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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

Boggs · Feb 20, 2013 - 9:51am

Really don't want to buy anymore au as I just got a shipment yesterday. However, it seems to be my only line of defense against the machine. It also makes me feel better. So 5 more oz's will be removed from the machine and not see the light of day for a very long time. Now off for a round of golf and a few beers...which also makes me feel better.

Grublux · Feb 20, 2013 - 9:54am

BTC is officially more than and ounce of silver!

So ridiculous I know. The reason I bring it up is it has one major thing going for it.

NOT TRADED ON THE CRIMEX!

Stock_Canines · Feb 20, 2013 - 9:54am

What the poll results would be today if Turd had asked this morning? My guess was 31 or thereabouts; I would change that to somewhere between 24 and 25. I guess the numbers being thrown out here - many of them 36 - 40 - was an indication things were still far too bullish. I wonder if any of you feel bad for lambasting that poster who a few weeks ago said they wanted to sell their stack when silver was 34. I wish I had. I think it could be bought back in the low to mid 20s by the time this is over. Would have been a great way to build a larger position. BTFD chants for the past 6 months look a tad silly here today.

robov · Feb 20, 2013 - 9:56am

BRUTAL! If your long and have no dry powder left to add at these levels.

Groaner Bollocks · Feb 20, 2013 - 9:58am

to Iran for a court trial.. they wont mess around with these scum bags

I thought under the Koran that they would cut off their hands for stealing.. that would work too.

Beastly Stack · Feb 20, 2013 - 10:01am

For all of us here in Turdville. If you enjoyed my Friday post please READ this

https://tradermartinstake.blogspot.com/2013/02/be-strong-be-smarter.html

Thanks

Groaner · Feb 20, 2013 - 10:03am

along with all the other miners.. except AG!

Just A Regular Guy · Feb 20, 2013 - 10:03am

Gold will continue to test $1588, maybe a little lower, but i'm sure we're so close to the bottom.

Silver more downside to come, will blast-off once gold starts moving (with some lag).

As Harald said, i'm sure something BIG is coming. How the wankers in power want to spin it, I have no idea.

Peace

robov · Feb 20, 2013 - 10:05am

Anyone else having trouble getting on to Ed Steer's Site or Casey Research for that matter? Are they the latest site to face an attack? Can some try this link?

https://www.caseyresearch.com/gsd/home

Is it just me as it seems a number of the bigger metals blogs websites have been attack very recently and taken down? Silver Doctor's, KWN, ZH, Greg Hunter and others including Turd. Coincidence or a further sign that we are getting close to the end game?

Update seems to be back up now.

erewenguy · Feb 20, 2013 - 10:06am

Better get it soon. We're about there.

edit: alright, put my bid in. Putting my money where my mouth is.

zman · Feb 20, 2013 - 10:10am

Too many longs (Open Interest) in the silver market, they are starting to throw in the towel, is this just the start?

Groaner · Feb 20, 2013 - 10:12am

got to hand it to the crooks.. the house wins again.

recaptureamerica · Feb 20, 2013 - 10:13am

Critics Be Damned, Bernanke Is Getting it Right: Munson https://finance.yahoo.com/blogs/breakout/critics-damned-bernanke-getting...

Groaner · Feb 20, 2013 - 10:18am

maybe? AG up .73 atta boy! NOPE!

ReachWest · Feb 20, 2013 - 10:23am

Wow - the MOPE is strong recently. 

US Economy improving .. Bernanke is Right .. China Says US Dollar Strong for Long Time to Come (Selection of headlines that have been appended in the posts above).

Logic simply dictates that we are right and they are wrong. We've got to be getting close to something significant. 

SilverSurfers · Feb 20, 2013 - 10:25am

0.0

1585 28.90 .....

mark it down

robov · Feb 20, 2013 - 10:28am

Getting brutalized today!

opticsguy · Feb 20, 2013 - 10:30am

Silver has gone down $2 since I bought mine last week, but the bars are only down $10. I guess I'll have to wait.

Provident, BTW.

Groaner · Feb 20, 2013 - 10:31am

haha $1580?

¤ · Feb 20, 2013 - 10:35am

Yep

crg · Feb 20, 2013 - 10:37am

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....

erewenguy · Feb 20, 2013 - 10:42am

Its puke day. Get it while you can.

babaganoush2307 · Feb 20, 2013 - 3:14pm

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?

tosser babaganoush2307 · Feb 21, 2013 - 5:23am

NO,IT'S TAKING AWAY PEOPLE'S RIGHTS

Eric King · Feb 21, 2013 - 6:30am

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

Tabberto · Feb 21, 2013 - 4:34pm

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.

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