The PM Break Out Is Here: Now What?

Tyler Durden's picture

Submitted by FMX Connect

Yesterday we published an article calling for a breakout in Precious Metals with a focus on Silver.


The breakout has occurred and you should be long both metals.

If you are long, or want to get long here your stop losses will be wide and volatility based. Here are some tips on managing the positions:

  • Silver Stop Loss should be $32.45. You can pick a tighter stop if you like, but this is the proscribed level for pullbacks to go to and the bull move to remain intact. Losses can be managed by adjusting volumes rather than tightening stops.
  • Gold Stop Loss Should be $1680.00. This may seem less risky than silver, but that often means worse reward potential.
  • Tomorrow morning trail stops higher as profits occur, use previous lows, highs on the hourly level or the top Bollinger Band line on the Daily chart previous session.
  • Get ready to take profits aggressively: when these hit, 80% of the projected volatility based move is in the first 72 hours
  • Get out if you are not in the money in 48 hours, even if your stop isn’t triggered. Momentum fades fast if you don’t get follow through from the immediate push.

Good Luck.

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RobotTrader's picture

NEM reports after the bell, I think...

Pladizow's picture


Buy gold and silver and fugedaboudit!

Troll Magnet's picture

Didn't FMX Connect "predict" yesterday that PMs will go lower?  Oh, right.  They "hedged" their bet by predicting that PMs could also go higher.  So I guess they were Wro..ght?  Or is it wrought? 

flacon's picture

"My mind was wrought with things forgot." 

dlmaniac's picture

JPM is using own shares to suppress silver price. Now that JPM and silver spot are getting closer to each other so watch out for shenanigans to kick in to cap silver's surge.

strannick's picture

FX Connect says gold going down, instead it goes up

FX Connect says sell gold cause it went up.

FX Connect hasnt got a clue, and just guesses about tomorrow from whatever happens today.

maddogs's picture

Are you sure FX Connect isn't warehousing their own dirivitives..frontloading and bagging you?

Harlequin001's picture

Well I predicted a long time ago that it would either rain or go dark and I've been right every day since then. Now, who wants some investment advice?

Listen to Robo first, and then go buy some gold...

GoinFawr's picture

It was a hard wrought decision.

bernorange's picture

You don't need luck when you have all the bases covered.  Similarly, you don't need buy/sell targets if you are stacking for the long term.

DoChenRollingBearing's picture

+ 1

Long term.

The winners will be the ones holding physical PMs.

Coldsun's picture

And that will be the one with the most guns. Always is.

The Peak Oil Poet's picture

except that i'm your gun dealer and i sold your details along with all the other disenfranchised righteous types' details to one of the local cops (he and his mates will pay you a visit if TSHTF)


and my polker buddy (the doc) says you havn't had your kids immunised - he's sold t6hat list to our buddies too


and all those long-life seed purchases you made? Well that's been sold too


i  hope you have a lotta guns and a lotta cousins to help ya fight off dem ravenoors when thez a com a-knockin 


the gold and silver that we hord
because we fear what comes
we'll give away for a loaf of bread
when the future comes a knockin'

when the future comes a knockin'
when tomorrow's at our door
what today is worth a fortune
will tomorrow make us poor


tsx500's picture

what are ravenoors ? just wondering ........

Ponzi Unit's picture

Tax collectors, from revenuers...southern US whiskey runners, source of stock car racing. Yew mus be a furriner.

DoChenRollingBearing's picture

Peak Oil, Coldsun,

PMs and a couple of guns is about the best a condo-dwelling Bearing can do.

Either I leave for Peru (where I have "infrastructure", if you will) BEFORE, or fight off the zombies / thugs / fascists with what I have.  Run or fight..., now THAT is a question.

Harlequin001's picture

Do be careful old stick, apparently there's a rapidly growing super volcano down there that could really ruin your day...

pupton's picture

Yeah, we all read that POS yesterday and 72 of us green arrowed the second poster who commented "Pointless Article" because much like the scarecrow in The Wizard of Oz, he pointed both directions. 

Now he's going to take credit on the record that he called this breakout???  Bullshit.  He failed to call the direction of the breakout, so he gets no points from me.

Smiddywesson's picture

No green from me either.  We have been trading in the rough range of $1600-$1700 for more than 5 weeks and we get one 3% rise to the top of the range and everyone claims we have a breakout that's going to take us to the moon?  Based on what, the few intraday points above $1700 that we already gave back?  With markets in this much turmoil, and with the kind of volatility we have been seeing, We should have expected something like this. 

I can't agree this is a confirmed breakout yet.  With clear evidence of manipulation on the downside, we have to also consider that same process can be used a bit on the up side too without greatly upsetting the suppression game.  Granted, TPTB cannot afford too much of a ramp, but to ignore that they could actually ramp prices to suck in the gold bugs is ignoring reality.  Wait for confirmation.

pupton's picture

You're right.  I think "technically" the breakout isn't official until silver goes above that $33.50 point it hit on the intraday after slamming down to $26.

buyingsterling's picture

I think all of the charts, price points, market dynamics, actual demand, etc. are pretty much irrelevant. The ponzi wants the price to yo-yo; if they actually control the paper price, that's what will get them out of their shorts. This will also discourage investors, and shake out the weak hands. At times they'll let the price run, only to crash it again. Whatever makes silver and gold look as unpalatable as possible is what we can expect, now that they're ready to throw away the rule book.

Hook Line and Sphincter's picture

If I could, I'd flush everyones macd's down the toilet. Wake up from the abortion of technical analysis in a manipulated market for Gods sake. All you painted chart chasing morons are going to get a whipping. You never learn.

Harlequin001's picture

I thought we would have learned that when gold last dipped to $688 on the intra day.

If that wasn't Goldman clearing out ALL their clients stops (having known precisely where they were and in what compressed quantity) then I don't know what is.

Since that day we just buy long physical and hold it regardless of any paper price.

No more will I hand over my gold to Goldman or anybody else through manipulation...

DosZap's picture


I concur, my ass is still sore from the LAST euphoric hopes I had, at 1890-1910's.

CME comes in a hits the margin hikes, fully expect them to do it again, and we have expiry the 27th.

Fool me once shame on you, fool me twice shame on you.

CME is going to cover their butts, and we have been KNOCKED down now, what?, 3x's?.

My $ is they throw the sink at it to keep it under $2k.(Once it gets there, the Sheeple will even wake up).

They cannot afford it.

DoChenRollingBearing's picture

DosZap, go check out, started by above ZH-er bernorange.  I think you would like it.  And you don't have to jump through any hoops to join in (like you did for my blog).

Harlequin001's picture

I thought the saying was 'Fool me once, shame on you, fool me twice and and ya ain't gonna fool me again..."

You Americans do elect some dicks to be Pesident don't you. I mean at least in the rest of the world they do tend to elect Presidents and Heads of State that can string more than two fucking words together...

Aguadulce's picture

It was fool me can't get fooled again. And also the populous actually voted for the other guy fwiw. But ur right. This nation is f'd up

Pinto Currency's picture





Condy says you can't affort to wait for confirmation when it could come in the form of a currency mushroom cloud.


Seriously, I agree with you we can't yet tell if this is a breakout in the futures prices however these prices to me are increasingly irrelevant.  The key issue for a purchaser is, and will increasingly become, the availability of the actual asset for delivery at a given (rigged) price.


The advice given in the article to sell as soon as the price moves ignores the massive imbalances that are showing signs of completely destabilizing the markets.  My advice to anyone would be to not get cute and to not try to time the market. 

mayhem_korner's picture



Yep.  No cigar from me either.  Besides, all of the gyrations simply shake out the shorts on the way up, the weak hands on the way down, etc.  All paper trading, knife-catching, chartists to me. 

Today doesn't change my strategy or outlook a bit.  We've seen a dozen moves of $45+ an oz in gold in the past 3-4 months, so what?  Steady accumulation of physical for me.  Always happy to see another sleeve arrive, no matter what squiggle things are following on Crimex.

Edit: it's interesting how the ZH crowd (of which I'm one) goes into deep forensic analysis on the inexplicable drops/smackdowns of PMs, but simply breaks open the bubbly on the upswings.  Smiddy had a good observation on the other gold post today about bucking the options-expiry trend with some sleight-of-hand...

LowProfile's picture

Didn't FMX Connect "predict" yesterday that PMs will go lower?  Oh, right.  They "hedged" their bet by predicting that PMs could also go higher.  So I guess they were Wro..ght?  Or is it wrought?




They said they were poised for a move, and to trade in whatever direction it broke to.

BTW, shit like yours is not helpful (and a good reason for ZH to put an 'ignore user' feature in place).

riley martini's picture

 No FMX said gold was going to break out up or down .They said buy a straddle but they didn't say what date or strike.

jdelano's picture

Anybody reading the article on the front page of CNBC?!!!!!!! Why the hell would they publish this?  ARe they trying to get Bernanke lynched?!!!

SRSrocco's picture


This article that came out yesterday said silver could go either way.  I made the case that is was going higher based on five fundamentals.  Those fundamentals have not changed.

1) COT Commercial Net Short percentage lowest since 2003....even lower than when silver was $8.90 in OCT 2008.

2) Largest Commerical Short Position against the Dollar I have seen in years. 59,000 Commercial Shorts compared to 9,000 Commerical Longs

3) Wholesale shortage is taking place when industrial buyers have to wait for delivery after buying at $30 an ounce

4) There is no GLOBAL SURPLUS of Silver....that's pure bunk....and there will be no surplus in 2012 or there after.

5) GFMS stated global slver supply would increase 7.4% to over 790 million oz in 2011 compared to 735 mil oz in 2010. Mexico's silver production was at 60.4 mil JAN-JUN, while last year it hit a total of 128.4. Peru's silver production is down 9% JAN-AUG. BHP Billiton just came out with their Q3 and they are down 25% YOY for the Q3 and down 20% for the first 9 months of 2011. Chile's copper production is down 4.3% in the first 8 months so you can figure their silver is down about the same percentage. Finally, the USA is down 10% JAN-JUL. 2011 will show a DROP not an INCREASE in global silver production

Investors may wish to buy PAPER SILVER and place stops, hedge positions and eat jars of tums all day long....but I believe the best strategy is to BUY and HOLD PHYSICAL.

Many mining analysts and CEO's of metal companies are clueless of the falling EROI, Land Export Model and the Peaking of Oil.  They keep planning huge open-pit projects years and decades into the future and they have no idea of what the energy situation will be like at that time.  Within the  next several years this will become apparent.

According to Jeffrey Brown and his Land Export Model, if the 33 top net oil exporting countries have the same trend from 2005-2010, by 2020 Available Net Exports (ANE) will decline from 35 million barrels a day to 21 mbd.  Now....if these 33 net exporters have a 1% decline rate per year of production, that ANE falls to 15 mbd by 2020.   GOD HATH A SENSE OF HUMOR

The best and cheapest silver to own is that bullion you have in ones sweaty hands right now.  Nationalization, trade wars, disintegration of supply routes due to a collapsing Fiat Monetary System will implode gold and silver supply at some time in the near future.  We are witnessing the End of a Way of life.  Best to be in the REAL THING.

DoChenRollingBearing's picture

+ 1 SRS

Unless you are a trader (which I am not), physical is the only way to go.  Hide it well.

fnord88's picture

Don't know what you guys will make of this, but a friend of mine is the CEO of Australia's largest arsenic producer. Australia has lots of new gold explorers between 6months and 4 years from production. My friends business is now sold out of all future arsenic production until 2019.


Thats what he tells me anyway, never sure if i can believe everything he says, any opinions?

Advoc8tr's picture

We're all just stocking up on poli-poison for the upcoming poli-cide frenzy.


Did read this morning that our banks have been 'ordered' to prepare recovery plans to show how they would survive another downturn ...



Pinto Currency's picture




Of interest and little covered by the financial media is that industrial silver users are going right to the silver miners to secure silver delivery - and paying premiums for delivery.  The exchange prices are for the amusement of the populace.


On the silver EROI front, wait while the new technologies developed over the last 20 years get deployed to discovering and putting silver deposits into production and extending the life of existing deposits.  It will take 10 years, and will not meet the monetary / investment demand but new production will come with declining EROI.


akak's picture

Po Robo, fomo go-go momo, oh oh, no mo dough, so low hobo.

fuu's picture

Hobotrader has a nice ring to it.

akak's picture

Netflix for sale or rent
Lululemon, only fifty cents
No gold, no pool, no bread
                     I ain't got no ZH cred .....

hamstercheese's picture

(dun dun) "King of the Gold!"~~

Poor Grogman's picture

Thats what has been missing "the ring"

kaiserhoff's picture

How did those tight stops on Netflix work for the momo crowd?  ;)

HelluvaEngineer's picture

Worked just fine as long as it was a market order.

junkyardjack's picture

Tight stops in Gold and Silver will get blown out if they head in the other direction. The smarter move would be to decrease your position size and use wider spots when volatility is crazy like this

topcallingtroll's picture

I am still sticking with my topcall in gold.

I dont believe the eurozone bazooka is really 1.4 trillion.