Guest Post from EdgeTraderPlus

387
Mon, Feb 18, 2013 - 10:05am

This was emailed to me last weekend. It's well-written with lots of pretty charts.

The web address for the author is: https://edgetraderplus.com/

Gold And Silver – Current Decline Not Over. Watch Market Activity For Turnaround.
Posted on February 16, 2013



We often make a distinction between buyers of physical precious metals, [PMs] and
buyers of futures, exhorting the former to buy with impunity, and some may see that
as cavalier, given how the price for both gold and silver have been in recent decline.

The point for buyers of PMs is for both protection and creation of wealth. Protection
against insidious central bankers destroying currency-purchasing power, over time,
and wealth creation as evidenced by those buying PMs over the past decade and seeing
the intrinsic value grow dramatically.

Buyers of the physical are less price sensitive and view current declines as opportunity
to add more. As an example, we still hold physical silver purchased when price was in
the mid-40s. Has the relative value declined? Absolutely. Concerned? Absolutely not.
It remains a matter of time when the price of PMs will go dramatically higher, and the
concern will not be how much one paid, $1800 or $1600 the ounce for gold, or $45 or
$30 the ounce for silver. The concern will be over having any at all.

If gold is to go to $3,000, $4,000 $5,000, or wherever, and silver go to $100, $150, or
$250, there will be many who will be glad to have paid $2,500 the ounce for gold, and
$75 the ounce for silver. How does that compare to $1,800 and /or $45 purchases for
physical PMs, at this point? One cannot always time the market, which is why consistent
buying over time is strongly recommended, but one can determine whether to be an
owner of PMs, or not.

The problem moving forward is fear of central bankers changing the rules and precluding
the purchase of any PMs by the public, at any price. Death and taxes are touted as the
two things one cannot escape, [not always true for the latter], but the certainty of lies and
deception by central bankers/planners runs an immediate third place.

The handwriting is on the wall, as most in PMs know only too well. We mention this for
those on the fence, those waiting for “bargains,” [misplaced values, there], and those who
have not yet purchased any PMs. Do not wait, do not wait, do not wait!

For futures, while most everyone is of the mind that manipulation is showing a steady
hand in PMs markets, that “hand” is losing its grip. It is the charts that show what the
market has to say about what those who are participating are saying about their decisions.
A not so simple statement, but one that says, watch developing market activity to know
what is going on.

That is always our purpose.

While ongoing efforts are being made to suppress the price of PMs and discourage their
purchase, mostly in futures markets, the “Discouragees,” [central bankers,] have been net
buyers of gold for a few years now, after having been sellers for so long, so do not go by what central bankers say, [often voiced through the puppetmeisters on daily financial
"news" programs], go by what they do, only in this area. Ignore them, otherwise.

The larger picture for gold is as bullish as ever. We provide two strong facts to confirm
why, on the monthly chart. Bullish spacing is referenced as such because it shows the
degree of eagerness of buyers in a market. It is measured by noting the last swing high
and the last swing low. Typically, markets retest previous swing highs. When buyers
are so intent on being long in a market, they do not wait to see if a retest of the last swing
high will be successful. Instead, they, [and by "they" we mean smart money participants,
or controlling forces], just keep buying breaks, creating a space that is bullish.

Another and related measure is the extent of a break, or market “give-back,” in a reaction
after a rally. Monthly charts are more controlling than the lower time frames, so the
information you can glean from them is more reliable and more pertinent. You can see
how the current break since the September 2011 high has been relatively shallow when
compared to from where the rally began.

Despite the “daily grind lower,” recently, the larger focus is very strong. Very strong.



A trading range is where smart money operates to accumulate or distribute their positions.
Controlling market forces require time to acquire positions so as not to disrupt their
attempted “sleight of hand” buys/sells during the process, and the TRs are also used to
discourage participants from following them.

We said last week that $1600 was a possible target, and it was reached on Friday. Will
that area hold? “NMT.” Need More Time to know that answer.

Points 1 and 2 form an upper supply channel line, and a further line down is marked by
dashes to show how it extends into the future, well ahead of price activity. Point 3 is the
low is between points 1 and 2, and it is from there that a horizontal line, a demand line,
is extended lower. It is also dashed to show that it extends into the future well ahead of
developing price activity, to be used as a guide to gauge potential support when touched
by yet to develop market declines.

You can see how the dashed line held the December lows, and now February is retesting
it, again. There is no evidence yet of a turnaround, and it does take time for a market to
turn.



The most interesting aspect of the daily chart happens to be the last bar, Friday’s activity.
It is a wide range bar lower, a sign of EDM, [Ease of Downward Movement], indicating
sellers are in control. The sharply higher volume is a red flag, a point in time for which
one needs to pay close attention, moving forward.

Remember, sharp volume increases are usually smart money either pushing a market even
more, or starting to take the other side in a transfer of risk. Subsequent developing market
activity usually indicates which. This volume day prompted a look at intra day behavior to
see if any clues can be gleaned.



We say smart money always tries to hide their intent, but volume is something they need
in order to move or accumulate positions, and they cannot hide that. If smart money sells
highs and buys lows, where is the highest volume in this chart? We ask, the chart answers.

The position of the close tells us buyers are more than matching the effort of sellers to
cause a rally off the low under such heavy selling pressure. The two preceding bars of
increased volume may “look” like selling, but it is quite possible that smart money has
been buying on the way down, taking everything offered by weak-handed longs selling
out and new shorts getting in.

If Benjamin Franklin had been a trader, he would surely have said, “Never a bottom-
picker be.”



Bullish spacing exists in silver, just not as strongly. We do point out how the past five
months of selling effort has not been impressive, relative to the two month rally prior.
It is like an Ali “Rope-A-Dope,” taking all the punches from his opponent, but protecting
himself so not much damage is inflicted, despite the effort against him. Eventually, he
comes out stronger to defeat his now-weakened opposition.



We show the same intra-TR channel down, just like in gold. Unlike gold, however, silver’s
low has held the lows of last December, a small show of relative strength within a negative
trading environment. Still, no apparent end is at hand in the decline of futures.

The best way to trade a TR? Not to trade it at all, instead, wait for a price breakout and
go with it. Why does that work? As mentioned, TRs are how smart money accumulates
positions. Once they are done, they then begin the mark-up or mark-down phase, and it
will last for some time, once it gets underway.



Just as a dashed line in a channel projects into the future for support/resistance, you can
see where the failed probe lower, at the end of December/beginning of January acted as
support. From there, a horizontal line is drawn. We made it dashed to show that is was
extended into the future much earlier than when current price activity has returned to it.

Will price hold current lows? No one knows, and anyone who says otherwise is showing
an unwise ego trying to be “right,” as opposed to being in harmony with the market. Any
bottom requires time in order to turn around, and any potential turnaround always needs
to be confirmed by price behavior.

The increased volume on Friday is a red flag, as it was for gold, but a red flag means a sign
of caution, to take note and see how price responds to it. That takes time. Futures players
have time, or at least the smart ones are exercising it.


About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  387 Comments

  Refresh
Tabberto
Feb 21, 2013 - 4:34pm

excellent tv

https://www.bbc.co.uk/iplayer/episode/b01qxmwp/Storyville_20122013_How_H...

This is a BBC4 documentary on Anonymous, hope you can access iplayer across the pond/elsewhere. I found this film rather heartening and reflected some of the spirit of Turdville.

Eric King
Feb 21, 2013 - 6:30am

KWN

Dont forget to check out the blog and all the latest from KWN at kingworldnews.com

tosserbabaganoush2307
Feb 21, 2013 - 5:23am

ABSOLUTELY NOT!

NO,IT'S TAKING AWAY PEOPLE'S RIGHTS

babaganoush2307
Feb 20, 2013 - 3:14pm

Got this in an email today, if true good for Florida!

Only 49 more states to go!
Hooray for Florida !
I-95 and I-75 will be jammed for the next month or so with druggies and deadbeats heading North out of Florida, because this is the first state in the union to require drug testing to receive welfare!
Hooray for Florida ! In signing the new law, Republican Gov. Rick Scott said, "If Floridians want welfare, they better make sure they are drug-free."
Applicants must pay for the drug test, but are reimbursed if they test drug-free. Applicants who test positive for illicit substances, won't be eligible for the funds for a year, or until they undergo treatment. Those who fail a second time wi ll be banned from receiving funds for three years!
Naturally, a few people are crying this is unconstitutional.
How is this unconstitutional? It's a legal requirement that every person applying for a job has to pass drug tests in order to get the job, why not those who receive welfare?
Forward this if you agree!

Let's get welfare back to the ones who need it, not to those who won't get a job.

I AGREE, DO YOU?

erewenguy
Feb 20, 2013 - 10:42am

Its puke day. Get it while

Its puke day. Get it while you can.

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

crg
Feb 20, 2013 - 10:37am

KWN Clown Car

Cant wait to hear, " i didnt see this coming!" $150 on GLD coming up along with $25 on SLV. Funny, i keep checking APMEX, Chinese Silver Pandas selling nicely. Perfectly normal market here!! Lol!! Yup, Benny B has solved everything. Forward soldiers, onto growth....

indosil
Feb 20, 2013 - 10:36am

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

Key Economic Events Week of 7/13

7/13 11:30 ET Goon Williams speech
7/13 1:00 ET Goon Kaplan speech
7/14 8:30 ET CPI for June
7/14 2:30 ET Goon Bullard speech
7/15 8:30 ET Empire State and Import Price Idx
7/15 9:15 ET Cap Ute and Ind Prod
7/16 8:30 ET Retail Sales and Philly Fed
7/16 11:00 ET Goon Williams again
7/17 8:30 ET Housing Starts and Permits

Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
6/30 12:30 ET CGP and SSHW to Capitol Hill
7/1 8:15 ET ADP Employment
7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 2:00 ET June FOMC minutes
7/2 8:30 ET BLSBS
7/2 10:00 ET Factory Orders

Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
6/22 10:00 ET Existing home sales
6/23 9:45 ET Markit flash PMIs for June
6/23 10:00 ET New home sales
6/25 8:30 ET Q1 GDP final guess
6/25 8:30 ET Durable Goods
6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
6/16 8:30 ET Cap Ute and Ind Prod
6/16 10:00 ET Chief Goon Powell US Senate
6/16 4:00 pm ET Goon Chlamydia speech
6/17 8:30 ET Housing Starts
6/17 12:00 ET Chief Goon Powell US House
6/18 8:30 ET Initial Jobless Claims
6/18 8:30 ET Philly Fed
6/19 8:30 ET Current Account Deficit
6/19 1:00 pm ET CGP and Mester conference

Key Economic Events Week of 6/8

6/9 10:00 ET Job openings
6/9 10:00 ET Wholesale inventories
6/10 8:30 ET CPI for May
6/10 2:00 ET FOMC Fedlines
6/10 2:30 ET CGP presser
6/11 8:30 ET Initial jobless claims
6/11 8:30 ET PPI for May
6/12 8:30 ET Import price index
6/12 10:00 ET Consumer sentiment

Recent Comments

by Ben Stackin, 2 min 39 sec ago
by RangeRider49, 4 min 8 sec ago
by Silvio's Zipper, 11 min 37 sec ago
by bruinjoe, 11 min 58 sec ago
by Turd Ferguson, 19 min 28 sec ago
by Turd Ferguson, 19 min 50 sec ago