DAN NORCINI'S TUESDAY COMMENTS WITH GOLD CHART

Hourly Action In Gold From Trader Dan

Posted: Nov 30 2010     By: Daniel Duval      Post Edited: November 30, 2010 at 1:42 pm
Filed under: Trader Dan Norcini

Dear CIGAs,
Considering the fact that today is the end of the month and that during such times, many markets that have been in uptrends see some price weakness as traders book profits, gold, and silver for that matter, displayed impressive strength as buyers went to work. One can only suspect that December should start off very well for the fans of both metals based on what we saw today as overhead resistance levels were shattered and both markets appear to have broken out of recent consolidation patterns and look poised to move higher.

If that wasn’t enough, Gold priced in terms of the Japanese Yen made a 27 year high at today. When priced in terms of the British Pound and the Euro, it set new lifetime highs respectively. It also is within a few francs of setting a lifetime high in terms of the Swiss Franc.

Clearly unrest regarding the sovereign debt crises of some of the Euro nations is bringing strong demand from the continent into gold and silver for that matter as silver made a new record high when priced in terms of the Euro.

One can easily make the case that a crisis of confidence in the current monetary system is manifesting itself in no uncertain terms. Seeing that the fiat system relies on the confidence of the investing public to support it, where does this now leave the global investment community? Bonds may be moving higher as a safe haven but they are a fool’s charade, a mirage, that will leave those who chase them forlorn and broken. When all the glamour is swept aside, they are nothing more than mere IOU’s from nations who have spent themselves into a black hole.
Bonds look to me like they are at a crossroads here. The long bond has moved back up to retest the former broken support level near 129^15. That level is serving as resistance now. If they fall back away from this level it will bring in additional selling and push them back down towards 125. If they can muster a close back above this level, they will have once again managed to snatch victory from the jaws of defeat. That is the reason it is difficult to be too aggressive towards these things. There are so many undercurrents that are impacting their price movement at this time.

The Dollar continues trekking merrily higher and it is benefiting from continued woes regarding the various nations that are having problems in the EU. It looks like it has a shot at moving towards 83.50 where it should attract some rather strong selling even with the current sad state of the European monetary union. As stated in my recent radio interview, all of these fiat currencies have their own particular set of problems and that is why gold is divorcing itself from its former nearly tic by tic inverse movement with the Dollar. The yellow metal is trading as a currency in its own stead and has pretty much been ignoring the Dollar of late.
I do not see much in the way of overhead resistance to Silver until it nears 28.90. If it closes above that level, it will run to $30 in short order.

The HUI needs a closing print above 557 to encourage additional buying and to give it a decent shot at challenging the 580 level. Many individual companies within the mining sector are going to show some impressive profits come reporting time.

Crude oil looks like it has established a pretty solid floor near the $80 barrel level. It appears to be attempting to “grind higher” on the weekly price chart.
DAN'S CHART:
http://jsmineset.com/wp-content/uploads/2010/11/November3010Gold.pdf

CME THANKSGIVING HOLIDAY SCHEDULE

http://www.cmegroup.com/tools-information/holiday-calendar/files/2010-thanksgiving.pdf

GT's GRATITUDE EXPRESSED TO DAN NORCINI FOR HIS EFFORTS HE FREELY CONTRIBUTES TO HUMANITY

Dan,

 

I'm sure you get your share of thankful emails, but I want to make sure you know just how EXCEPTIONAL

you have always been in informing the public of how the markets REALLY work and what people  should know and do to save their ignorant asses.

 

I know how much time it takes to trade each day, let alone post cogent comments on the day's events.

 

You are one exceptionally talented writer who knows how to write in terms that the layman can understand.

 

ALWAYS REMEMBER THAT!

 

It is far too easy to lapse into the jargon of the market and thereby lose your audience.

 

Your use of humor, which is quite evidently from your heart and understanding of human nature and how it applies to the everyday interactions of the people on this fragile planet, keeps it all REAL.

 

Your efforts are appreciated, if by no mortals, at least by the gods who run this insane universe in which we all exist.

 

My wishes to you for a joyous holiday season and hope that all your interactions with those you love and are the closest to you are the most intimate and truthful you can create, as this may be one of the last holiday seasons we can all celebrate that isn't clouded by the coming disaster that the most evil and uncaring of modern day psychopaths have precipitated upon us all.

 

You are a magnificent human being my friend.

 

Goldtrader

 

DAN NORCINI'S FRIDAY COMMENTS WITH GOLD CHART

Hourly Action In Gold From Trader Dan

Posted: Nov 19 2010     By: Dan Norcini      Post Edited: November 19, 2010 at 3:59 pm
Filed under: Trader Dan Norcini

Dear CIGAs,
China this; China that; whatever. Yesterday it was hedgies running pell mell into risk trades once they figured that the ECB’s version of QE was on for Ireland. Today there were running back out of risk trades in many of the same markets. Let’s see – Wednesday these same nitwits were selling everything that moved on fears of Chinese interest rate hikes. They were convinced deflation was on the way. Yesterday they were buying everything in sight fearing inflation was on the way. Today they are selling fearing Chinese action regarding reserves will trigger an economic slowdown.

To give you an example of the madness that these fools have unleashed in the markets consider one commodity – cotton. Wednesday it was limit down. Yesterday it was limit up. Today it is limit down once again. I repeat – anyone who trades in this fashion is a total fool. This is the reason that a large number of hedge funds are going to be gone a year from now. They have no idea what they are trading or why. They simply chase motion. Once a price moves a certain amount, their computers all see the movement and unleash a barrage of buy or sell orders depending on the direction. There is no skill, no thought, no analysis, no nothing. There is only reaction.

That brings us to gold – in spite of all this idiocy caused by hedge fund algorithms, it is holding very well. It thus far has uncovered what appears to be reasonably solid buying support near the $1330 level. As the hedgies unload it, stronger-handed buyers are picking it up. The longer it can hold this level and track sideways, the more time it will give the technical oscillators time to bottom in the oversold zone  and begin a slow turn higher. That will bring in some momentum based buying.

I have said it earlier this week and will say so again – China needs commodities, especially food such as grains and beans. They are struggling with rising food prices. One needs to know that the average Chinese family spends a larger percentage of their income on food than does the average American family. That in particular is why the rulers of China are very sensitive to rising food prices. If history has taught them anything, it is that the working classes must be kept relatively placated. Rising food prices are not conducive to a happy peasantry!

In the past, they have maintained massive reserves that they will draw from to add additional supply whenever prices seem to be getting out of control. That tends to damp down the rising price for a period. However, people need to eat whether or not bank reserve requirements are higher and interest rates are higher. Since China has been drawing down their reserves at a rapid rate, the only way that they are going to be able to keep prices from working even higher is to import more. That is a simple fact.

I believe that one of the things that they are doing is attempting to trip the hedge fund algorithms into a sell mode in the commodity sector so that they can secure what they need for feedstuff and metals for that matter, at a reduced price. After all, if we all here understand how the mindless hedge fund algorithms function, is it not reasonable to suspect that so do the Chinese, whom after all, are excellent traders and who never chase prices higher. I repeat – the Chinese NEVER buy when the hedge funds are buying. They buy when the hedge funds are selling. Whom do you think the hedge fund algorithms often end up selling to?

My guess is that during periods of sharp market sell offs across the various commodity markets, a change of ownership is occurring with grains, beans, silver and gold, moving into strong hands who are buying for the longer term and will continue to buy on any bouts of price weakness. The long term trend in the grains and the metals are all pointed upward, and that is why periods when prices are falling are going to continue to attract quality buying. That is where the floor of support under both gold and silver is going to come from.

As mentioned in yesterday’s post, silver has a stronger looking price chart than does gold as it has now managed to run more than $2.00 higher off an important technical support area near the $25 level on the price charts. It still needs to clear $27.80 on the upside to have a shot at another run towards $30. If it dips lower again and moves back down below $26, it will be important that it holds above $25 to cement that level as a strong floor of downside support. That will give buyers, especially from Asia, confidence to step into the market in large size.
For gold, the level on the downside to watch is $1,330. It need to hold there to forge a floor from which it can mount another climb back towards $1,400. A trip above $1,365 will spook out a few weaker shorts.

Bonds are back up today after going back down yesterday.

It seems nearly all of our markets are becoming yo-yos. In my mind this is perhaps the worst legacy of the easy money policies of the Fed and their QE foray. They have provided the huge sums of liquidity that are sloshing around in our markets. Under normal circumstances, we would not see this “free money” being used to speculate in such size. The markets would be tamer, more reliable and more closely matched to real world fundamentals. Instead we have markets which experience severe distortions in price and are wrecking havoc on legitimate hedgers and other commercial interests who have historically employed the futures markets to minimize risk exposure. Now, thanks to the machinations of these mindless wits tossing money in and out without any regard to much if anything, the legitimate hedgers are encountering hedges that are blowing up in their faces and causing them to experience the exact thing that they have been trying to avoid. The exchanges don’t seem to care because they are making lots of money thanks to the fees that they charge for every trade. The problem is that hedging interests are beginning to look more and more for some different venues to offset risk. What will happen down the road is that we will end up with less true commercial hedging leaving more and more of the funds to be trading against each other. That will not be a good thing for the long term welfare of the futures industry. But then again, who cares about the long term these days….
DAN'S CHART:
http://jsmineset.com/wp-content/uploads/2010/11/November1910Gold.pdf

DAN NORCINI'S THURSDAY COMMENTS WITH GOLD CHART Hourly Action In Gold From Trader Dan

Hourly Action In Gold From Trader Dan

Posted: Nov 18 2010     By: Dan Norcini      Post Edited: November 18, 2010 at 2:14 pm
Filed under: Trader Dan Norcini

Dear CIGAs,
What a difference an evening makes – once word began circulating that Ireland was going to be bailed out by the ECB suddenly the hedge funds fell back in love with risk after seeking a divorce from her just the other day. The result – where some markets were limit down yesterday (cotton), today there were limit up. Such is the fickle nature of global capital flows or more appropriately, hot money flows. Do some of you out there find it as amusing as I do watching these hedge funds panicking over Chinese talk about rate hikes to tame inflation only to then run right back into every single market that they threw away the previous few days once they see more QE this time coming from the ECB.

Make no mistake about it, the ECB is engaging in its own version of QE, just as Jim has repeatedly said they would. And if anyone is under any illusions that this was about Ireland, please let me dispel that notion here and now. It is about bailing out the BANKS who are on the hook for the money loaned to Ireland. It is always about the big banks ( I think that there is a special place in hell reserved for that crowd of international thieves). Now that Ireland has apparently received the same treatment as Greece, I suppose Portugal and Spain are next in line.

I wonder what Germany must be thinking about all this.

Regardless, the European Monetary Union is a joke – everyone knows it – there is no one size fits all policy that can ever make this forced union which resembles a patchwork quilt function properly. That did not stop the hedgies from bidding up the Euro once again with the result that down went the Dollar and up went the entirety of the commodity world. Fundamentals be damned; it is off to the races again as inflation is now back in vogue whereas yesterday it was deflation that the hedge fund world was enamored with.

I still have my eyes on the bond market as it could not take out this week’s high and is sharply lower today as I type these comments. That market more than any other is what I am watching to tell me what the investor sentiment is towards inflation or deflation. Based on what I am seeing of the price action, inflation is winning out unless the bonds can pull off a major reversal and climb back above 129 by tomorrow afternoon. That looks remote right now. Failure to do so will have cemented a major top on the weekly charts with the bond market failing to climb much above 135 back in early October thus creating a double top that was confirmed with last week’s breach of the 129 level. The implications for gold are obvious – it is going to move considerably higher once the market becomes totally convinced that the gazillions of dollar and now Euros floating around the planet are going to result in a strong surge in inflation. China is already struggling with inflationary pressures, thanks in part to their refusal to let their currency float higher in combination with the Fed’s QE which is pushing investment capital into China and causing enormous problems for their managers.

The bounce higher in gold is friendly as it is working to confirm technical chart support centered near $1,330. Bulls are not out of the woods yet as they must get the price back at least as high as $1,365 to give themselves some breathing room and unnerve some of the new shorts in the market. As long as the ten day moving average is headed lower, some technicians will look to sell rallies so the first order of business to revive the gold bull will be to get this moving average headed up, or at least no longer moving down. Maybe some more consolidation is the order of the day. I would much prefer to see that sideways trade that holds above support and cements a new and higher price level.

Silver looks better on the charts than does gold as it is back above the 10 day moving average which never turned lower although price did sink down below this level. The 20 day MA however has been thus far serving as downside support. Bulls will need to push it back through and close it above $27.80 or so to snatch back the initiative from the shorts and force some of them to cover.

The Dollar had pushed through all of its major moving averages (10 – 50 day) on its chart and looked as if it was making an upside run towards 80 but it has retreated on news about Ireland. We will have to keep a close watch on its chart to see if we can spot any clues as to what is coming next. As long as market participants are convinced that the ECB will be successful at containing any spread of financial contagion, the Dollar will encounter selling pressure. Any shift of focus back onto China and rate hike talk will spur Dollar buying and commodity selling. Take your pick as to what the funds are going to be looking at on any given day. You might as well attempt to count the grains of sand on a beach as to decipher what this crowd is going to be gazing at in tomorrow’s trade. That is why it is still best to use the longer term charts such as the weekly to get the main trend of these markets and try not to let the day to day gyrations captivate your attention too much. Too short sighted of a focus will end up only giving you a case of severe whiplash. Suffice it to say that any crowd of traders who throw away most of their positions one day only to put them all back on the next are not making informed calm decisions but are trading emotional swings. Using the word, “Schizophrenic” to describe this crowd is an insult to those who truly have to contend with that malady. Learn the fundamentals of the markets you trade and let these bozos set up opportunity for you from which you can profit. Very few of them are going to survive the mess that they have made of our markets.
DAN'S CHART:
http://jsmineset.com/wp-content/uploads/2010/11/November1810Gold.pdf

TUESDAY COMMENTS BY DAN NORCINI ON THE SUBJECT OF GUV'MINT DEFAULT ON ITS DEBT

If the US were to actually default on its debt, it would potentially risk a war with China whose national wealth would be wiped out overnight.

Gold will be brought into the monetary system at some point in the future and will then stay at a permanent higher level. The US does not need to outlaw private ownership of gold. That is idiotic thinking. What it needs to do is to only allow the price of gold to move to much, much higher levels. The reason that Roosevelt passed an executive order forbidding private ownership of gold in the US back during the Great Depression was because at that time, the US was on a direct gold standard domestically and needed the gold to ramp up the money supply. The first thing that then happened was they devalued the dollar or a better way of saying it, they let the price of gold move higher.

The US claims to have 8000+ tons of gold. We have no idea if that is true because we cannot audit our own gold. But assume that they did – they still have the damn stuff valued at an asinine price on their books. They need to simply allow the price to rise to an equilibrium value to balance the amount of liabilities. That would bring the total “Dollar value” of the gold that is held to a significantly higher level.

The World Bank President let the cat out of the bag last week when he said that gold was acting as a sort of defacto reserve currency. That tells us what the international monetary lords are already thinking.

When the Dollar loses its reserve currency status, the new reserve currency will be a unit made up of a basket of major currencies – with the yen, the euro, the yuan, the real and perhaps the ruble or even the rupie part of that basket. I am also confident that gold will be in the mix.
I do not know why we have so many people in the gold community who are constantly looking for a reason for gold to collapse in price. I have lived through and traded many, many bull markets in an assorted variety of commodities and I HAVE NEVER SEEN a market that has so many people who follow it and write about it who are ready to trash that market so quickly. It is almost perverse.

One more time – there is not a shortage of gold for the government to use in bringing a return of the metal to the monetary system. All that is needed is to let it rise to a natural price. That would be so staggeringly high that most will not believe it can happen.

Trader Dan

DAN NORCINI'S MONDAY COMMENTS WITH CHARTS

The Long Term Implications Of QE2

Posted: Nov 15 2010     By: Dan Norcini      Post Edited: November 15, 2010 at 7:16 pm
Filed under: Trader Dan Norcini

Dear Friends,
After the close of pit session trading in New York, several of the commodity markets began to slip lower in their electronic trading session. The culprit was the following chart action as evidenced by the daily price action of the US long bond.

It smashed through the floor of support that had been established last week as if it was non-existent. The reason – bond traders began having second thoughts about the extent of the Federal Reserve’s Quantitative Easing purchases and the duration of that program on account of the strong wave of criticism that has been unleashed against the Fed for pursuing what more and more people are becoming convinced is wrongheaded and ultimately fraught with serious long term implications towards the health of the US Dollar. It seems as if a growing majority are more concerned with the inflation that this sort of money creation is going to create than with any potential effect it might have on the US employment situation.

That had traders and hedge funds pulling money out of various risk trades and left individual commodity markets exposed to another round of algorithm related selling as the US dollar began gathering late session strength against its fellows.

Even those markets with extremely strong fundamentals such as corn and soybeans saw some late-in-the-session selling which took them off their best levels of the day. Corn, which had been limit down on Friday during the first avalanche of selling tied to talk of Chinese rate hikes, had nicely recovered and totally erased the entirety of those losses by moving more than 30 cents to the upside as the limits had been expanded by CME Group to 45 cents. When the bonds began to break down, corn surrendered some of those strong gains as even in that pit there was evidence of computer-based selling pressure.

Silver was knocked lower into what is a strong support zone on the charts that extends from 25.50 down towards 25. The 25 level is very substantial so if the big Asian buyers do not show up near that level as we expect them to, it has the possibility of moving down to near 24 where formidable buying will emerge.

Please note on the following two charts of the long bond (daily and weekly) the various markings and annotations.

The weekly chart is particularly important as it gives us the longer term trend. You will note that the bonds have not been able to accomplish a single weekly close above the 75% retracement level from the late 2008 high and the mid 2009 low. The market spiked through that level but failed to hold the close over it. It has then moved back down after failing there where it initially found some support at the 61.8% retracement level. That too failed when it broke down last week. If it was going to hold, we would expect to see it then encounter buying near the critical 50% retracement level that comes in near 126^25.

That level failed as well today after holding there earlier in the session. If the bond market does not climb back above this level by the end of trading this Friday, it is likely that they will fall down towards 123.

I find this quite remarkable chart action because of its implications. The Fed is incurring great displeasure from more than a few quarters over its latest announcement for QE2. That process is deliberately designed to affect longer term interest rates by keeping them artificially lower. What is now happening is the action in the bond market is actually witnessing those same long term interest rates moving HIGHER. I am reading this price action as a vote of NO CONFIDENCE by the market in this next round of QE2. It is as if the collective market has said to the Fed:

“You are not going to reduce unemployment and get the US economy moving forward with this policy. The only thing you are going to be doing is to unleash a wave of inflation”.
If that is indeed the case, we have reached an important crossroads for what is the Fed now supposed to do? If they do nothing, the stock market could very well fall out of bed which would work to kill consumer confidence and put consumers into a funk and a potential buyer’s strike. That is the last thing they want because the main reason behind the program in the first place is to restore consumer confidence by having the price of paper assets move higher in a low interest rate environment which will (so the thinking goes) induce consumers to spend. That would then ignite additional borrowing which leads to some hiring and hopefully get the ball rolling on improving the employment front. If the stock market tanks – forgeddabout it!
If they move forward with the plan, bond traders are liable to use any rallies that might result from Fed purchases to unload bonds which will work to short-circuit the intended impact of each round of QE purchases. They are liable to do just that because of growing doubts about the effectiveness of this approach to cure what ails the US economy. If after the QE purchase, rates which initially moved lower then sharply reverse course and move higher, then what? If that occurs, does the Fed then double down on its buys unleashing more potential for inflationary pressures or do they back off. I honestly have no idea but all I do know at this point in time is that the market action in the long bond is very troubling and signals that we are entering a period of incredible volatility and great uncertainty in the markets.

Gold is not going to move much lower or stay down for long in such an environment.
DAN'S CHARTS:
http://jsmineset.com/wp-content/uploads/2010/11/November1510Bonds1.pdf
AND
http://jsmineset.com/wp-content/uploads/2010/11/November1510Bonds2.pdf

PLEASE GO TO JSMINESET.COM EVERY DAY TO FOLLOW TRADER DAN NORCINI'S CHARTS AND COMMENTS AS WELL AS JIM SINCLAIR'S WISE COUNSEL

I WILL STILL BE POSTING ON:
 GOLDTRADERCOMMENTSAUGUST2010 BLOG
AND
TALKBACKTOGOLDTRADER BLOG

JUST CLICK ON THE LINKS AT THE RIGHT OF THIS PAGE
TO GO TO THOSE BLOGS

DAN NORCINI'S FRIDAY COMMENTS WITH GOLD CHART

Hourly Action In Gold From Trader Dan

Posted: Nov 12 2010     By: Dan Norcini      Post Edited: November 12, 2010 at 2:47 pm
Filed under: Trader Dan Norcini

Dear CIGAs,
Overnight news that China was hiking rates in an effort to remove some of the inflationary pressures that have been building in its economy served as a catalyst for the hedge funds to unload everything that remotely resembled a commodity. There was not a single commodity that was higher today no matter what its current fundamentals may have been. Even the soybean and corn markets, both which have a strong set of bullish fundamentals were sold off as hedgies unloaded some of their longs once their algorithms tripped into the sell mode.
Ditto for gold – it was not spared even though the Dollar was repulsed from its overnight gains. It initially bounced off a support level at this week’s low but then another wave of selling appeared after mid-morning which obliterated that level and dropped it down towards the next support level shown on the price chart near the $1,368 mark. That too did not hold as the longs surrendered their advantage to the shorts by failing to stand their ground. That is the nature of today’s trading crowd however and it is due to the fact that computers are making trading decisions, not human beings. I strongly suspect that quality buying is emerging on this foray lower using the hedge fund liquidation to accumulate the metal however.

Remember the reason gold is moving higher  – it is trading as a currency. The failure of the G20 to produce any meaningful consensus in the way of the foreign exchange market leaves unresolved the tensions involving the current monetary system. The status quo remains the same in other words. The US Fed policy of QE is causing inflationary pressures throughout the rest of the global economy, particularly in the emerging market nations as capital flows to those quarters in search of higher returns. As long as the Fed employs its QE, that will not change. The Chinese don’t like what is happening to the cost of commodities and are attempting to slow down their price rise but investors are going to continue to search for areas into which they may protect their wealth from what the Central Banking class is doing do their currencies. Where else are people supposed to put their money? Even the bond market puked today – it is particularly weird seeing this because all the red on my quote screen today especially with bonds, gold, equities and the Dollar all lower, means that for today at least, THERE IS NO SAFE HAVEN TRADE. That is bizarre to say the least. Then again, with the Euro holding slight gains, maybe investors are buying Irish debt as a safe haven! 

This is the reason I am not putting  much stock in what is occurring today even though damage is being done on the technical price charts for many commodities. It is just money flows being generated by machines without any particular logic behind it. If there was a logic, the bond market would be higher; it is not. Money is coming out of commodities but it is not going into anything. It is just sitting there in trading accounts and investment pools. That tells me no one knows what the hell to do. Look for cooler heads to prevail next week as the sell off in many commodities is overdone and will be corrected as value buyers move back in.

Rest assured, if the stock market gives any indication that it is rolling over, the Fed will not hesitate to ramp up the QE. This could shape up to become a nasty battle between China raising rates and the Fed working to lower longer terms rates with additional QE. What a nightmare that would be! If this cat and mouse game keeps up, it might very well end in a currency war.
DAN'S CHART:
http://jsmineset.com/wp-content/uploads/2010/11/November1210Gold.pdf

GT JUST WENT BUST FOR THE LAST TIME

I WILL KEEP MY BLOGS OPEN BUT I WON'T BE ABLE TO POST THESE TYPE OF CHARTS ANYMORE BECAUSE I JUST CANCELLED MY eSIGNAL TRADING PLATFORM FROM WHICH THESE CHARTS HAVE COME.

I MAY BE ABLE TO POST SOME GENERAL FUTURESOURCE CHARTS, BUT I WON'T BE ABLE TO DRAW LINES ON THEM AS OF YET.

FUTURE SOURCE DOES HAVE AN 'INTERACTIVE' CHART SYSTEM THAT YOU CAN FIND BY GOOGLING FUTURESOURCEPREMIUM CHARTS AND LOOKING FOR THE LINKS TO THE VARIOUS THINGS THEY PROVIDE.

I WILL BE STARTING AN INTERNET BUSINESS OF SOME TYPE BUT THAT WILL TAKE AWHILE TO BUILD. I WILL KEEP YOU INFORMED ON MY THREE BLOGS.

YOU CAN ALL STAY IN TOUCH VIA TALKBACKTOGOLDTRADER BLOG.

I WILL NOT BE FOLLOWING THE GOLD MARKET FULLTIME AS I HAVE MANY REPAIRS TO DO TO EQUIPMENT THAT HAS RECENTLY BROKEN AND WINTER IS COMING FAST.

GOOD LUCK TO YOU ALL AND HANG ON TO YOUR CASH GOLD AND SILVER AND ACQUIRE MORE WHEN YOU CAN.

THINGS ARE GOING TO GET VERY BAD SOON AND GOLD AND SILVER WILL BE YOUR ONLY SAVIOR TO BE ABLE TO BUY ANYTHING.

BE PREPARED TO DEFEND YOURSELVES AGAINST THE MANY WHO WILL WANT TO TAKE FROM YOU WHAT YOU HAVE.

HAVE WATER AND WATER PURIFICATION, FOOD FOR AT LEAST A YEAR, WEAPONS AND AMMO AND ALWAYS CARRY A FIRE STARTING KIT WITH YOU. A GOOD ONE BESIDES FLINT AND STEEL OR MAGNESIUM, IS SIMPLY A SMALL BATTERY AND SOME STEEL WOOL. HAVE LOTS OF THE STEEL WOOL AS IT WILL IGNITE QUICKLY AND YOU ONLY NEED A SMALL PIECE TO LIGHT KINDLING.

MY BEST,

GT

GOLD DROPS TO THE 61.8% RETRACE POINT, WILL IT RALLY BEFORE THE CLOSE?

GOLD DROPS BELOW THE WHITE DOWNTREND CHANNEL BUT BOUNCES, WILL WE SEE A RALLY HERE?

GOLD MOVES DOWN TO THE LOWER YELLOW DOWNTREND CHANNEL LINE ON STRONG VOLUME AND BREAKS THROUGH IT

STOCKS, OIL, EURO TURN UP, GOLD STARTS TO RISE ON A BLAST OF 1,070 CONTRACTS IN ONE MINUTE, MAY CONTINUE TO RISE

GOLD SEEMS TO BE COMING OFF THE LOW AS STOCKS, OIL, EURO MAY BE TURNING UP

2,570 CONTRACTS JUST BOUGHT IN ONE MINUTE PLUS ANOTHER 1,080 THE 2ND MINUTE JUST ABOVE THE LOWER YELLOW DOWNTREND CHANNEL LINE

THIS CHART TOOK FOREVER TO POST. UNTIL I CAN SPEED UP BLOGGER AND/OR MY INTERNET CONNECTION CHARTS WILL BE FEWER AND MORE GENERAL IN NATURE

BUYERS MOVE IN BUT GOLD RETESTS THE LOWS AGAIN THEN MOVE BACK UP

HAVING TROUBLE POSTING CHARTS

GOLD APPROACHES THE TOP YELLOW DOWNTREND CHANNEL LINE

GOLD MOVING UP NICELY IN A GRADUAL UPTREND CHANNEL THAT IS HIGHLY TRADEABLE AND IS $10 WIDE

6:17AM PST GT HAS BEEN DOWN AS THE VERIZON WIRELESS WOULDN'T CONNECT

CHARTS COMING AS SOON AS I CAN GET EVERYTHING OPEN

1:15 AM PST GOLD RALLIES $11 OFF THE LOW SO IT'S MAKING SOME GOOD SIZED MOVES

11:35 PM PST FEELS MORE LIKE B BANK SELLING RIGHT NOW TO KEEP THE PRICE DOWN AHEAD OF MIDNIGHT PST

11:21 PM PST EITHER A LITTLE PROFIT TAKING OR B BANK SELLING JUST BEFORE THE FOREIGN MARKETS BECOME ACTIVE AROUND MIDNIGHT PST

THIS IS THE 2ND UP LEG FROM THE LOW AND COULD BE THE START OF AN EXTENDED RALLY HIGHER

10:42 PM PST GOLD KEEPS RISING ON LOW VOLUME

10:36 PM PST GOLD BREAKS OUT OF THE RED DOWN FLAG

10:20 PM PST GOLD RALLIES OFF THE NEW LOW TO THE 1ST POINT OF RESISTANCE

GOLD IS NOW MAKING A LITTLE DOWN FLAG AND MAY CONTINUE TO BREAK HIGHER

NOT SURE HOW FAR THIS SELL OFF CAN GO, BUT IT MIGHT RALLY CLOSE TO MIDNIGHT PST

9:45 PM PST GOLD DROPS FURTHER

8:38 PM PST GOLD TURNS UP BEFORE HITTING THE 75% RETRACE POINT ON GOOD VOLUME, DIP BUYERS ARE ACTIVE

THE 2ND LEG UP IS THE SAFEST  PLACE TO BUY IN AS IT MORE OR LESS CONFIRMS THE PREVIOUS LOW AS A BOTTOM

8:33 PM PST GOLD MAY RALLY IN A 2ND LEG UP OFF THE 75% RETRACE POINT OR, COULD RETEST THE LOWS

DAILY CHART OF MOVING AVERAGES

GOLD MAY FIND SUPPORT ON THE BLUE 10DAY MA

7:40 PM PDST GOLD MAY NOW RISE IN STEPS

7:37 PM PST GOLD DROPS TO A RETRACE POINT AND RALLIES $5 SLOWLY

6:55 PM PST GOLD FALLS FURTHER ON MODERATELY STRONG VOLUME, WILL PROBABLY HIT 1392.0

4:22 PM PST WILL GOLD FIND SUPPORT AT THE BLUE UPTREND LINE OR FALL TO THE NEXT LOWER RETRACE POINTS?

4:17 PM PST GOLD STARTING TO DROP RATHER QUICKLY

10:20 AM PST JUST BEFORE THE CRIMEX CLOSE, A FAIRLY QUIET DAY

GOLD COULD DROP TO THE NEXT LOWER RETRACE POINT

GOLD GETS BOMBED ON VERY STRONG VOLUME, FINDS SUPPORT FOR NOW AT THE PREVIOUS LOW BUT COULD MOVE LOWER

GOLD TRADING QUIETLY ON LOW VOLUME, MAY NOT BECOME MORE ACTIVE UNTIL STOCKS OPEN

ANYTHING CAN HAPPEN ON A HOLIDAY EVEN THOUGH THE TRADING SCHEDULE IS NORMAL AND VETERANS DAY IS NOT CELEBRATED EVERYWHERE IN THE WORLD TODAY. THE MARKET JUST HAS NO REPORTS TO REACT TO TODAY SO IT HAS TO WAIT FOR OTHER MARKETS TO DO SOMETHING LIKE STOCKS AND CURRENCIES AND OIL

VETERANS DAY...NO REPORTS SCHEDULED

5:10 AM PDST GOLD COULD MAKE A NEW HIGH TODAY

2:20 AM PST GOLD HITS THE 75% POINT, MAY GO HIGHER

1:04 AM PST GOLD SUDDENLY BREAKS HIGHER ON STRONG VOLUME BUT PULLS BACK QUICKLY ON GOOD VOLUME

12:15 AM PST GOLD TRADES RATHER QUIETLY SINCE THE CRIMEX SESSION BUT HAS GAINED $10

DAN NORCINI'S WEDNESDAY COMMENTS WITH GOLD CHART

Hourly Action In Gold From Trader Dan

Posted: Nov 10 2010     By: Dan Norcini      Post Edited: November 10, 2010 at 2:22 pm
Filed under: Trader Dan Norcini

Dear CIGAs,
Two significant developments occurred in today’s trading session which bear mentioning as both have important repercussions for the future.

The first is the clear breakout above $87 in the crude oil market which is heralding a further rise in the cost of crude and with it, all of the liquid energies including gasoline and heating oil. The catalyst was a report showing a drawdown in the amount of crude in storage. Needless to say, this is not welcome news to cash strapped US consumers who are already feeling the affects of higher food costs. Now into this sordid mix comes higher energy costs. Food and energy – what are more essential than these? Nothing!

The second is further downside follow through in the long bond after it breached an important chart support level in yesterday’s trading session. There are so many false breakouts and breakdowns in today’s markets on account of the algos that I am becoming a bit more conservative when reading the price charts but the lack of additional buying in the bonds even in the face of a weaker equity market is ominous. It seems to me that this market, which had been supported only by the Fed’s QE buys is now discounting those buys and has shifted its focus to the sheer volume of supply which is hitting the market. In other words, bond traders are discounting the price of bonds to reflect the fact that demand is not going to keep up with supply at current levels of interest rates. Bond traders are in effect signaling a return to inflation on the long end of the curve as the effect of the QE impacts the economy at large. So far the decline has been rather orderly so we are not looking at a rout or a sharp spike in long term rates, but it could very well be that the days of low long term interest rates are behind us. I still want to see how this market closes out the week however before becoming too dogmatic on things. I have been tripped up too often with these things to get overconfident.

Gold and silver are today feeling the after affects of the margin rate hike in silver. Combine that with a pop in the Dollar and a general wave of commodity selling, and the hit to silver in particular has been quite dramatic. It is currently down over 6%. Oddly enough, even with a downdraft of this extent, its chart does not look all that bad as the uptrend is still intact. If it can close out the week this Friday above 26.75, it will have dodged a bullet. If not, look for further downside with a move down towards $25 very possible, where it should garner buying support if the uptrend is to stay healthy.

Gold’s ability to recapture $1,400 in the face of the rout in silver is very impressive. It seems to me that a goodly number of long silver/short gold spreads are being lifted today. That is part of the reason gold is holding up so much better than silver. Silver had been leading to the upside and now it is leading to the downside. Gold is also responding to woes in Ireland as investors in Europe are driving the price of gold above the €1010 level priced in Euros. In short, although the yellow metal is weaker, it is holding together quite well thus far.

Incidentally, gold just missed setting a new all time high when priced in terms of the Japanese Yen at today’s London PM fix.

Downside chart support in gold was touched earlier in the session where buyers came in and brought it off that level. That serves to validate the levels shown on the chart which are marked in red. The ideal price action would now be not a sharp spike back up in price but rather a sideways period of consolidation to allow end users to become acclimated to the higher cost. Sharp run ups in price tend to put the damper on the physical market overseas whereas a climb, followed by a drop in the level of excitement and some price stability gives buyers the courage to step in once they see that prices are now at a new and higher sustainable level and not just the result of a wave of speculative hot money flows which can dissipate all too quickly.
The Dollar is reaping the rewards of the crisis involving Ireland’s debt. That brought some rather intense selling into the Euro but I find it telling that once the Dollar pushed towards the chart resistance levels near 78.50 on the USDX, it could not hold its gains. The fact is all of the paper currencies are under stress and that is why gold will continue to perform well and will be supported on price dips.

The HUI is showing remarkable strength which is interesting. I think some of what we are seeing there is those ratio spread trades being unwound. That involves buying the shares and selling the bullion. I view that as a good herald as if this is the case, it indicates that the hedge fund crowd is throwing in the towel and abandoning that strategy. We’ll see. Either way, it is difficult to see much more in the way of enduring selling pressure in the metals themselves if the HUI stays strong. Silver is a money game right now so try not to read too much into the chart action as it will take some time for the margin hikes to weed out the weak-handed long side specs.
Cotton has been all over the place today nearly hitting limit up in overnight trade in Asia, then getting whacked and moving almost limit down, then rebounding over $10 and then dropping almost limit down again. Right now it is down but above any limit move. I keep seeing signs in the department stores being changed every 30 minutes to reflect the change in the cost of a pair of cotton socks or T-shirts. Pity the poor clerk who has to keep running in and out of the storage section! Seriously, cotton is evidencing the same kind of wild volatility that silver is experiencing. Ditto goes for sugar which has been all over the place today. The fact is hot money is sloshing all over the globe and moving in and out of markets in huge quantities making trading extremely dangerous for all but the most fleet of foot or the most experienced. Be careful; be very careful out there if you are trading. Scaling down in size is not a bad option as you can still make a great deal of money if you are right in your trades with a small position but at least you can survive if some of them go bad. A large number of hedge funds are not going to survive this period in the markets as these types of extreme ranges in price are going to claim a significant number of them. You can carve that in stone. It is not a zero sum game for no reason.

The grains are seeing weakness today but the fundamentals in there are so strong that it is difficult to see them staying down for any length of time. Food is not going to get cheaper, even if we get a few down days in the commodity markets. The genie is out of the inflation bottle and it is too late to put him back in.

DAN'S CHART:
http://jsmineset.com/wp-content/uploads/2010/11/November1010Gold.pdf

12:48 PM PST GOLD RISES IN AFTERNOON TRADING

THE NEW WHITE DOWNTREND CHANNEL

10:45 AM PST GOLD IS SUPPRESSED DURING THE CRIMEX SESSION, MAY CLIMB HIGHER OVERNIGHT

HARD TO SAY WHAT GOLD WILL DO NEXT

GOLD DROPS BELOW THE WHITE UPTREND CHANNEL A BIT THEN RALLIES

GOLD DROPS ON THE JOBLESS CLAIMS AND TRADE BALANCE REPORTS THEN RALLIES AND STALLS AT THE TOP JUST ABOVE THE 75% RETRACE POINT, ALL WITHIN THE WHITE UPTREND CHANNEL

NOTICE: GT IS HAVING PROBLEMS WITH HIS VERIZON WIRELESS RECEIVER/MODEM AND MAY LOSE HIS INTERNET CONNECTION

THE BRAND NEW MIFI 2200 WIRELESS MODEM THAT VERIZON USES TO RECEIVE THEIR WIRELESS SIGNAL IS A RECHARGEABLE DEVICE THAT CAN BE CHARGED FROM A WALL CHARGER OR IS PLUGGED INTO THE COMPUTER VIA A USB CORD THAT IS SUPPOSED TO KEEP IT CHARGED.

AFTER ONLY ONE WEEK OF USE, MINE IS NOW INDICATING A LOW CHARGE OF 25% AND DROPPED THE WIRELESS SIGNAL, SO I PUT IT ON THE WALL CHARGER FOR A COUPLE OF HOURS AND IT CAME BACK UP TO 50%.

IT'S SUPPOSED TO TAKE 2 AND A HALF HOURS TO FULLY CHARGE.

IT SHOULD NOT HAVE DISCHARGED IN THE FIRST PLACE.

I MAY HAVE TO DRIVE TO TOWN TO GET A REPLACEMENT. ONLY 50 MILES ROUND TRIP AND IT'S BEGINNING TO SNOW LIGHTLY HERE AND I DON'T HAVE ANY EXTRA TIME DURING THE WEEK IF I ALSO WANT TO GET SOME SLEEP WHILE NOT WATCHING THE MARKET.

4:40 AM PST GOLD ACTING WEAK AHEAD OF THE CRIMEX OPEN

10:20 PM PST

8:10 PM PST GOLD MAY MOVE LOWER

5:24 PM PST GOLD MOVES UP STEADILY, MAY TURN DOWN AROUND 1407

5:07 PM PST GOLD MOVES UP GRADUALLY THROUGH THE RETRACE POINTS WITHOUT MUCH PULL BACK

2:15PM PST AFTERNOON GOLD CLOSE

1:15 PM PST GOLD STARTS BACK UP, MAY RETEST THE LOWS BEFORE THE MAIN RALLY

12:50 PM PST GOLD CONTINUES PLUNGING ON FAIRLY STRONG VOLUME

12:15 PM PST GOLD GET BOMBED BY THE B BANKS ON THE CRIMEX CLOSE, DOWN $30 SO FAR BELOW THE RETRACE POINT AT 1396.4

GOLD RETESTS THE NEWEST ALL-TIME HIGH AND PULLS BACK