seven points and Obama’s early vote advantage collapsing 22 points over 2008.

El Gordo
Nov 1, 2012 - 4:38am

Is it just my imagination...

...or have the metals crept up a little overnight?

Nov 1, 2012 - 5:01am

Ever get the feeling...'re being stalked? Sheesh, I never knew I had this much restraint/willpower

Basil ClinkinKY
Nov 1, 2012 - 5:13am


Well done - keep that willpower going because it's the right thing to do.

Don't drag yourself down to his level by responding.

May be easiest just to put him on "ignore" ?

Nov 1, 2012 - 5:33am

Forget the Evil Empire taking over the world...

It doesn't get much worse than this!

Hedgehog trapped in crisp packet in Weston-super-Mare

A baby hedgehog which found itself stuck in a crisp packet has been released after a three-and-a-half hour rescue involving six people.

The animal became trapped after it crawled into the empty wrapper in a railed off area near steps in Weston-super-Mare.

A shopkeeper heard rustling and saw the hedgehog - now named Crispin - stick his nose out.

Workers had to cut through the railings and help rescuers reach the hedgehog.

Jules Bishop, from Prickles Hedgehog Rescue, said Crispin crawled into the area as he was attracted to the warmth of the packet and the smell.

"He's thriving now and will be here all winter as he's so tiny," she said.

"I want to thank all the people involved because obviously without their commitment and dedication this little hog would have had no way to survive.

"He was very, very cold and dehydrated when I emptied him out of the crisp packet."

Nov 1, 2012 - 6:39am

the nightmare

was when i woke up and a communist indonesian named 'barry' was president.

and no, it wasn't Goldwater.

Nov 1, 2012 - 7:07am


Thanks! My life is now complete .

Nov 1, 2012 - 7:18am

soon we will see this again

US Treasury expects to hit debt limit before 2013

As of Monday, the Treasury was $235 billion below the $16.4 trillion limit, or legal amount the government is allowed to borrow

Remy: Raise The Debt Ceiling Rap

Nov 1, 2012 - 7:38am

re A Question

I have posted this interview before, but it is very interesting and addresses this very point. The interviewee claims that "state" money, i.e. the stuff that also gets printed for QE, used to make up about 6% of M3 (claims it is a much more accurate measure of the money supply) and has risen to 15%. The rest of the money is "bank money" if I remember correctly. Inflation, thus, but not hyper-inflation. At least not yet. Well worth the listen:

Hanke on Hyperinflation, Monetary Policy, and Debt

Steve Hanke Hosted by Russ Roberts

Steve Hanke of Johns Hopkins and the Cato Institute talks with EconTalk host Russ Roberts about hyperinflation and the U.S. fiscal situation. Hanke argues that despite the seemingly aggressive policies of the Federal Reserve over the last four years, there is currently little or no risk of serious inflation in the United States. His argument is that broad measures of the money supply lag well below their trend level. While high-powered reserves have indeed expanded dramatically, they have not increased sufficiently to offset reductions in bank money, in part because of requirements imposed by Basel III. So, the overall money supply, broadly defined, has fallen. Hanke does argue that the current fiscal path of the United States poses a serious threat to economic stability. The conversation closes with a discussion of hyperinflation in Iran--its causes and what might eventually happen as a result.


Nov 1, 2012 - 7:44am

re Hedgehog

I remember this, with horror. That Hedgepig was luckier than he knows:

Back in 1981, here in the UK, Hedgehog Foods Ltd marketed Hedgehog-flavoured crisps! The flavouring used was actually pork fat, and Hedgehog Foods landed up in trouble with the Office of Fair Trading the following year. What happened next? As one website relates it, 'Bizarrely, a settlement was finally reached when Mr Lewis, of Hedgehog Foods, interviewed gypsies who actually did eat baked hedgehogs, to ascertain the flavour of hedgehogs. Mr Lewis then commissioned a flavourings firm to duplicate the flavour as closely as possible and changed the labels from "hedgehog flavoured" to "hedgehog flavour" and all interests were satisfied!'

The man who stole a leopard
Nov 1, 2012 - 7:51am

Comfy and cozy at the

Comfy and cozy at the All-Inn.

Nov 1, 2012 - 7:52am

Lots of news coming out.. Do we get smacked down

today or tomorrow by our protectors of truth, justice and the american way?

Urban Roman
Nov 1, 2012 - 8:02am

Could this be?

The left side of another "Turd Hat" pattern I see forming? Silver just shot past 32.50

Nov 1, 2012 - 8:08am

i say no we don't

i'm with DRG. .................... on this subject anyway.

i see big up on BLSBS tomorrow.

9 minutes to new ADP formula OCT results.

and yes.....i'm comfortably sitting at the ALL INN.......................

i'll think me n the dog will go fishing.

Nov 1, 2012 - 8:12am


the first biggy to default [in two yrs.?] think THAT wakes up the bond vigilantes?

panasonic says future viability in doubt after posting 9BIL$ loss.

Wayneminer TF
Nov 1, 2012 - 8:24am

Dodge this! (lit road flare up arse)

Well Turd...... first of all, very concise response :-)

I've noticed during the past 20 years this very type of behavior on a mass scale. Not trying to read too darned much into his/her statement, but societally we have seen a huge increase in people basically saying "tell me what to do". Our education system has achieved its goal... to remove critical thinking from society. Besides the educational system, people do follow trends and the trend for the last 20-30 years has been "just listen to what we tell you". To the original poster... go out and do a lot of reading.. read about crony capitalism.. what QE really is... the quickening rate (diminishing time frame) of how long it now takes to double the debt.. what happens if QE stops, etc, etc. Form the basis... read... get a lot of foundation knowledge and then draw your own conclusion. I know it is work and the conclusion is scary, but unless you take these steps, you may very well be on the wrong end of someone "telling" you what to do. Kudos to you for being here.... you could do far far worse. I've been broke and busy Turd, but when I get home tonight, I'll click the donate button.

Nov 1, 2012 - 8:27am

Added a bit at 32, 53 XAG

Added a bit at 32, 53 XAG USD.

Nov 1, 2012 - 8:32am

Watch the monkeys

2% up day is ~32.89 or very close to 32.95 fib... If I was planning a raid i'd do it there

Nov 1, 2012 - 8:48am

i remind everyone

to continuously click on advertisers here...........they count these clicks..........makes TF look EVEN stronger to his advertisers.........they advertise more........this place becomes more solvent!

Nov 1, 2012 - 8:50am

WIth Oil Down, Copper as well...

The PMs seem to have held up recently with the declines in other market related items.

If Copper rallies again, and Oil starts it's upward march, it seems that could jumpstart a good run in PM prices... Then again WTFDIK?

Nov 1, 2012 - 9:08am


Did we just get a 32.50 handle? :)


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 4/15

4/16 9:15 ET Cap Util and Ind Prod
4/17 8:30 ET Trade Deficit (Feb)
4/17 10:00 ET Wholesale Inventories
4/18 8:30 ET Retail Sales (March)
4/18 8:30 ET Philly Fed
4/18 10:00 ET Business Inventories (Feb)
4/19 8:30 ET Housing Starts and Building Permits

Key Economic Events Week of 4/1

4/1 8:30 ET Retail Sales (Feb)
4/1 9:45 ET Markit & ISM Manu PMIs
4/1 10:00 ET Construction Spending (Feb)
4/1 10:00 ET Business Inventories (Jan)
4/2 8:30 ET Durable Goods (Feb)
4/3 9:45 ET Markit & ISM Services PMIs
4/5 8:30 ET BLSBS

Key Economic Events Week of 3/25

3/26 8:30 ET Housing Starts (Feb)
3/27 8:30 ET Trade Deficit (Jan)
3/28 8:30 ET Q4 GDP final guess
3/28 10:00 ET Pending Home Sales (Feb)
3/29 8:30 ET Personal Income (Feb)
3/29 8:30 ET Consumer Spending and Core Infl. (Jan)
3/29 9:45 ET Chicago PMI
3/29 10:00 ET New Home Sales (Feb)

Recent Comments

by Blythesshrink, 2 hours 45 min ago
by AgAuMan, 4 hours 50 min ago
by Thor, 6 hours 29 min ago
by NW VIEW, 6 hours 36 min ago
by lakedweller2, 8 hours 45 min ago