Thursday, January 27, 2011

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.

74 comments:

  1. New blog entry from Jim Rickards over at KWN.

    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/1/27_Jim_Rickards_-_BoE_Governor_is_Right,_We_Are_in_a_Depression.html

    And here's the article they are discussing.

    http://www.telegraph.co.uk/finance/economics/8282354/Bank-of-England-chief-Mervyn-King-standard-of-living-to-plunge-at-fastest-rate-since-1920s.html

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  2. Another great post,thank you..

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  3. Dang! you beat me by posting about the Patrick A. Heller article by a mere 8 seconds hehehe.

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  4. Pretty good link from Jesse.

    http://jessescrossroadscafe.blogspot.com/2011/01/competitiveness-training-at-cafe.html

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  5. Turd,

    Any comment on this little nugget:

    Here is the latest and boy is it good for silver. It seems that traders are buying front months in silver contracts and selling the back months. As of right now (again this data can change later today), there was an increase of 915 contracts in Mar and 542 contracts in May. The only significant decrease was 698 contracts in Dec 2014.

    There can be only one interpretation of this. Traders do not have faith in contracts after May, and are willing to trade back months for front month contracts in silver. They do not trust the Comex contracts past Mar and May.

    Look at gold, they are still buying back month contracts. Wait until February.

    http://www.cmegroup.com/daily_bulletin/S...


    Say what you want about the bears, they have called this stuff even better than the Turd!

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  6. The articles are great! They are the sort of things that make it very clear, maybe even clear enough to those who don't have any clue!

    THanks!!

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  7. Maybe its a nice idea to have crude and copper ,maybe cci or crb charts besides the three present already?

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  8. Turd : i am physical long - but i think we well see a further set back to < 1300 in Gold and 25 in Silver...

    There is something going on out there you cannot check with Charts ...

    The EE can read these Charts as well and can prepare them so that they will look ugly to the most of people - to hold the away from the market...

    Thats why i believe we will see new lows today or tomorrow... so they have created a nice dark candle on a weekly basis..

    They will not accept anything else...

    Gold > 1360
    and
    Silver > 28.4

    is no option this week..

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  9. I have always found trading one market because another market is behaving a certain way to be a losing proposition. If you think the dollar is weak, sell a currency contract, but don't buy gold and silver for that reason. Trade them on their own merits. As I said weeks ago, the gold and silver monthly charts do not suggest either market is in a position for a sustainable rally at this time.

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  10. welp, silver was just raided. from $27.55 to $27.25 in about 2 minutes.

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  11. Silver just got murdered (11:15 ET)attemptin to rebound after tapping 27.024..

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  12. @Marvin -- well, it looks like you may be right. Look at her dive...

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  13. Sick...the minute I get back in...Bamm!

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  14. WTF on silver???? Those sons of bitches .....

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  15. Just more opportunity for the masses to get some silver cheap.

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  16. What's really important here is to see the strength of the response.... perhaps we will see another FUBM.

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  17. it's all your fault dd. -sarcasm-

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  18. actually, looking at it, the raid started just after the London market closed.

    are the english doing the same in europe as the EE is doing after the comex close?

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  19. Still about $0.30 ABOVE where we were 24 hours ago.

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  20. I can't help but wonder....Now that the dollar is down for so long, what if a rally is coming? The middle east and europe could precipitate one at any time. If the normal correlation of dollar up/commodities down could get ugly. Just sayin'.......

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  21. Let them work for you.....this is your chance to collect on letting the big boyz take out some more weak hands. If you believe in this trade then you should care less what they do in the short term.....EXCEPT...if they do have another leg down in this channel then BUY BUY BUY....if you are loaded then just marvel at how corrupt your "free market" is......BTW IT ALWAYS HAS BEEN!!!

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  22. nice action going on in metals, lol

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  23. I guess she came back early from shopping. Cool, so no I can prepare myself for some more shopping!

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  24. I guess the 'resistance' @ 19.60 will be broken before the end of the day.. Which brings us to the $25 zone.. Cool!

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  25. well it seems it was a bit too good to be true, da beeaatch ain't done shitting our bed just yet.

    Ole A cups got a little FUTF going so far today mate...

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  26. And gold follows it down, 1321 and counting. Wow. We could really use a close above 1330, hopefully the BoS make another appearance today.

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  27. I'm in euroland btw, so for you guys it's $26.80

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  28. The action just contradicts the fundamental realities...I'm mentally exhausted. The Bitch is breaking me down!

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  29. It's not just commodities. Everything is taking a shit.

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  30. lol come on, no big deal, no panic needed

    sure its frustrating but...buckle up!

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  31. I was concerned that JPM and co would want to try and break people's will on PM seeing they had gone 3/4 of the way.

    Only problem for them is that the US and global economies are still a disaster, inflation of essentials a concern and social unrest on the horizon. On that basis they are just making PMs cheaper for those that missed out the first time around.

    I picked up my gold at 1050 and silver at 20 and will be sitting on them for some time. Just waiting for the corrupting cartel to finish make the bottom, fix up their shorts and let a real market ensue.

    By the way anyone seen the CFTC around? Counting their bribes and promises maybe.

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  32. Blythe is on her broom. The Metal of Kings has cracked 1320, while the Pauper's Prize hasn't set new corrective cycle lows, yet.

    Caution is still the watch word.

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  33. This one is straight out of Mossad's terror bombing manual: when survivors and others think it's safe to come help after the first bomb goes off, THAT'S when they detonate the second one.

    That little twist really chings up the terror. BM has learned a thing or 2 from the Masters of Terror.

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  34. May have to make a phone call to Gainesville today.....hehehehhehehehe ...right JD ?

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  35. Interesting comments on ZH from Quinvarius about today's action:

    When dealer restocks, he shorts paper vs the physical to lock in the premium. This is partially the holiday buying aftermath restocking surge in PMs and partially the speculators riding the cycle. That is why the downturn is only only in gold and silver and no where else. All it shows is that the public bought a lot of gold and silver.

    http://www.zerohedge.com/article/nyse-rule-48-invoked#comments

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  36. Gold down 1% the AUD .8% not much of a pull back in gold in AUD terms. The AUD is due for a kick in the guts and with Japan a major trading partner, along with China it might just start to get a tanning.

    If equities finish nice and red today as well along with this PM action will create some bargains in junior PM miners.

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  37. Damn! Screw the broom, old Blythe must have flown in on one of those fancy Swiffer Wet Jet's!

    Running out at lunch to grab some more physical, though I am dang near out of powder...

    How the hell Butler still has faith in the CFTC I will never know.

    I can't wait to see today's volume, Blythe went through a cr@pload of toilet paper to flush the price down that fast/far on no news I can see other than Egypt melting down.

    Sickening.

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  38. Another something interesting from ZH:

    Here It Comes: US Suspends New Issuance Under Supplementary Financing Program, $200 Billion Liquidity Gusher Imminent

    "However, what that also means is that the US stock market is about to become awash with another $25 billion in suddenly free cash every single week, until the entire $200 billion SFP buffer is depleted. In other words, take the liquidity impact of POMO, which is roughly $25-30 billion a week, and double it! We are confident the US Treasury will announce that beginning with the week of February 14, it will no longer roll maturing 56-Day Cash Management Bills, which means that for the ensuing 8 weeks, one on every single Thursday, there will be a total of $200 billion in incremental liquidity flooding the market, and probably sending stocks, commodities, and everything else that is not nailed down into the stratosphere all over again."

    http://www.zerohedge.com/article/here-it-comes-us-suspends-new-issuance-under-supplementary-financing-program-200-billion-liq

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  39. One more beat down in Globex comming? Then the free market? Or a few more days of this? Anyone?

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  40. Sorry I missed a bit in that post... What I copied was what was predicted back in January. And this is the news:

    "As the revised table below shows, each Thursday beginning February 3 we will now see an incremental $25 billion in extra liquidity as the maturing 56-Day CMB is not rolled."

    Therefore it begins Feb 3.

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  41. Just decided to have a little fun and call the CFTC. Got through immediately to a nice fellow by the name of Charles Ricci. Told him I wanted to file a complaint as a silver investor who had just watched the spot price drop by .50 in a matter of minutes on no news that would indicate such a rapid drop. He asked what company I was filing a complaint against and I told him I guess that would be the CME.

    He informed me that an investigation had been going on for over a year in silver and then walked me through the CFTC website to the spot that I could file a "written complaint". When asked if I would get a response, he said, "I assume so and if you file it online, it will get to the proper team working on silver complaints."

    What a crock! I don't feel better. Guess I'll go fill out the form and tell them it's time to stop "investigating" and start prosecuting. Maybe I'll feel better then. Or better yet, maybe I'll call up Gainesville and order some more cheap silver. Yeah I think I'll do that instead!

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  42. Blythe hates it when you buy physical on the dips.

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  43. SilverPaine--
    1050 & 20? Sounds like you and I must have been buyers on the same day last year, comrade. I like having this cushion now.

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  44. Just saw ZH has something up about the submitted to accepted ratio? I have no clue what the heck that's talking about, but thought I would point it out since they said it is what is affecting commodities right now.

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  45. The AUD was reasonably strong at that time too, about .94 I think. Its way over valued so every 1c drop in AUD is a big bonus as well. However if the USD dives.....

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  46. Turd, you might want to take a look at the ZH article I linked to above. You were all over the POMO and its impact, now we're going to have DOUBLE the POMO impact starting Feb 3. Would love to hear your take.

    Jimmy, The idea is that the if the submitted/accepted ratio is higher than average, that means the Fed didn't buy back as many bonds as usual and so the dealers have less money to inject into the markets, thus the markets go down. When the ratio is lower, more were bought back and there is more cash to inject into the markets.

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  47. flaunt: It onlt reinforces my opinion that you don't want to be short ANYTHING.

    Sheesh...I step away for 90 minutes and all hell breaks loose. Gold tempoarily traded to 1315 for crying out loud. Apparently, confirmation of QE to infinity is reason to SELL your gold. What a joke our "markets" have become. Ruled by non-thinking algos and witches with evil intent. Watch silver very closely as it is still near $27. It will either lead us to a further beatdown or it will lead higher. On a lighter note, copper is hanging in there so keep the faith and lets see where things settle out.

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  48. ok, so I finally drove over to GVille Coins and made my silver buy-in at 27.04. Bought 8 rolls of 2011 Eagles, but they are waiting for delivery by Feb. 14th! Hope they make it! I figured I'd get those now, and if the price drops some more in the next 24 hours I'll buy as many of their Buffaloes as I can. Thanks for all the info on here. No matter if it keeps going down in the next week or two I feel good about it because it's eventually all going way up again and I'll just keep buying either way.

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  49. Turd this is the kicker about that SFP program:

    "The Supplementary Financing Program, in which the Treasury Department sells bills and places the proceeds in a Fed account, will be part of the Fed’s strategy for rolling back its extraordinary assistance to the economy and financial markets, the central bank said in its monetary policy report to Congress yesterday."

    So the program was supposed to be used to help "roll back" the Fed's assistance i.e. mop up liquidity, and now it's having to be released again, and in a torrent due to the govt's debt crisis. This is a perfect example of how Bernanke can't predict how current Fed policies are going to be affected by future circumstances. I don't know how anybody with half a brain could trust him and his claims about being "100% confident" in what he's doing. It's frickin' insane. Ok, done ranting time to do something productive.

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  50. This has nothing to do with QE. It's the euro, which is about to fall as the euro currency crisis resumes. This will drag stocks down for several months. Gold could easily turn and go the other direction (up) at some point however.

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  51. She loves the globex and I smell a second round then.
    dd you are not alone.

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  52. Thanks for the explanation flaunt.

    Now for another question. Would that mean that Blythe is raiding Gold and Silver right now to make it less appealing for folks to flee to Gold and Silver as a safe haven from the falling market? Sorry for the newb questions, I'm a computer geek by trade :)

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  53. Oh I get it, maybe a raid gold and silver so the Algo's don't start running from the market and jump into gold and silver?

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  54. Ian- Nice. I think you are going to be very happy. Like he said in "Casablanca", " Maybe not today. Maybe not tomorrow, but soon and for the rest of your life."

    Wish I had 7k to drop on silver today, but I don't because I dropped it all last summer! :D

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  55. Good morning Turd,

    Thanks for posting your frequent thoughts these past few extraordinary weeks - much appreciated.

    My sober second thought Re: Au and Ag is what the charts cannot point to. Namely, what happens if/when Euroland sovereign credit becomes a "problem" once again? Or the action picks up in the Middle East - Algeria, Egypt, Yemen, and neighbours are up in the air after the events in Tunisia. Will the Euro case be USD positive, and regime change be oil positive AND USD positive? Do you consider the impact due to all those shenanigans? This is why I haven't fully re-loaded at these prices so far.

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  56. Central bankers will do anything, including take losses, to maintain the illusion of integrity in paper/digital markets.

    This is nothing new, either.
    http://anatocism.blogspot.com/2009/08/understand-this-chart-and-you.html

    Watch copper and oil, especially, as physical supply is continuously consumed and indispensable.

    Au and ag priced in yen is also a key right now.

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  57. PEOPLE!! Puleeeze....gold AND silver will perform very well if Euro land cranks up its fear again (and it WILL) Dollar gold trade WILL decouple as it did the last time.......SO fochin RELAX....heehhehe

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  58. @plastercaster if you don't like it don't come to the blog.

    the rest of the 25,000 of us enjoy his predictions.

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  59. it is getting cheaper and cheaper here in Europe ... not only the metal plumbs - even the currency...

    Buy 2 and get one for free ....

    Last Entrypoint....before Moon

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  60. OK I couldn't resist. From GGR:

    Negative Money Flow Accelerates for GLD

    "We are doubtful that the negative liquidity currently in play for precious metals will continue all that much longer, but of course time only will tell if that assessment is correct."

    "Money flow for the largest silver ETF, iShares Silver Trust (NYSE-AMEX: SLV) has actually been positive for the past week, with the silver trust reporting an increase this week so far of about 53.17 tonnes to show 10,447.70 tonnes of allocated silver bars held by a custodian in London. "

    At least so far, apparently investors are more keen to buy the dip in silver than gold."

    http://www.gotgoldreport.com/2011/01/negative-money-flow-accelerates-for-gld.html

    Ok, now I'm going to go do something productive. Really.

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  61. I like the first minute or so of this one. Perfect prelude to "Looking Good Billy Ray!"


    http://www.youtube.com/watch?v=_gekaEzqj5g&feature=related

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  62. Latest from Trader Dan:

    Dear Friends,

    This morning news came down the wires that the rating agency S&P had downgraded Japan's sovereign debt from 'AA' to 'AA-'. This is no small development. The reality is that Japan's finances are in even worse shape than those of the US when its overall indebtedness is compared as a percentage of GDP. Japan is approaching a debt to GDP ratio of nearly 200%! Yes, you read that correctly. The only nation in the entire world that is higher is Zimbabwe. In effect, the Japanese government spends 2 yen for even one yen of overall economic activity.

    What this means is that the rating agencies, who are watching these sovereign debt woes which have struck various countries in the EU, are concerned about the same problem beginning to surface in other quarters around the globe. Quite simply they are looking at the huge deficits being run by many nations in the West (and Japan). In other words - TOO MUCH DEBT!

    That led to selling in the long end of the US yield curve this morning as bond traders are starting to be more than a bit fearful that the same thing is going to happen to the US's 'AAA' rating at some point in the future if the US does not get its financial house in order. They are watching massive amounts of QE2 and another ballooning of the federal budget deficit and are selling even as the Fed attempts to jam the market higher with its purchases. AT this point, the only thing holding the long end of the curve is the Fed. How long can that last especially without affecting the Dollar?

    More and more we see the integrity of sovereign debt being brought into doubt which leads to the question among many investors; "what is a safe haven that is actually safe?" Who wants to take the chance of holding a nation's bonds if overnight they face the real risk of being downgraded?

    The real world impact of this is that nations whose debt gets downgraded will have to offer potential investors a higher rate of return to compensate them for the increased risk of holding their debt. For nations already hopelessly in debt, that means borrowing costs begin to rise forcing them to borrow even more money just to keep their heads above water. The whole thing becomes a vicious cycle with rising interest rates compounding the problem.

    The US has been able to sneak by and thus far avoid a rating agency's downgrade partly because its borrowing costs are so low. Should these agencies begin to train their sights on the US and give closer scrutiny to its miserable financial condition, there is a chance that a downgrade could follow. Such a development, were it to indeed occur, would force the US to offer higher rates of return on its debt. That of course would raise its borrowing costs at a time when it can least afford it not to mention short circuiting the QE policy which is deliberately designed to lower borrowing costs.

    This is why the take down in gold, after yesterday's nice performance, is so remarkable for its perverseness and why long term oriented holders of the metal should not be the least bit concerned as to the antics taking place in the paper market. Sovereign debt woes are not behind us - the problem lies squarely ahead of us and no amount of wishful thinking is going to change that hard reality.

    This being said, one of the things we now want to monitor will be the performance of gold when priced in terms of the Yen.

    Trader Dan

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  63. "This is why the take down in gold, after yesterday's nice performance, is so remarkable for its perverseness and why long term oriented holders of the metal should not be the least bit concerned as to the antics taking place in the paper market. Sovereign debt woes are not behind us - the problem lies squarely ahead of us and no amount of wishful thinking is going to change that hard reality."

    This is 100% correct. Thanks, TraderDan

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  64. Looks like possible short covering into the close, will be the first time in a while.

    Fingers crossed that it holds.

    An encouraging sign.

    Maybe we bottom out soon?

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  65. not before monday...

    That week we will see only downside...

    check the weekly chart

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  66. plastercaster, the actions of criminals are like any actions of all human beings,, they are predictable and are repetitive. And you are an idiot and a rude asshole idiot.. There is nothing more productive than predicting and understanding the actions of criminals so that you can protect yourself from their criminal conduct. I hope they rob you blind since you can't see your nose from your own ass.

    The fact is these criminals have been robbing you blind all of your life with their fiat con job which you bought into hook line and sinker. Just because you can't figure out what these criminals are up to,, does not mean we can't. We can and are.
    So,, you shut the fuck up! Find another blog to spew your ignorance and stupidity. There is nothing more productive than preserving your your hard earned wealth.

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  67. Today is just another reminder that the power of the criminal bankster elites is still intact. They have had over two hundred to perfect the art of manipulation and thievery. The EE will not be brought down over night. But,they are up against the internet the most powerful force since the printing press which they have used to evil advantage in the crime of counterfeiting the medium of exchange.

    Sometimes I think JP Morgue is sending a message to Max Kaiser et al, that the "buying silver campaign" is not going to bring down any too big to fail. That they own the CFTC, and Butler is deluded to think they will ever be regulated by a former Goldman Sachs employee.

    Evil is presently at the pinnacle of its power and we must never underestimate it. When they lose the power over the precious metals they lose the power over their fiat lie, and the whole thing comes crashing down. Hopefully, we are witnessing this now in real time.
    Keep up the excellent work Mr. Turd you are indeed an inspiration to us all.
    Thank you !!!

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  68. Yes the corruption of the CFTC is astonishing, but probably no less than at all other regulatory bodies. They are all owned by the banks and their purpose is to aid the banks corruption and stealing and control over everything.

    This will never change now, not until the whole things crashes and they are dragged out onto the streets for public executions under a people's court. Corrupt officials will have nowhere to hide if the system ever crashes. And things can change ever so quickly. But don't hold your breath.

    In the meantime less fiat more assets and gold and silver.

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  69. from sprott interview...

    "With gold and silver rallying off the lows today, King World News interviewed Eric Sprott, Chairman of Sprott Asset Management which has $8 billion under management. When asked about the Sprott physical silver trust acquiring silver Eric stated, “We had to go into the market and buy about 15 million net ounces from third parties and it took us about ten weeks. It was a very, very long process and the one thing we can read out of it is obviously there weren’t 15 million ounces sitting around somewhere.”

    Sprott continues:

    “I haven’t had time to study where the bars came from, but I can tell you by looking at the pictures of the bars they look like they came right out of the refineries. So I suspect it’s a hand to mouth situation in silver.

    I think if we went in to by twenty million ounces of silver it would take a long time. I know we had an order to buy a million ounces about five weeks ago for a different account and the delivery was going to be two months. So I think silver is as tight as a drum."

    my simple question is why didnt he just buy comex contracts & stand for delivery, if there is such a shortage & all this hoopla regarding taking down comex, jp morgue , etc. ?

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  70. You cannot purchase large quantities of gold on the open market if you are a sovereign....These large purchases are done through a separate dark pool...that has a price on gold that is near to its TRUE VALUE. Right now the price is estimated to be approaching 5000K for the "members" of their cabal......of course if you believe they pay spot for their massive purchases then good luck

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  71. eToro is the ultimate forex trading platform for newbie and pro traders.

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