Thursday, December 23, 2010

Interesting Weekly Charts

First, a little back-patting.
I wrote this at 9:20 EST while fighting a pounding, red-wine induced headache.
"All I can say is "whatever". There's almost a kind of arbitrage that will now take place as we go through the morning. Since the EE has artificially depressed price, you'll most likely see prices drift higher going forward. If I had to guess, we'll probably finish at about $1380 and $29.25."  -- actual closes of 1380.30 & 29.34

Again, The Turd is not some sort of soothsayer or witch. The Turd simply recognizes that the PM "markets" are not really markets at all. They are the dominion of The Evil Empire. Lately, the EE has been countered by an equally powerful Buyer(s) of Size. Once you accept that these two forces are the primary drivers of price, predicting the future becomes quite simple.  For a refresher, review this:

OK, now take a look at these three, very interesting charts. First up, gold:
Let's not make this too complicated. For the past 2+ years, gold has moved up in segments. Each segment establishes a new floor roughly $150 higher in price and a corresponding consolidation phase typically lasts about three months. The current consolidation began in early October. Hmmm...what is three months from early October? Early January, of course! This chart would indicate that a new up segment is about to begin next week or early in January with a price target of $1550-1600.

Next up, take a look at the weekly silver chart:
This is quite telling, too. Note that, since the BoS emerged in late August, silver has also moved up in stages. After an initial run from $19 to $23, silver has had a pattern up sharp price increases, followed by three-week consolidations. The latest peak was either two or three weeks ago so, history would suggest that we are about to blast off again, either next week or the first week of January. Funny how this coincides with gold, too. Hmmm. At any rate, when the next move starts, I have a target of $32.50-33.

Now, here's the really interesting chart, Feb11 crude oil.
Selfishly, a breakout in crude would, of course, be beneficial for the PMs as "the rising tide lifts all boats". However, rising crude is an absolute killer for the global economy and will bring upon us, in a much sooner fashion, the brutal super-inflation that we've all been expecting. Breaking out through $90 and following through today to close at $91.40 is bad enough. Next, if we move through 92 and 94 we're at least going to $100 and from there, what, $115? Yikes! For now, this is where the action is and I recommend you follow it very closely next week.

I leave you tonight with another selection from the Grooveyard of Forgotten Favorites. This may be of particular interest to our Canadian readers but all should enjoy it. Have a great evening! Turd out.


  1. I want to take this opportunity to wish you and your family a happy and peaceful christmas :)

  2. Note to Turd: drink more wine! (Merry Christmas, buddy)

  3. So, I've been a lurker at Zero Hedge and here, and never had the urge to post, but I just had an interesting experience with the JP Morgue/Chase.

    I initiated a wire transfer for $10,500 to a bullion dealer on Tuesday. Today (Thursday), at 5:45 pm EST, I got an email saying my wire had been rejected. I called; they said they would approve it, hung up, then called my wife back and told her that they couldn't un-cancel the wire and I had to resubmit it. I've now eaten 48 of the 72 hours I have for the wire to go through in order to preserve my locked in price and deposit.

    Anyway, not paranoid, but I do love a good conspiracy. I probably just tripped one of their fraud alert flags, even though the transaction was not unusual for me—but wouldn't it be interesting if others had a similar experience?

  4. Xaritas: Very interesting, indeed. Welcome. Stop by often!

    Marcus: Yes, for the longest time, I never got wine headaches because I drank it so often. Lately, I guess I've gotten out of practice. Bummer. Absolutely need to drink more. Sounds like a great 2011 resolution!

    borte: Thanks! From us to you and yours, too.

  5. Merry Christmas Turd. The season to be merry. I prefer a nice ESB or Ale over red wine but at least we like to post while inebriated (or recovering).

    Question to all, for those that have been involved with PM's for the long haul, what can we expect for over-the-spot premiums in the next year? For instance, the premium at gainesville coins is $2.99 per silver eagle tube. Would it get any higher than that?

    Thanks everyone

  6. Merry Christmas Mr Ferguson, thanks for sharing your insights.

    Best wishes in everything you do and may you and your family never be in want.

    Merry Xmas everyone :)

  7. Good red wine shouldn't give you a headache.
    Do yourself a favor and spend a little more to get better splash.
    If you're not sure what to drink, find a good bottle shop and they can help.

  8. Turd I have learned so much from you.
    I don't know what it is abouut red wine as long as you keep drinking the headaches get better it must be a marketing thing. LOL
    You totally amaze me and I turned a few others to your blog and they are much smarter than me and they are much impressed.
    I wish a happy xmas and a prosperous new year for you and yours

  9. If you need a bit of help on getting the basics and going traditional on foods? check my site I prep on the cheap but eat good,3+ years of food stored in the basement and a year of meat in the freezer. Not bad for chick on disability and no food stamps, no energy assistance and paid off all debt except the mortgage and buying silver. WOOT!

  10. Happy Holidays Turd. Your work is much appreciated.

    "All this has happened before, and all of it will happen again."

    "There are many here among us
    Who feel that life is but a joke
    But you and I, we've been through that
    And this is not our fate
    So let us not talk falsely now
    The hour is getting late"

  11. If headaches are due to cheapness of booze, then all that bourbon we drank last night must have been pretty much free. Merry Christmas to you and your family Turd, thanks for all your blogging activity over the last few months. Same to your commentariat!

  12. Turd,

    Fist post here, been lurking for a couple of weeks. I would like your take (anyone) on this...

    "JPMorgan must have some reason to justify the big concentrated COMEX silver short position. If they claim that they are long silver OTC swap positions as an offset to their COMEX short position, it becomes critical that the CFTC inquire who is holding the short side of the OTC silver swaps. My belief is that it will be Chinese interests on the short side of the swap. Such a finding will lead the CFTC to conclude that it is really China holding the concentrated silver short position and they are using JPMorgan and the CME Group as their dupes to carry out the silver manipulation. This wouldn’t absolve JPMorgan or the CME for enabling China to manipulate silver, but actually make it worse. A foreign super power and clear rival to US national interests being aided and abetted in the serious market crime of manipulation in the price of a vital world commodity by leading US financial firms is almost too outrageous to contemplate. Yet that is exactly what I think has occurred.

    I did not pick interests in China out of the thin air. As the largest producer of silver in the world (mining plus refining), it would sound plausible for them to be short (but never to the extent it has reached on their surrogate COMEX position held by JPM). More importantly, rogue traders from China have had a regular habit of betting on the short side of world commodities that their country consumes with a ravenous appetite, although that would not appear to make sense. Two examples that come to mind are disastrous bets on the short side of oil and copper five or six years ago.

    It made no sense for Chinese traders to have bet the short side big in oil or copper. Yet it happened. Just because it makes no sense for someone from China to have bet big on the short side of silver doesn’t mean it couldn’t happen. Let’s face it – someone is and has been short on silver, all the way up from the single digits. It will go down as the single dumbest trade in history when all is said and done, taking the title away from Barrick Gold and Anglo Ashanti for their dumb short gold trades."

    The full article found here...

    The merriest of Christmases to you and yours!

  13. OK, I promised some deep due diligence on Tanzanian Exploration, symbol TRE:
    - Chairman is Jim Sinclair. Too much to write about him here, so get Googling. Suffice to say, there is no better gold man in the world. His father was partners with the legendary trader Jesse Livemore.
    - Tanzania has the most stable gov't in Africa
    - there is gold everywhere even in surface gravel. That gold van be recovered for ~$50; yeah, that's a decent profit margin
    - under the gravel are quartz reefs, filled with gold veins
    - read the last few press releases, including the private placements to get money for the needed crushers. Lots happening now, 2011 will be THE year for the first moonshot in share price IMO. Everything is falling into place now quickly.
    - I have heard there will never be any more shares, no dilution going forward. Once they begin producing, no need.
    - Heard the dividends per share structure will be very sweet indeed. 40% of profits within company to expand etc; 60% paid out in divy's- PAID IN GOLD.

    Enough for now. This is Jim's Grande Finale, I think it will be one hell of a ride.

  14. Should have added I am definitely talking my book here on TRE, I own a chunky-chunk. Please do your own DD, and if you have companies you like and have info on, share.
    This is quite the nice little community shaping up here in TurdLand. While I love ZH and Slope of Hope to name a few other blogs, my focus is PM's baby, and so far no trolls, hah.

  15. Rudeger: Mr. Butler et al clearly know more than I but I think the "massive chinese short position" idea is nonsense. Just a bunch of speculation based upon the presumption of which excuse JPM might choose as they run for cover.
    The Evil Empire is short massive quantities of gold and silver because they are attempting to suppress price at the behest of the Fed. That's it. Its not any more complicated than that.

  16. TF...Butler's theory has too many holes for me to reach the same conclusion as He did. Having said that, the B of S unequivocally has to be our friends from the East.

  17. Keep doing your good work, I refer people to your analysis. You are a bit more accurate, but I know what is happening in the long-term.

    This end of keynesian economics will provide opportunities for humanity that people cannot even imagine...

    Ron Paul Revolution... He has been on this subject for the last 40 years. Turd I assume that you support this man, if you do how about a post about his ideals of following the constitution and sound economic policy...

    The Revolution is In Full Effect... this revolution involves the enlightenment of the public... it starts with the average world citizen...
    Scott J

  18. 1st time here. Good insights- like the blog.

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