What We've Learned Today

What a terrific, interesting day we've had.

We've learned/confirmed a lot today. As I type, crude is UP almost $3 and above $92. Copper is up over 8 points at 445.50. The grains all have double-digit gains. The CRB Index is up almost 6 points and is breaking out of its recent 6-week range. Of course, with that as background, gold is up....uhhh....errrr....oops, gold is down $10. Huh? How can that be?

If there was any thought that the "correction" over the past four weeks was organic and natural, fuhgeddabouddit. Its all bullshit. If you've needed further proof, I submit todays action in the PMs as exhibits #1 and #1A. The oh-so-obvious, reverse H&S bottom that will form on any move through 1345 in gold is causing the Evil Empire to throw as much new paper at the Comex as monetarily possible. Silver, too, is surviving against EE selling so heavy that it should be down over $1.00. The fact that it isn't is testament to its fundamental demand.

Look at the battle as it played out over the last 90 minutes or so on the Comex. Real demand spikes price around noon eastern. The battle to beat it back begins. At first, the PMs grudgingly give back ground. Then, as the close approaches and buyers begin to pull bids (which they are always going to do in volatile, crisis-driven markets like this), the consistent EE supply of paper finally begins to accelerate the downtrend right after 1:00. The "market" closes at 1:25 and the buyers go home. Not Blythe, however, as she keeps supplying her worthless, unbacked paper metal and price instantly collapses. A few buyers re-emerge for about a half hour or so to pick up some bargains but once they step away for good at around 2:30, down we go again. Expect this to continue the rest of the day. Here are one-minute charts of gold and silver that depict graphically these events:

As you might expect, I'm extremely confident in the aptly named "Turd's Bottom". However, since its clear that this entire "correction" is nothing but EE-inspired bullshit, don't expect Blythe to give up without a fight. Crude, copper, the grains...everything is conspiring to make Blythe's task impossible but she may be about to get a break. Check out these charts of copper and crude:

Both have moved within striking distance of breakout points. In fact, they are so close that if they don't break out tomorrow or Wednesday, they'll certainly pull back and consolidate. It will be this moment when Blythe will attack...sort of like how I described today's action only writ large.
Let's say copper pulls back toward 440 or 436 and crude pulls back toward 90, this will likely cause a lot of gold bids to be pulled. Blythe will utilize this weakness to put the fullcourt press on the PMs. I guess what I'm saying is: don't be surprised if we see some mid-week weakness.

Turd's Bottom is in, of that I'm certain, but logic and these charts tell me a semi-retest is coming. I'm expecting gold to trade down to 1320 and silver to 27.20. That should do it and I'll be a buyer at those levels. However, the monkeys will keep the pressure on so, if those levels fail, we may get a full retest at 1310 and 26.50. Not sayin we will get a second look at those numbers, just sayin we might.

That's it for now. Keep the faith. Don't get spooked by this volatility. Buy the dips. We will win. TF


8:00pm EST UPDATE:
Just a couple of quick things to follow up on this evening.
Gold is trading higher and is once again approaching the critical 1345 area. I've got a last of $1338.60.
Silver is up 0.07 and copper and crude are flat. It seems gold is actually playing some catch up.
Only one quick chart to share and that's of the CRB. I mentioned above that the index broke out today from the confines of a six-week range, Graphically, it looks like this:

This is one year chart. Note the significance of today's breakout. Because many of the components are so fundamentally strong, I believe its the real deal, not a phony, one-day pop. Time will tell but the index sure looks to be moving toward the 500 level and there is no way the PMs stay down at present levels in that environment.
Its eerily quiet across the board tonight. There's a 1MM+ person rally scheduled for Cairo tomorrow and I get the feeling that the entire world's on edge, waiting to see what happens next. ZH posted a link to an absolutely terrific, live Middle East Twitter feed. Seriously, what we all do without ZH? It's truly indispensable. http://www.mibazaar.com/egypt.html

More later if anything crazy happens otherwise I'll check in again tomorrow morning. Turd out.

Volatility

Well, I promised you a volatile week, didn't I? This crazy volatility, particularly in gold, is actually our friend. We discussed "V" bottoms last week and how unusual and unstable they are. I much prefer double bottoms and bottoms that bang around in greater-than-usual ranges...just like what we're seeing in gold. A lot of capitulatory selling is being expended but no further downside progress is being made. At some point in the near future, virtually all who want to sell will have sold and we'll be left with a lot more buyers than sellers. Just be patient. This day is coming very soon.

OK, here are your items of interest for today. First, DrC is very solid and looking to move higher. Again, if copper begins to head back toward its highs of late last year, there is no way that gold and silver are staying down. Last is 442.

Silver has been beaten back almost a dollar from its highs last evening. Thanks, Blythe!
However, I gave you the 27.20-60 area as major, short-term support. This is playing out exactly as expected...so far. Last is 28.11.

Gold, too, is resting upon its primary support area near 1325. Let's see if that holds. If/when it does, even  Ray Charles will be able to see the reverse H&S that will have been painted onto the chart. Last is 1330.

And, finally, here's the buck. Last night it looked like it wanted to break out higher. Today, it looks like it wants to break down lower. For now, watch 77.70 on the March, which is about 77.45 or so on the cash chart you see to the right. For now, whether or not a breakdown would be PM positive or negative is anyone's guess:

OK, that's it. Watch all four of those today and keep an eye on the headlines out of the Middle East. This has already been a wild week and its only 10:00 am Monday. TF



12:30 EST UPDATE:
Crude and copper are rolling, which is making the task of  "contaning" gold and silver quite difficult for the EE. I have a lst in crude of 91.41 and copper of 445, both right near their highs of the day.
Gold has rebounded almost $12 from its lows and silver almost $0.80. Gold will have a difficult time putting in a constructive close today but that's of no import. Watch silver very closely, however. As I told you back on Friday, a close above $28 today would be huge. It raises the probability that "Turd"s Bottom" is in to about 90%. A close over $28 tomorrow takes us to 95%. Any close this week above $29.50...well, by then it'll be quite obvvious to everyone that the correction is over.
So, watch silver. I've got a last of $28.30. Watch copper, too. If you really want to pull for something, pull for DrC to close above 447. That would be HUGE.

1:30 EST UPDATE:
If anyone still questions the existence of the EE and their malicious intent, you simply need to look at the 1-minute chart since 1:00. The monkeys are hammering away, trying to constrain the metals, silver in particular. They see the charts, too, and they will give anything to keep it under 28. Oh, well. Too bad. I've got a pit session close of around 28.12. However, you can bet your sweet batooty that they'll keep hammering away on the Globex so don't be surprised to see a dip below 28 before 4:15.
Gold is just a joke. As mentioned above, fucking Helen Keller can see the reverse H&S on the gold chart if it moves UP through 1345. Blythe is giving it everything she's got to keep it down. The fact that crude is up almost $2.50 and copper is up 8 only serves to illustrate the absurdity and criminality of the bullion banks.
Check back soon for some closing charts and commentary. TF

Buckle Up!

Well, well, well. What an interesting time to be alive.

Someone had mentioned earlier how this weekend kind of felt like fall of 2008...checking the headlines, wondering how the markets would open on Sunday night and Monday. As it is, gold traded only about $5 higher before succumbing to what has become rather significant selling pressure above the $1345 level. As we head through this week, that level has become the one to watch. Geo-political events, rising crude prices and strength in silver and copper should help provide a push but, clearly, the Forces of Evil have decided to make their resistance there. See for yourself:

As has been the case for the past several days, silver is stronger and is leading the way. Actually, the trend of silver leading gold has been in place since August of last year but I digress. Take a look at this 8-hour chart. I chose that time frame only because it illustrates as concisely as possible the significance of the $28 level I mentioned so frequently last week.

Moving back through $28 tonight is step one. Closing above there tomorrow or Tuesday is step two. Extending through $29 toward $29.50 is our next goal.

Here's a dollar chart to ponder overnight, as well. Once again, just when all seemed lost for the greenback and it appeared ready to plunge, world "events" step in to save the day. Hmmmm.
At any rate, it is struggling with the old 78.47 level as you can see here.

Onto other matters, I received several emails with a link to this FOFOA piece. I must say that its pretty well written and it makes some terrific points. In case you haven't seen it yet, here it is:
http://fofoa.blogspot.com/2011/01/who-is-draining-gld.html

I also came across this brief interview of Peter Schiff. The dude that interviews him is such a tool that it's almost unwatchable...but...if you can bear with it, Mr. Schiff makes many of the same points you've heard me make ad nauseam here over the past few months:
http://www.youtube.com/watch?v=AhtQPc951hA&feature=related

Many have conflicting opinions of "debka" as a news source. I've read on several occasions that it uses the Mossad as source material for its stories. Whether or not that's true I have no idea but I've followed the site long enough to realize that their information is no more inaccurate than CNN or Fox.
At any rate, here is debka's latest take on the situation in Egypt:
http://www.debka.com/article/20609/

Lastly, Ambrose Evans-Pritchard gets it. Anytime you see a link to one of his articles, click it and read it.
In this one, AEP discusses what you and I discussed back on Saturday, namely how soaring global food prices are affecting global political stability.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8291470/Egypt-and-Tunisia-usher-in-the-new-era-of-global-food-revolutions.html

That's it for now. Get some rest. Its going to be a wild week. Turd out.

A New Record!!

No, not for pageviews...though if yesterday hadn't been a Friday, we almost certainly would have set one. This record is NINE. That's the number of charts that I'm about to unload on you. But first...

I hijacked this from ZeroHedge as I can't find it anywhere else. Please take time to read:
http://www.zerohedge.com/article/tracking-gold-conspiracy-gatas-must-read-presentation-cheviot-asset-management-sound-money-c#new
Here's my favorite line. How many times have you heard me say this?
"Second, all technical analysis of all markets now is faulty if it fails to account for pervasive and surreptitious government intervention."
And if you'd like to read the rest of Kipling's classic, you can find it here:
http://tfmetalsreport.blogspot.com/2010/11/change-of-pace_13.html

Eric King has so much valuable information on his site today, you could spend hours there. I'd say this is a pretty good place to start:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/1/27_All_100_Ounce_Silver_Bars_Will_be_Gone_in_a_Matter_of_Days.html

Harvey refutes the current "story" behind the unprecedented, one-day drawdown in OI this week.
http://harveyorgan.blogspot.com/

Lastly, I know its the weekend and its fun to give your brain a few days off but you absolutely must keep an eye on the Middle East. There are a wealth of links on Drudge. I'll be checking it often:
http://www.drudgereport.com/
For example, check this out, Note the reference to The Muslim Brotherhood:
http://apnews.myway.com/article/20110129/D9L25G0G1.html
ZH has a link to a story about protests spreading to Saudi Arabia, which would be very disruptive to peace and commerce, to say the least. Again, I mean this only as it pertains to the PM trade. Any attempts to hijack the comments below will result in comment deletions by yours truly.
I traded emails last evening with my pal, TraderDan, and he said this regarding the next few days:

"If we come in Sunday evening and that stuff is still going on in Egypt or if it looks even worse and appears to be spreading to perhaps Jordan or some other neighboring nation, crude is going to jump another $4 or even $5 and gold will be up another $30 or more.

If things look tamer, gold will probably drift lower as the mental midgets that constitute the world of today’s hedge funds forget all about global instability and turn their short sighted focus to the “improving economy”. Makes me want to scream at the utter stupidity of the crowd that really believes you can just print your way out of economic woes."

Crazy times we live in....

Speaking of crazy, what a week, huh? For me, personally, it all started when I typed this back on the 20th. If you haven't read it yet, I ask you to do it now because it provides necessary context:
http://tfmetalsreport.blogspot.com/2011/01/1600-gold-by-june-10-2011.html
You might also review this:
http://tfmetalsreport.blogspot.com/2011/01/end-is-near.html
And this. As you know, gold then traded lower but silver did not:
http://tfmetalsreport.blogspot.com/2011/01/step-one-complete.html

We now sit in a rather interesting position. Have we, in fact, now put in what will henceforth be known as "Turd's Bottom"? Or, are we simply hoping for a bottom and Blythe is now sharpening her giant silver auger, preparing to bore us out and send us packing to CVS again for Prep H and maxipads?
As you might expect, I believe in the former but I also know that the latter is always a possibility.
One thing that is certain, we will experience some crazy volatility in the PMs this week. The tightest range of any day this past week was Tuesday, when it was fifty cents. The other four days all saw price ranges of over a dollar and Friday the range was $1.73. Incredible! Expect this to continue in the new week as PM "market" participants attempt to discern the future of price and trend. (If they all just read Turd, they'd know!)

OK here are your charts of interest. First up, here's the CRB. Another weekly high makes places it UP six of the past 7 weeks:

Here's a weekly crude oil. Note how, like gold, it has had a steady UPtrend since the pivotal month of March 2009, when FASB capitulated and the entire charade began:

On to copper. I drew some trend lines on here but I'm not sure if they mean much. Mainly, this commodity has been rangebound for nearly two months. As long as it stays within the range, there won't be any additional spillover selling into the PM pits:

Here are your PM charts. First up is silver because its pretty self-explanatory:

Now, take a minute to look at this weekly gold chart. The trendline is arbitrarily drawn. Its not meant to be exact. However, note the percentage moves of the three corrections:

Isn't that somewhat odd? If we've seen the lows, then the last two corrections will have ended at almost the exact same percentage drop. In fact, using the rounded numbers above, drop #2 was 8.71687% and drop #3 was 8.71271%. That's freakin bizarre. Very strange. Read into that what you will.

OK, I want to close this note by getting back to the very real risk to global peace and security that is being caused, in part by the skyrocketing costs of food. Fat and happy people will "put up" with a lot. Hungry, desperate people will do anything to feed themselves and their children. What you are seeing now play out is just the beginning. The American political/financial complex, in its sickening attempts to maintain status quo and retain power, has brought this evil upon us. It will get worse. For confirmation, as you look at these charts ask yourself if the staggering percentage moves are from global economic growth and demand OR are the moves caused by a nearly infinite amount of new dollars chasing a static, if not declining, amount of goods? Knowing what we know about QE to infinity, will these price trends reverse or will they continue and, perhaps, even accelerate? If Egypt and Tunisia are rioting now, which countries might be next? Are you glad you own physical PMs? If you don't, why not?

One more thing, here's a chart I don't usually give you but its so odd and so telling that I felt I must. Its a daily chart of the US long bond (30-year bond future). Note that since early December, the bond has been in a very tight, 3-point range. Words cannot describe how strange this is and it utterly wreaks of manipulation by the Fed. Look at the precipitous decline from October to December as the world came to grips with QE2 and the likelihood of QEinfinity. Rates were skyrocketing. As you know by now, we can't have that! Do you recall what cartoon Blythe taught you last week about the importance of low interest rates in maintaining the Great Ponzi? If not, maybe you'd better re-watch:
http://www.youtube.com/watch?v=9FGVtJRWP6k
And if the only thing preventing outright ponzi collapse is low interest rates...and if the only way the Fed can keep rates low is by QEinfinity and active participation in the treasury "market"...then have we dispelled any doubt you may have about the reality of QEinfinity? I hope so.

The end of the Great Keynesian Experiment is upon us. Prepare accordingly.
Turd out.

Freaky Friday

Well, we survived the onslaught last night.

OK, so my 1320 bottom in gold is looking pretty shaky but, you've got to admit, 26.50 in silver is hanging in their like Rocky against Creed. IF 26.50 continues to hold, we will have found a VERY STRONG bottom...one that, if we ever get down there again, you can use as a base price for big, confident purchases. But, that's a big IF.

So far, so good today, We've rebounded overnight and, even though Blythe unleashed her goons right on schedule this morning, price is hanging in there. Astute Turdites will have noticed by now That I've bowed to popular pressure and added a 24-hour copper chart to this page. This will be a temporary add but one that I feel is necessary in the current environment. One thing to note, it shows a spot price which is about 2 points below the March contract that I will continue to reference so, please, factor that into your thoughts when you look at that chart.

That said, look at copper this morning!

This is really, really nice and simply adds more bewilderment to the gold chart. IF we can hold this price and close above the 438 level, we will have had a very good day and we can feel even more confident that we are very near the bottom in the PMs.

Now look at silver...very strong at 26.50. Not ready to proclaim it "stronger than mustard gas" yet, but getting close:

IF we can mount a rally today...and we might...and drive price back UP through 27.20, chances will greatly increase that 26.50 will NOT be significantly breached and we can begin buying with a higher degree of confidence. Any move through 28 and we can declare this correction over.

I leave you with gold. The first thing it needs is a relief, short-covering rally back UP through 1325. Absent that, it almost looks like a waiting game for the next leg down. Yuck.

I'll have a small window of opportunity to update and add thoughts around 11:30-noon EST. Please be sure to check back then. In the meantime, keep the faith and watch copper and crude for clues. TF


NOON EST UPDATE:
Turd happy today.
We are rolling and our bottoms are looking more secure than ever. Let's just keep it up for another 90 minutes or so. If you want something to pull for, watch March silver very closely. A close above $27.80 and we'll have ourselves and UPward outside reversal day and that would be a very big deal. It would almost ensure that last evening saw the low and mean that, though a near re-test was still possible, even that becomes unlikely. Here are your mid-session charts.

Again, a close above 27.80 and a move UP early next week through 28 and we can all breathe a sigh of relief and begin to get very excited. Here's gold, which sure looks a lot better than it did earlier:

Copper has backed off but crude is up almost $4! Its as though the world has awakened to the possibility of revolution in Egypt. Recall that I mentioned last night the The Muslim Brotherhood is now getting behind the "movement". This likely spells doom for the Mubarek government. It also means that the next government will be Islamic law-based, not the current secular dictatorship. Without condoning either, you must understand the implications of this for peace in the Middle East and traffic through the Suez Canal (which is apparently what the crude pit is worried about).
That said, if anyone tries to turn this thread into a pro or anti Israel slugfest, your comments will be deleted. This is my blog and I make the rules. If you want to argue incessantly about Arab-Israeli-US relations, head back to ZeroHedge. Lots of willing accomplices there for you to "discuss" things with.
More after the close. watch $27.80 very, very closely and pray like MCHammer. TF



4:30 EST UPDATE:
This must be brief as Mrs Ferguson and the little turds have some birthday plans for me.
What a terrific day. We managed to get an outside reversal day painted onto the silver chart. This is great news. Lord knows we've sure been on the receiving end of some downward reversals so its nice to have an UPward one. for once. We should fell very confident that we've seen the lows. Next week will most likely bring us significant volatility within a consolidating range before we begin moving back toward $30 and $1400.

If you haven't yet, please read today's update from Trader Dan. As a birthday gift, Dan has summarized most of the main points I would make if I had the time.
http://jsmineset.com/2011/01/28/hourly-action-in-gold-from-trader-dan-397/
I'll post for you a comprehensive week-in-review tomorrow. Until then, thanks for your participation in this wonderful and fun blog. Please tip an adult beverage in my name this evening, kick back and relax and get ready for what will surely be a wild week come Monday. Turd out.

Happy Birthday, Turd!

I told you last night that today was a big day. It is!! Its the anniversary of The Turd's birth!

Like most of you, I have found that birthdays are less fun to celebrate as I get older. There's always this looming reality that I'm now statistically closer to death than birth...but...what can you do? Time marches on. Fortunately, for me, I am surrounded by Mrs. Ferguson and the two pre-teen turds and, really, who can ask for more than that? I am blessed in so may ways that I try to thank God every day for my family, my friends and, yes, even all you Turdites. This blog is growing so quickly, I am struggling to keep up. I have some very interesting ideas of where we can go from here but I'll leave that for another day.

For now, I'll close this note with a personal favorite musical interlude.
Everyone says that "music was better when they were younger" but, in my case, this is definitely true. This song was written and released back in my college days and, at the time, was just simply part of another cassette in my cassette case. (If you're near my age, I bet you had one of those, too.) In the years since, it has become a bit on an anthem for me and I seem to always find myself listening to it around my birthday. Its about hopes and dreams and how the battering ram of life can beat most everyone into submission. You and I are different, however, but like "Peter" in the song, just because we've seen our dreams come true, that "don't make us no hero, just one of the lucky few".

Upon further review, I felt I needed to add the rest of the lyric from the best verse:

"And Peter's seen his dream come true
but that don't make him now hero
he's just one of the lucky few.
If a man can't change the world these days,
I still believe a man can change his own destiny.
But the price is high
and its gotta be paid.
For everyone who survives
there are many who fail.
I've seen my friends caught up
in that cross fire
all their dreams and hopes smashed
on the funeral pyre.
I will never give in
until the day that I die.
I've got myself some independence.
Carved out a future with my two bare hands.
Oh my friend oh my friend oh my friend...

Give me a few minutes and I'll be back with a usual morning take. Until then, enjoy:

http://www.youtube.com/watch?v=kimPYBRnq68

Sour Grapes

OK, I admit it. Maybe I'm just bent out of shape because I gave you 1320 and 26.50 a week in advance and, for about 18 hours, I looked like frickin Nostradamus. Instead, I'm Nostradumbass.

I believe we have reached a rather interesting point. Everyone who knows anything about precious metal trading (myself excluded) from Harvey to Ted to Jim to Dan to Rob to Eric seems utterly confounded by the action in and out of the pits. Its almost surreal. Harvey tonight begged people to get out of paper metal, buy physical and look the other way. Ted Butler seems to have his head spinning so fast he doesn't know which way is up. Look at this freaking chart, for the love of pete:

I wish I had something witty or insightful to say but, the truth is, I'm out of ideas. I'm not just going to make something up and grasp at straws just to make you believe I have an answer for everything. I don't and I really don't now. As crazy as it sounds, the only semi-plausible explanation lies with those crazy silvergoldsilver bears and/or Lady Gaga (or whatever that email lady's name is).

The dollar is in the shitcan.
The Fed is forced to print infinite amounts of money to continue the ponzi.
The U.S. economy continues to sputter if only because of the ongoing, massive cash infusions supplied through the Treasury by the Federal Reserve.
The EU is an economic basketcase as many individual states are bankrupt and their debts are carried by the other, healthier states.
Yet gold and silver are being indiscriminately sold. Crude, too. And copper.

I'm open to any and all answers from our fine group of commenters. Please post your most rational and believable explanation below.

To close on a bright note, we exceeded yesterday's total pageviews by 10% today and set a new, single-day record at 28,560. We may soon approach the point where we need to move from blogspot to our own dedicated site. I'll keep you posted as I will definitely seek out your input if/when the time comes.

Turd out.


11:30 pm EST UPDATE:
First of all, thank to everyone for the moral support. This post was written right after I saw that 5-minute, 50 cent beatdown at 8:30 EST. Wouldn't it be funny if that ended up being the low?

OK, anyway, a couple of comments tonight were so terrific and interesting, I feel that they merit inclusion in the regular text. First up, my man "quintas" checks in with some very good advice:
"Turd - don't sweat it. Nobody can read the price action over the past few weeks, except those insiders who are causing it, obviously.

The Metals market has now, in my view, officially gone full retard. Sure there are people who've been calling for a pullback and they're getting one, but then, there's always someone (many people usually) calling for precious metals to crash, so when it does drop there's always someone who looks like they saw it coming and is therefore accorded visionary status by some.

I've been trading metals for quite a few years now, and what's going on at the moment feels substantively different from what has gone before.

Over time we have all become familiar with the games that the Bullion Banks normally play. OpEx smackdowns, chart painting, engineering big moves around jobs number announcements etc. Been there, done that.

I am guessing, and given the opacity of the PM markets that's all one can do, that we are near the endgame right here. I don't know if the talking bears are right. I have no way of knowing if the supposed Silver raid on the Comex next month is anything more than the crazed fantasy of a nut job with a keyboard and a Yahoo account, but I will say this:

There are far too many little signs to ignore, and they strongly suggest that this time it's different (I know, I know). Physical metal is genuinely difficult to obtain in quantity - look at Sprott's difficulties. We see backwardation in Silver on the LBMA. There are phenomenal, record sales reported by the US Mint, bizarre movements in Comex inventories on a daily basis and huge withdrawals from SLV and GLD.

Also, rarely if ever before have I felt the fundamentals to be SO far out of line with the price action, and the activities of the EE to be so blatant - as if they just don't care who sees what they're doing. I'm not suggesting that they care about the CFTC reining them in, but rather that they are blatantly running the risk of discrediting their own paper market in the eyes of the world. Why do that, risking killing the golden goose, if you don't have to?

For what it's worth, my read on all of this is that the crunch point is coming. Maybe soon. The EE is shaking the market to within an inch of its life to scare people away from taking delivery, and possibly also frantically accumulating physical behind the scenes. Smells like fear to me.

I feel like they have my nuts in a vice at the moment, but then again, how much bigger is the vice their nuts are in, being short half a year's global production of silver and facing a physical squeeze?

I will not surrender any physical metal right now. At the risk of sounding a bit tinfoil-hatty, 'That's exactly what they expect me to do'. Hedge with paper? Yes. Sell? No"


Next, and I must admit that I laughed out loud when I saw this, apparently "Wynter Benton" cited yours truly as a "great technician". Oh, if he/she only knew...
"Turd,
Sounds like this wynter_benton knows you.

This seems to be her latest:

"I am not a technician like Turd Ferguson and other far more accomplished technical analysts so I'll leave it up to them to interpret the charts from a purely technical viewpoint.

But in my opinion, the low in silver has now been reached. I base this conclusion on the fact that Blythe could not puncture yesterday's low point. Not even close. Gold got blasted right through 1322 like a hot knife through butter yet silver stubbornly clung to the $27 level and was no where close to the $26.50 level. Believe me, if Blythe wanted silver to crack $26, she has the firepower to do it easily.

The reason that she didnt was because she must somehow realize that the people she was selling her Mar contracts to were going to be standing for delivery. Believe me she knows when these people are buying.

Which gets me to my original post. This whole slam down in precious metalsm was all about silver. Gold was just the unfortunate mechanism and instrument by which Blythe worked her magic. She slammed down gold because she knew eventually traders would not be able to stand for delivery in Feb. The gold market is just too big. But you can buy every ounce that the comex CLAIM to have with a mere $2.8 billion. Blythe has access to that type of money in the folds of her couch at The Morgue's HQ.

You can see clearly now why she needs to suppress the price of silver and force traders to cough up the Mar contracts. Once the slam down in gold no longer has the desired effect than it is time to abandon that strategy. My guess (and it is only that for now) is that we have seen the low for silver.

If she is at all competent, then she will be sending the price of silver up by at least $2 by Feb 8 to make it more difficult for hedgies to raid the Comex. But we'll have to see. Either way as long as hedgies and big investors cough up about $5 billion in Feb, then Blythe and The Morgue will be in a world of hurt.

I want to clear up another point. Some people are interpreting that I am predicting a default in March. That is definitely NOT what I am predicting. All I am predicting is that there will be massive contracts that will be standing for delivery and each one of these contracts will be offered a huge premiums which will be settled in cash. You see, it is always more profitable to buy the Mar contracts settle in cash and then buy the May contracts and do it all over again.

It is as if you buy $1 billion worth of silver, sell it for $1.2 billion and buy the exact same position for $1 billion again. You really don't lose anything and someone automatically gives you 20 percent and you get to keep your position exactly as it was before. Well not exactly because the equivalent May contracts are slightly more than the corresponding Mar contracts. It's up to you what you want to do with your money but since it was so easy in December, why not do it again in March and then again in May?

It's as if you show up with 1 ounce of silver, The Morgue pays you 120% of the value of your holding, and you go back into the pits and buy it back at face value. Nothing could be easier and they are defenseless to stop it.

I know for a fact that the silver shorters are desperately trying to come up with physical silver from anywhere they can get it--from the SLV, the US Mint, foreign ETFs, anywhere they can get physical silver. Too bad it still won't be enough.

So watch for February and see how high silver spikes up. This whole slam down was The Morgue trying to get people to stop hoarding silver, so keep buying physical silver and they will fail. Good luck to all physical silver holders. Our time is close at hand."


And finally, our friends at silvergoldsilver stopped by again. I, for one, can't wait for the next video. I just hope they work the name "Turd Ferguson" somewhere into the text. 
"I am the bears. You can listen to me at http://www.youtube.com/user/MrSilvergoldsilver?feature=mhum
for now until my site gets back and running as an information site, no more bullion selling. I am a former wallstreet trader. I once rigged the game. Come over and listen. I warn you-I am the merchant of truth, sometimes my bluntness is blunt."


OK, that really is it for tonight. Tomorrow is a big day. I'll tell you why in the morning...TF


I lied...one last thing...I mentioned on ZH earlier that the Egyptian "rebellion" could be contained by the Mubarek government IF the Muslim Brotherhood stayed out of the fray. According to debka, they are about to join the fray. Not sure what it means for metals prices but this is definitely something you need to keep an eye on: http://www.debka.com/article/20598/

This Must Be Read

I have no idea of whether or not I can do this or if its legal. If its not, I apologize in advance.
This Mike Krieger is like my long-lost brother. Every time he posts something on ZeroHedge, I feel like I had written it myself (only if I had, it would be a lot less eloquent).
I've chosen to copy and paste it whole because I wanted to add my personal emphasis for you, my dear reader. Its my site and I can do that kind of thing. :)
So without further ado, I give you Mike Krieger...

Submitted by Mike Krieger of KAM LP

Terrorism is the best political weapon for nothing drives people harder than a fear of sudden death.- Adolf Hitler

Sometime around the year 2005, perhaps a few years before or after, America will enter the Fourth Turning. A spark will ignite a new mood. It will catalyze a Crisis. In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. It could be a rapid succession of small events in which the ominous, the ordinary, and the trivial are commingled.

Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression

-  Strauss & Howe in “The Fourth Turning” written in 1997

All people who try to get elected to government are in love with government, it’s just that the Democrats are in love with one kind of government and the Republicans are in love with another kind of government, and government is going to continue to grow until there is revulsion for government.

-  Jared Dillian (he puts out a great daily piece I would look into it at http://www.dailydirtnap.com/)

The Global Revolution:  Welcome to Phase Two

When first I mentioned the food riots in Tunisia and Algeria in my note two weeks ago the former authoritarian leader Zine al-Abidine Ben Ali had yet to flee to Saudi Arabia with much of his nation’s gold.  What I find so amazing about this whole situation is why someone in their right mind would take the time to take some shiny little element that is in a bubble and that you can’t eat in the chaos surrounding one’s escape to another nation.  Surely he has hidden foreign bank accounts and since gold is just another “fiat” currency according to a Wall Street strategist, why bother?  He must be some right-wing radical that likes the Constitution and is therefore anti-American.  Isn’t that right Mr. Potok?

So back to the food situation.  When I say that we are in Phase Two I am actually not referring to the simple fact that a leader with a 23 year rule under his belt was deposed in weeks seemingly out of nowhere, I am referring to the actions that are being taken and will be taken all over the world in response.  As I have said time and time again, government’s today throughout the world could care less about their citizens.  When they show signs of caring it is merely to satiate the people back to sleep so that they can stay in control.  The leaders of governments throughout the world today consist of the worst humanity has to offer.  The most egomaniacal, narcissistic specimens on the planet (with some exceptions of course, Ron Paul for one).  They care about power and maintaining it.  So what does this have to do with food?  A lot.  I have stated in the past that we are in revolutionary times.  The system that has existed for most of our lives (all of my life) is crumbling under its own weight of insanity, immorality and fraud.  The last ditch effort by the global elites has been to flood the world with money and make sure nothing they are invested in ever fails or defaults.  This bought them a little time and their hope was that rising asset prices would boost confidence and lead to a recovery that could maybe keep this scam monetary system running for another decade or two.  The problem with this strategy is that we are in the Fourth Turning.  My generation is coming into its own and we don’t buy the bull shit of our parents’ generation.  We don’t believe in Democrat or Republican.  We don’t believe in the system itself.  We will be the ones making the decisions going forward.  We will default on the astronomic promises our parents made to themselves.  We will create an entirely new monetary and financial system.  Real free-market capitalism will flourish, not this socialism for the rich garbage Obama loves so much.   We will focus on doing good while doing well.  Not because the government forces us to, rather because we are witness to and victims of this sick, twisted creation of our parents generation that celebrates total greed without the slightest concern of the consequences to others.

With this as a backdrop, the leaders of all nations are scrambling to somehow survive in their positions through this time period.  What is happening across the emerging world now is countries that had increased prices for food and energy are reversing policy.  Countries such as Saudi Arabia are bidding for world grain supplies.  Think about this for a minute.  What this means is that what is being employed around the world at a time of global crop failures is essentially price controls.  What happens when you have price controls?  No elasticity of demand.  What does that lead to?  Even worse supply/demand imbalances and ultimately food shortages and everything goes to the black market and farmers stop planting as much.  So what we now have is the very beginning of a food price spiral that will lead to prices in dollars at unimaginable heights.  I would start to be very careful of the quality of food you buy and where it comes from.  I assume companies will start mixing in all sort of fillers and garbage into their foods.  Especially in emerging markets looks for increases in tainted or corrupt food supplies.

This will also affect oil prices and they should move substantially higher.  While people still quote WTI as the oil price and claim it is down, this is total and complete nonsense.  Nobody pays WTI prices.  Brent is $98/b and Asia Tapis is $101.50/b.  Anyone that is telling you oil prices are moving lower are either lying or don’t know what they are talking about.  For example while WTI is down 7% from recent highs, gasoline is down only 4% and heating oil is at the highs.  Do you pay WTI or do you buy gasoline?  There is also this idea that OPEC is going to come out and save the world by boosting production.  Good luck with that.  First of all, OPEC’s true spare capacity number is highly debatable and I am in the camp of those that thinks  they do not have control over the market at this point.  Banana Ben Bernanke does.  Secondly and most importantly these Arab nations are short food and we are in a food crisis.  They are also amongst the most vulnerable governments to overthrow.  You think for a second that they will crash oil as food prices are soaring?  Oil is their currency.  For what it is worth I think many of these regimes will be history within a year.  Then the Western governments will fall one by one.  This is the Fourth Turning.  There is no point trying to stop it, the only thing you can do is prepare.  There is precious little time left for that. 

U.S. Treasury Bond Holders Will Never Be Paid

Remember the old saying, “if you don’t know who the sucker is in the market, you are the sucker.”  Well ladies and gentlemen if you own U.S. treasury bond you are the sucker.  There is one way these things will be paid back.  With completely worthless pieces of paper, OR not paid back at all.  The one thing linearly thinking investors are not appreciating right now is that there is a gigantic awakening occurring in the United States that will develop into a successful and peaceful revolution.  The new leaders that will emerge will consider this debt illegitimate as I do personally.  It will not be paid.  Think it can’t happen?  Watch.

Meanwhile, looking at the chart of long term treasury yields what we see is a coiled pattern where rates have been in a tight range ever since breaking to the upside in early December.  I think these rates are about to break hard in one direction and I think that direction is higher.  When I looked at the commentary from the Fed yesterday and I saw this line “expectations have remained stable, and measures of underlying inflation have been trending downward,” all I could think was if I was a bond investor I would just say “alright I have had ENOUGH.”  I think that some of the biggest moves ever in the history of financial markets could be coming within the next 1-2 months.  I would focus on treasuries and precious metals.

Silver Disobedience

While the 20th century was a brutal and violent one, some amazing things happened.  Two prophets, Martin Luther King Jr. and Mohandas Gandhi we able to usher in a period of tremendous social justice for their respective causes through non-violent means.  We are now entering a time where the people (completely and totally sold out by their leaders and masters at the banks) must exercise civil disobedience and non compliance with an evil system.  Fortunately for us, the most effective and powerful means of this I can think of is completely legal and consists of buying physical silver and taking possession.  Although the comex paper silver price is showing a drop, this is not reflected in the physical market which is tight as a drum.  Many major dealers are sold out of product all over the world and the U.S. Mint recently stated that they sold 4.7 million silver eagles in January alone, a new record and the month isn’t even over.  If you do not like the way the banks and politicians are robbing you blind in broad daylight buy physical silver and take delivery.  I think it is abundantly clear that the raid on the comex silver market is a desperate attempt to shake out some supplies since the actually physical market is being depleted rapidly.

One of the irrational “fears” out there is that the Fed will somehow tighten rates.  Get out of the emotional brain for a second and into the logical one.  The Fed funds rate is 0-25 basis points.  The two year treasury yields 0.60%.  If the Fed raised rates even to 0.50% with the two year note at 0.60% total and complete chaos would ensue and the government wouldn’t be able to deal with the rising costs of debt service.  It is just not going to happen.  They will print and print until the whole corrupt house of cards crumbles to dust.  

V for Victory

We are in revolutionary times.  The new generation will not accept the Federal Reserve.  We will not accept feudalism by an oligarchy of banking criminals.  We will not forget the Constitution.   We will not accept SDRs or any global fiat currency.  We will not accept global government or “governance” (sounds so much better doesn’t it).

As I went to grab dinner last night, I noticed V for victory posters plastered all around downtown (http://www.youtube.com/watch?v=s5GlOeEUyQ4&feature=related).  Go Boulder we are winning the infowar!

Turn off the tv and think for yourself,

Mike

Select ratingCancel ratingPoorOkayGoodGreatAwesome

Cancel rating

Poor

Okay

Good

Great

Awesome

Continued Frustration

About two hours ago, the entire commodity complex got whacked, particularly gold, when the Fed announced it was temporarily withdrawing a special liquidity program. See here:
http://www.zerohedge.com/article/here-it-comes-us-suspends-new-issuance-under-supplementary-financing-program-200-billion-liq

Here's the frustration: gold gets sold off in a larger % today on this bullshit/spin announcement than it went up on actual news yesterday. Apparently, the mindset still exists in traders, both man and machine, that rallies need to be sold. Shit's gettin old.

Now the good news is, silver and copper have both held in there quite well. In fact, we have the makings of another FUBM on the silver chart. Whether that beautiful pattern emerges again is of no real consequence, however. What is nice is that while gold was making new lows down near 1315, silver held in above its earlier lows and only fell to 26.77.

There's still about 20 minutes left in the pits so let's see how things finish out. Since this wasn't a simple "pull-the bids" EE takedown, I kind of doubt that it will continue onto the Globex but we'll see. Let's hope that sanity prevails, silver continues to bounce back, copper stays above 432 and gold can eek out a close above the low of Tuesday at 1321.90. On the bright side, we now have a true double bottom in gold...maybe even a triple bottom if you include yesterday. Keep the faith, the move to 1315 was simply an air pocket of sell stops from nervous longs. Now that they've been taken out without starting another, classic gold waterfall, 1320 can become even stronger support.


I have something very interesting to share with you later that does not have anything to do with trading PMs. Please be sure to check back later. TF


3:00 EST UPDATE:
Gold continues to dive as I have a last of 1313 with a low of 1311. Crude's getting taken to the woodshed, too, down almost $2 to $85.50.
On the brighter side, copper and silver continue to hang tough at 433.30 and 26.87.
My hopes for finding a bottom are on shaky ground. I'm reduced to crossed fingers, wearing a lucky t-shirt and prayer. (obligatory) http://www.youtube.com/watch?v=umcEDoe6cSA

Lastly, check this out. I find it interesting but, probably, meaningless.

More in a bit...

Building Strength

The overnight action was disappointing but not necessarily surprising. The metals needed to back and fill some and they've done just that. Today becomes a very important day for our "recovery". Here are your charts of interest.

We must start with the dollar. I've seen a few comments wondering why I keep posting dollar updates. Please understand the historical, inverse relationship between the $ and gold. Again, gold is the ultimate anti-fiat. For the past few months, that correlation has been interrupted. That this change in historic correlation coincides with QE to infinity wreaks of manipulation by the Fed. No matter, it won't last. In the near future, the algos will hit a flipping point. Will it be 1350 v 77? Maybe 1375 v 76? Its impossible to say. What we do know is that it will happen. Soon. Take a look at this sick pig:

OK, on to the fun stuff.
Take a look at DrC! I mentioned last evening that I was a little concerned that we hadn't yet broken the 2011 pattern of lower highs and lows. Well, we're getting close. I have a last of 435.15.

Next up on the happy train is silver. You know how I feel about making predictions off of images one chooses to see in charts but...As bottoming processes go, a reverse head & shoulders works pretty well for waking up the masses that its OK to get back in the water. Is there one forming here?

The only real trouble spot is gold. I have a last of 1335. It needs to rally back through 1340 and 1345. Soon. I believe the strength in copper and silver will give gold investors the fortitude to pull this off but it must be watched closely as a move lower in gold could halt the momentum of those two markets and everything could stall.

All in all, however, I am very encouraged by the action since Tuesday. Its still going to be some tough sledding to get through 1345-50 and 28 but its going to happen. If not today, tomorrow. Watch the dollar and DrC for clues.

I leave you with three excellent bits of reading. I'm out of time so just the links. In your case, please make the time to read all three today. Maybe I can comment on them later. TF
http://news.coinupdate.com/more-than-gold-and-silver-prices-are-being-manipulated-0644/

http://www.commodityonline.com/news/China-vs-JPMorgan-the-battle-over-gold-and-silver-35898-3-1.html

http://www.marketoracle.co.uk/Article25884.html
This one is a must read.

An Eventful Wednesday

Well, well, well. What a day we had.

Let's start tonight by summarizing what needs to happen next. I truly believe we have found our hoped-for bottoms at 1321 and 26.54. We have risen nicely from those lows. The HUI has rebounded sharply and the FED confirmed today what we all know, namely that QE will last until The Second Coming. Next up, we need some follow-through. First, let's look at the most troublesome of the charts, copper:

Note the pattern of lower highs and lower lows, though the new low yesterday was only fractional. Now that we've regained 428, it is vital to the nascent PM recovery to have copper retake 438, as well. The FOMC minutes should give us enough fundamental strength to make that happen but no one is allowed to launch balloons and shoot off fireworks over the end of the PM correction until it does.

Now let's look at silver. It looks a lot like copper but its next objective is a lot closer:

Any sustained move through $28 should seal the deal but it won't be as easy as you might think. Don't get discouraged if we have to bang away at that level for a bit before we get through. Lots of fresh paper shorts waiting there in a last ditch effort to contain this bounceback. Again, The Ben Bernank gave us plenty of fresh fortitude this afternoon and I believe $28 will fall before the end of the week. Gold looks much the same but its bar is even lower. Do you recall the hope that $1345 would hold. Well, now 1345 is resistance that needs to be cleared. I have a last in silver of $27.62 and gold of $1343. I can't wait to see what the overnight action holds for our two friends.

Here's an updated dollar picture, this time in a 1-hour format. This dog is clinging to the 78 level by the skin of its teeth. Absent some manufactured "news" overnight, the pressure will soon become too great for it to hold on. I expect 77.50 before I awaken in the morning. From there, it'll be 77 before any substantial amount of buying surfaces again.

A couple more things...
One of our friendly readers, who shall remain anonymous, sent me a link to this nugget. Apparently its a powerpoint presentation that the Sprott folks are using to market their funds. Nothing earth-shattering, it isn't marked "broker/dealer use only" and its in Goggle Docs format so I figured, what the heck, it looks like public information so I'm going to post it for you to look over. Here you go...
Nuts. I can't seem to get this into a format that will work. I'll keep trying...

Also, I got this idea from Harvey. Its a very interesting discussion from Jesse Whatshisname. I link it because it covers the main "conspiracy theory" everyone's been mentioning but Jesse also seems to see the situation as I do...namely that JPM is a proxy of The Fed and has put themselves in a rather untenable position. Here's the link: http://www.marketoracle.co.uk/Article25628.html

OK, that's it for now. Can't wait for tomorrow. TF

ps Today was the biggest day yet at TFMetals with 25,447 total pageviews. My "gold to 1600" post from last week has now been pulled up over 9,000 times alone! I'm am amazed every day by the incredible success of this blog and I want to thank you all again for participating in what has apparently become one of the foremost PM discussions on the internet. It would be nothing without your efforts and terrific input so please accept my gratitude. God bless us everyone.

Feeling Good, Louis!

(obligatory)
http://www.youtube.com/watch?v=mmMS9nvi6eg

We all should feel very good about today's action. Its been a while since we had a pretty, little FUBM painted onto the intraday chart but we got one today. Please take a moment to behold:

Remember, the FUBM is a very strong technical indicator as it shows an EE takedown that, when it reaches a certain point, is met with significant buying. This is very real...and very positive given all the pain, suffering and sold-into rallies of the past three weeks. Of equal importance, both crude and copper had nice days and both are back above what could have been strong resistance. Crude is back above $87 and now needs to follow through and get back above 88. Copper is even better as it bested 423 and 425 and now just needs to hold its ground and grind higher.

I must ask you to take a moment to review this before we move on. I'm not looking for a pat-on-the-back or an atta-boy. I simply want you to keep our current position in its proper perspective. Almost everything we discussed last week has come to pass:
http://tfmetalsreport.blogspot.com/2011/01/1600-gold-by-june-10-2011.html
So the question is: What happens next? The answers can be found in these two charts.

We've set nice bottoms right where we wanted them at 1322 and 26.55. Are we finished? Is that it? I believe you'll have your answer very soon. As written on the charts, if silver can now get UP and away, through the rebound highs of last night, and trade near 27.60 tonight and tomorrow, my confidence will grow that the worst is over and we can buy with impunity. Not surprisingly, gold looks the same. If we can soon clear last night's highs and move toward 1345, we'll be in good shape. The next 24 hours are important and they will either create a virtuous cycle of new longs and short-covering and more new longs and more short-covering or momentum will fade and we'll move back down to a re-test of the lows. Let's hope its the former.

One last thing, the HUI is very strong today. Its above 510 and about 20 points off its lows from yesterday. This is very important as its been my experience at tops and bottoms that the mining shares tend to lead the bullion by about 24-48 hours.

Keep the faith. All is well. Let's keep it rolling. TF

ps Found out today that your favorite Turd has, once again, been asked to grace the airwaves of CNBS for a segment in February. DO NOT expect me to give you a date and time as I enjoy my anonymity too greatly. I will, however, try to drop a few clues while on air. Maybe I'll simply wear my big yellow hat. Nah...ole A-cups and the FOAD probably wouldn't appreciate it.


4:15 EST UPDATE:
Well, isn't this fun? The Turd lives for days like this. We called a bottom about a week in advance and its worked almost perfectly...so far.
The FOMC minutes could not have been timed any better to help our cause. To the amazement of the uninformed, The Ben Bernank announced that QE will continue until further notice. How this comes as a surprise to anyone who is even remotely paying attention is beyond me. This is why you must ignore the top-callers that populate the MSM and, unfortunately, ZH. They are utterly clueless, status quo-pushing morons. For all the reasons mentioned here ad nauseam, QE will never end because it can't. Period. End of story. BTFD.
The minutes have given everything a solid push up.
Crude is back to $87.73. Sweet.
Copper is 428.55. Refer to the note above to see how important that is.
The USDX looks primed to succumb to its lousy chart.
The HUI closed up almost 4% and is pushing the old 520 mark again. Two, consecutive closes above 520 and you can feel very confident that the lows have been reached in the miners, too.
And, most importantly, the PMs have surged to near the levels needed to stave off a re-test of the lows. Again, I listed above that we needed a short-term move in gold to near 1345 and then 1350. I have a last of 1344. Silver needed to best 27.40 and then 27.80. I have a last of 27.64. (The Turd smiles.)
Soon, we will enter that virtuous cycle pattern of courageous new longs and scaredy-cat squeezed shorts.
I'll check back in later this evening. For now, savor this feeling. It comes far too infrequently. TF

And one more thing, I can assure you that Trader Dan are not one and the same. Separated at birth, maybe, but we are not the same person. You might think that after reading this:
http://jsmineset.com/2011/01/26/hourly-action-in-gold-from-trader-dan-395/