Thursday, January 20, 2011

Ah, Buck It

7:15 EST UPDATE:
I've been crunching numbers and looking at charts, trying to call a bottom for this correction. I'm pretty sure I've found it but it means I must change my prediction a little. It is now official and formal:
$1600 by 6/10/11.
Please give me a few hours as I've got a lot to do tonight but I am very excited to share this information with you. Keep checking back but you may have to give me until 11:00 EST to get it posted. Thanks for your patience but I promise you, it will be worth the wait.



For those of you seeking a bottom in the PMs...and aren't we all...the USDX will be your key. Followed by rebounding copper and crude.

As for the USDX, after coming within 3 basis points of the November 21 low yesterday, the predictable "dead cat bounce" struck earlier today. The bounce took us up almost exactly to where it should have, about 79.35 on the March USDX. It has since pulled back:
Obviously, what matters now is what happens next. This dog is headed lower but how soon? Three possibilities, in reverse order of likelihood:

1) Another leg up commences tonight, the index races through 79.35, all the way to 79.70 or so.

2) We roll over this evening and immediately begin our trip back to the critical 78.45 level.

3) The index tries to rally one more time but fails again near 79.35. It then heads lower, takes out 78.45 as soon as tomorrow or Monday and trades down toward 77.50 and 77 next week.

If I'm right, and #3 plays out, you'll get a shot to pick a bottom in the PMs somewhere below today's pit session lows, maybe on the open or right after the open tomorrow. I still think this "correction" is almost over with gold bottoming between 1340-45 and silver at 27. If #1 plays out, we may see 1320-25 and 26.50. Either way, this correction is almost over as the dollar is headed lower.

More later this evening after I have a full review of Harvey and the rest of the days events. Turd out.

48 comments:

  1. Banging the close in gold?

    Wow weird stuff

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  2. Turd, others,

    What do you think about this:

    Gold and silver broke their trend support line built from august 'till recently.
    The miners did held their support line from august (you can see it very clear on for example Hecla mining chart).
    Which one of the two is going to give? Why are the miners hanging tight above support while silver and gold fell trough?

    I'm quite puzzled about explainations on this... Anyone?

    Thanks!
    Thomas

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  3. The formation the dollar made when it touched your trendline (its dead "dollar" bounce) was the same formation that gold made between 8 and ten yesterday.

    Today gold slumped (after being hit over the head by Blythe). So tomorrow, the dollar...?

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  4. This could have something to do with the sell-off; the audacity to cut expenditures, as if it would ever happen
    http://www.usnews.com/news/washington-whispers/articles/2011/01/20/house-gop-lists-25-trillion-in-spending-cuts

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  5. I suppose this is a dumb thing to say .. but .. why isn't the current action in the PMs really just a reflection of what's really happening to the Euro as opposed to what the media is telling us.

    In other words, the Euro is in deep deep doo-doo. It's way worse than we're being led to believe. So what's really happening is that a lot of the big boys are headed towards the dollar.

    The price of Gold/Silver is nothing more than an expression of the value of the dollar. That value changes with changing demand for the dollar. So there is a tidal wave of demand for the dollar coming our way. That will pull the rug out from under the PMs and the whole commodity complex.

    The broader market has at this point become completely dependent on commodities. So as commodities crash, the broader market will crash as well. There will be a wipe-out in the stock market. The sell-off in PMs is just a precursor of the much larger carnage to come.

    When the markets implode, the Ben Bernank will go berzerk and flood the world with dollars a billion times over. So as we hit bottom, the bottom will drop out again, but this time the PMs will shoot up like a Roman Candle. The dollar will collapse, and the world will spiral into another world war.

    At the end of it all, the world will be reduced to a burned out cinder, and most of us will be dead. But there will still be a few shit-eating politicians who think that we should have central banking and that every American should have a house regardless of income.

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  6. Comment from Dan Norcini:

    There was also the rather strange report out of the CME Group that the mini gold contract was to be delisted. This is the 33 ounce contract not the micro gold contract. This abrupt announcement, without any explanation, (there was a blurb on their website) had many traders wondering what was going on and why. Some sold first and waited for an explanation later. I am still going to try to see if I can find out what the reason behind that sudden announcement was.

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  7. Dont you think a bear flag is forming in 60 minutes silver chart ?

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  8. We will need two more national elections to get enough Conservative votes to pull off that kind cuts. I'm all in favor of them, but we still have a country that voted Obama in.

    Did take advantage of the dip today and bought 20oz of Silver a local dealer for $28 an oz. He was out of all smaller coins less than 1 oz in Gold. First time in years. Said he had a pretty good run this past week and few selling.

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  9. Turd-

    When you talk about the correction being over, are you talking short term or long term? Because I'm thinking this is going to take a couple of months to shake out before we start trending up again. I tend to agree with Kenneth that the commodities are simply "front running" the stock market in general, which will take everything down for a while. I'd be OK with waiting for 6 months to bounce off a really solid bottom for the year and then invest, rather jump in and out every few weeks.

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  10. @wrd. I thought Conservatives helped get us into this mess in the first place?

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  11. What you are also forgeting is the massive divergence in stoch based indicators together with a major reversal taking place in most USD vs Majors. The commodity market is heavily overbought and 30 year has just hit 4.3%. Surely a horizontal trendline wont stop this short-mid term USD bullish bias.

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  12. What don't you people understand about these markets.

    Turd, you are your own worst enemy. You see the market manipulation, yet you fight it. The only way to fight it is in the physical market Take delivery of your core position and trade the futures from the same side as the EE. Their raids are predictable for god's sake You say that every time the dollar gets too low they roll out the negative Europe headlines. Yet you sight the dollar as an indicator for when to get back in the PMs. News flash. The dollar goes lower and so do the PMs lately.

    Beat them at their own game. I'm making a boatload off trading the sell side of silver on days where the raids are happening. Watch for the a.m. raids. On those days sell into silver on any dollar strength. This is a day trade. Buy the silver back asap. Short the silver on the close and buy it back when they raid it again in the post market Then take your profits and buy physical silver. This is how you beat them at their own game.

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  13. Tying gold to the dollar is not giving gold its due. Gold's upward move has decoupled from the dollar on several noteworthy times the last several years....THE LAST was during the the Greece and Ireland euro crisis. I see gold moving again with the dollar strengthening as Euroland takes center stage....remember GOLD does decouple from the dollar and has done so before.

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  14. http://www.financeandeconomics.org/Articles%20archive/2011.01.21%20Chinese%20puzzles.htm

    "There is one possible solution to the puzzle posed by China over its strategic use of precious metals: she has far, far more gold and silver than we commonly believe. To understand why this conclusion makes sense, we must try to understand her political objectives and where her manipulation of bullion markets fits in..."

    Read the rest at the link above. If Macleod is right, then some seriously crazy market action will cross our paths in the next few years.

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  15. kiwi: I'll answer your question later this evening with a new post.

    Mark: You're absolutely right. I'm a PM masochist. Oohhh, you got me thinking...now I'm picturing Blythe in a dominatrix outfit with me, on my hand and knees, wearing a studded dog collar while she whips me.

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  16. @ wrd

    FWIW, my favorite local coin shop guy has had zip, zero, nada available in gold coins for 2-3 weeks. He got cleaned out of what he had, and nobody is selling him anything. He usually does a pretty brisk business turning over all the odd, small size stuff that other shops don't want to deal with. Sovereigns, French or Swiss 20 francs, Mexican 2, 5, or 10 pesos, etc. He even sold out of a bunch of wierd latin american gold that you never see anywhere. Cuban, Colombian, I don't know what it all was but he sold it almost instantly.

    He usually has silver. I know for sure he has stacks and stacks of silver dollars.

    Eric

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  17. Turd. Since we don't know what you look like, thats even funnier from our perspective. We have to picture burt reynolds in that scenario.

    I picture burt liking it. Moustache rides!!!!!

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  18. @Kenneth

    Wow! That just about covers it. I think the "Fall of the Roman Empire" took hundreds of pages to cover pretty much the same cycle. But I think you have it just about right.

    By the time our PM's go to the moon, the world will be such a shithole that we won't care anyway. But still, we (or our kids) will be better off having them than not.

    Eric

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  19. Crimex is raising margins, again...

    http://www.cmegroup.com/tools-information/advisorySearch.html#

    http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv11-23.pdf

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  20. I like to look at things in macro views as such, I'm not a day trader. But what I noticed in a simple logical sense is last year silver gained ~82%. Is there anything going on that would deter silver from gaining 100% in 2011? If for some act of God, the (R's) in the House start slashing spending like crazy to get spending under control, there's nothing BETTER than last year. If anything it's worse so I figure we'll see 82% or higher at the end of 2011.

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  21. Barb,

    Yes, my coin dealer usually has plenty of smaller Gold coins from 1/10 to 1/2 all the time. Funny, a couple of months ago he said Gold was much slower that Silver. But now Gold seems to be making it's move. I bought 2 Johnson Matthey 10 oz bars. Only a week ago thay were $350 on fleabay. I paid $280. each. But my pocket was not big enough to buy a ounce of Gold.

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  22. @thecoloredsky-

    Funny you should mention this- I noticed a headline yesterday that the GOP is set to roll out 2.5 trillion in spending cuts over the next 10 years. I thought well, this may give the dollar a short-term bounce, especially if the White House makes a few mewling noises like they may possibly, potentially, conditionally, think about considering it in the abstract. Then I thought about the insanity of "cutting" 250 million a year, while borrowing 1.5 trillion a year, and calling it "fiscal responsibility". The Turd is right, the fundamentals haven't changed.

    BTW I am personally encouraged by all the cautious to downright bearish comments here recently- a very nice wall of worry to climb. I am back in as of today.

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  23. From Harvey. Please read, contemplate and understand:
    THURSDAY, JANUARY 20, 2011

    Jobless Claims - The Truth
    Once again the Government manipulated jobless benefits statistic - and the number which is the headline number read and reacted to all over the world - is much lower than the "unadjusted" raw number. The reported number was 404,000, which was a decline from the previous week's manipulated number and lower than the market consensus expectation. HOWEVER, the actual unadjusted number of claims was 550,594. So there it is. The golden truth. Here's the Dept of Labor press release:LINK

    Even more disturbing in that report - and a number which likely 98% of all market professionals and 99.9% of everyone else in this country who at least attempt to stay informed - is the fact that the total number people claiming jobless benefits under all of the programs jumped by over 401,000 from the previous week. So nearly 1/2 a million more people either can't find work and qualify for a weekly welfare stipend, or just can't be bothered with looking for work since they do qualify for taxpayer largesse. The total number of capable workers now feasting on part of your paycheck is 9,607,424.

    The truth will set you free.

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  24. aMac: Well, there's your answer for the selloff in copper, the PMs and crude today.
    Didn't Martha Stewart get sent to "the hole" for insider trading? What about all the douchebags on the Crimex that sold today ahead of this bullshit announcement? What an absolute and complete joke our "markets" have become.

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  25. Completely agree Turd - totally disgusted right now!

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  26. "World needs $100 trillion more credit, says World Economic Forum"

    http://www.telegraph.co.uk/finance/financetopics/davos/8267768/World-needs-100-trillion-more-credit-says-World-Economic-Forum.html

    No matter what they say, they're totally dedicated to gold's supremacy. A few dollars more or less per ounce will matter not.

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  27. Hmmm, all margins raised but the newly cornered copper market that was DECREASED.......Maybe this is when their fangs will come out of silver...ya right

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  28. Not metal related but character related to Blythes EE http://theeconomiccollapseblog.com/archives/the-more-americans-that-go-on-food-stamps-the-more-money-jp-morgan-makes
    They are now shorting the unemployement numbers to bleed another buck.

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  29. This is a great buying opportunity. From an emotional standpoint the past few days have sucked, but this dip is all about insiders trading & market manipulation. Investing is not one of the things that has influenced the evolution of our brains. Emotion usually is a detriment when it comes to investing. Most of us here *know* the fundamentals are solid for PM's. BTFD and expect volatility. Think longterm & do not try to time this market. The Bernank is flipping so many damn levers & switches like the wizard of oz right now, and we have barely started to see the wild fireworks that are coming.

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  30. this is from a person with a great deal of knowledge in the PMs on the margin hike :
    " Comex is increasing margins I am greatly
    encouraged because that shows desperation from the cartel to be raising
    margins after such price declines and particularly when margins have
    already been raised recently. The physical buyers will see this as a buying
    signal because such effects are very transitory as they only affect the
    under-capitalized longs and after three weeks of selling one has to wonder
    if there are many undercapitalized longs left in the game. If the big
    physical buyers move in and rally the price then it could well be the fresh
    shorts who get killed on the new margin requirements…what sweet justice
    that will be!

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  31. Wow and they raised the margin requirements again after the tumble silver has taken? Hahhaha, what a f$&king sham! You gotta be wondering what Chilton is thinking right now.

    Going to go buy some physical silver tomorrow... Cram it in your cram hole Blythe!

    Turd getting beat down by a dominatrix Blythe, that's to funny! Be sure to keep your hat on Turd!

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  32. Hahaha!!!! Way to go after those f&cksticks over there at zerohedge Turd!

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  33. Turd-

    Thanks! Any illumination you can provide would be wonderful, I'm looking forward to the post later (if I am awake for it) I'm not too worried about the top of the next run, just trying to get some sense of the bottom, another 10% to 20% beatdown (I was heavy in miners the last 3 weeks) would be really hard to take before it starts going up again.

    And hey, I'm doing my part to help keep prices up, I bought some ZSL this morning and the silver price stopped moving down. I deserve a medal.... :-)

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  34. "Funny you should mention this- I noticed a headline yesterday that the GOP is set to roll out 2.5 trillion in spending cuts over the next 10 years. I thought well, this may give the dollar a short-term bounce, especially if the White House makes a few mewling noises like they may possibly, potentially, conditionally, think about considering it in the abstract."

    Ha, this made me laugh...you forgot "in principle".

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  35. Turd, you know what pisses me off the most about the margin changes?

    IRON ORE was __REDUCED__ __DRAMATICALLY__ along with ... guess it ... Blythe's new favorite toy .... COPPER!

    This just shouts bailout to JPM!!

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  36. I think Turd is waiting to see the next big move in the USDx before he posts :p

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  37. Micro Manage Glod? Everybody ease off. We done good. We'll do even better. Chill.

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  38. Come on Turd, I'm dead tired and need to crash!

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  39. Saw a funny line over on JS Mineset:

    "The global credit stock has already doubled in recent years, from $57 trillion to $109 trillion between 2000 and 2009, according to the report. "

    The "global credit stock".....can I buy an ETF for that?.... ;-)

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  40. All the frantic manipulation going on should tell you just how precious your physical has become... it all gets more surreal by the day

    PS ~ calling 'the bitch' by her first name gives scum like her too much dignity, IMO

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  41. Could the recent sell off be related to the popular play of shorting the Euro and going long gold, which had been a good play until recently and now that is being reversed as players get out
    ?

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  42. It's posted. Thanks for your patience. Its been a long night.

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  43. CMON MAN! WTF?!?!?! COMEX crooked f*%kers!! Man, we gotta do something...we cant just sit here and let them do this. What's the breaking point for Americans? The cooler heads prevail school of thought is looking more and more like BS to me!!! The fall of Rome is going to be one HARD F$%KING FALL!!

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  44. To Turd and anyone else....


    I have a friend that I have been (off and on) trying to have a serious look at PM's, and his counter arguments have been summarized to this.


    "Why in the fuck should I jump into a pool filled with corrupt entities like the FED and JPM. I see the PM's shoot to the moon overnight."

    and one like this..

    "I see Gold and Silver shoot through the stratosphere overnight just to see it atomized the next morning"

    I'm tired of giving him my usual litany of reasons as to why..........So I like to hear from you one knockout (a blood gusher) answer that I don't already know. Have at it!!!!!

    Thanks!

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  45. Don't overthink this thing. The broader market is currently rolling over. We're topping. The commodities that led on the way up will lead on the way down. We have two global bubbles to pop. First, the debt bubble. That's starting to go. As it does, we will have massive deflation and worldwide depression. This will cause the Bernank to go wild and flood the world even more thoroughly in dollars, Keynesian moron that he is. Some time after that the dollar will collapse. That's the point where hyperinflation sets in. Before that happens, we have to pop the debt bubble. Only after deflation has done its worst will we see hyperinflation, and by that time it will look like salvation.

    All of this is ultimately driven by central banking. Mises and Hayek warned decades ago that central banking would not work, and indeed this is America's third attempt. The constructivist fallacies and errors simply will not die. People refuse to learn that central planning works no better for currency markets than it does for anything else.

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  46. @Rudeger. Whip out some of Turds' trend line charts. Show them that the direction of the trend is UP and then little blips here and there are moot if you go long phys. Don't try to convince them it's a get rich in a short period of time and market it to them like it was insurance. You buy insurance for your car, right? why not buy insurance for your money? if the USD goes away tomorrow..guess who still has the same amount of wealth in silver/gold as they did in fiat. I never bill it as an investment to those I try to convince. I tell them it's insurance and a storage of wealth at the very least.

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