Thursday, January 27, 2011

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:

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

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)

Lastly, check this out. I find it interesting but, probably, meaningless.
More in a bit...


  1. Silver over $27. DXY under 78. I don't see the problem. Guess I could care less with my stash of coins.


  2. I find this site useful when looking at gold in different currencies. Just thought I'd share...

  3. Nice compilation of data from CPM Group:

  4. BTW that's supply/demand data on silver.

  5. Kinda confused about the liquidity withdrawal, seems like TD is predicting massive liquidity inflows NOT a contraction.

    Am i reading it wrong?

  6. This might be the last minute attack on Feb gold contracts before January trading winds down.

  7. No, I think you're reading right.
    It is a temporary inflow but then the program gets "suspended" as the Fed wants to "keep their policy options open".
    Its an absolute manipulation joke.
    All commodities rebounded yesterday on the REAL news of infinite QE. The Ben Bernank can't have that so they roll out this BS headline today to cause the sharp pullback.
    Its utterly astounding that so few people can see through the bullshit.

  8. Rui: Maybe but I call tell you, I hate the close in gold below 1320.

  9. @flaunt

    If i'm reading the data right, inventories are growing?

    And investment demand outstrips industrial, not a particularly bullish dynamic.

    Somewhat perplexed.

  10. flaunt: Great, great stuff. Thanks for providing it!

    qussl: Forget inventories. Look at two things:
    1) "net surplus/deficit"
    2) "ETF" inventory. Hmmm, I wonder what that is?...

  11. I don't get it. Why now?
    How did they allow gold and silver to rise up as far as it did?

    I find it difficult to believe that the entire decade long bull-market in gold was a manipulation. There was no propaganda binge in favor of it. It went up in stealth amidst an enormous tide of negative press.

    But if they can do this now, they could have done it at any time. Unless they can't.

    So the question remains, why now?

  12. I did a fabonacci from July low to Dec high, and it shows 1320 is about 38.2% retro and 1294 50% so I think the bottom is somewhere in between. Should EE wanna push it more down they'd have to work hard, maybe using the upcoming GDP # (tomorrow?) and non-farm JOB next week as setups. Stay tuned.

  13. About the CPM numbers -- Industrial demand is up YOY, investment demand is also up. Supply deficit is also up. How is that negative?

    Turd, why do you think that headline would cause a sell off? Tyler's take was that it puts an additional $200B in the hands of the dealers who will promptly inject it into risk assets. Seems bullish to me. We're going to have additional money sloshing around plus the debt ceiling is going to get raised.

  14. Turd:

    If I'm reading it right it implies that there silver is in net surplus based only total supply minus industrial consumption.

    Ofc when investment demand is factored in we get a deficit.

    This does imply that at some point in the future silver will be in glut though.

    Well as long as current demand exceeds supply price will continue to climb.

    But when the "shadow" inventories liquidate we may have a 1980-2000 bust in price again.

  15. From

    "London Trader - Big Money Lined Up To Buy Gold & Silver
    Ahead of the World Economic Forum at Davos we have seen gold and silver under pressure. One trader out of London commented, “It appears certain interests are trying to give the appearance of technical weakness, so all of the banks have sold. That tells me we are at a bottom because they are always wrong in their call. Remember they are telling their clients to sell here, and they are on the other side of the trade.”

    Full text


  16. Qussl3: An alternative viewpoint would be that silver is starting to take on its monetary role again, as gold has been doing. If that's the case, then the trend should remain in tact.

  17. All just noise - that's why I couldn't ever be a trader. Sometimes I can even hear the slow motion grinding higher and higher, year after year. Sure, one day all hell breaks loose to the upside, but you'll see it coming. Your neighbors will be buying penny mining stocks, and there will be reality shows like "Gold Virgin" and "Flip this Coin".

  18. The War for honest valuation will not occur in the digital/paper market(s). It can only be won in the physical space(s).

    Trade what and how you will, but recognize the truth above.

    For we small players, it means using the digital profits to buy physical, until the digital markets fail. That also mean temporarily going to the Dark Side to profit from price declines.

  19. flaunt:

    Perhaps, but I think modern society is too comfortable with digital currency to make a shift to a physical metal currency.

    Though a fiat currency linked to a weighted commodities/PM basket is certainly possible.

    Either way physical PMs are a store of value regardless.

    What does concern me is that if current trends persist physical inventories will accumulate and we'll have a silver strategic stockpile liquidation scenario again.

    Though based on current trends its likely only MUCH higher prices and private inventories will precipitate that cycle.

  20. Gold spot is holding below 1320 (down to 1316.80 as I type). Tommorrow I'm wondering if we could see 1300 or even get near 1255-56 if we don't find some brakes soon.

  21. It's worth mentioning once again. All this strum und drang, and lovely lower prices, allows us "shrimps' top buy physical, not just at lower prices, but AT ALL.
    The day will come when for a while you won't be ble to buy gold at any price; it simply won't trade ( by and large). Until it is settled at some astromically higher price.
    In the meantime, in between time, ain't we got fun.

  22. My spider senses are still tingling. IMHO If you're not a professional, do not trade these markets .... you will be traded out of your position. Buy Physical Ag & Au and sit back and relax. As Turd has said many times the Fundos have not changed.

  23. Just found out I need a new furnace. No more silver for me!


  24. So much for my theory that gold wouldn't get whacked on the Globex afterhours. What a joke...1314.

  25. I'm sorry.
    This is all beyond my level of comprehension at this point. Gold is at $1311, off almost $36 from its highs last evening. Why? I seriously have no idea. Silver and copper are holding their ground. Gold should be no lower than 1325 or so, in relation.
    Maybe I need to take a few days off...

  26. Martin Armstrong's most recent read - a monthly close below 1372 could lead us to 1235 and then possibly 1150. March and June are months to watch and that we could see a low in June but that they could also be the opposite. This could last a while with a low coming in the next few weeks and then we resume course for a high in May/June. At any rate I am still waiting though yesterdays action sure made me think the bus was leaving without me.

  27. I hope silver keeps dropping until the IRS sends me some of my money back next week. The majority of this years return is going toward BTFD!

    Where is Ian from yesterday who was worried about missing the bottom? Stay thirsty my friend.

  28. Hang in there, Senior Ferguson- Mama said there'd be days like this.

    In a previous post you said "So, there you have it. Watch $1320 and $26.50 very closely as any serious break of those levels will have the opposite effect of that listed above and price my rapidly plunge toward the next perceived support levels near 1280 and 25. Yikes!"

    Gold, at least, seems to have seriously broken that mark, but silver is still hanging in for now... is this 'look out below' time or is silver bouncing off 26.80 three times during this mess enough to hang tough, for those of us foolish enough to try and trade these markets?

    Many thanks for all your efforts!

  29. Don't worry, Turd, tomorrow there will be some announcement of death and destruction and total meltdown....and the market and PMs will go wild and scream upwards....

    Honestly, I'm getting to the point where I'm trying to not pay attention to day to day reasons (since most of it is BS) or actions (most of them contrary to any logic) and the state of my investments (I don't need the money til retirement), and trying to look at it as a marathon instead of a sprint.

    The PMs will come up eventually, they always have, and they always will.

  30. Good ol' Dan connected the dots between Japan debt downgrading and this raid on gold market. Very well-reasoned article. I remember other experts also said sth similar that a raid on gold is almost certain whenever EE wanna divert concerns on debt crisis away.

    Check it here:

  31. Could someone clarify whether futures expiry is upon the COMEX or GLOBEX close?

    Thanks in advance

  32. Our metals are walking on thin ice. Not having any fun today.

  33. No days off Turd, we need you on the ups and the downs! I'm still a 4 month newb to the silver game and I'm not worried about these dips at all. Nothing about the fundamentals have changed, only the drastic measures being taken by the EE to continue their manipulation. Weak hands and the timid are the only ones unloading right now and they are mostly holding paper anyway. My stuff hurts when I drop it on my feet because it's real. They'll have to snatch it from my cold, dead hands before I'll give it up. Even then I'll still have a ninja death-grip on it.

  34. Justin...

    yep, I'm still in it. I'm working in the office today, but still keeping one eye on the forum and the charts. What a crazy ass day.
    But I didn't wanna miss out today on B'ingTFD like I did yesterday, so I cruzed over to GVille Coins before lunch and quenched a little of that thirst. Bought 8 rolls of Eagles when spot was at 27.04 or so, so I'm cool w/ that. Didn't spend all my Bernankies though...saved a littl over 2G's just in case to see if silver drops even further in the next day or 2 and then will use that up on the cheaper Buffaloes. Hoping that will work out ok.

  35. This comment has been removed by the author.

  36. I take EE with a side of Turd.

  37. Damn Turd, I sure hope I wasn't right about 1260. Nice place to buy more physical though, and God knows what the miners will looks like at that price. Gotta go scrounge more ammo.

    Hopefully we bottom tonight or tomorrow and end the week on an upswing.

    The key word right now is patience.

  38. That 18-hour Feb Gold chart looks a lot like one of your favorite umbrella formations...

  39. We need to start trading higher NOW or we're in for another beating.

  40. Y'all are just a little too emotional right now. Let me put something in your back pocket:

    This is the absolute end of the line for the big boyz. This is it. They absoulutely HAVE to try to knock this thing down and will do so with every available means at their disposal. You have to remove your emotions from this, as China is hugely demanding physical and thus have tampered with the paper market. COMEX and others are just simply using this time to further induce their need to keep pm prices down.

    The action today is comforting to me. I now have market confirmation that something is about to give very soon.

    I don't really care if you don't believe me. I'm just adding my $.02 to the discussion. But I'll leave you with one small thing to think about:
    If the strange outflows of physical keep occuring commensurate with paper price destruction, then the end of JPM is near. You have to see the full picture here to understand the dynamics.... forget price. It's a tool. Look at the physical market and you begin to see very quickly that it is unsustainable, therefore this last ditch effort is not only expected, but welcome IMO.

  41. Ok, I'll get my furnace fixed, THEN hunker down.

    Or maybe right after "American Idol" tonight, THEN I'll hunker down.

    I think you get my point.

  42. Well I don't know why I'm surprised about today's action. At this point I shouldn't be. Neither should you Turd, but I totally understand your frustration. But look at it this way, the more silver bounces around in the $26 range, the better base it forms there. Gold is way, way over sold as has already been indicated by those watching MACD and as Gene Arensburg points out, the outflows most likely won't continue much longer. Add to that the fact that the news cycles last several days to a week at most. Pretty soon reality will be back in the headlines about how the entire world is headed for a fiscal disaster. I mean for sh!t's sake, the U.S. gov't just had to release $200B in bonds in order to stop a default! The world is still asleep when it comes to the U.S. dollar, and also the Euro for that matter. It seems impossible that this doesn't engender panic.

  43. We have reached the tip of the triangle on my 3 minute charts...which way will she break???

  44. Mike Krieger's post over at ZH is awesome though, and I'm just a normal middle class schmoe.

    "It's a hard rain's a'gonna fall"
    -Bob Dylan

  45. Accept your beatdown and thank Blythe for the discount....I added today and will hold in case they go for the wipeout.....hehhehe....lettum.....they are swimming upstream in a river full crocodiles...just a matter of time.....and time is OUR friend...not theirs

  46. Welcome to the game of trading bitches! A pure unadultarated bulls vs bears scenario. What you are witnessing is a short-medium term shift in power between the two sides. Its the way markets operate, always have and always will. No matter how much you might want to believe in the "fact" that news drives the markets, it couldnt be further from the truth. It should be your long term fundamental view that will have you hanging onto those 100oz shiny bars, as paying too much attention to the ups and downs of this game will drive you mad. Unless of course you are familiar with technicals but I wont dive too much into that on this blog.

  47. There is strong monthly support in silver at 26.55 which is the reason it has held up better than gold (so far). That support will go away when the calendar changes to February, and we should see that level give way in short order.

  48. I posted on Harvey's site last night wondering if the huge withdrawals from GLD and SLV were foreshadowing a raid.

    Looks like the put that 1M+ oz of gold and 1M+ oz of silver to good use today.

    These big ETF withdrawals seem to correlate with raids fairly regularly. Would be nice to plot them out somehow.

  49. Not as much short covering kicking in as I expected...regardless of whether it's sane or not I do trade silver ETF options and this lack of an "FUBM", as Turd calls it, is concerning

    I'm starting to wonder if GoldFinger is right...

  50. In my simple mind I see a quick by back in for gold in the a.m. just before the 1:30e.s.t for the expiry same thing that happened to silver yesterday, didn't it gain near .50 in the hours before expiry. I'm hoping this smackdown is just that simple. Yesterday silver got beatdown moreso that gold until expiry, and earlier today and throughout gold was beat more severly than silver. I don't know much but time will tell.

  51. I forgot to add I think people tend to forget there are traders and there are "hoarders". Traders freak out when prices don't follow their predictions; they are trying to make some fiat on paper market fluctuations.

    Hoarders (like me) are accumulating physical and have no intention of selling until there is a massive upswing, if at all.

    You see these two get into arguments all the time, especially on ZH. Hoarders can't believe anyone would ever sell, traders are constantly making calls for buying and selling.

    I think a large part of the hostility against guys like RoboTrader is that the hoarder thinks the trader is just trying to scare them out of the market. He really is just doing short term trading, just like turd with his charts and TA. Whether his/their "calls" are of any value is another issue altogether.

    TA is an attempt to predict short term outcomes, so buying and selling at the right time is key. Hoarders will buy buy buy and hearing someone say "sell" is like a punch in the gut and generates hostility.

    These battles and the shills at ZH are why I usually just skim the comments there now. 95% of the posters are in agreement but their differing goals end up causing catfights.

  52. Just bought a sealed box of 2011 Eagles from Tulving. For those of you unfamiliar with them, they are one of the big boy wholesalers who supply the coin shops. They only sell in quantity, so you've got to make a decent size purchase. But if you can afford it, no one is better.
    Interesting to note three weeks ago they had opened boxes of 2010 Eagles, sealed boxes of 2010 Eagles, opened boxes of 2011 Eagels, and sealed boxes of 2011 Eagles. Each one is a little different in price. As of a few days ago they sold out of the first three and only have the sealed 2011 Eagles.

  53. @wingman good point. You will know the price has bottomed out when you can't get delivery!

    There has been some angst around here about prices holding at such and such a level. C'mon Au over $1,300 and Ag over $26? No problem. I thought prices were crazy with Au @ $950... $1050... $1200 and Ag @ $15... $19... $22.

    BTFD and take delivery, and don't look back.

    V for Victory! Victory. Awesome.

  54. @ David. Good post. Put me down as a hoarder. Based on my experience, I'm not smart enough to trade. ;)

  55. Well, tonight Blythe is working her monkeys overtime (sure hope they get extra pay), but we are not near the bottom in silver yet anyway. I have my own sentiment indicator for silver which works quite well: I will know when it is time to start buying more silver when I feel like puking and can't hold any dinner down at night.....sort of like when silver dove last time from $21 down under $9 an ounce.....even then I had to wait until it recoverd to around $11 before I BUTFT (backed up the F**king Truck) !! I think we might see 21-22 on silver before I can't keep my dinner down....hang tough out there, we will win in the end!!

  56. Been watching PM's for over a year...Have wanted to invest but never have and don't know how. Do I need a broker or is there a trusted site that is recommended. Please......I feel the need to do this NOW. Any assistance would be helpful. I found this blog about two weeks ago and really like the "Turd's" (and commentators) thoughts.

  57. Okay. My very first post sounds desperate and perhaps overly ignorant. Let me explaine;
    I am on a fixed income after becoming disabled in an auto accident 10 years ago. (The claiming process and medical almost wiped out my entire savings.) Since then, I have tried to "live with in my means" and have slowly built up a small savings. (If you knew how much I am sure you would regard it as a pittyance by comparison.) Anyways, I have been a believer in PM's for over two years but, have not acted on my instincts due to ignorance of the system. I have never invested, stocks, bonds or PM's. The only thing I have done in the past was funds. I have been jumping from site to site for months when finally found "Turds" blog. I found him through a link from zh and admit that he and his commentators think along lines that are the same as mine. I am in a small community that has 1 coin shop but, never have been there. I feel that gold is too much expense for me and therefor am looking at silver. Would like physical but, not sure how or for that matter even from who. It appears there are many of you who already have this knowledge and are actively purchasing. Any suggestions? I feel the time is now because I believe the Egypt scenario will bear more consequences than what most believe it will. Thanks in advance for any/all suggestions!