Wednesday, May 4, 2011

The Knife Catcher

It looks like we are seeing the bottoming in all three of our friends...gold, silver and crude. All three have found some solid support and have moved higher, partly because of the lousy ADP number (more on that later).

Gold and crude may move higher from here and not retest the levels they found yesterday and overnight. Silver, because the decline was so sharp and severe at almost 20%, will likely need more time and will probably need to make a double-bottom type of base. A "V" bottom is possible, particularly when you consider the high probability of a fast, short-covering recovery. But with all the talk about "tops" and "bubbles", I suspect that instead we'll see another probe down below 41 and toward 40.50 before the recovery begins.

Here's gold. Note the solid support that materialized near 1530. I had given you 1525-1530 so that worked out pretty well.
Crude is holding nicely, too. I'd mentioned yesterday at this time that 110.50 looked pretty good as support. It got to 110.15 overnight. Now, we need a move back UP through 111 to start getting interested.

And here's silver. Again, its found buying support just above $40. Let's see how today plays out before we go grasping at the knives.

Regarding the POSX and the ADP report. As you know, I've been expecting the standard BLS BS monkey business to goose the dollar on Friday. The ADP report this morning obviously calls that into question...kind of. This could just as well be a head fake where ADP sets up the SPIN media for disappointment Friday only to have the government-issued BLSBS "surprise". After all, why not suck in some more dollar shorts today only to squeeze them on Friday to exacerbate the POSX calvin? Just something to think about.

Lastly, I've been getting lots of emails regarding my $65 target for silver in June. Everyone wants to know if that number is still valid after the recent drop. Frankly, its not. I came up with $65 based upon recent pattern of drops and rebounds in similar timeframes. As you know, I'd expected a pull to $45 not $40. In light if this, we have to at least lower our target to $60 if not a little lower but even that's just a guess at this time. Let's see how the next two weeks play out. Pattern suggests that the UP move as we head toward first notice day in June will begin somewhere between the 17th and 24th of May. I'll have a much better idea of what to expect by then.

OK, that's it. This day should be fun to watch. Much of the recent damage has been done beginning around noon EDT each day. Let's see if we can hang in there today through that time period. TF


12:30 EDT UPDATE:
The Forces of Darkness are so heavily aligned against us at this point that it is impossible to know what might happen next. I was very confident that silver would bounce off of $40 and that gold would hold $1520. In a normal, everyday correction those levels would have held. Unfortunately, I failed to comprehend the enormity of the power working against us. We are merely spectators to their game. The fact that they make the rules, too, and can change them at a moment's notice makes it practically impossible to participate.
The price of paper silver has now declined over 20% in two days without even the slightest hint of a bounce. At some point, price will rebound as there will no longer be any sellers left in the market. What that point will be is impossible to tell just now.
I will have a more complete update after the Comex close. I'll try to take a look at all or our favorite miners, too. Until then, try to hang in there if you can. TF

309 comments:

  1. Thank you for your continued insight, TF.

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  2. Looking good Turd. Agree the downside risk in the metals from here is very low compared to the upside. Let's not forget this is near a 20% correction.

    For all of you thinking about selling your miners let's have a little perspective.

    I ask you one question: How much further downside risk is there in the miners?

    I argue, not too much more. One benefit we are seeing from the ratio trade or under-performance that has gone on since mid-March is that we have been so undervalued that there is little room to go down. I have noticed yesterday that despite silver's plunge to $40.xx there has been little downward movement in the miners compared to recent days.

    Sprott is putting $25 million in going long. This storm shall soon pass.

    If there is a ratio trade of shorting the miners and going long metals the short miner trade has played out and the covering will need to happen soon to lock in profits.

    There are only so many sellers in the miners before you are left with the strong hands. I believe most of the weak hands have flushed out. We are near the bottom as a result.

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  3. i actually feel better waking up to the dollar under $73 again. gives me hope

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  4. Good work Turd. Its time for everybody to get back into the trenches, and grind this out. Do protect yourself though, pick up some puts in a PM rally just incase.

    $US just dies again under 73, lets see what happens.

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  5. hello Turd

    any news regarding webpage?

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  6. well said Matt.

    Personally, I've been buying miners since late last week. My cart got filled with the following sale items.

    GPR.TO still green
    CCE.V still green
    SAC.TO 12% red (ouch! falling knives hurt!)
    fishing for some CMA.V today

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  7. Turd - keep an eye on Portugal...

    Rumors are spread around that they will - or will be forced to - sell their 22t of gold.

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  8. For all the Revett Minerals fans out there, I recommend looking into South American Silver (SAC).

    Similar set up in a lot of ways. The big difference (and what sold me on it) is that it will be a primary producer of silver (Indium and other metals will be by products) and the market values it as a silver play.

    It was clear to me looking at Revett that the market values it as a copper play, something I was not interested in.

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  9. Slow steady climb over time, none of this rocket ship $5 up/down per day stuff anymore.

    Don't count on $31 oz cause it might not come. Who cares about $50 when it's really WORTH $150. Buy what you can when you can. Think about the new dawn in 2013, not the next 7 minutes.

    Stay the course, ignore the chaos, set up your price targets, buy and stack. The only thing that has changed is nothing has changed.

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  10. I just took 132 oz off the market =)

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  11. So the IMF has run dry Ha ha ha ha

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  12. Revett listing on the AMEX May 9th. Get in now before this rocket blasts off! ScottJ88 has told the story. LAST CALL!

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  13. @Marvin - Portugal selling 22 tonnes of gold (if they do that) will be a total non-event. China, Russia, Saudis, India would by that in a nano second! Not that long ago the IMF had to sell 400 tonnes to raise POSX so they could bail out a few debt drunken countries. Selling 400 tonnes didn't crash the market either, so why should 22 when demand is even higher now? Also keep in mind, central banks hardly ever buy or sell in the open markets in large quantiies so as to not disrupt the price too much.

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  15. From the end of the last thread ..just wanted to post to:
    Xaritas & Kumanari,
    Thank you both. The SLV thoughts were very helpful. I know I want to stay pretty close to the money...within a couple of $s but wasn't sure about how far out to go. I may mix it up a bit because that seems prudent. ..Now, if I can just figure out a bottom here! ..No one knows of course.. will $40 hold ...or are we headed lower..

    One other question for you here.. ..Kumanari are you still feeling good about your UNG/USO calls? (I know you mentioned OTM UNG....not sure about USO) ...I heard Stuart Varney on Fox Business this a.m. saying that he believed we had reached pretty close to the top in oil prices! WOW!.. that surprised me as he has been singing the opposite of that until today. I am considering what to do with my USO. Any thoughts are appreciated. My USO is way OTM Jan12.

    Eric,
    Thanks for your refresher remarks to Kate on the sterling. The example was VERY helpful to me!

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  16. More on Portugal and potential gold sale:

    http://www.zerohedge.com/article/portuguese-gold-sale-urged-senior-german-lawmakers-mexican-central-bank-buys-100-tonnes

    On the other hand,

    "central bank of Mexico has been diversifying their currency reserves (largely in dollars) into gold with the purchase of 100 tonnes of gold bullion in February and March. "

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  17. Not getting the deal I want yet...

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  18. Full disclosure:
    I just got a fill on 1 July silver $45 call and 1 August gold $1550 call.

    The new website is looking like it will be ready around June 1. I'm getting an update tomorrow at 2:00 so I'll know more then.

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  19. I foolishly moved from my 100% cash position back into a fully invested position (30% AGQ, 30% CEF/PSLV, 30% Miners) on friday as I completely missed the Asian holiday schedule. Rather than sell I rode this down to the tune of a 30% loss in my portfolio but just when the pain is at its maximum and I am starting to feel like capitulating (yeah I know its an emotional response)I ask myself the following key question... If I was sitting now in 100% cash and knowing everything I do about the state of the global financial and PM markets would I be buying at this level? If the answer is yes or even hell yes then why am I considering selling? So I made a judgement error by not standing aside over the weekend. So I made a judgement error by not getting out on Monday when we had a short rebound. Do I really want to compound the error by going to cash now when my instinct tells me we are in buy territory? As many others have said..nothing has fundamentally changed that makes me long term bearish on PMs, therefore I hold my position.

    Thats the way I look at it but you DYODD.

    MetalMike (formally the other Michael)

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  20. Many thanks to TF for the terrific blog.

    The divergence between the comex paper price and the price on the street is really amazing me. It seems that someone is trying to corrale the retail investors into the ETF's. Now why would they want to do that? hmmm....

    SLV ETF longs are the bank's friends.

    CNBS' newsbabe said this morning that Soros is dumping silver and Paulson is still long. Who cares what their paper position is? Where's their vault? How many ounces of silver and gold are in it? Does it match Sprott?

    CNBC was going to run a story on metals, then they killed the story before running it. They opened with "Silver continues to drop". Yeah...keep it up CNBC.

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  21. @waffen

    "i actually feel better waking up to the dollar under $73 again. gives me hope "


    Now that is funny in a morbid sort of way..

    MetalMike

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  22. Matt,

    Is it correct that Revett has forward sales contracts in place for both their silver AND copper production?

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  23. Dr Durden sums it up nicely!

    If one is the Metals & Miners game for the long term, one is nearly invincible. If something meaningful in the Big Picture changes, I'll bail out in an instant and redeploy where it makes most sense. It's the very same process that guided me to M&M's.

    Not thinking I'll be bailing out on M&M's for at least 10 years.

    Go Turd.

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  24. MetalMike - I often also see holding decisions as a buy, but without the commissions.

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  25. We have been through all of this before (and we will go through it again on the way to $500 silver). The fundamentals have not changed and every time we bounce back hire. On another note has anybody heard anything about Andrew Maguire. He was supposed to reveal some important information in April. Maybe he is trying to find a carrier who will give him life insurance. Not many takers after his last ordeal.

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  26. It might be worthwhile to remember that some party (either part of the EE or someone in the know) placed big bets on silver dropping when silver was around $42 back on April 11 and 12. According to the Bloomberg report that short bet was in the form of an option strategy that would benefit most if the price of SLV dropped to $36 before May options expiry. Given how options players manipulate the markets to get the closing prices they want, it is likely that the $36 price will be seen, and that is likely to be the bottom. Here's the bloomberg link for those who are interested:
    http://www.bloomberg.com/news/2011-04-12/silver-options-bears-boost-bets-on-metal-s-drop-for-second-day.html

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  27. Thank you Turd!
    Coin shop report from yesterday: I couldn't get inside!! There are about a dozen parking spaces out front, all were taken, one or two were double parked. Will try again today... Hopefully there is something left.

    Where is Xty?

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  28. Metals surge to near $50 and my miners fall; Metals down to $40 and my miners mostly all in the green this a.m.

    Not complaining. Just..
    :|

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  29. @ewc

    Many marriages last less than 10 years.

    Me I'm in until the fundos change AND something better is available to rotate into. I'm not staying married to my M&M position.

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  30. I forgot to say that *CENTRAL BANKS ARE NET BUYERS OF GOLD* due to the ever declining value of the US Dollar, and that my friends is the ultimate put under the price of precious metals! Any even slightly under-spot sale of gold will be promptly absorbed by governments and their central banks. The end game is the US dollar losing its reserve currency status and some new global currency traded by central banks (not something your or I will see), that is backed by gold. When that day comes, expect a global re-pricing of gold upwards by 100-300% from where-ever it is at. Then watch silver rocket from our moon to Pluto on that event. After that, hopefuly we can all go back to our regular lives, instead of having to keep one eye on what's going on at work, another on our family, while trying to become economists and stock market experts on the side. That end game could happen anytime between end of 2012 to 2015. That end game doesn't mean the end of the US dollar (sorry to dissapoint the hyperinflationists), because the USA has a plan B - and that is 8 tonnes of gold at Fort Knox (assuming it's still there and not tungsten filled). You can bet your bottom 1oz silver round on that theory ;-)

    Now chillax and look for a break above $42.50 to confirm the silver rut being over for now.

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  31. Matt,
    I'm with you, not much downside, my worry is the pass the CFTC and SEC have given all the Naked Short Sellers and non-accountability for all the Failure To Deliver's (FTD's). I've ridden the miners down for the same logic, somewhat limited downside, prepared to hold out all until late 2014, it's IRA money afterall. Looking for some good Birthday Karma, any number above these levels ending in 45 for both gold/silver. Word ver.: grappl

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  32. Watching the discussion of options by Turd and others everyone seems to buy OTM calls.
    I don't see it.

    If I buy ITM calls at 39 they are 4.22
    If I buy OTM at 45 they are 1.75

    At expiration given the 46 guess they are worth
    6 and 1 respectively.

    The 39 trade breaks even at 43.22 on the close
    The 45 trade breaks even at 46.75


    If we assume that silver continues its steady growth rate of the first quarter. (and does not accelerate like it did two weeks ago before crashing) Then I see silver around 46 at the end of June where the July calls expire.
    So the 39 is a much better deal.

    I can buy 2.41 times as many contracts with the 45 than the 39's.

    So if I'm wrong about growth and it jumps back up then the 39 still makes more until silver crosses 49.25

    If my growth figure is way off and we blow right on through to 60 then the 45 is worth 1.7 times as much.

    This all assumes I just buy and sit on the contracts. If we start rolling then I'm likely to roll into higher valued calls as the price goes up and the analysis of what the outcome becomes is not as simple.

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  33. Turd,
    What exact silver calls are you buying? SIVR? Thanks!

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  34. Update on Minera Andes: the work stoppage at their San Jose mine has ended. Work to resume shortly. Congrats to those who bought the recent dip, Minera is up 7.75% on the news.

    Ooops, shouldn't have said anything, it could alert the hedgie piranha to attack. "There's meat in the water boyz!!!"

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  35. Trading ZSL until we see silver bottom. In at 17.70

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  36. @NYC I believe turd does Futures contracts not a stock

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  37. @Wade Thanks...makes sense as I couldn't find a comp call.

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  38. @Paul: Most buying OTM calls won't hold until expiration. Those are pure volatility plays where the buyer expects rapid movement which means greater appreciation for OTM options in percentage terms.

    If silver jumps from 41 to 43, then those 39's may rise 40% or so while the 45's would likely double. If silver drops off a cliff to 35, then the 39's place more capital at risk per contract.

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  39. Peter Schiff on Silver sell off

    http://seculartrends.blogspot.com/2011/05/peter-schiff-video-on-silver-sell-off.html

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  40. Myron,

    agree with your assessment. That's my strategy for return.

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  41. They've tried to take silver back down under 41 three times now but it hasn't worked.
    Gold wants to stay positive, too.

    Let's ee if we can rally here and begin squeezing the shorts a little.

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  42. Well hey there Lazy,

    Thought I said I'd bail in an instant if circumstances warrant? I just really don't expect to.

    If you've been around here very long you'll know I'm also a big proponent of actively managed sell stops to limit losses and/or preserve gains. When one knows EE take downs are coming, that's when sell stops can really pay off.

    I'll pursue my long term M&M strategy until I see that Fiat World is all better. Not holding my breath- - how 'bout you?

    Oh, and I'm married 26 years on May 11. To each his own I guess.

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  43. Looks like the hedgies are hammering the oil stocks like they have the silver stocks. I'm looking to short oil via SCO. Also adding to SWC. Already cashed out of ZSL for a small profit.

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  44. SSK:

    you got into ZSL now? At this point, don't you think you may have busted that move a wee bit late?

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  45. Turd don't you think “technical analysis” is meaningless in manipulated markets. technical analysis is based on a very long list of assumptions, starting with “free and open markets”. If any one of the assumptions is violated, the technical analysis has diminished or maybe zero validity.

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  46. SSK:

    Dude, you move too fast for me :-)

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  47. Very Tight price action here. Seems a fight here at $41.

    I just got filled on some Stink bids via BullionVault. Very nice prices too!

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  48. MetalMike:

    Bad timing can be a bitch. You'll never guess who bought a big load of Uranium stocks on March 10..... Yep, me. I rode them down, doubled down on the dip and sold on the bounce to come out a little ahead. Let me tell you, it was tempting to sell at that first bottom thinking that there was a lot more downside pain to come.

    Hold and wait for the bounce. It is just around the corner. This selloff was too steep and fast. If you have the guts to hold for a while (couple of weeks) you should be fine. Just don't look at those red numbers for a couple of days.

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  49. Turd thanks again for the great commentary. Interesting observation about the failed attempts at piercing $40. I saw monkeys flying this early am, but 40's holding pretty strong still.

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  50. We're on our way to 39.6, and probably eventually 36 before we see any new highs.

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  51. Mr. ST

    As a total Fundie guy who's well aware of the suppression scheme for many years, I felt the same way about TA! Most technicians haven't got a clue.

    I felt that way until I found a guy who knows how to use snapshot TA in context of what you described, the big picture.

    His name: Turd Ferguson. Stick around here and I have little doubt you'll see this for yourself...

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  52. Great thorough analysis glinskym....lol

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  53. Thanks as always Turd for the insight. I'm going to wait a day or two here and see if silver trickles any lower before making my BTFD physical haul. Some good deals out there on the internet this week. Sold some stocks on Monday's climb to have some extra powder to burn. ZSL currently at 18.19 and climbing! Wish I'd btfd on that, Monday :(

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  54. Looking quite weak, I think we hit the 39s today.

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  55. @ewc,

    LOL. My apologies. Congrats on your marriage. Yes, I missed you saying you'd bail in a minute. Props to you on your use of stops, too. Me not so much, I just try to breathe through the pain during these corrections.

    I'm with you in that I don't see anything changing any time soon. 10 years is a long time though. I expect radical change within that time frame.

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  56. Catch as many physical ounces of gold/silver knives you desire on sale. USDINKer just hit a new 52wk low today. This has got to have some folk's sphincters puckering to get their hands on PM's. Paper fiat dollar still not buying into PM's sell off! A tale of future woe! Not to those holding physical PM's come July's end.

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  57. It is completely bizarre to see Gold and Silver moving in opposite directions. I have GLD puts and SLV calls, and I'm getting screwed from both sides simultaneously. Very uncomfortable.

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  58. afrum, your starting to sound like a pirate again, settle down. Revett starting to catch a bid.

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  59. My crystal ball sez 39.80 but what the heck do I know...

    In two months a few bucks won't make even the slightest difference if you own physical or good mining shares. In a few years this 20% drop will be hard to notice on the charts.

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  60. Does it really matter whether Silver hits $39.xx or $36.xx? We are not far from a LOW now...Forget about trying to pick the bottom...buy NOW while there is blood....You will be sorry later

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  61. X - all I can say is I hope you get out of that position and quick.

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  62. eek, just dipped under 40!

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  63. just sold out of my SLV may 40p. Sitting on the sidelines waiting. Saw a mention of SILV. Anyone bought that ETF?

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  64. what the fuck is going on I have never seen so many trades in my life within 1 minute. check out SLV. something is pounding this with relentless

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  65. Now and then we see the "double bombing" effect, whereby a second device is detonated after first responders make their way to the scene of the blast. Maybe we're looking at one of those psy-ops today. But we can't say it was unexpected that the raid continues.

    The second blast takes many of the first responders and is particularly devastating from a psychological/terror point of view.

    But once one understands the EE Game Plan and knows to watch for the elements of a Really Good Show, one can sit back and thoroughly enjoy the tumult and panic peddlers.

    Gotta give 'em credit, this show's been pretty good. Not nearly as good as January's mind you. But pretty good. Just wait for the bottom and then strike. Turd'll tell ya. Just like last time. No biggie.

    "An Turd-educated consumer is our worst fucking nightmare"
    --Blythe Masters

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  66. anyone getting back in below 40 ?

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  67. Getting the hell out of my miners (most of them) has turned out well. The amount of hurt this market goes through during a correction is awesome. You never think it will get worse. But it always does. I should have listened to my gut last Friday. But I feel good about yesterday's selling I did. Now I'm making nice money off the short ETF's. SCO-- double short oil is performing well. My SWC didn't pan out, but I'm still holding half and putting in a large order for 20.03.

    Good luck all. Remember: you've got to know when to fold 'em.

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  68. it's really not good that PMs are dropping at the same time the dollar is getting crushed?

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  69. Anyone else think that the $39.60 range we just hit was the bottom? its back up to the $40.10 range already...

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  70. Now is the time to get nibble back in. Just bought some AGQ on this dip.

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  71. @ stevy

    I bought at $40.20 and again at $39.88. I think we sit range bound between $40 and $42 for a while as David Bannister and Turd had stated.

    If I'm wrong, I doubt there's too much downside from here.

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  72. I have the 50% and 61.8% fibs at 38.07 and 35.32 in spot silver, using January low to recent top. The 50% fib is a no brainer, if rest of commod complex sees the same flight to safety liquidation, gotta bet the house on the 35.32 61.8% fib level in silver.

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  73. Maybe they're trying to squeeze the USD shorts here. DXY getting propped up.

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  74. Crude is down 2$ in the last 45 minutes. Oil inventories were released, but I don't know if they are the reason for the selloff.

    http://biz.yahoo.com/c/e.html

    Either way, the crude pressure timed oh so nicely with this recent takedown. As always.

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  75. @stevy
    My target of RSI 20 has still not been hit (and how great is that target for not grabbing false bottoms?!!) I'm watching carefully for an exhaustion point here...coming soon I think.

    Meanwhile, not wanting to piss around too much, I grabbed Englehard 100 from Provident a few minutes ago..spot was 36.65 at that exact moment. I think I'm good with that :)

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  76. it seems like 40 is a fake fight, i think it's going to kiss the 50 day, if i see volume there i'm back in with weight

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  77. Average volume of SLV just taken out for the day. 60 million shares trades in 1 hour. This is the average for one full day.

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  78. This is actually frightening to watch. Almost like 2008 when it dropped 53%. I bought thousands of oz. off craigslist for $8. People were lined up to sell at the bottom. People are quite stupid.

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  79. ScottJ

    Slightly higher build in crude than expected.

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  80. Any words of comfort for a holder of physical who's questioning his decision a couple of days ago to wait for the ride back up? Getting out now would still mean a modest profit (as would be the case all the way back down to $32).

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  81. BoS on the sidelines waiting for this game of fire-sale limbo (how loooow can you go) to play out. When they come back in this is going to be fun.

    Meanwhile, Seller of size SoS still in control of USDX.

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  82. http://finance.yahoo.com/q?s=slv&ql=1

    Avg Vol (3m): 50,552,100

    http://finance.yahoo.com/q/hp?s=SLV+Historical+Prices

    Today's volume in 1 hour 62 million at the time of this post

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  83. @geneparm If you 38 is too much pain and you will sell it there, then sell it now. Best to keep your peace of mind and re-evaluate after the big players dispose of massive positions.

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  84. My prediction is 37-38 silver.

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  85. "I just try to breathe through the pain during these corrections."

    That's the nice thing about being young and having some retirement accounts to play around with; Your immediate standard of living is completely divorced from your trading activity allowing for a "time heals all wounds" attitude. I think it's great training and helps instill the emotional discipline that's required to be a successful investor...especially in high-volatility environments.

    "i actually feel better waking up to the dollar under $73 again. gives me hope"

    Ben Bernanke: Turning presidential campaign promises into reality since 2008!

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  86. Booked my gain on SCO. Looking like AGQ might be a temporary buy on a bounce (to be short-lived). Picked up my SWC bid at 20.03. That's going to be a nice one.

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  87. Wow!
    Turd proves the fool's errand of attempting to catch falling knives.

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  88. Thanks, Kurt. Just unsure of whether the physical will actually be available at lower prices. On the other hand, I'm also concerned with being able to find a buyer if and when everyone else is running for the exits.

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  89. @geneparm
    What thinking got you into physical silver? Does that thesis still hold true (for you)? That's the equation. My equation is physical vs. paper. Paper loses every time, but I do try to lever that to my advantage with (some) trading and buying physical at advantageous prices. If you had sold some physical a few minutes ago..it would have been to me!

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  90. Definitely not selling my puts for a few more days. I told myself not to sell my calls when we had just made new highs within the last couple days which turned out to be a good rule. I'm doing the same with my puts on the way down. I think we get a lot of more selling when Asian markets reopen.

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  91. Low of 39.621. And yes, I bought at 39.706. We're going to have a bounce, no doubt. But take a look at the weekly silver chart - have a long way to go down. Crude's broken 110 pretty well. Got to believe what the market is telling you, not what you hope and wish for. Silver rallies are only $1-1.50, just like the pullbacks when we were going up were only $1-1.50. That's telling right there. When you have $3-5 or $6 washouts to the downside, and only get a $1.50 rally, you're in a short-term downtrend. Like Turd says, catching the falling knife is bloody.

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  92. You really need a forum, Turd.

    So many comments! =P

    (nice call on <$40, btw)

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  93. Just picked up some GG at 49.72. Going to flip it.

    SO many trading opps today.

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  94. Just added a little more DGP.

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  95. Look at the July Contract Volume!
    MASSIVELY BULLISH Is this a DEFAULT coming? 166,000 CONTRACTS!

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  96. No manipulation here. Move along folks. Nothing to see.

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  97. Eric,

    I'm sympatico with that trade. Buying right now.

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  98. It's my oils that are killing me today. My miners are flat.

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  99. Sorry 162k contracts= 810,000,000 Million OZ Of Silver. Comex Crush is coming

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  100. Like I said earlier, the hedgies are doing to oil stocks what they did to silver miners. Short 'em on the next rally.

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  101. what the hell is this about?

    Out Come The Big Gunz: Interactive Brokers Advises Traders Of Yet Unknown, But Certainly Scary, Silver Margin Increase

    http://www.zerohedge.com/article/interactive-brokers-advises-traders-yet-unknown-certainly-scary-silver-margin-increase

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  102. bought the dip too. lets just sing cume by ya

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  103. ASE Per APMEX $47.03
    SLV per Market watch $39.00

    Physical in hand...Priceless.

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  104. EA- -Hey buddy. I know, Crimex only has enuf Ag to cover something like 6,600 contracts?!

    Eric #1, ditto, my miner board is surprisingly only semi-pretty damn nauseating. A number of ups, mostly downs. As expected. BUT I would have thought it would be even worse, esp w/ Ag, Au, and the broader market all being down today.

    Anyone else seeing this in their portfolio? Thoughts?

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  105. Well, I HATE to say it but I sold some physical today. This market has me spooked so I swapped 20% of my physical silver stash for gold.

    Still believe in the fundamentals but always reminded that it is VERY difficult to fight against the major players.

    Is this all-out panic yet?
    They must be careful because there is a point where Ag can drop so low that it will only make me a stronger long.

    ~~~"THE JEEPSTER"

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  106. @flaunt
    At some point we may see some platforms pull silver off altogether. These guys do not like the risk of loaning against long right now. That's the straight answer, there is of course the conspiracy theory answer too :)

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  107. @ Economic Analyst

    Today's volume for Silver Futures can be found here:

    http://www.barchart.com/commodityfutures/Silver_Futures/SIK11

    Currently, July Volume is: 89,844

    That is roughly 450,000,000 ounces of silver traded in the last 40 minutes through this venue....

    Yep fair price discovery indeed....

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  108. Comment from SGS on his blog:

    "umm not to scare you...buuuuttt, If $38 clears, most hedge funds will liquidate...buy PUTS to protect yourself immediately. Dont be surprised if we see $35, maybe even $30.

    Make money on this downside, load up the phyzz, you will be rewarded. "

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  109. I went back to recent blow off tops in silver to look for historical precedent. Here's what I found:

    Week of: % Decline # Weeks

    3/29/04 35.8% 6
    5/08/06 37.8% 5

    Similar performance would take us to the 31-32 area.

    Sorry for the formatting problems. Only way I could post.

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  110. @Shill
    That's why I don't buy ASE. Waaaaaay too much premium. My Engelhard was $1.09 over spot.

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  111. Ha, Turd! Well, you titled it! Another raid as I type this. Ah well, misery loves company. I just dove in as well.

    Mr. ST - I used to think that technical analysis was dead as well but once you layer the EE's motives and methods - it's clear to see that they use technical analysis against us. They paint the tape when there are negative formations so that we'll help them out with the selling and they like to sell when the chart looks positive to demoralize us. Turd has honed his skills to recognize when and where they are most likely to strike. So traders have to look at fundamentals, technicals and now interventionals.

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  112. Vote of confidence from Richard Russel. http://www.investmentpostcards.com/2011/04/29/a-gold-tsunami-coming-according-to-richard-russell-2/?

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  113. Anyone think we might see a short squeeze up to the $45-$46 range and then a rollover down to $38-$40 before the next sustained rally? It seems the small specs are short the metals, perfect time for a hedge to strike and cause some chaos.

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  114. "What thinking got you into physical silver? Does that thesis still hold true (for you)?"

    ______

    When I first went in to my guy's shop (in the low $20s) and said I wasn't sure of what form of physical I wanted he asked me why I was buying. I told him it was partly as a hedge against the S H'ing the F, and partly as a "wealth preservation" move, ignoring the fact that mine isn't truly "wealth," just a smallish collection of FRNs. So I went half ASEs and half 90%.

    The 90%s have been hanging out there in the back for the duration, but the collection of ASEs has been accumulating since. I find myself buying for 2 reasons now: to convert paper money into something with what I consider to be a brighter future, and to maybe be able to flip back to (much more) paper money at some later date. The events of late have me questioning whether or not the latter of the 2 reasons is realistic, and frankly whether silver's future really is brighter in the medium term (next few months). In other words, does physical silver still make sense as an investment, given that I may want or need to cash in at least some before the end of the summer?

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  115. Comex close will be interesting.

    But forget the takedowns we've had in after-hours in thin markets.

    Shit must be getting real at the Crimex.

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  116. Just ordered a monster American eagle box from www.silver50.com. The rates are way better than Apmex.

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  117. After a phenominal ass-whooping, old SSK is back baby.

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  118. Oh yeah, they're putting the hammer down on the PMs today.

    What a laugh. Gary Gensler I mean.

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  119. Atlee is exhausted from his "Day trading with Atlee" webinar, and is recuperating on the beach with a cocktail. Rumor has it the phrase "Venezuelan chickas" was heard also, but no confirmation.

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  120. GeneParm...IMO...do not sell physical unless toilet paper is needed to pay some bills or buy a toy...just saying...this is strawman tactics.

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  121. Don't know if this was posted yet..Mexico Buys 100 tonnes i Gold

    http://www.ft.com/cms/s/0/cbc02e10-7637-11e0-b4f7-00144feabdc0,s01=1.html

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  122. The game is changing here... TF says blood in the water which is right. BOS is setting the mother of all bear traps. Paper traders take care where you plant your feets!

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  123. Eric Sprott interview about PSLV silver physical holdings. he says they have more than ever and is bullish on silver.


    http://lonerangersilver.wordpress.com/2011/05/04/eric-sprott-%E2%80%9Csprott-has-more-physical-silver-now-than-ever%E2%80%9D/

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  124. i bought every time under 40 when it dipped ... look like it just stops there and bounces back ... can someone please tell me i did the right thing ?

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  125. Locked in a bunch of Maples..75 min order @47.31 @ Northwest Territorial Mint

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  126. Just took 20 ASE's off the market at 43.00 - got lucky! :-)

    Ol' Michael
    "...paper is paper..."

    P.S. Thanks MetalMike, and good luck with your trades. BTFD.

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  127. Gold is the enemy:

    http://biiwii.blogspot.com/2009/11/gold-is-my-enemy-paul-volcker.html

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  128. Here's the audio ver of Der Shprotts comments for anyone who like me who can't ready anything longer than a T. Ferguson blog entry:

    http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/5/3_Eric_Sprott.html

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  129. @geneparm
    Your horizon is a lot shorter than mine. I'm in for years, maybe decades. I'm in until the global mess rebalances...so fixes to all current bubbles (housing, stock market, fiat currencies, sovereign debt). Like many here I'm looking to make a switch to another undervalued asset class when this one peaks.
    So I won't say buy or sell, but I will say, end of summer, IMO, could be higher or lower than right now 50/50. Perhaps you would just peel off what you think you'll need then now, and sit on the rest for as a longer hold?

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  130. ewc,

    IMO, miners are faring better than they might because firepower is directed elsewhere right now. to wit: SLV volume through the roof the past several days.

    Don't worry, when silver starts rolling again, the hedge fund pair trade long Ag/ short miers will be back on in force.

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  131. @ stevy- you did the right thing long term. short term i cant tell you! were in the same boat

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  132. Back Seat Driver...they are spot+2.69 at http://www.silver50.com/CanadianMapleleafSilver.html

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  133. well I just grabbed 20 more silver Buffs from GVille Coins a little while ago. They were just under 40/oz at 39.86 Benny Buck-a-roos.
    Hope I timed BTFD right, but who knows how much more damage the EE will do today.
    The Monkeys are very busy today...

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  134. @Black Hawk
    My guess would be that atlee is very very busy trading this morning. His outlook was more bullish than mine in the short term.

    @stevy
    39s is fine as long as you don't go too heavy and get yourself in trouble. We all have different targets. I just grabbed that Engelhard, but I've more dry powder for same at 38 and 36. Hell, even 34 and 32 if we get down there. So that's me. My PSLV is hold, hold, hold. It's IRA money anyway, it's not coming out for a long while w/o a penalty. My XAG trading is still looking for a RSI 20 deal. Closest we got was high 20s on that first dip to 39.60. I was tempted, and it sucked to watch that sweet bounce-back and not be in it...but, rules are rules and I follow mine.
    I would say that 39s looks pretty weak right now considering we're moving towards COMEX close and we haven't move a lot higher since those lows. Just a little short term risk there, doesn't mean we won't be at 43 (or 35) by end of week. I just don't know on that right now myself.

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  135. here's a question i have not seen answered definitively anywhere as yet - for TF or anyone who may know...
    assuming as has been surmised that paper price plummets but the physical price rises or stays about flat... what happens top the price of mining shares? and will any affects happen concurrently or will there need to be a lag-catch up time?

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  136. VXX up $1 since the open on hi-hi volume.

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  137. Anybody here follows Gunner24, he has 39.70 as the 3rd arc buy point....thus far...pierce a bit but holding...

    I believe a low has been set for today already..

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  138. http://news.goldseek.com/Goldseek/1304514976.phpo

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  139. http://newsgoldseek.com/Goldseek/1304514976.php

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  140. Thanks, Pailin - I appreciate the input, and I'll take it for what it's worth. I don't come here looking for advice, just the thoughts and interpretations of those more experienced than I am.

    I guess I'm in Au for the longer term, just thought I had found some relatively easy, relatively short term money in Ag in the meantime. Not sure that I've missed that boat, but also not sure I want to sit around and find out. Scaling back might be the best bet for me.

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  141. i feel sad and slightly anally abused this week. All i can say is that thankfully most of my investment have been in a very select handful of miners (i pretty much got slaughtered on a very small amnt of options i purchased friday eve thinking wed pop back up with gold on monday for a quick trade)... at least they havent responded so badly with this move down in the same respect they havent really responded on the big move up.

    Its amazing how just a few days can feel like weeks and how right now i have the fear feeling that i should sell everything and go back and hide under a rock somewhere to watch some dancing with the stars.

    theres been no real rally upwards, just a complete floor drop. first one to the exit wins, folks!

    so... angry...

    needless to say im watching 40 VERY closely.

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  142. Just sold ICO with an almost 400% gain. Dry powder for buying gold & silver miners on sale. Bargain basement. Adding positions today to lower cost basis on the most recent acquisitions that are down.

    Frankly I never imagined I'd be trading coal for pm's.

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  143. @MetalMike

    If you are "The" Metal Mike, then given your situation, Pain Museum just took on a new meaning I suppose.

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  144. You've lost all credibility Turd.
    And yes I read the disclaimer and yes I own physical silver.

    ReplyDelete
  145. @stevy
    :)
    I'm not sure I was helpful!

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  146. Sitting here on the fence, watching this train wreck. Tops are difficult to call, and so are bottoms…until after the fact.

    My 2¢:
    Step back, take a deep breath, try putting your emotions aside, and wait until Silver is back on a clear trend up. You likely will not buy back in at the very bottom of the trough, but you will avoid the pain of catching that falling knife.

    -Mammoth

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  147. Looks like Kirkland Lake Gold just hit the motherlode.

    8.16 oz per ton over 46.7 feet true width.

    "The combination of grade and width would make this intersection the richest in the 100 year history of the Kirkland Lake Camp,” said Stewart Carmichael, Chief Exploration Geologist.

    Holy Crap!!

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  148. ZH
    "US Treasury Tells Lawmakers It Needs $2 Trillion In Debt Capacity"

    Whoa

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  149. @mc2560

    Why's that? Because he said don't try to catch the knife yet?

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  150. Mockra, read my 11:43 a.m. post up above.

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  151. because he didn't tell us all to sell at 49.

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  152. 8(

    So Sad today.
    Can't believe I sold some of my physical silver stash. This market spooked me.

    Booo Hoooo Hooo.
    Can anyone make any sense of all this?

    ~~~"THE JEEPSTER"

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  153. $2 Trillion more. Ah geez. That's like giving yourself a 15% credit line increase. When you're already maxed out, made a lot of promises too, and can barely afford the interest. And we're supposed to believe that the "hedge trade" is over? Yah. Right.

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  154. Bought 10oz of shiny yesterday and will likely buy another 10oz today. Using this drop to build up my physical. So my trading account is bleeding like a monkey with ebola. Don't need the money for another 20 years anyway. My physical PMs are growing nicely.

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  155. @mc2560

    Hey knucklehead, ever hear of hedging? Babies should not be playing this game. Stick to your 9-5.

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  156. mc2560, you don't even have any credibility to lose.

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  157. They're gonna test that low for the day all day until the break it or it's 4pm. Looks like they're headed there again...

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  158. Jesus H. Christ, this is like watching an historic battle.

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  159. FWIW, the controversial Marty Armstrong has a cycle turn date in early/mid June. My personal opinion of Mr. Armstrong varies, but there is little doubt that he is a formidable technical analyst, and I would rather, regardless of my long term view of gold, see it fall into that date than rise. Presently, it seems quite clear that we have made a meaningful top in PMs.

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  160. This is the epitome of a shakedown. When you get a fairer game in Vegas, this is the sh!t you can expect. What I don't understand (and it's probably not true anyway as these 'angels' most likely don't exist) is how this week's action doesn't play into the offshore buyers of size who are (supposed to be) taking physical off the market by the boatload, or so say's Eric King?

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  161. @mc2560

    and how much did he exactly make off of u on that one? what have u contributed to him or anyone...?

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  162. sumo!

    Be nice, we wanna be sure Mr. J.H.C. stays on our side! Another powerful enemy, we don't need.

    :-0)

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  163. @Jon
    BOS and others (including Yukon) are waiting on the sidelines for this to fully shake out. Perhaps BOS even knows what the target bottom is?

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  164. Ouch ! 39.63. WHere is the next level of support?

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  165. this is just getting silly

    http://www.zerohedge.com/article/us-treasury-tells-lawmakers-it-needs-2-trillion-debt-capacity

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  166. SSK

    re:DGP

    Well, this sucks...

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  167. HiHo:

    Rent a uhaul and hope for $35.

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  168. isn't there a possibility that silver could go down to 30 or 25, but sellers will be asking 50 or 60 over spot one of these days?

    Selling your physical now, or even if you sold at 49 to wait for a big dip to jump back in on might just screw you over if that scenario happens right?

    Couldn't that happen since all these countries are buying up massive amounts of phyz right now and supply is fast dwindling?

    Why not just keep all your phyz...keep buying the dips as they are offered at these rates and wait for the dollar to end up at the bottom of the sea next to OBL...shot to shit and being eaten by the bottom feeders.

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  169. If it provides any comfort, Netdania 8hr volume (4am-noon) at nearly 600k is the largest since 12/15/2010. That's hella huge. And unsustainable.

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  170. lol what crazy action... one quick thing to remember for those of you freaking out - silver isn't about to get unpegged from gold anytime soon, no fundamentals have changed, and the dollar's still in freefall. The EE can slap down gold and silver as hard as it wants, and it will still have one effect in the long run - investors will simply accumulate more physical and keep driving the prices up. IMO today's silver price looks pretty good for a re-entry with some June calls, especially considering the amount of Silver doom talk out there right now.

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  171. pailin - how much slide on the downside for xag do you account for when you buy, or do you use short stops ?

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  172. Anybody remember what was so special about 12/15 last year anyway? I don't.

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  173. ewc58: JHC took on the Banksters, big-time.

    HiHo: check out Dan Norcini's recent posts. Strong support is a long way down.

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  174. Eric,

    I bailed on that one. I'm buying gold miners for flips. GG, AUY, KGC-- these are all tradable, imo.

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  175. @HiHo: if SLV is really leading the market, look for it to approach the 100dma as it did in Jan. Maybe in the 35 range? Which puts silver in the $36 range, if the delta stays constant.

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  176. All I know is that the 3 week ATM straddle is trading at 4.6. That's 11.5% premium for 3 weeks. YeHAWWWWW! Get ready for some sick mkt moving action. Folks don't bid 60% vol for no reason.

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  177. Well.. they have successfully moved the whole thing to the main multi-annual trend.

    Now it needs to find pace.

    I believe all this bloodbath (today) is thanks to all those holidays... perhaps?

    This multi-annual trend I'm talking about was broken in April 13th 2011, when Silver went parabolic (please check the DAILY chart for more info.

    I will ask again, as it seems my questions are being ignored:

    @Atlee, XTY, Ginger, Turd, or anyone:
    Where can I review the CME rate hikes announcements? --I'll appreciate your replies

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  178. let it come more down so that we can afford to buy more quantity of Physical Silver..... this way there won't be much with the KAMSEX idiots .....

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  179. 38.89 or so is 50 dma on my chart.

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  180. @stevy
    In other conditions I do other things. But right now I don't buy unless RSI is 20 and I pay really close attention to where the support is under me. If I make a mistake, I sell at that support because I know it's going to take a drop from there. We're real uncharted right now, so I would manage that by just grabbing a quick flip by getting out as soon as the bounce looked like it was fading. That's why I only grabbed $28 on my early morning trade. I had no faith that it would hit RSI 50 (my present sell target) before breaking through 40.50 (bottom at the time). It turns out I was very much right, but I did leave hundreds on the table by being too chicken to ride it up a little more.

    If these large drops are scaring you, there's no shame in stepping to the side stevy. I've actually pretty much done that except for quick stabs in/out.

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  181. And one other thing, I'm tired of hearing about not hedging, this is the way the market works, etc., etc. This is not the way the market works, i.e. price discovery is being obfuscated by blatant manipulation. And how in the hell does a commodity in severe backwardation deserve this beat down? Has this correction put Ag back in contango? Can someone check please.

    I know a good majority here are just momo daytraders, maybe even TF - all well and good - as there is plenty of action in the metals. But PM's are my hedge against the American default trade.

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  182. Own JPM as a hedge. They must be printing money on this move down.

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  183. I wonder if the OBL death was planned to coincide with the need for 2 TRILLION DOLLARS by the end of 2012. QEx + 2 Trillion. WTF are we doing!!!! I hope you guys have your passports ready. I didn't believe that the SHTF scenario was real but 2T in 1 year jeez. This was a wag the dog moment. OBL was brought back from the dead to be killed again so the Obama administration can look good and he can get re-elected even if the economy takes a shit and we go into a depression. I WAS gonna sell my physical at 33 if that's where we went. NOW just call me long TIM silver because I will never trade my silver for monopoly money. If I could I would buy more, for now I will wait, and possibly get a paper route or something.

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  184. my wife purchased over 2000 silver shares at 42.50.
    Soon, if she keeps this up, she may become my divorced spouse if she doesn't start to listen.

    the gosbel according to turd recommended "40-42". shes a bit of a loose cannon who needs to be coached.
    Aahhhhhhhhhhhhhhhhhhhh!

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  185. how cow, how much lower can this go? so glad I didnt buy in 41's.

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  186. AUY and KGC are telling us something. BOth reported earnings. AUY missed by .02. KGC beat by .03. Whether they beat or not isn't the issue. It's that they reported. Their risk is known and are getting a bid. Interesting to note as we go into more earnings next week.

    SSK

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  187. well im pretty wiped out on paper silver. Given back everything for the year and now down a few grand. I've been shaken out.

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  188. @Nad123
    Yes. I'm watching very closely for another snatch near 20. The way this thing is going, I may hold out for 10 though. That's where the Sunday flash crash bottomed.

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  189. Dammit, where are those bottom callers when we need them???

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  190. I'm currently down >$40K from Friday with no leverage (8K s/s cef) and knew this could happen. These people are fighting for their survival and will do anything to prolong their feeding at the trough for as long possible. The absurdity level in the total disregard for legality, and moral and ethical behavior will reach much higher levels than what we have seen/experienced to date, before this is over. Long term PM holders will win in the end, IMO, but the pain will be immense.

    The world's best sociologists/behaviorists are not in private practice helping normal people, they work in the bowels of the financial markets to help take your money/wealth away from you. GLTA.

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  191. Trader Dan's 8 hr chart:
    light support at 38.10
    strong support at 36.70

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  192. The technical setups on a few miners are good. Just not sure if it's the bottom yet.

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  193. It should be noted that they're throwing up tremendous volume to cut through to 39. There are a lot of buyers in here. It just doesn't look like it. But the vols speak (sorry!) volumes.

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