A Wild Ride on The Globex

This afternoon's action even got the attention of ZH:
http://www.zerohedge.com/article/todays-precious-metal-close-banging-moment-brought-fine-people-comex

As mentioned earlier, rather than suspect the EE, I'm more inclined to believe that today's Globex craziness is more directly related to this being "put up or shut up day" in the March silver contract. Either way, however, we should all be very impressed by the resiliency of the buyers. I'm standing by what I mentioned earlier about $35 looking imminent. We'll see.
More this evening. TF

ps Read this post from Trader Dan and look at the two charts:

http://traderdannorcini.blogspot.com/2011/02/cci-notches-another-new-all-time-high.html

First, note the incredible CCI chart. Picture this chart in your head the next time someone tries to argue the whole "deflation vs inflation" thing with you.

Second, look at the long bond chart. Note that the current bottom was marked by an UP outside reversal day. Always be on the lookout for them. There are few technical indicators as prescient when predicting trend reversals.

Are You Ready For $35?

I broke out the white-out one more time and look what I found.

In case you've forgotten, I first used the white-out last Tuesday evening:
http://tfmetalsreport.blogspot.com/2011/02/getting-into-white-out.html
I figured that if Blythe was going to spend so much money trying to pretend that last Monday hadn't happened, it was the least we could do to oblige her and play along. With silver now having broken through the latest containment line at 33.75, I figured I should use the white stuff one more time. Hmmm, take a look at this:

Again, Blythe wanted us to forget about last Monday. Once you do, you see a chart that is breaking out and looks ready to charge higher. Tomorrow is Happy Tuesday so maybe we can get to $35 in the next 24 hours? Maybe. We'll see but it certainly looks like a strong possibility.

Furthermore, look at this daily chart of silver. Provided we don't absolutely collapse into the bell, silver will set a new, post-1980 closing high today. This will attract momentum-chasing buyers tomorrow, too.

Strength into the close and on the Globex will feed on itself and $35 silver will be in plain sight. With about 45 minutes to go, I have a last of 33.89. Let's go get it! TF

ps We have lots of fun here but this story sure brings you back to reality.
http://finance.yahoo.com/banking-budgeting/article/112189/who-owns-the-us?mod=bb-debtmanagement


1:50 EST UPDATE:
Several comments below regarding the drop that occurred right at the Comex close.

I do not suspect think this was EE action. Since the drop occurred at exactly 1:25, this is most likely due instead to some "market-on-close" orders. Its safe to assume that some March contract holders who are unwilling to stand for delivery and post the $ this afternoon simply bailed at the close. Their accumulated offers overwhelmed the bid at that moment and dropped price by 20 cents.
Now, Blythe may yell "Carpe Diem" to the monkeys and attempt to pile on from here but I doubt it...not with tomorrow being Happy Tuesday. So far so good as we have already recovered back up to 33.71.
I'll keep you posted. TF

Four Charts For Monday

OK, let's get the week started.

First up, the USDX continues its ugly ways. You can expect some buying to emerge somewhere down here which may cause a brief rally back up toward 77 and change. However, this chart looks to me like something that wants to accelerate to the downside. Below 76.18 you know there are a lot of stop orders so we could see 75 pretty frickin quick.

Overnight news that Saudi can pretty much replace every single barrel of lost Middle East production served to put a lid on the rally at about $100. Hmmm....makes you wonder what would/will happen if/when the revolutionary fervor takes hold there but I digress. For now, this chart makes me think that we will soon get a pretty stout move in either direction. Given all the turmoil, it will probably break higher as "War Breaks Out" is always a less more headline than "Peace Breaks Out".

Onto our precious precious metals. Conveniently, these two charts have begun to show a rather clear pattern. First, in gold, if you look closely you'll see that for the past 10 days or so, we've closed higher than where we've opened. This is gives us a very strong picture of real, significant demand. The EE has clearly decided that they'd like to keep things under 1420 as long as possible but such strong demand will, eventually, overwhelm them. Remember, Friday gave us the 2nd highest weekly close of all time. This is extremely significant, as well. I get the distinct impression that this is a market about to burst  back toward the alltime highs of early January and beyond.

Silver is equally compelling. Rarely have I seen such a sharp line of EE defense as is clear on this chart. Four times in the last three days we have tapped...and I mean tapped...33.75 and each time fresh selling has quickly emerged. The fun part is that Blythe has now set a trap for herself. Everybody and their brother can see the line at 33.75 so WHEN that level is finally breached, there will be lots of fresh buying and lots of shorts covering. Watch that level closely!

We're sitting at 1411 and 33.53 as I wrap this up. I've got a feeling that this is going to be a pretty interesting day so keep an eye on things. More later. TF

10:55 EST UPDATE:
Looks like there were, in fact, a few stops above 33.75 in silver. Now, where do we go from here? Probably higher still as Blythe finds herself in an increasingly tight position. All of the fresh paper that she issued last Thursday is now well under water. HAHAHAHAHA!

Watching Crude

Wow, what a crazy weekend! Thank you all for your active participation on the blog.

We opened higher on the Globex tonight and we've managed to stay there. I have an April gold last of $1413.40 and a last in March silver of $33.46. Very nice when you consider how much the PMs rallied on the Globex Friday afternoon. You can bet that Blythe would like to claw those gains back but, so far, she's either been unable or unwilling. I suspect its the latter because of what's going on in crude...its up over $1.50. Take a look at this 60-minute chart:

I would not be surprised to see WTI over $100 when I wake up tomorrow. This is significant because we know that instability and unrest in the Middle East have consistently translated into higher PM prices. I need it too, boy, because my accounts a mess and I need to clean it up. Hate to do that on a down day so I'm hoping for a nice, solid UP Monday and Happy Tuesday in which to get it done.

My inbox just exploded tis weekend but I think I was able to get back to most everyone. I don't have time tonight for a full "Turd's Mailbag" edition but I do have a couple of things to pass along...

First, reader Badu took the initiative to set up a chatroom for us until the new site is ready. Here are the instructions for how to access it:
"Thanks!
Ok it's set up, when you want to take control over it just go to www.tinychat.com/ and sign in with username "turdworld" and password "password123" and the link to the chat itself is www.tinychat.com/turdworld.

If you don't like the name I can change it!"

Next, Vineet from India sent this. Pretty interesting:

"hello Turd

This is your humble follower and regular reader from India. I want to share the following piece of news that I stumbled on Yahoo.

I went over the brief communique many times -- if we prune away the other details regarding tax collections etc, the core info reveals that :

1] Contrary to the expectations of most, it is not Mexico or China, but India that has taken the first step towards remonetisation of silver. I noted that these coins are not 'special edition' or 'collecters' items', but intended for general circulation.

2] I would hazard another guess that the Indian govt will bring out silver coins in other [maybe greater] denominations, to replace the paper money notes of INR 100, 500, 1000 etc

3] It seems that India has been aggresively stockpiling silver [ stockpiles had dwindled between 2002 and 2005] and now has the reserves to gradually introduce monetary metals as medium of exchange. This is probably the first step. In time, India may phase out a large part of paper money -- in approximately the same period as some other countries like China, Russia, Mexico also start re-monetising silver.

4] There was another news that Bank of India is now facilitating trade between China & India in Yuan instead of $. BOI is one of the largest public sector banks in India, and other banks will follow its example. Consider that India is now paying for Iranian crude oil in a combination of gold & INR. In 2006, India picked up half of the IMF gold sale [200 tons], the inference being that India was accumulating gold reserves before and has being doing so till date. My point is that the largest Asian economies [also the main growth engines] are gradually but surely detaching themselves from the US $ and towards re-introduction of monetary metals in their internal economies. These seem to be subtle indications that the gold standard is inevitable in the not-so-distant future."

A reader in Virginia passed along some correspondence that informed me that Jim Willie likes to read this blog. Yes, the real Jim Willie! I'm flabbergasted and truly honored!

Lastly, another reader sent me this regarding the situation in WI. Its my favorite, so far:

"I have to tell you: I read your blog daily for the measured commentary and often spot-on analysis regarding silver. As someone who's not a trader or market insider, your plain analysis is greatly appreciated. Occasionally though, when you veer into political discussions, your ignorance is cringe-inducing."

Which is why I so rarely go there....

OK, that's it for now. I'm headed upstairs to watch the Oscars with Mrs. Ferguson and the two little turds. Still can't believe that "Hot Tub Time Machine" wasn't nominated. TF


Midnight EST UPDATE:
I've received several requests that I pass along this information from Ted Butler. Duly noted.
We should all take time to participate in Ted's campaign. All the information you need is listed below. Thanks!

Speak Up and Be Heard

 On several occasions over the past couple of years, thousands of you have taken the time to write to The Commodity Futures Trading Commission (CFTC) concerning the issue of position limits in COMEX silver.  Now the CFTC has solicited your opinion again for what will be the last time.  The current open comment period, through March 28, is the culmination of all the public hearings and commentary over the past two years.  Your comments on silver position limits make a difference.  Private legal counsel and even sources within the Commission have assured me that there can be serious consequences for the CFTC should they ignore the will of the public, when that public opinion is reasonable.

The silver market has been manipulated by a concentrated short position.  You can’t have a manipulation without a concentrated position.  The only effective way to prevent concentration is by enacting legitimate speculative position limits.  The key is to set the speculative position limits at the right level; not too high, so that speculators control the market, not too low as to restrict trading liquidity.

The proposed position limit for silver comes out way too high, over 5,000 contracts.  It’s too high because it gives speculators too much dominance over real world producers and consumers.  5,000 contracts is the equivalent of 25 million ounces of silver.  There are only three mining companies in the world who produce more than 25 million ounces of silver a year.  In addition, there are only a handful of silver consumers in the world who consume more than 25 million ounces a year.  There are hundreds of important miners and consumers who produce or consume less than 25 million ounces of silver a year.  Therefore, it makes no sense to empower any speculator who comes along with the ability to hold, long or short, more than the amounts most of the important world producers and consumers make or use in a year.

The proper level for position limits in silver is about 1500 contracts or 7.5 million ounces.  That amount is still larger than what the vast majority of the world’s silver producers and consumers make or use in a year.  If you agree, please make your opinion known to the Commission.  It’s crucial that you do.

Here’s my letter.  Use any part of it or just the last sentence on a copy/paste basis if you wish.

Dear Chairman Gensler and fellow Commissioners:

I urge you to approve the staff’s proposal on position limits, including limiting exemptions to bona fide hedgers.   I would ask you, however, to readjust the proposed formula in silver.  The current formula would result in a position limit of over 5,000 contracts for any single speculator, on an all-months-combined basis.  5,000 contracts is the equivalent of 25 million ounces of silver.  This is too high of a threshold in light of the realities of the world silver market.

There are only three mining companies in the world who produce more than 25 million ounces of silver per year and only a similar number of industrial consumers using more than that amount.  Any speculator holding an amount of silver derivatives greater than what 99% of the world’s silver producers and consumers make or use in a year would have inordinate pricing power.  The purpose of speculative position limits is to prevent such a circumstance.

Please institute a 1500 contract (7.5 million ounce) position limit for silver.

Respectfully submitted,

Ted Butler

The instructions for submitting a comment can be found here http://comments.cftc.gov/PublicComments/CommentForm.aspx?id=965  All that is required is your first and last name and email address (repeated) and to use the validation code before submitting your comment. Your email address will not be published, but you will receive a confirmation that your comment was recorded. If you have difficulty entering your comment electronically, you can mail it in, but I just did it and I’m not a computer maven.

Please remember that your comments and name will be published for the record. Accordingly, please be professional and limit your comments to position limits, the issue at hand. Also, please comment only once, but be sure to comment. It is important that the Commission knows your opinion on this matter. You can view the public comments on position limits here http://comments.cftc.gov/PublicComments/CommentList.aspx?id=965

Weekend Update and a Message From Turd

First of all, here are your charts to ponder over the weekend.

The CRB made its seventh, consecutive higher weekly close yesterday. Again, your house may be going down in value and the banks may be insolvent but that doesn't mean a trip to the grocery store or the gas station is getting any less expensive.

Next, here's an 8-hour gold chart. Again, for neo-turdites, the time period I utilize for my charts is solely determined by the perspective I want the reader to grasp. In this case, I needed a chart that went just far enough back to include all of the action for this year to date.

And here's a 1-hour silver. I purposefully left off the white-out this time because Mrs. Ferguson took it back upstairs and I'm too lazy to go all the way back up there to retrieve it.

I was going to print off a bunch of USDX charts but Trader Dan already has so I figured...why waste time duplicating effort? Besides, his charts as much prettier than anything I could come up with.
http://traderdannorcini.blogspot.com/2011/02/technical-look-at-us-dollar.html
Also, I had asked Dan to write a note that explained the hedge fund "ratio trade" that has been negatively impacting the miners for some time now. Thankfully, he obliged. If you own any mining stocks, I urge you to take some time to read this: http://traderdannorcini.blogspot.com/2011/02/hui-gold-ratio-gld-and-ratio-spread.html

Lastly, please take a few moments to watch this: "The Turd Speaks".
http://www.youtube.com/watch?v=MOwdMj3ZfY0

Have a great weekend. More tomorrow evening, after the Globex open. TF

Pour Some Coffee and Read This

Its early Saturday am in the US. Reader Eric posted this link in the comments section of last night's thread and several other readers suggested that I link to it here so that everyone will be encouraged to take a look.

Now, of course, there may be a few items contained within that I don't completely agree with. For example, in dollar terms, I don't believe the future price of gold to be infinite. However, Mr. Willie clearly put a lot of time and effort into creating this and he deserves to have it reach as wide of an audience as possible. I'm happy to do my part.

http://www.kitco.com/ind/willie/feb232011.html

I'll have another thread later this afternoon. Little Turd #2 has a basketball game this morning which I will be attending. Have a great day! TF

Yesterday's BS Selloff

Just a quick note as it is currently cocktail hour at The Fergusons.

First it was Trader Dan discussing the "low volume selling" that drove prices sharply lower on the Globex yesterday.
http://traderdannorcini.blogspot.com/2011/02/4-hour-silver-chart-update-542-pm.html

Now, today, you have this from FMX Connect through Zero Hedge:
http://www.zerohedge.com/article/fmx-connect-afternoon-gold-fix-yesterday’s-sell-1415-area-seemed-almost-orchestrated

"Seemed almost orchestrated". That cracked me up.
It amazes me that the blatant manipulation is so obvious yet so few want to assign blame. Why? What is there to be afraid of? We're already thought of as tinfoil hat-wearing, conspiracy-theorizing insects. What? Calling a spade a spade makes you even more crazy?

The Evil Empire, led by the commodity desk of JP Morgan, screwed many again yesterday. Period.

Heading Into the Close

We've got about 45 minutes left. Gold and silver have been firm all morning which is very encouraging after yesterday. The EE attack was only able to reset price a dollar lower or so. It was not able to scare away determined longs, which is nice. From here, I'd really like to see us move convincingly through 33 and close UP near yesterday's close. That we'll have an UP week seems assured absent some BS manipulation/trick (which we all know is always possible). Gold is looking tough, too, and a close above 1408.40 would give us our 2nd-highest weekly close ever. I don't care what anyone says...a close above 1408.40 would be significant.

And this is good, too. Looks like ole Dan and I are looking at a lot of the same stuff:
http://traderdannorcini.blogspot.com/2011/02/4-hour-gold-chart.html
http://traderdannorcini.blogspot.com/2011/02/4-hour-silver-chart_25.html

Keep your fingers crossed for the next few minutes. More later this afternoon. TF

Your One-Trick Turd, part II

First of all, we should all be very pleased by the action overnight. All who BTFD late yesterday are lready about a dollar to the good on silver and $10+ on gold. For all the angst, wailing and grinding of teeth, gold currently stands off just $10 from its Comex close and silver is down a measly $0.39. I've seen woiss.

Rather than bore you with two more PM charts, here are two other key commodities to review this morning. First, here's crude. Crazy volatile this week but it ain't over yet. Only a move down through 94 would be a sign that things are calming down.

And, rather quietly, DrC has halted his sharp decline and has put in a rather impressive turnaround. As you know, strength in copper often spills over into the PMs so this is an encouraging development.

Lastly, a lot of chatter lately about how this "board is too bullish" and that "Turd is always long". Everyone needs to understand something: If you're looking for trading advice like when to sell and when to buy, you need to look elsewhere. There are lots of shills and con artists out there who are willing to provide you with this "information" for a fee. They'll gladly take your business. Let me remind you that this site and all the wisdom contained here is provided free of charge. All that is asked of you is that you occasionally visit our sponsors and consider "feeding the turd". I have developed a bit of a reputation for accurately predicting moves in the PM markets. That's all well and good and I've never tried to hide my methodology from anyone. However, if I were to pretend that I could, with consistent accuracy, call every single short-term top and bottom, I would quickly be shown to be just as useless as Prechter et al and my long-term message would end up being ignored.

I am not long just for the short term. I am long intermediate. I am long long. I am currently in April and June gold and May silver. Dips like yesterday don't bother me because I am extremely confident that my May $35 silver calls will, eventually, make me money. Whether or not EXK traded off $0.20 makes no difference to me, either. The trend for everything PM-related is UP until and unless the fundos change. Needless to say, I'm not expecting that to happen anytime soon.

The end of The Great Keynesian Experiment is upon us. I am attempting to prepare accordingly. You should, too.

Off The Mat

Well, the EE went for the knockout punch this afternoon. Like Rocky vs Creed, we have crawled off the mat and signaled to Blythe, "Bring it on!". If you need to get your head screwed back on straight, I highly suggest you take 2 minutes, right now, to watch this:
http://www.youtube.com/watch?v=25NmudB2fqg

And furthermore, maybe you never watched this or maybe you only watched it once back on Sunday and laughed it off. I make these "movies" for several reasons, the chief of which is to get you to understand my core thesis at the moment. I've found that I could type and type and some still don't get it. Reading comprehension issues, I guess. Again, please take time to watch this once more. 96 hours on, its rather prescient. If you throw out the Monday night raid to claw back Monday's gains, today's action was foretold right here: http://www.youtube.com/watch?v=Lq0bAOVaQwQ

OK, here are your updated charts. First gold...note that today's raid pierced but did not break the primary, short-term trend.

Silver, too, has its primary trend still intact. I hope you haven't already abandoned ship. By tomorrow, you may be sorry that you did.

A couple of other items...
You should take time to read this:
http://news.coinupdate.com/huge-comex-silver-supply-squeeze-developing-0695/
And this:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/24_Royal_Canadian_Mint_Now_Saying_Its_Difficult_Securing_Silver.html
And, of course, Harvey:
http://harveyorgan.blogspot.com/

Oh, and contrary "rumors", the diabolical Gadaffi is still alive and killing...I mean kicking. Hmmm...haven't seen a corresponding meltUP in gold and crude yet have you?

That's it. Long f-ing day. See you in the am. TF

Here We Go Again

A brutal combination of Gadaffi rumors and crude oil margin hikes has given Blythe the opportunity to once again raid the Globex.

This afternoon's meltdown was primarily due to weak-handed longs who have been hanging in, hoping for a short-squeeze, all heading for the exits at the first sign of trouble. Blythe of course, never wanting to miss an opportunity to push price lower, has joined in to create an exceptional opportunity. Here's your chart:

So, I ask you, what has changed?

Is the silver supply issue suddenly all better?

Did we suddenly discover a couple billion ounces laying around somewhere?

If Gadaffi has been assassinated, does this make the survival of other despotic, Middle Eastern regimes more or less likely?

Did the U.S. suddenly balance its budget?

Are all of the U.S. states suddenly solvent?

I could, of course, go on and on but I won't. Just buy the fucking dip. I did. TF

ps And look at this from Trader Dan. Note the comments regarding volume.

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhltRgibhfL8xzkAM454gsUPU_mFgDjF7LjZW0xFVYwuAKRxmFj0PgKamToqiAHYXNj-PyIRufx0GDXUEvzTGFrRpChyphenhyphenKDPVNFi-btDVj-TXunfwsIMg0zNqmPHdT43QwcUCxlZ3mJL8U4/s1600/snapshot-444.png

4:30 EST UPDATE:

Again, if you're going to exist in Turd's World, you have to get used to this crap. Shit happens....oooh, lets make that into a t-shirt: "Turd Happens". I like it!

At any rate, this chart speaks for itself.

Hmmm...Coincidence?

One of the things we've been following very closely for the past few weeks is the price of the U.S. long bond. Here's a sample discussion:
http://tfmetalsreport.blogspot.com/2011/02/santas-pillars.html

Well, what to make of this?

Now, I'm not ready or willing to ascribe this to anything other than luck and good fortune for the perpetuators of The Great Ponzi. I would suspect, however, that many of you will say otherwise.

Have at it!

This Day and Age

A very lively discussion overnight and I would encourage everyone to scroll through the comments as their is a wide variance of opinion and much to consider. Also, I'd like to ask that, in the future, we refrain from using the terms "good entry point" and "Turd's Bottom" in the same sentence. Just sayin...

While I slept, I see that April crude spiked to $103.41. Wow! Though it has since pulled back to 99 and change, events in the Middle East continue to spin wildly out of control and must be watched very closely. As the tumult grows and spreads, expect a positive impact on the price of gold. The chart looks great and demand may soon suddenly increase so...lets just say I'm not looking to sell any of my April calls just yet.
Oh, and here's your updated hourly chart. Gotta say, that's about as solid as it gets:

While we collectively hold our breath watching every tick in the silver market, here's a chart to chew on:

For the WB/shortsqueeze storyline to continue, we'll need to see silver move UP through 33.75 and then go tackle the Globex highs of Monday near 34.30. In the past 24 hours, we've approached that 33.75 level four times and Blythe has repelled us each time. A move down here, through 33, will be your first clue that this current saga is ending and that the EE will survive until May. A drop back through 32.25 would almost confirm it so watch these levels very closely.

That's it for now. I've got lasts of 1415 and 33.18. Don't stray too far from a computer today. This promises to be a another wild ride. TF


10:30 EST UPDATE:
Note that silver bottomed at the exact same time yesterday and at the exact same price. No, there's no manipulation here. None, at all.
At any rate, IF the EE is successful in taking out 33 later, they would still have to take out 32.70 before I'd get nervous. On the other hand, a strong bounce today, like yesterday, off of the morning lows and UP to 33.75 will again be met with EE resistance. If/when that level is bested, look out!

12:15 EST UPDATE:
Today is a lot like the previous two days. There have been repeated attempts to accelerate price downward but each attempt has failed to significantly breach 33. Lets watch the close to see if we can fight off Blythe yet again and close green.

And I think its safe to say that President O'bottom regrets this photograph...Yikes!

Paper vs Physical

I must keep this comment short tonight due to time constraints but I wanted to start a conversation.

With all of us acutely aware of the supply problems of the Comex, we need to start preparing for the post-EE world. At some point in March or May or July of this year, the Comex will default. Whether or not its a de facto default is of no matter for this discussion. At some point soon, "paper" silver will cease to be a actual asset. Paper silver only has value because it is perceived to be backed by some measure of physical. A Comex failure will, inevitably, lead to a failure of all paper metal assets. Everything from futures and options on futures to ETFs, both the SLV kind and the AGQ format.

So, three questions:

1) Do you accept this general thesis?

2) What is the trigger point for liquidating all paper metal? It can't be at default because, by then, it will be too late.

3) If you can't exchange into physical because of lack of supply, what do you buy? I say non-hedged, junior miners. What do you say?

OK, have at it. I'm very much looking forward to reading your responses in the morning.  TF

p.s. I had a great planing meeting with my web team yesterday. We are looking into a new site that combines elements of blogs and forums, maximizing for us the opportunity to exchange information. We're utilizing many of the suggestions you provided over the weekend so thank you all very much for your input. I have a target date of April 1 for the unveiling...provided the world hasn't ended before then.

p.p.s. We've now had four consecutive business days of 65,000+ pageviews with a peak yesterday of over 72,000! This is madness! I'm sure glad you all enjoy this so much. I'll keep up my end. You hold up yours (heh heh, he said 'up yours'). Lets keep it clean and focused and we'll keep growing.

Midweek Madness

The world is on fire. We are seeing history in real time. Maybe these lunatics are going to be right:
http://www.msnbc.msn.com/id/40885541/ns/us_news-life/
I'm sure that Blythe is pulling for them...

Oh, my goodness, what a day. What a week! This has been crazy!
March silver open interest basis last night remained high at 39,528. Surely, more rolled today but how many? There is still plenty of suspense as we head into tomorrow and Friday. However, even if the EE survives this month, the back-channel publicity this squeeze has gotten has exponentially grown the amount of people who are now aware of the inevitable Comex default. The EE may buy time until May but May's going to be a bitch! Frankly, I hope that they do survive because I will be loaded and ready come early May. I'm sure you will be, too, and we're all going to make a lot of frickin money.

Let's start to day with an update of the crude oil chart. With Libya in chaos and the very real potential for this to extend to Saudi, well, lets just say "all bets are off". Anything, and I mean anything, could happen.
If we continue with an orderly climb (if you can call $5/day orderly), there is nothing stopping oil from making it to $110 or so before encountering some resistance. Again, if you wake up tomorrow and Libya's oilfields are all on fire??? Uhhhh, lets just say there won't be much resistance at $110.

Next, here's a 2-hour gold chart that takes us back a little over two weeks. Does this look like a chart that is topping?

And, finally, here's a 2-hour silver. Note the ongoing "stair" accumulation pattern. Nothing has interrupted it now for over two weeks. I say we keep buying until this breaks.

There's still more to talk about today so I'll likely add another thread this evening. Until then, smile and be happy. We've got the EE on the run. TF

A New Thread

I don't have anything new to say right now but with the old thread well through the 200 comment level, I figured I'd better start a new one.
I'll have a full update in about 2 hours. TF

Wacky Wednesday

Its called that because Blythe is in there, whacking away at the silver advance.

You can see it already. The EE has decided to vigorously defend the area around 33.40. Why there, I have no idea but you can clearly see it here on this latest hourly chart (WO edition):

This is a chart that looks to me like it wants to go higher. Much higher. And soon. Like a pop up toward 34 and beyond is in the cards before too long. We'll see...

Someone on the earlier thread posted some preliminary numbers for the March OI basis yesterday. The number was something like 48000+. If this is accurate, it is a truly astounding number! Again, by Monday at 1:30 EST, you either have to show 100% funds for delivery or be out. There is no in between. Watch this very, very, very closely today.

Lost amongst the shuffle of all the madness, this pig looks like crap. It must be watched closely as we are once again approaching some pretty significant, long-term technical levels.

OK, its off to the races on this pivotal day. I have a high in April gold of 1406 and a last of 1403. Very nice. I have a high in March silver of 33.39 (sound familiar?) and a last of 33.07.
You have a great seat for observing this epic battle. Enjoy.
As usual, more later. TF


10:50 EST UPDATE:
Well, this was pretty good...
"This is a chart that looks to me like it wants to go higher. Much higher. And soon. Like a pop up toward 34 and beyond is in the cards before too long."
If you're trading this morning, don't bail too quickly. Blythe is dealing with a  severe counter-attack is surely under duress. Let this keep kicking higher for another 90 minutes or so. Sometime, after 12:30 EST, I'll be looking to finally sell my remaining March calls. On any subsequent pullback, I'll begin piling into May. TF

Getting Into the White-Out

While printing off your updated charts, it suddenly dawned on me. If Blythe wants to spend a few million dollars trying to convince everyone that yesterday didn't happen, then fine, it didn't. But if that's the case, then I'm going to spend one dollar on a small vial of Bic Multi-Purpose White-Out. Take that!

It would seem only fair to honor Blythe by playing by her rules once again and wiping yesterday completely off of the hourly charts. Hmmm. What do we have left? How about this?

Well, that's not so scary, now is it? Looks like a perfectly fine chart to me. Shows the same old consistent, stair-shaped accumulation pattern that has been so good to us in the past. Thanks, Blythe! I know I'm going to sleep a lot better tonight knowing that the silver chart looks so darn bullish.

Now, I wonder what a little W-O would do for the gold chart? Well, well, well. Looky here:

Wow, that suddenly looks quite friendly, too. Six straight days of consistent buying has led us from 1360 all the way to 1400 with no real end in sight yet. Thanks, Blythe, for making this so clear!

So rest well, my friends. Our dear Wicked Witch has done us a great favor! Our rallies are obviously still intact and, in the unfortunate event that the metals begin to roll over, we now have clear exit points below 32 and 1390.

Again, thanks for all the help, Blythe.
Love ya, babe. Nite nite. See you tomorrow. TF

One More Monday Update

I just got off the phone with Mister Hyde. We were discussing the predictability of the EE beatdowns.

Something significant dawned on us. We now know that the March open interest barely budged on Friday. It remained very high at 50,848. Blythe knew this, too, which was why she was on the floor last night, personally directing the raid like Rommel from his battle tank. OK, now, lets think like Blythe for a moment. If you're her, you're pissed. You have foreboding felling that things are getting away from you. You must raid. NOW. Not tomorrow (Tuesday), but now!

March silver officially closed on the Comex at $32.30 back on Friday. It impressively traded higher all afternoon on the Globex. We discussed that great strength here: http://tfmetalsreport.blogspot.com/2011/02/amazing-day.html
Monday comes and its a holiday. The Comex is closed but silver continues to trade on the Globex as it reflects global prices. Price reaches a high of $34.33 last evening before Blythe shouted "Genug!". At that point, if you're Blythe, you'd give anything to claw back the Globex gains and set us back to Friday's close. In fact, that might even be enough selling pressure to really get the ball rolling lower and force some weak hands to finally liquidate their March contracts.

With that in mind, look at this chart:

Actually, I messed that up. The low was $32.39 now 32.49. (Oops. Moving too fast these days.) At any rate, Blythe made it to within 9 cents of Friday's close before our BoS put a stop to her advance right there. The battle now is waging between a vigorously defended 33.40 or so and an equally strong support of 32.75 or so. Who will win? It all depends on tomorrow's open interest numbers, I guess. It will be a very interesting overnight trade. Don't stray too far from your computer.  TF

Monday Update

OK, what do we know at this point?

1) The open interest numbers basis Friday have finally been released to the public. Yes, a/o Friday there are still 50,848 open March contracts! This is why the EE have so aggressively raided last night and today.

Also note the rise in open April gold was a huge +5610.

2) The raids have been sharp and predictable and Blythe has since decided to protect 33.25 and 33.50. Gee, where have I heard those levels before...

3) Ahh....but look...someone or something has decided that the area around $32.70 is a pretty nice price. Blythe has hit that level three times and each time we've rebounded. There was even the pre-dawn raid to 32.40 that was repelled and pushed back above that level.

So, again, the question is what to do next. Watch 32.70 very, very closely. If you believe in WB and the BoS, that would appear to be your entry point.

I'll be here, watching and waiting. There are 60 minutes to go. Its going to be very interesting to see how this all plays out. TF


1:15 EST UPDATE:
I've been asked to provide some perspective on copper. Here you go.

DrC is getting washed back as part of the "risk off" trade. This trade is obviously working to Blythe's advantage, too. The long-term trend remains intact, however.

The Moment of Truth

(obligatory)
http://www.youtube.com/watch?v=MqZQsv1QPA4

Well, no one should have been surprised by the action overnight. No one should be frightened by it, either.
Blythe gave it everything she had and silver still stands at $33.20 as I type. Let me type that again for effect...silver still stands at THIRTY THREE DOLLARS AND TWENTY CENTS.

Do not let the trolls and AGAs fool you. Last night's action was pure, unadulterated capping and manipulation of the part of the EE. Our friends at silvergoldsilver even reported that Blythe herself was in the office last night, directing the onslaught. If true, its shows you just how desperate they really are.
Take a moment to study this 5-minute chart of the overnight action:

Remember, you can always differentiate an EE attack from "regular" selling by the timing of the event. Blythe needs to get maximum effect from her actions so her strategy is often to "pile on". She waits. She watches. Then, as she sees price rolling over she steps on the accelerator, hoping that her new shorts create and even greater level of momentum to the downside, perhaps even starting a "cascade effect" of stop orders and fresh shorts. So far, it hasn't worked! Look closely, when EE selling abates, price rebounds every time. Buyers are there, hitting Blythe's bids. When Blythe relents, price rebounds. This is the essence of the FUBM formation.

So what happens next? Well, that's the $100,000,000,000 question. If the BoS are going to stand for delivery this month and if the WB story is to be believed, we're going to start finding out today. If price continues to rebound, and we head back toward $34, Blythe should begin to panic. Seriously. She created enough new shorts to take almost two dollars and sixty cents out of the price of silver overnight. If she fails to "shake the tree" today....well, lets just say that she and Ruprecht had better have their bags packed and the cab waiting.

I'm headed out shortly to meet with my web designer to begin planning our new playground. The fact that I'm leaving should give you some indication of just how concerned I am at this point regarding Blythe's long-term impact on silver price. Regardless, its going to be a crazy day and a wild week. Keep the belts buckled and your trays in the upright and locked position.

Much more later. TF

Welcome Back

Its been a long, three-day weekend. If you haven't yet, I strongly suggest you re-read this from last night:

"An absolute classic EE beatdown tonight as Blythe tries to claw back all the gains that were made on the Globex earlier today. Take a look at this 2-minute chart for tonight's action:

This is 100%, no-doubt EE manipulation. Some may claim algo, $-related selling. Nonsense. This is exactly what I was looking for when I made that "movie" last night. Blythe likely stored up some fresh ammo by covering some shorts back on Friday. She then unleashed some new shorts on us tonight in a blatant attempt to scare some March longs into selling. So the question is...what happens next?
I doubt she's done. I would initially look for support around the 33.25 level. We struggled with that area a little this morning (remember...broken resistance becomes support and vice versa) and it served to contain last hour's attack. It may hold again but don't be surprised if, at some point overnight, silver trades all the way back down to the highs of Friday, somewhere just below $33. If I were a BoS, intent upon taking delivery and shoving my silver auger right up Blythe's patooty, I'd be waiting right there for her with giant bids. Let's hope we see one, final, massive FUBM begin there and rally us into the morning. If I were trading tonight, I'd sit, cool as a cucumber and let Blythe come to me."


And you must also watch this, from Sunday night:


http://www.youtube.com/watch?v=Lq0bAOVaQwQ


OK, now you are prepared for this day. Silver is already about 70 cents off its lows so we may be in the process of building the biggest and most important FUBM of all time. Watch out, though. Blythe is still lurking.

I'll have more in about an hour on this very important day. TF

You'll Only Be Right Once

I've received quite a few emails asking me why I seem so subdued. Many have indicated that they would expect me to be more excited by the silver market. I've asked myself these same questions. Here's the thing...

There's an old trader's adage: Never predict the end of the world because you're only going to be right once. The same holds true here...Never predict a Comex default because you'll only be right once. However, I made a promise when I started this blog that I would never be purposefully vague and that I would always tell you exactly what I think. The world is full of opinion-givers who attempt to surround every issue so that they can never be proven wrong. We don't do that here. In Turd's World, I tell you exactly what I think, win or lose. Take it for what its worth. That said..

HOLY SHIT CAN YOU BELIEVE WHAT'S GOING ON IN SILVER?!?! THIS HAS ALL THE MAKINGS OF A SHORT SQUEEZE AND A SIGNAL FAILURE!!! HAHAHAHAHA!!!!! EAT IT BLYTHE!!!!!


OK, enough of that. But, seriously, I sit here with my mouth agape just like you do. Every time silver pushes another 50 cents higher, I find myself in stunned silence by the enormity of it all. I honestly have NO IDEA of whether or not the Comex is on the verge of default. What I DO KNOW, however, is that I have never seen anything like this before. The consistent bid. The lack of offers. The record-breaking open interest. The daily 2%+ moves. Again, I've never seen anything like it.

We sit here on Monday evening, February 21, 2011. By the end of this week, anything is possible. The Comex may be on fire and silver may be at $50/ounce. Libya may be in civil war and oil may be over $100/barrel. Israel may attack the Iranian ships that will be passing through the Suez and drive oil to $150/barrel. If the silver Comex collapses, gold may be over $1500. Anything...and I mean anything...is possible. I've used the term "buckle up" quite a bit lately. I mean it. There's some crazy stuff coming over the horizon. As Fred Thompson's character said in The Hunt for Red October: "This business will get out of hand and we'll be lucky to survive it".
On the flip side, maybe we're getting overly worked up. Libya will peacefully transition to a new goverment. Iran will not attempt to utilize the Suez Canal. Silver will peak at $35 and then sharply correct back to $30. As I said anything is possible. Be prepared.

For tonight, take a look at this crude chart first. It is absolutely soaring and I hope you took the time to fill up your gas tank today as it will surely cost you about $0.20/gallon more tomorrow.

I must admit that I could stare at this next chart all night. Its a daily gold. Do you recall how, just one short month ago, every amateur, con artist chartreader was telling you that gold had formed a perfect H&S top and that the downside target was now $1***. What a bunch of crap! Do not ever listen to these morons. They are nothing but two-bit shills trying to separate you from your money. Gold will trade at $1600 by 6/10/11. (Actually, if the silver Comex fails, it'll probably trade there by 3/10/11.)

And, finally, silver. There aren't very many charts I can give you at this point as we are in unprecedented territory. This, however, is interesting. You can clearly see some EE activity. Note how in each dip, "natural" selling was taking place and then, suddenly, a massive drop gets cooked in. This is classic EE. They use their available firepower in an attempt to capitalize on the downward momentum, thereby exacerbating the selling and hoping to create a cascade effect. All of Blythe's recent attempts have been rebuffed and, as you can see quite plainly on the chart, this one was, too, at around 6:30 pm. Its happened again while I've typed. Can she be pushed back again? We'll see. Watch that area around the first low, near 33.75, for clues.

If Blythe is able to register any small victories, I'll be looking for 33.50 and then 33.25 as possibilities for sharp, FUBM turnarounds.

OK, that's it. Tomorrow is going to be absolutely crazy and volatile. A day like no other we have seen in recent memory. You might take notes, maybe keep a journal, so that you can clearly recall when it over how you felt and how you acted at various points during the day.
Get some rest. Be ready. See you in the am. TF

11:25 EST UPDATE:
An absolute classic EE beatdown tonight as Blythe tries to claw back all the gains that were made on the Globex earlier today. Take a look at this 2-minute chart for tonight's action:

This is 100%, no-doubt EE manipulation. Some may claim algo, $-related selling. Nonsense. This is exactly what I was looking for when I made that "movie" last night. Blythe likely stored up some fresh ammo by covering some shorts back on Friday. She then unleashed some new shorts on us tonight in a blatant attempt to scare some March longs into selling. So the question is...what happens next?
I doubt she's done. I would initially look for support around the 33.25 level. We struggled with that area a little this morning (remember...broken resistance becomes support and vice versa) and it served to contain last hour's attack. It may hold again but don't be surprised if, at some point overnight, silver trades all the way back down to the highs of Friday, somewhere just below $33. If I were a BoS, intent upon taking delivery and shoving my silver auger right up Blythe's patooty, I'd be waiting right there for her with giant bids. Let's hope we see one, final, massive FUBM begin there and rally us into the morning. If I were trading tonight, I'd sit, cool as a cucumber and let Blythe come to me. Here, kittykitty....come to papa...
However, I'm not trading. I'm going to bed. Good night. See you in the morning (U.S.). TF

The Revolution Back Home

As worldwide events seem to spin out of control, I find myself paying closer attention to the events in Madison than those in Tripoli.

We are approaching a tipping point in America. The underfunded liabilities of state and local governments for the retirement and health care benefits of their employees, current and past, has been estimated to be as high as $3T. Amusingly, regular viewers of CNBS are still being treated to an endless series of "experts" who claim that soon the Fed will "begin to withdraw liquidity" and "end the policy of quantitative easing". What complete nonsense! Where, exactly, will this $3T come from if it isn't directly created from whole cloth by the geniuses at the Fed and Treasury?

Governors and mayors are the ones who are on the front lines of this battle. New Jersey governor Chris Christie saw his popularity grow after famously telling a teacher in New Jersey to "go get a different job" if she wanted higher pay. http://www.youtube.com/watch?v=aw0aBkt8CPA

But its not just the big states and the big cities that are struggling. Take a few minutes to watch this segment from "CBS Sunday Morning" yesterday and ask yourself what the possible solutions are:
http://www.cbsnews.com/video/watch/?id=7357162n&tag=related;photovideo

Now, I recognize that there are myriad reasons for why we are in this position. Here are a few, in no specific order:

1) Politicians negotiate much-too-favorable public employee contracts in order to buy votes.
2) Pension plans make far too generous return assumptions when planning fund growth.
3) Pension funds co-mingled with general funds and already spent. (Think Social Security.)
4) The soaring costs of current and future healthcare.

I could go on and on but it doesn't really matter. What does matter is that the money isn't there. Period.
So, if its not there, from where will it come?
In Wisconsin, all the protestations came about because the newly elected governor proposed three things:
1) That current employees begin to deduct 5.8% of their current pay. That money would be devoted to the maintenance and preservation of the state employee pension fund.
2) That current employees begin to pay 12.5% of their state-provided health care costs. So, if your health care coverage costs the state $100/month, you will now have to pay $12.50/month for the coverage.
3) That some of the state employee unions will no longer be granted the ability to collectively bargain.

I'm not here to debate the wisdom or the logic if the three proposals and if this thread degenerates into partisan political bickering, I will close it. However, the implications of this "battle" are significant and I feel that they must be discussed. Why? Look at the way we are being pitted against each other.

By refusing to "pick up some of the tab" in proposals #1 and #2, aren't the public employees of Wisconsin otherwise demanding that their fellow citizens should continue to foot the bill, instead? I recognize that many teachers and firefighters are struggling to "make ends meet" on their current salaries but why should private sector employees, who are struggling with all of the same issues, be made to pick up the slack? If we are going to get thousands in the streets, school shutdowns and service stoppages in Wisconsin...for this measly level of "cut"...what do you suppose the debate will look like in the U.S. when we are finally forced into real austerity?

Again, my point is this: There will be no end to QE. There can't be. QE will go until the entire financial/government ponzi finally collapses from its own weight.

The end of the Great Keynesian Experiment is upon us and it is coming faster than you think.
You should be "preparing accordingly" right now.  TF