Thursday, November 18, 2010

An Amazing Week

First of all, I want to thank everyone on ZH who encouraged me to make my posts public and easier to find. This blog went live exactly one week ago at 3:00 EST and, at last check, we have had a total of 21,632 pageviews. I'm truly astounded at that number! Thank you all very much for participating and reading. For fun, if you continue to find the insights shared here to be helpful and interesting, please pass along our web address to anyone who might also enjoy visiting.

We all should feel pretty good about calling that bottom back on Tuesday. When $1330 gold and $25 silver held their inevitable retests, it was clear that the corrective selling/manipulation had peaked and that the bottoms were in. As I type, Dec10 gold is 1353 and Dec10 silver is 26.86. Very, very nice.

I wouldn't expect much price change tomorrow. The bias is clearly higher but there will be light selling heading into the weekend as weak-handed longs pull some bets, wary of being long until Monday. Lets look for a Friday close around today's highs in gold near 1360. Silver may see 27.50 tomorrow before pulling back to close somewhere between 27 and 27.50. All in all and considering how dark the landscape looked back on Tuesday, not too shabby.

Next week will be interesting as we get option expiry on Tuesday followed by the holiday on Thursday. Probably a quiet, give-and-take week. This will set us up for an explosive first week of December when $35,000,000,000 in new POMO comes into the market. That first week should take us back up and through the highs of early last week. The second week of December is when I expect the gold market to finally fulfill my $1500 by 12/10/10 prophecy.

Thanks again for making tfmetalsreport a smashing success. TF


  1. Turd-

    Excellent site - thanks. Saw a terrific post on the manipulation of the Gold and silver markets on SmartMoneyTracker and am pasting it below. It pertains to the likely bear raids coming to avoid delivery due to options expiration. Hope you don't mind, and sorry for the length.:

    "Imo the big decision days are next Tuesday Nov23 and Wednesday Nov24, with Options and Futures expiry, respectively. Currently there are 8430, 6236 and 10785 call options open at $1350, $1325 and $1300 respectively. Were they all to end up in-the-money, of course not all of them would stand for delivery/physical, but even if only 10% would then the bullion banks would have to come up with real gold for an +extra+ approx 2500 contracts. That is: 2500 on top of what they'll already have to bring in to fill the deliveries for all the in-the-money options below, say, $1250, a level they probably won't be able to bring gold down to.

    Those options below $1250 add up to (very rough count) 50,000. Again, if only 10% of those would stand for delivery, that's approx 5000 contracts.

    Conclusion: if the bullion banks could drive gold down to 1300 (in a spike down ONLY on Tuesday!), that would save them 50% less gold they'd have to come up with to fill the deliveries. (And even at a 5% or 15% delivery rate, that 50% less rate still remains intact.)

    With such huge stakes it is simply imperative for the bullion banks to make another desperate attempt to drive gold below 1350-1300 on Tuesday. It's not a matter of IF they will try but of HOW FAR they will be able to drive gold down. There WILL be a raid on Tuesday (but: it could fail completely, see below).

    Now imagine yourself being big money trying to buy gold in quantities as cheaply as possible. Then the point for you is: how deep should you let the banks drive gold down on Tuesday before you step in to buy big time - that is: before some OTHER smart money party steps in and snatches those options right from under your nose? That's one game of chicken for you... - the outcome of which will decide how deep the raid will be allowed to go.

    Regardless, to stand any chance of running gold sufficiently down, until Tuesday the bullion banks simply HAVE to cap gold below, say, $1350 (a $50 down day is likely the max they can hope to achieve, considering their previous 'successes' on expiry days). That is why gold currently gets slammed at every single breakout attempt. (So far, at least - it just broke upward of 1345 as I write this.)

    However, this whole Waiting-For-Tuesday game works equally powerful in upward direction. If the banks can't keep gold capped until Tuesday or if their raid on Tuesday doesn't get them anywhere and would stall again at, say, $1330 - boy, then the chances are we're going to see a short squeeze the likes of which we haven't seen for quite a while. Consider that there are another 25000 call options expiring merely between $1350-1400; and the higher the bullion banks would have to let gold slip up (i.e. more options in-the-money, i.e. more deliveries), the bigger the short squeeze.

    So, the question on where gold will go won't be resolved until Tuesday. (Or if the banks fail on Tuesday, they'll try another raid on Wednesday.) As of Thursday, we'll have a new and more normal situation - if such a thing exists in gold & silver."

  2. TJ: I completely agree. Let's just see if the EE is able to pull it off. Lots and lots of support near 1330 and down to 1320.
    However, even if they are able to mitigate the damage on Tuesday, they are simply "pressing on the spring". Gold would quickly rebound.

  3. @TJ: Or if all else fails maybe they'll have their cronies at the CME jack up margin rates yet again. I have to think at some point they're going to run out of bullets and will either have to simply shut down the exchange or get with the program and let the price discovery mechanism work.

  4. flaunt - the last margin increase for Gold, just a few days earlier - in comparison with Silver - was rather SMALL (and indeed surprising) - but now that eventually finally makes sense. What about this strategy:

    Let Gold run towards approximately 1375. There the EE strikes back, and after a 15-20 bucks raid - the next day they announce a big increase of Gold margin.
    Guess that could would do the job - and additionally finish the SHS pattern as mentioned by Turd.

    For silver that could paint a double top - initially. Just to convert into a triangle later.

    So anyway tomorrows action and Mondays should be closely followed.

    Todays tame NY session regarding HUI and Gold - could well have to do with the stock OE tomorrow. The usual stuff with da boyz sitting on gold stocks the whole day. But nevertheless in the last minutes there was pretty good buying accross the board, so I expect do HUI to open higher tomorrow. So good chance for Turds projections for tomorrow to become true.

  5. Turd - a big congrats for a successful launch of your blog!

    After Dec 9th I'm going to promote your blog in my site and where I'm usually posting - that will add quite a bunch of new hits. You will be surprised.

    Anyway - glad to have you posting here!
    Along the Watchtower.
    A great site name btw!

  6. Yes, isn't that what they did last week... raised margins in combination with all their other manipulation. Especially when they raise margins mid day and suddenly. This margin raising is a new tactic isn't it? It seems that already after just 2 tries, it is not quite as effective. They got lucky with the 2nd one because of all the news media hyping Ireland and China news... which wasn't really new news, they just made it come across that way. If I am wong on anything I say, feel free to correct me.

    All in all, thanks for the great advice and great spot on calls. I needed to hear some re-assurances after Monday.

  7. Not happy with JPM HSBC or Ireland.

    What's wrong with the Irish?

    Usually they have a whole lot more to say but have gone quiet. If they want to leverage their position, show how important they are, they should make a few comments that create doubt that take the market down and make the EU IMF more desperate to get a deal done. They are missing their opportunity to get a better deal.

    And JPM HSBC were did they go? Patiently waiting for them to continue their nefarious business and nothing, gold and silver stabilised and start climbing again.

    Why am I disappointed? Sold all my (Australian) gold and silver stocks first thing monday (and a nice profit there was too) looking for a decent dip, set my buy back prices....waited for JPM and Irish to do their thing....and nothin. So the market slowly recovers again, still lower but on its way back.

    So Ireland, how about leveraging your position, make some doubtful comments!

    And thanks for the Blog Turd.

  8. Kina... Some people say when they miss the lowest part of the bottom, they watch the big rally day (which was today) and usually the following day (tomorrow) there are some sell off's from those gains from the shorts. So like if a stock rose 5% today, they will sometimes drop down maybe 3% the next morning. So you might be able to take advantage of that. We might see a big rally now so it would be nice to get in even if you missed the true bottom and you could still make some great gains.... maybe....

  9. You are right there. There is a good rally today so far, looks like an overshoot due to 'relief' in some of those stocks.

    But some of them I think are vulnerable as they are not yet producing, just have some indicated sizeable deposits of gold or silver. They will need to borrow or do some capital raising so that should make them less stable. But long term they are good stuff.

    We can guess there will be increasing volatility from now on as the shell game gets harder to keep going.

    I could have got back in yesterday. But the way things are now days, if I keep my powder dry and wait to see the whites of their eyes....

    Sometimes need to keep the greed under control and stick to the plan.

    Can JPM give up on its shorts? I gather they have no choice but to keep it going till they bust or win.

  10. Keep it up Turd. This site is a winner. Good job.