Monthly metals re-cap, 5/31

I just wrote up a weekly metals recap thinking today was Friday. In my defense, heavy drinking has been shown to reduce the integrity of white matter, the brain's highways that communicate neuron messaging. But on top of that, the financial markets have been incredibly boring of late (not that there's not a lot of interesting stuff going on, just that it's all going on behind the scenes).

Well at any rate it *is* the end of the month. Seems like yesterday I posted the monthly gold chart and mentioned we had completed an unprecedented third red month in a row. That was April, now we add May for a total of four consecutive red months and counting. What a bullish development for anyone afraid gold was getting ahead of itself.


My gold and silver predictions from a month ago ($1550 and $27.50) have held quite well, though there have been a few quick spikes lower. Note the 21-month MA on the monthly chart above, which was among the main sources of my predictions. 

I've also been looking at the CCI(50) indicator, and noticed that whenever gold fell into the red zone below, that never marked a rally-preceding bottom (as when sharp drops in the indicator didn't quite make it to the red zone): there was always another shoe to drop (at least another scare, even if a lower low wasn't made). Well you'll note that's exactly what happened, so now I'm waiting for the CCI(50) to get back over -100.



Here's the $GOLD:$CRB index from last post, which was discussed a bit in the comments. Breakout? A few more up days, and it will certainly start looking like the next big move for gold as a safe haven is upon us. 



Also check this one out, suggested by victor_the_cleaner. Also at an all-time high!







Then there's the $CCI commodities index, which is hitting the $506 level that I warned about a month ago, when it was at $542 ("the $506 level, at the 50% retracement, looks like a good time for a QE3 announcement.") If QE3 is indeed soon announced, and the $CCI jumps, then I deserve to be crowned and hailed as a grandmaster of prognostication by the governing body of mildly innumerate chartists forgetful of all my bad predictions.  



Finally, the "10 yr yields in silver" chart, which still looks ready to drop precipitously to me ... despite all-time low yields. 

12 comments:

victorthecleaner said...

I love the gold/CRB chart. Can you also produce gold/(CRB without oil)?

Victor

GM Jenkins said...

Hey Victor,
Stockcharts.com doesn't let you do anything with raw data. But check out the $GOLD:$CCI, which doesn't have oil. Also at an all time high as of this week!
http://stockcharts.com/h-sc/ui?s=$GOLD:$CCI&p=D&yr=20&mn=0&dy=0&id=p35051992236&a=268529218

victorthecleaner said...

Thanks - I should use StockCharts, too. Well done, I was just getting impatient and wanted to see the break out.

Victor

GM Jenkins said...

Wait, shit - it doesn;t let me link the actual chart I made. I'm gonna post it.

GM Jenkins said...

It only goes back 20 yrs, but I wonder if it went back further, that could potentially be a massive cup and handle.

S Roche said...

You have made one of the most outlandish, least supported claims made by any "analyst".

This is real research:

http://www.cbsnews.com/8301-504763_162-57413201-10391704/can-alcohol-make-men-smarter-study-suggests-yes/

http://www.guardian.co.uk/science/2005/aug/04/highereducation.australia

and I do not accept the "heavy" cop-out, if it's good, more is better.

GM Jenkins said...

LOL, I saw that study. A perfect example of what's wrong with so much research in all the softer sciences, from epidemiology to economics. They can be internally valid and even elegant, but they aren't generalizable. I read that drinking study and I conclude: among people paid $5 to participate in a boring study where they're asked to solve verbal puzzles with nothing at stake, the group who drinks (which will be in higher spirits, more willing to try to impress each other, more able to block from their heads the sad reality that they're wasting an hour they'll never get back playing meaningless short term memory games) will probably do better. The authors of the study, on the other hand, conclude that alcohol raises everyone's IQ in any situation. The media knows that conclusion is what lots of people will want to hear and presents it uncritically.

S Roche said...

Ouch, cheers!

GM Jenkins said...

LOL, what would be the point of drinking if it made you smarter?

On the other hand, I'm thinking damn lucidly right now while working on my third Shiner Black, so ...

S Roche said...

Tweet from IzaKaminska FT:

Izabella Kaminska ‏@izakaminska
OK, just went thru two usually abandoned Swiss/France borders. Both buzzing with activity. Someone cleaning posters off windows at one.

What chance a weekend announcement of currency controls...gap up Monday?

victorthecleaner said...

S Roche,

I think capital controls over the weekend are unlikely. If I was in charge of Switzerland, I might consider charging a tax (0.5% to 2% perhaps) on foreign exchange transactions into Swiss Francs inside Switzerland and on Swiss Franc wire transfers into Switzerland, saying "we don't want your hot money" ...perhaps...

And here are more details on the inventory of GLD:

GLD – The Central Bank Of The Bullion Banks

Victor

victorthecleaner said...

... and $GOLD:$CRB should have a clean break-out today, too.

Victor