Friday, December 10, 2010

Son of ChartDaddy

Before we get rolling. we should all be encouraged by the action in the PMs today, particularly silver. Blythe drove the March11 all the way down $28.06 before it rebounded. I have a last of $28.70! The hold of $28 again is significant as the EE just can't quite seem to get it through there. Wednesday it made $28.01 before rallying. Yesterday, it hit $28.20. Looks like the BoS has determined that $28 is a decent price. That said, take a look at this chart:
$28 looks great as proven support but its easy to see that, if this current pattern holds, $28 may give way to a move toward $27 before the metal regroups and makes new highs. It certainly doesn't have to but don't panic and get all freaked out if we see $27 at some point next week.

In gold, I spent a lot of time discussing the long-term bull market earlier so I thought I'd give you a weekly chart to peruse. I could draw lines all over it but what would be the point? You can see, quite clearly, the same "Swiss Stair" formation that we've discussed often in the past. Though in this case, I've drawn it more like a "Swiss Escalator". Oh well, I think you get the idea.

I thought I'd include a USDX chart, as well, but I'm not sure why. Where it goes in the short term is anybody's guess. For now, it appears rangebound between 79 and 80.50. The chart looks like it wants to roll over but I'm probably just seeing what I want to see. As discussed earlier this week, it looks like every round number will act as support if we start heading lower (79 then 78 then 77...).

Finally, the BIG STORY today for me is the new POMO schedule. For new Turdites wondering what the heck POMO is, check this:

I always count at the upper end of each daily range so this current schedule adds up to another $117B in brand new, fresh greenback for the PDs to play with over the course of the next four weeks. My advice to you is simple: Be long or be out. Do not attempt to be "Mr. Smartypants Topcaller" and try to short anything. Don't be short stocks, grains, crude, PMs. Nothing. Long or out are your only choices.
For reference, the just-expired POMO schedule began on 11/12. On that day:
The ES (mini S&P) closed at 1195.50. Last 1239.25. +3.66%
Feb11 gold closed at $1367.70. Last $1387.40. +1.44%
March11 silver closed at $26.02. Last $28.68. +10.22%
Jan11 crude closed at $85.34. Last $87.74. +2.81%

I think you get the point. As long as we're creating from thin air over $100B in new cash every freaking month, shit ain't going down. Period.

Please check back for some additional, new posts over the weekend. Don't forget to visit our "advertisers" on your way out and please tell all you friends about The Great and Powerful Turd.

Thanks again for another fun week. Turd out.


  1. Massive dollar weakness in the piepes. Look for a move back down to 77 by the end of next week. Gold to shred the dollar hard next week, too. Silver will out perform all assets.

  2. Thanks Mr. Turd! Happy to say the TF Metals report is one of my favorite visits on a daily basis. If anything it's just nice to be around a significant amount of PM bulls. You got you a good thing going here, and I wish you the best!

  3. The Turd has left the building.

  4. Dear turd. As a frequent reader, I came to think about what you said of Blythe doing one or two raids most days. After getting smacked around today, I sat down and constructed the following chart :

    Thank you for the inspiration.

  5. Mr Jimi isn't bashful about his calls on the PM's or the USDX. 77 in a week would really shake things up for sure.

  6. This comment has been removed by the author.

  7. Forgive me for playing Devil's advocate, Mr Hendrix, but what makes you think 77 USDX in in the cards? It would be nice, but I'm somewhat suspicious when it comes to hearing something that pleases me (which a drop to 77 would). How did you arrive at your reasoning?

  8. Yes, To Mr. Hendrix... I too would like to know why you are thinking the DXY will drop to 77 next week. Is it just a blanket statement, an educated guess, or a solid projection based on something I don't know? Would love to hear your insights. Thanks

  9. NIA interviews Bill Murphy

  10. Jimi yesterday also "projected" 1430 Gold for today! So just take that DX 77 with a grain of reality dose - or classify it as "noisy wishful thinking" - for all the goldbugs here, so that they have a nice and warm weekend.

  11. Gold corrects to $1300 and then rallies to $1600?
    All this and more chart-porn at:

  12. Bill Murphy on PM manipulations (video) a must listen!

  13. Must be important - two out of the last 4 posts!

  14. This is not important in a true PM sense but funny and somewhat important to the big political picture. I found it good for a laugh, especially the part where Clinton tells Obama, "Just go!"

    Clinton dismisses Obama to go have dinner with Michelle...

  15. I heard some talking head on CNBC today speculate that China might raise bank reserve requirements or interest rates to dampen inflation soon, maybe this weekend. If they do that, it would probably have a depressive effect on PMs. That would allow them to pick up more gold and silver at these price levels and make the eventual pop that much more explosive.

  16. Mr. Ferguson,
    thank you for the live charts. now I don't have to leave E-VAR
    great work man.

  17. Not sure if I have ever been a Turdite before. But look forward to the daily news. Nothing is real anymore. The spending and blatant market rip offs are beyond comprehension. Where this is taking us is not going to be fun. So be diligent and watch the canary. Thanks for the help.

  18. Damn there's a lot of books you got here Turd. Oh, I was thinking that your website motto should be "The Wurd of Turd." Make it some crazy religious experience!

    Apart from all the jokes I'm glad that you have this site and I decided to make my own as an attempt to break into the PM blog market. Let's have fun with it!

  19. CPM Group looks for historically high silver prices:

    "Silver prices are projected to remain at historically high levels over the next 10 years, concludes CPM Group in its 2010 edition of its “Silver Long-Term Outlook,” released Thursday by the New York commodities research and advisory firm.

    The 224-page study is a comprehensive analysis of the key market fundamentals of silver that are expected to influence prices over a decade. The report contains projections for global mine production through 2019 on a mine-by-mine basis and also contains a new China section with an analysis of the silver supply and demand in a previously opaque market. CPM Group said the use of silver in China during 2009 was perhaps twice as much as had been believed...."


    MUMBAI: India, the world's No. 1 silver buyer, is on track to show sharply higher imports this year of the metal near 30-year peaks, as consumers normally fond of more expensive gold seek to lower cash outlays.

    "Certainly there has been an increased interest in silver, and it's drawing interest from people who cannot afford gold, even return-wise the metal has done well," said Haresh Acharya, head of the bullion desk at Ahmedabad-based gold wholesaler Parker Agrochem .

    India's silver demand averages 2,500 tonnes per year and the country, which produces around 7.3 million ounces a year (206.95 tonnes) according to the Silver Institute, could import 20 percent more this year or 1,200 tonnes, the Bombay Bullion Association (BBA) says.

    Around 50 percent of imports come from China while recycling makes up some of the supply of the metal. Silver is used in jewellery, coins and bars for investors, while industry uses the metal for products from light switches to cars.

  21. Many thanks to ben and tim for the link. I enjoyed it, and am now dreaming of the day when Bill Murphy is interviewed by CharlieRose, and Michael Lewis writes his sequel of "Big Short" on PM manipulation. It is fun to imagine how much M.L. will be shocked to learn that current PM manipulation repeats exactly what was done for the Mortgage market by bank cartel few years ago, except that banks are now on short side. It would be also worth to add another chapter to 'Bail out nation', and Barry will admit that the rate of market manipulation and its bailing out accelerates parabolically.

  22. Turd, check out Rob Kirby's latest:

    His conclusions (direct quote):

    # The BIS tells us that total global outstanding “other precious metals” derivatives are 127 billion.
    # General market wisdom [gleaned from OCC Commercial Bank data] suggest that J.P. Morgan and HSBC are the two dominant players in silver [other precious metals]
    # Yet, the U.S. OCC tells us that J.P. Morgan and HSBC combined – make up 13.577 billion of the 127 billion BIS total [roughly 10 %].
    # The U.S. OCC tells us that Morgan Stanley and B of A and Goldman have an additional combined 70 TRILLION in derivatives – at the Bank Holding Company level – but they give us NO HINT as to what portion of these totals consist of precious metals activity. We are left to assume that this is because the OCC is only mandated to regulate Commercial Banks – while Bank Holding Companies fall under the purview of the Federal Reserve.
    # Unless J.P. Morgan and HSBC are LYING to regulators as to the extent of their silver market activity – there are other MASSIVE players in the silver price suppression game. Who ever these ‘players’ are – metaphorically, they MUST BE BLEEDING FROM EVERY ORIFICE with silver’s parabolic run up in price over the past few months.
    # Most likely among American entities are MORGAN STANLEY, B of A and Goldman Sachs – since together they are operating a 70 Trillion derivative “BLACK BOX” about which we know LITTLE to NOTHING as it pertains to precious metals.
    # Any way you slice it – precious metals data reporting on the part of American regulators is atrocious. Simple MATHEMATICS tells us a gold / silver ratio at 48:1 is EXTREMELY contrived and REEKS of manipulation on the part of the Federal Reserve and the Banks they are charged with regulating.

  23. sumo: I'd love to read that report... too bad they want serious cash for a copy:

  24. Sumo, that is great stuff!
    Thank you for the summary.

  25. JPM's control of the copper market is rather disturbing. There could be any # of schemes up their sleeves. The first thing it tells me is they don't intend to EVER cover their silver shorts. They will just offset those losss with copper long gains...What bothers me is the thought that they could conjure up a scenario which is copper positive while being gold/silver neg. One thing I've learned is they know how to spin a storyline at just the right time when everything else is being manipulated (currencies,gov stats,ect)....That is exactly how they started the ball rolling (down)in '08

  26. It's pretty obvious that JPM is trying to divert money and interest away from PM's into copper.

    Don't believe anything you see on CNBC about Gold and Silver, which according to those air heads, Gold has just entered a bear market, suffered key reversals, etc. They are part of Blythe's flying money brigade, TV Division. Just todays Gold/Silver "chart" showed a 5% decline in the week. Pick any other time frame and it's a positive not a neg. After the chart came out, Gold immediately dropped 3 bucks and silver took off 10 cents. I thought, Blythe you slimy bitch. A coordinated attack. ...

  27. The other thing is that JPM's control of the Copper market shows the CFTC is part of the problem, not the solution.

  28. I find it interesting they no longer have the bravado like before when they just rammed it all the way down regardless what technical stop there was. I have a physical buy order at 27.8 that still has not been triggered.

  29. Jack - at the Dec. 9th CFTC meeting they announced that the issue of position limits will be on the agenda for the Dec. 16th meeting. This is good news because given that the "problem" is BIG and MESSY, it will be talked about in a public forum. Gensler and Chilton have shown signs of ethics is a cutthroat unethical world. Do they have the gumption to enforce position limits? I don't know. Would position limits actually be enforced? Who knows. In any negotiation, talking about the issues in public always offers a chance for the good guys to be heard and the bad guys to make a mistake. I'm looking forward to next Thursday's meeting. It should be positive for PM's.

  30. Rui, I had exactly the same thing, but I cancelled it and bought around 28.50 because I thought the BoS would step in now that 28 withheld the paper attack on Wednesday, confirmed on Friday.

    Besides, I like to think that there is a number of BoS and they now have the problem that one could frontrun the other, so they end up buying earlier/quicker than before, not waiting too long for the dust to settle after a paper attack.

    The tendency of this to happen should increase with the number of BoS and the halflife of such interventions should become similar to that of a BoJ intervention. The next BoS we could see are the ETFs in India and China, the mysterious Arab investors, US Mint, and maybe even Comex, so game on :)

  31. Turd, as per your silver charts, my opinion (and it is just my opinion) is that any pushdown to the low 28 area is a gift which should be bought and that 28 will hold (Friday's trading session may have been the last opportunity to get a good price). If I were a betting man, and I am, I would look to buy on a break above 2950 on the March contract utilizing a buy-stop. Why 2950? Because a break above this number clears not only the congestion of the last few days, it also clears that big intraday spike which occurred in early November. A break above 2950 signals blue sky up to, and possibly surpassing, the recent all time high. This is merely my gut feeling (which is how I trade, strange as it may sound to some), but my gut is pretty big, so there must be some truth to it. Anyway, this is my projection and I'm sticking to it.

  32. Marcus: Turd sees it exactly the same way. I'd say your scenario is 65% likely. A gut-wrenching, bone-rattling plunge to 27 before the move up is 35%

  33. Jack: the generalists on CNBS do not have time, nor do they take the time, to fully understand the current situation. They have been wrong, they are wrong, they will continue to be wrong.
    The Turd has actually graced their airwaves on four, separate occasions, the last of which was back in March. They're not evil or conspiratory, they're just clueless regarding this Brave New World of Failing Keynesianism.

  34. Hey Turd,

    Given the old Wall Street expression, "buy the rumor sell the news" ( I think that is it), do you think it would be BENEFICIAL for PMs if the Chinese DON'T raise rates this weekend?

    I have seen you comment that those rate hiikes are already "priced in". Does it stand to reason that if the rate hikes don't occur, that they would then be "priced out", as it were, meaning higher prices for PMs?

    just wondering...

  35. Cris, I think so.
    A lot of the selling pressure this week was due to the pending "news".

  36. As much as I'd like it to happen I don't see USDX down in the 77 region next week. There's still too much focus on EU sovereign debt to shunt USDX down that far in my opinion. Also, with liquidity starting to dry up coming up to Christmas I'd more expect to see a range-bound market continue between 79 - 81 or USDX even climb some more until the market decides to have another look at the U.S. and realises the dollar needs a good kicking. The markets are kind of like a small child - can only focus on one thing at a time and the EU crisis is that thing right now. Whenever they do manage to finally get their arms around it look out dollar.

    On the Chinese rate hike I'd be surprised if they don't do it. They've been telegraphing it to the market quite openly and now their "man-made" inflation report of 5.1% released yesterday must be the final signal. The last rate hike was a surprise and battered the markets so I guess they've been trying to proceed a little more openly.

  37. What do ya'll think of the Silver Keiser's that just went on sale this morning?

  38. I bought a 1 ounce Keiser, for novelty.

    And buying silver is a hobby of mine

  39. Daily Spreadsheet Update. I've added prices for Spot, SLV and PSLV columns, and also Futures volume and open interest columns.

    Google Spreadsheet

  40. FWIW, Ted Butler's reading of the COT is that JPM is systematically closing out their short position, and that they are now doing so in the face of rising prices.

    Full steam ahead for silver!

  41. Talk is of a 0.25% hike by the Bank of China.

  42. sassballsgrandpa: Where can we access these updates?

  43. Position Limits announced on Thursday, any thoughts on what this will do to Silver on Thursday Friday? SLV options expire on Friday

  44. @dd click on the words in my post that say Google Spreadsheet

  45. @Justin,

    My hope is that we will see a boost in prices from ANY announcement of position limits that has teeth.

    As always, the devil is in the details, and we have to hope that there are no exemptions given other than ofr bona fide hedgers.

    But recent statements by Bart Chilton suggest at least he and Gensler undestand the problem and want to act, incidentally, as required by LAW.

    Just as Chilton put in written for Wed night that which he said publically on Thursday, I hope we get some sense of what will be proposed by Wed at latest.

    This has been a huge theme of Ted Butler's; I would encourage everyone to at the very least look at his public articles which can be found in his free archive by searching "Ted Butler" on Google.

    For $, he publishes a subscriber only newsletter 2-3x/week; full disclosure: I subscribbe and have found it well worth it.

    I thnk that you will see that as with Turd, he bases his arguments on facts and numbers. I find Turd is extremely helpful in his short term day-to-day prognostications. Mr. Butler is a long term guy and does not often talk about specific price. As a result, I personally find these two analysts to be quite complimentary and even synergistic.

    With re: options expiring, I hear you! I have a whole bunch of SLV calls at 29, and I keep wondering to myself if/when the Chinese raise rates, how this will affect them.

    In the end, this is all noise, though. The important thing is long term silver has nowhere to go but up. I recently bought a whole bunch of Jan & Feb call for SLV as well.

    One man's humble opinion...

  46. Here's a link to one of the last free articles Mr. Butler wrote.

    I think ANYONE reading this blog would be VERY interested.

    Note the date of publication: Sep 14, 2010.