GOLD AND SILVER TECHNCIAL ANALYSIS REPORT 31 OCT 2011

OCT 31, 2011


GOLD AND THE MEDIUM TO LONG TERM TREND

If you're wondering why gold has been in a wild choppy range the long term charts
offer a clue. There is a new channel that is being formed that has a higher slope,
momentum, and velocity. The big daily price ranges in gold are the result of the
new "Panic Channel" that has been formed. This new channel is the guide as to

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whether the "loss of confidence" gets worse along with the global conditions we
are dealing with.

I've circled the chart in red where the lower dotted panic line and the upper gold
main channel lines are intersecting. NOTE how the wild price swing is right in
between the major lines. In other words --- this is where the "battle" line for the
long term bull market resides at the moment.

If you think it through --- there is only two directions gold can take from here.
Above the upper main channel line and into the panic channel ------ or a break
below the lower blue dotted panic trend line. THERE IS NO OTHER CHOICE.
Thus it would stand to reason that above the GOLD main channel line and the
trend IS UP. A break below the lower dotted blue channel line --- and the medium
term trend will be down. In between is neutral territory. The roadmap for the next 6
to 12 months lines within these channel lines and will be our guide to whether the
trend is up or down.

Since we have no control of price ---- then the key is to follow it where it wants to
go. These two long term trend lines will give us trend direction and potential
velocity. While we all have an opinion of where price is going --- it is the market
and the market alone that dictates WHERE it does end up going. The next best
thing we can do then -- is figure out where the turning points are. This is one of
them. Join us as we track the 21st Century Bull Market.
Gold - A weekly close below 1643 would be bearish, a weekly close at or above
1680 would be bullish. Some lateral resistance at 1655 to 1665. A move above
1702 would allow PoG to move up to 1770ish or better. 1595 appears to be set up
as critical support in the short term, a break of which invites a move down to test
1440 to 1510

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Silver

This weeks big move wasa result of silver finally moving above the lower uptrend
line. For four weeks price has been stuck between the the long term blue line and
this uptrend line. THE long term blue line is the MOST IMPORTANT Line in the
entire silver market for this reason ------ all of the old highs were where this line
would "HOLD" price as resistance. Look at the 2006 and 2008 highs on the chart
below. Now look at where the explosion higher was ----- right at this long term
blue line. And now the CORRECTION into this major long term line has held the
line on a MONTHLY CLOSING BASIS as October is going to not only close
above the long term blue line --- but now most likely in the uptrend channel again.
There is only really one more hurdle that silver must over come and that is for our
LONG TERM TRENDS. Look how price is arriving at the major moving
averages. This line provided support throughout the entire run from the 20 dollar

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area. Now price is arriving once again at these lines. There are two things to watch
for. First, the BLUE line must be above the RED line for the trend to be up.
Second --- price must have weekly closes (at least two of them in a row) to favor
the uptrend has resumed. These moving averages are where the next major
RESISTANCE AND PRICE TEST FOR SILVER IS. As far as pullbacks --- the
lower white channel lin line near the 33 area should be strong support for the
coming week.
Key MT support still at 28.41. There is a bullish CnH formation present that
could propel PoS to a calculated target of 37.55 if the rim line is breached
at 32.70 this week. This bullish pattern will die if 28.41 is broken first and
possibly produce a fall into the $25 range

ST support range is 32.92-33.57 and look for resistance in silver at the 36.50-37.55
area

Options Expiration Calendar for Gold & Silver 2011 ==== All set until November 26th


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