Everyone knows by now that I use a lot of acronyms. In this case, however, I'm choosing not to because I don't want to mess up all of my search engine metrics.
Let's see, we've got FUBMs, WOPRs and the LHSI. We've even got the EE and the BLSBS. To this list we officially add....uhh-uhmmm...well, you get the point.
Our new indicator attempts to combine the traffic level of this site with the overall sentiment of its readers. Multiply this number by the price of silver and you get a rather useful new measurement. It looks something like this:
(T + S) x P = TITS
T = Traffic relative to benchmark of 25,000 unique visitors/day
S = Turdite sentiment index measured subjectively by proprietor. (10 = Euphoric, 1 = Suicidal)
P = Dollar price of an ounce of silver
For perspective, the following table quantifies our new proprietary index
Date Traffic Sentiment Price TITS Value
8/4/11 1.32 6 38.20 279.624
9/30/11 1.13 3 30.05 124.107
11/10/11 0.92 5 34.20 202.464
12/28/11 0.98 2 27.28 81.294
2/28/12 1.33 7 37.21 309.959
3/20/12 0.89 3 31.83 123.818
Clearly, we have found another index which demonstrates that we are once again very close to a short-term bottom in price for the precious metals. Let's see if we can find a few other indicators which confirm our suspicions.
First, there are the lease rate charts. Note that both gold and silver lease rates have moved up rather dramatically in the past week or so. Then note that, since last September, the two bottoms in lease rates preceded bottoms in price by about 2-3 weeks.
How about some price charts combined with the RSIs (relative strength index). As you'll recall, an RSI reading near 30 is generally considered to be a sign of a price bottom.
Note that both gold and silver are resting right above what should be very strong support levels. Additionally, both are potentially forming rounded, cup bottoms. If these "teacups" develop and then coincide with the longer-term, reverse head-and-shoulder formations we've been predicting for the last few weeks, both metals would be screaming "BUY!", at least from a technical perspective.
Taken all together...the lease rates, the open interest (which is back to mid-February levels), the charts with RSIs and the TITS...we are obviously very close to a bottom of this latest, manufactured "correction". The charts give me a hunch that there may be one more spike down. Maybe gold spikes to 1625 and silver to 30-31 but that's it. Anyone looking to BTFD (another favorite acronym) should be ready and waiting to pounce if this happens. Regardless, we are very close to a bottom. Be patient and stay confident in your analysis and belief.
Lastly, no sooner did I print some crude oil charts than the Saudis announced that they wanted to ramp up production to attempt to lower price. (Is Ali Al-Naimi a closet Turdite?) The immediate effect of this was to lower price by about $2. Whatever. It just served to make the chart look better. Notice that crude has broken the short-term downtrend line that had contained it for about three weeks. Typically, after such a breakthrough, the commodity in question will dip back down and "ride" the other side of the line lower for a while before finally breaking away and kicking higher. The Saudi headlines accomplished this perfectly. Give it another day or two and I'm confident that crude will charge back higher, toward $108 and the $110. I would only get nervous if crude were to break convincingly down through $105 and $104.
OK, that's all for now. If anyone was offended by the content of this post, I apologize but that's the way it goes. If this analysis seems unconventional, that's because it is. This site is not, and never was intended to be, "conventional" and/or "politically correct". That said, so as not to further offend anyone, please refrain from posting images in the comments that would serve as suitable visual aids for our new index.
Have a great day. TF