Along The Watchtower

Discrepancy

2012-02-29T14:50:00.000-05:00

Two of these charts just ain't like the othere. Two of these charts just ain't quite the same.

Actually, crude is now UP 40 cents.

Combine this with what we know from our loyal Turdite regarding JPM indiscriminately dumping 10,000 contracts of gold in two minutes this morning.

Clearly this was a coordinated attack, meant to create the cascading waterfall which ensued.

1705 and 34 are still holding, however, and must be watched closely for clues as to whether or not there is more bullshit to come.

Bots and EE Simultaneously Attack

2012-02-29T11:50:00.000-05:00

First of all, I greatly apologize for the site being down yet again. I enrolled yesterday in the site "Alexa" with surveys the site and measures the traffic. Perhaps the overload of traffic that is crashing the site is due to an initial Alexa survey? Maybe. Of course, when the crash of the site coincides perfectly with a crash in gold and silver, it sure makes me wonder.

The reason given for the smash of gold and silver is the testimony of The Bernank. Hmmmm. Of course, stocks aren't down very much. Hmmmm. Look, Santa has warned us repeatedly that there is extreme volatility coming. Today's action is certainly a part of that trend. If you can't stomach the volatility, I suggest you completely avoid trading and only use the big dips like today for adding to your stack.

That said, I guess we now know what the EE has been planning to do with all of their leased silver. Lost in the madness of yesterday was a drop in the 1-month rate to -0.48%. Since we've been discussing this possible "raid" indicator here for weeks, today's drop should really come as no surprise. Let's see now if $34-34.50 can hold. I suspect that it might not. $33 will be a possible floor as that is a significant level and it would represent a roughly 10% drop from the highs of yetserday. Even $31 is not out of the question, though.

Gold is getting punished, too, but should find a solid floor between 1680 and 1705.

Please be patient and try to keep your wits about you. Silver is going much, much higher from here. Later this week, we will discuss some extraordinary, new fundamentals that will drive prices. I know it's tough but try to hang in there and enjoy the ride. TF

Backup Post

2012-02-03T10:55:00.002-05:00

Just in case the site goes down again, here is a reprint of the main post from today:

Getting Caught Up

Friday, February 3, 2012 at 9:53 am

After yesterday's nefarious activities, I had hoped to create a lengthy, comprehensive post for you this morning. The BLSBS has gotten in the way and, since things are moving so quickly, I figured I'd better just post what I have and worry about going into detail over the weekend.
Before we get started, thank you all for your patience in dealing with the nonsense of yesterday. The attacks continue today but Ron and Stephanie have battled through the night (seriously, I don't think that either of them slept) to get the site back up. Their efforts are greatly appreciated and, since their efforts aren't inexpensive, all of those who have donated to the "TFMR DoS Defense Fund" are greatly appreciated, as well. We don't know for certain who is behind these attacks but we have our suspicions. I, for one, would like to bring in the FBI and/or Interpol but, apparently they're a little busy. Maybe we can simply organize some type of TFMR Goon Squad to go have a "visit" with the perpetrator.
OK, first the BLSBS. All you really need to know can be found at ZeroHedge. (What else is new?) Go there to find the truth. Here is just one of the links:
http://www.zerohedge.com/news/record-12-million-people-fall-out-labor-force-one-month-labor-force-participation-rate-tumbles-
Additionally, in the spirit of seeking the truth through the manipulation and the propaganda, you are really going to enjoy the next podcast. I recorded it yesterday and it is quite timely. It will be posted later this afternoon so please be sure to check back later or over the weekend.
Here are the only charts that matter. When reviewing them it is critical that you remember this:
I am diligently following the daily changes to open interest in the precious metals. In doing so, it has become quite clear that there is very little, regular trading left in the PMs. All we have are The Cartel and the EE alternately covering and adding shorts as well as some HFT WOPRs that swing back and forth depending upon which way the POSX is moving. This is a double-edged sword.

This makes movements in the PMs even more easy to predict than usual.
This also brings significantly greater volatility which can wipe you out fast if you're not careful.

Anyone attempting to trade (and I do not encourage it) must trade cautiously and use well-defined stops.
To that end, let's start with the POSX charts. It looks like The Pig has, in fact, found a short-term bottom this time. I thought it had double-bottomed at 79 earlier this week. Instead, it has formed a rounded bottom. Nevertheless, you can clearly see on the one-year daily chart that 79 functions well as a technical support level...at least for now. I still have a hunch, however, that Pigatha will soon head even lower, toward 78 and maybe even 77.

Next is gold. Unfortunately, the trend from last Wednesday's FOMC minutes is now broken. Oh well. It had to happen sometime. As you can clearly see, however, gold could fall quite a ways from here and still NOT violate its trend from 1/1/12. In the end, all is well. QE is going to infinity. BTFD.

Lastly, silver might actually be in a tradable position. Maybe. I still think that the real Battle Royale will be at 35-35.50. IF that's the case, then it may be possible to trade some March calls from 33.25-50 up to 35-35.50. Maybe. Again, trade at your own risk and be on guard for some nasty volatility, to the UPside and the downside.

OK, I'm going to stop there, cross my fingers and toes, and pray that when I hit "SAVE" that this post actually appears on "Main Street" and simply doesn't disappear into the ether. Thanks again to all who have donated in support of the Tech Team and security improvements. Be sure to check back later this afternoon or over the weekend for a great and timely podcast. Have a fun day!! TF

Chart Update

2012-02-02T16:40:00.001-05:00

The Tech Team is still working with the server company to blunt and stop the continued DoS attacks. In the meantime, at least we have this backup platform to utilize.

I'll keep this brief. I had tried to buy back my Mar $35 silver call today but I never got filled. Nuts! I thought I might on the pullback late morning but it never happened. I was looking to buy it back because I'm expecting a decent UP day tomorrow, post the BLSBS.

I may still get another chance. If tomorrow plays out like your typical BLSBS day, the metals will surge in the moments right after the numbers are released. They will then get hammered back about 15 minutes later before reversing course and heading higher. Now that 1750 and 34 have fallen, the next targets are The Battle Royale.

Gold is head to the area around 1770-80 where it will encounter the downsloping trendline from the September highs. Silver is headed to 35.50 or so where it will also encounter stiff resistance. With a lousy BLSBS number, both metals may reach these levels by tomorrow.

Regardless of what happens tomorrow, these two charts are the only ones that matter right now. Both metals are trending higher post the FOMC "announcements" last week. Look for these trends to continue.

I'll let you know via twitter when the site is back up. Until then, enjoy blogspot! TF

Denial of Service

2012-02-02T14:16:00.000-05:00

For all who might be wondering, the site is currently being maliciously attacked by someone or something. The common term for this is a "Denial of Service" attack whereby the site is shut down by an overload of requests for access. The servers get overwhelmed and the result is a site shutdown.

Who is doing this and why are the questions we are trying to answer. In the meantime, please keep checking the site to see if it has come back up. Hopefully, by later today, we'll get back to business.

On a side note, you've surely noticed that silver has finally smashed through $34. With the BLSBS coming out tomorrow, I expect this rally to continue, probably all the way to heavy resistance between 35 and 35.50. Gold has broken out to and should continue rallying all the way to the major downtrend resistance line, somewhere near 1780.

Thanks for your patience. TF

WE'VE MOVED!!!

2011-06-14T16:14:00.001-04:00

At long last, the new home for TF Metals Report is ready!

Before you head there, however, please take time to watch this informative video:

http://www.youtube.com/watch?v=n5W9ATVcXL0

OK, click the link below and you'll be directed to our new site.

http://www.tfmetalsreport.com

See you there!! TF

Almost Ready

2011-06-14T10:18:00.002-04:00

The new site is ready. The programmers are simply cleaning it up and removing test content. Keep checking back today.

Both PMs have found support in the areas where we would have expected it to materialize. Gold near 1515 and silver near 34.20. The support is nice to see but I wouldn't get too excited about it yet.

Gold gives us a clear range to watch bordered by 1512 on the bottom and 1525 on the top. A breach of either will provide us with some short term direction.

Silver is similar with a range between 34.40 and 35.20.

One interesting thing to watch is Ole DrC. Nothing to get excited about just yet but definitely something to keep an eye on.

I'll be sure to post a link on this site when the new site is ready.
Thanks for your patience. TF

3:00 EDT UPDATE:
The new site is almost ready for you. I'm currently uploading an introductory video and performing some other "housekeeping" tasks. None of this will take longer than two hours so please check back to this current site and you'll find all the directions/instructions in a new post I will have for you by 5:00 EDT. Thanks! TF

Just Mucking Fugly

2011-06-13T16:00:00.000-04:00

Wow, what a brutal day this has been. It now appears certain that silver will not reach 42-43 before first notice day. That pick is going to end up costing The Turd a lot of money. I'm very sorry if it has negatively impacted your account, as well. The obliteration of Friday and today has caught me by complete surprise. Just another reason to leave the day-to-day trading of these "markets" to us poor, addicted gambling fools and, instead, confine yourself to the regular, slow accumulation of physical metal.

To that end, the new site is almost ready. Technically, it's finished but I still have to learn how to do my postings as well as craft some introductory messages. I may still get all this done by later today but I don't know if I'll make it. I'll keep you posted.

Let's start with gold. It has broken through the primary trendline which dates all the way back to Turd's Bottom in January. A couple of things:
1) It has done this before and recovered so its not the end of the trend...yet...though it might be.
2) The trend was/is going to end soon, anyway.
As stated in the "roadmap" and often since, gold was seasonally due to peak in June and then trade sideways through the summer. I strongly suspect that these "doldrums" have now begun and that gold will be rangebound, roughly between 1460 and 1550 until mid to late August.

Silver looks awful. Take a look at this dreary, ugly 15-minute chart:

And having broken down through the pennant we've been watching since last week, silver looks set to drop to at least 34, if not 33. Yuck.

Registered silver at The Comex is at only 28MM ounces, enough to physically settle just 5600 contracts but who cares? It doesn't seem to matter right now. All that matters is this mistaken belief that QE is ending for good in 17 days. Whatever.
Silver, too, now looks rangebound for the summer, bounded by maybe 31-32 on the downside and 37-38 on the upside.

Crude stinks, too, but it still has some support left. Take a look at this chart and be sure to note the quick, snap-back rallies that have occurred from the $96 level.

If our esteemed and highly experienced Chief Executive gets his way and crude moves lower, look for very strong support to emerge between $90 and $92.

Thanks again for hanging in there and patiently awaiting the new site. As I publish this, my next call is to one of the developers so she can teach my how to write these posts on the site.

Again, I'm very sorry that silver failed to make $42. It's a real drag but we live to fight another day. For now, preserve capital and maybe take the summer off from trading. Get ready for happier times in the fall. TF

Late Night With Sweetness

2011-06-13T09:11:00.000-04:00

After a late night during which my buddy, Sweetness, filled The Turd with Hendrick's gin and Pine Ridge wine, The Turd is moving a bit slowly this morning. Coffee helps, however.

Accordingly, since I am away from my hidden bunker, I am unable to post charts this morning. I'll have a full update for you later today.

Gold bottomed overnight near 1525. Again, if we're going to see another stab at 1550, we really need to see 1520-25 hold as support. IF it fails, I think we can be quite confident that the "summer doldrums" will have officially begun...a rangebound trade between 1460 and 1550 until late summer/early fall.

The silver chart does not look good at all. A break of the lows from 6/3 at 35.06 would be a very bad sign so that level must be watched very closely.

At least the stockmarket is called higher and crude is firming up so maybe the PMs can reverse and put a little distance between themselves and those critical support levels. Keep your fingers crossed but stay diligent.

Have a great day! TF

Nuts, Not Today

2011-06-10T16:52:00.000-04:00

I really, really wanted to open the new site this afternoon but I just got off the phone with my web developers and, unfortunately, there are still several kinks/bugs that need to be worked out. They've promised me, however, that we are a GO for Monday launch. Thank you for your patience.

I had sincerely hoped for a launch today, mainly because of this:
http://tfmetalsreport.blogspot.com/2011/01/1600-gold-by-june-10-2011.html
Amazingly, calling a bottom and then having gold move from 1315 to 1577 is not enough for some people. I've got an idea...if you don't like it, you can kiss my sweet, hairy...
https://www.kitcomm.com/showthread.php?t=84164
Oh, how I wanted to open today. Just to piss off the tiny little whiners on that Kitco board and elsewhere. I sure would have liked to have poked them a bit. Maybe ruin their weekend. Darn it all.

Believe me, I would be glad to quit today and go away. Writing 2-3 witty, insightful and interesting blog posts per day is far more challenging than you might think. Extremely time consuming, too. But over the past three months or so, the response from Turdites requesting me to keep the site going has been overwhelming. I've also noticed that the world needs this site far more than I do. Look around, there are no PM-dedicated sites available today that provides the user with quality, non-biased information. None.

Well, there's about to be one...come Monday.
See you then. TF

Our Primate Picassos

2011-06-10T10:06:00.003-04:00

If you ever wanted to save a chart for posterity, here is one for you. A perfect, three-stage Cartel raid of the gold Comex.

With nearly infinite, Fed-supplied, taxpayer cash at their disposal, The Cartel can simply overwhelm the public bid whenever they desire. They can't and don't do this everyday as blatant, daily manipulation would draw too much heat and leave them with too sizable of a short position. However, when an operation is needed to clip price or paint a chart, you can bet that The Wicked Witch will spring the monkeys from their cages and send them forth to inflict pain and suffering.

So, what did today's mission accomplish? Take a look at this 4-hour chart:

All that work over the past week suppressing price under 1550 has painted a nearly perfect, head-and-shoulders top on this chart. After waffling a bit yesterday, it is quite clear to me now that gold will be contained by the EE through the summer, in a range from roughly 1460-1550.

Silver still has the potential to break free of its current shackles and run to 42 or 43 by the end of the month but time is, unfortunately, running out. It is still within its pennant formation and may present a buying opportunity around 36 but anyone buying there must have a pretty tight stop. While a break of the pennant to the UPside would indicate a run to 39, 39.50 and even 42, a break to the downside could take it all of the way down to 33. Yikes.

Keep checking back today as we are in the final stages of preparing the new site and I hope to have it ready later on. It's a great new playground for us. Not the fanciest thing ever created but it will widen our conversations and provide some fun, new wrinkles, too.

Hang in there today. TF

10:55 EDT UPDATE:
I figured some of you might be looking for a crude update.

File these two away for posterity, too.
http://www.zerohedge.com/article/german-rating-agency-feri-downgrades-us-government-bonds-aaa-aa
http://ca.news.yahoo.com/china-ratings-house-says-us-defaulting-report-054309883.html

Jim Rogers on GB

2011-06-09T22:00:00.001-04:00

So I'm working out this afternoon and I look up to see Jim Rogers giving a lengthy interview to Glenn Beck. My dear reader, I don't know what you think of Glenn beck and, frankly, I don't really care. However, you should take the time to watch this interview. Rogers is usually interviewed only on the financial networks. There, the questions are often the same and his responses, though genuine, frequently lack candor. In the environment of the Glenn Beck studio and given the time to expand on his beliefs, Rogers shares some opinions that fit right in with our stated mission here. Below is a link to the first segment of the interview. I highly encourage you to go program your DVR to record the replay of the program when it airs again tonight at 2:00 a.m. EDT.
http://www.foxnews.com/on-air/glenn-beck/index.html#/v/985583134001/beck-can-inflation-be-controlled/?playlist_id=86917

In the metals, gold is quiet but silver looks firmly entrenched above 37.50 and ready to go tackle tough resistance at 38.50-38.85.

If you're wondering...Yes, there's still time for the "roadmap" I gave you three weeks ago to play out.
http://tfmetalsreport.blogspot.com/2011/05/its-finally-over-now-what.html
Remember, our goals are 1560-1580 in gold and 42-43 in silver before the end of June. IF silver can rally tomorrow and finish the week in the vicinity of 38.50, it will be primed to go attack 39.50 next week. It will then pound away on 39.50 and 40 while buying pressure builds as we approach "first notice day". After finally breaking through, we could get a quick burst to 42-43 very easily.

That's it for today.
Turd must rest as tomorrow is a very BIG DAY, not just in the PMs but in all of TurdLand.
See you in the morning. TF

Cartel Cap at $1550 Still In Place

2011-06-09T15:33:00.002-04:00

All in all, a very good day for the PMs today.

It is clear to everyone but Ray Charles that The Cartel is making a concerted effort at keeping gold under $1550. Take a look at this weekly chart:

The question is, why?

To me. it's quite clear now. Although overt quantitative easing will eventually continue, The Fed is making every effort to convince the world that it won't. If/when gold closes above 1550, it will quickly move toward a new all-time closing high above $1558. Pretty tough to SPIN a brand new all-time high in gold as somehow indicative of coming austerity and Fed hawkishness.

Silver, though still pennant-bound, is also looking pretty good in the short term. As I type, it is trading in the Globex at 37.54, just 0.08 off of its high. The longer it can stay above 37.50 this afternoon and evening, the greater the chances that silver will jump toward 38.40-50 tomorrow. Keep your fingers crossed.

I think you could tell that ole Turd was getting a little nervous yesterday but things are looking quite a bit better today. Let's see what tomorrow brings but, right now, it looks like we'll close out the week on an up note.

p.s. Would someone please sign up to follow TF Metals at Twitter. I'm stuck on 666 followers and its making me a bit uncomfortable...

A Quickie

2011-06-09T10:01:00.000-04:00

This post will be brief as I have several other items that I need to be working on this morning.

A couple of quick notes on QE, though. First (I love this one), Bill Gross stated yesterday that there will not be a QE 3.
http://www.zerohedge.com/article/bill-gross-no-qe-3
Gee, since PIMCO is on the record as being net short treasuries, doesn't anyone else see an apparent conflict of interest here? Nothing like talking up your book, huh, Willy?

Next, here's a little story from the Washington Times about the reality of no QE and its effect on rates.
http://www.washingtontimes.com/news/2011/jun/7/lack-of-buyers-may-force-treasury-to-boost-interes/

And this is just kind of interesting. I don't believe in the entire top 10 but it may make for a fun discussion.
http://www.thestreet.com/story/11142443/1/10-myths-that-politicians-want-you-to-believe.html

Here are some charts to watch. Have a great day. I'll have more after the close. TF

The HUI Pukey

2011-06-08T16:32:00.000-04:00

You do the HUI Pukey and you screw yourself around. That's what it's all about.

I'm sorry. I don't mean to make light of the losses we all are incurring in the pig miners. I guess we should know better. That's what hurts. When you're dealing with market caps between $500MM and $1B, it doesn't take a lot of dough to manipulate things. Oh boy, there I go again, Mr. Evil Conspiracy is in the house. I guess my simple, obtuse little brain can't figure out a way to explain things so I must rely again upon the "evil conspirators" of The Cartel.

Since I'm such a simpleton, maybe some of the MBAs and PhDs in the audience can explain this one to me: Back in 2009 and 2010, Barrick Gold paid nearly $3B to "buy out" all of the hedges on their books.
http://seekingalpha.com/article/160666-barrick-gold-s-hedge-removal
Apparently, management was so confident that gold was headed higher, they wanted to maximize future profits. They no longer wanted to limit future profits by hedging. At the time, it sure sounded like a great idea. Hmmm. At today's closing price of $44.30, ABX is now at the same price level that it was in November of 2009. Interestingly, in November of 2009, gold traded around $1150. So, in the past 18 months, gold has increased in price by almost 35% yet the now fully-unhedged ABX is unchanged over the same time period. Hmmm. Full disclosure: I do not own a single share of ABX so this is not sour grapes, just an observation and, yes, I know that ABX has a market cap of about $40B.

If Apple can hold the cost of making a MacBook at $400 but, over the course of 18 months, they find that they can increase the retail price of a MacBook from $1150 to $1540, you'd expect their earnings to increase and, with that, a much higher stock price.

If Ford could make a cars for $4000 but, over the course of 18 months, they find that they can increase the retail price of a car from $11,500 to $15,400, you'd expect their earnings to increase and, with that, a much higher stock price.

A miner, however, can hold their costs stable and see the retail cost of the metal skyrocket. Their earnings increase commensurately. What's their reward? Nothing but a bunch of pissed-off shareholders who stomp away in disgust.

Here's a picture of the HUI. You'd think it would find support near 500 but I thought it would stop near 540, too, so what the heck do I know? At this rate, 450 or even 400 may be in the cards.

Lastly, here's just a sampling of some of my favorite miners. There's a oxymoron for you..."favorite miners". Kind of like "favorite punishment" or "most-likable demon". If the PMs have indeed entered their summer doldrums/consolidation, maybe you can put in some stick bids on a good-till-cancelled basis and pick up one of these pigs at a cheap price in a few weeks.

That's it for now. I'm off for more electroshock treatments. More later after I come to. TF

Hoping To Be Wrong

2011-06-08T10:15:00.002-04:00

Back on Monday, one of our astute Turdites pointed out that the $/Yen was approaching 80 and that, below there, all risk assets would come under pressure. Astute, indeed.

Under 80, it seems that nearly everyone expects the Bank of Japan to flush trillions of new yen into the market.
http://www.zerohedge.com/article/yen-surges-boj-intervention-watch-defcon-1
Currency traders seem to be trying to front-run this move and have thus bid up the POSX from its lows right at support of 73.51. Having now broken the 2-week downtrend, technical buying may drive Pigatha all the way back up toward 74.50 and even 75.

The dollar rally has added to what was already a rather tenuous position for gold. Take a look at the chart below. If we again use the white-out to wipeout the blowoff from early May, we get a chart that made a top about five weeks ago, corrected down, moved back up and now has made an attempt at a "new high". Failing the new high, it instead has rolled over and is now pointing lower. I hope I'm wrong but it looks like we have found our range for the summer. It looks now like gold will trade between 1470 and 1550 for the foreseeable future. Do not despair, this pattern of four months UP and two months sideways has been going on for years in this bull market. This new range would just be a continuance of the pattern and it certainly is consistent with the "roadmap" I posted several weeks ago. I still believe that, by late summer, gold will finally break higher and rally toward a December high between 1700 and 1780.

On January 21 with gold at 1346, I wrote this:
http://tfmetalsreport.blogspot.com/2011/01/1600-gold-by-june-10-2011.html
Here is the most important paragraph:

"I firmly believe that there is absolutely no reason not to expect the pattern to continue so, follow closely, as this is some pretty complicated math...
20 weeks from this Friday...assuming the lows for this correction are made this week, is 6/10/11.
19 weeks from next Friday...assuming the lows are made next week, is 6/10/11.
A 20% gain off of a low of 1345 puts us at $1614 sometime during the week of 6/10/11.
A 20% gain off of a low of 1320 puts us at $1584 sometime during the week of 6/10/11.
Let's split the difference: $1600 on or before 6/10/11."

August gold actually bottomed at 1314.20 on 1/28. Adding 20% to that number gives us 1577.04. The high (so far) of the August contract came on 5/2 at 1577.70. I'd say that's pretty close.

Again, if we are now rangebound through the summer and, sometime during the next two months, we retest the low of the range near 1465, then we get this:
1465 + 20% = $1758 December target

And I'll also give you this: The 12/31/10 close of the August contract was 1427.70. The average annual gain for gold since this bull market began back in 2001 has been around 25%.
1427.70 + 25% = $1784 December target

So, again, don't despair when you look at this chart. It is what it is.

Like gold, silver looks somewhat foul. If you're trading, you must watch that lower trendline very closely as a break of it may indicate that a move back toward 34 or even 33 is coming. I'm still hoping for 42-43 before the end of June but this, too, is beginning to look like it has found its "summer range", bounded by 33 at the low end and 39 at the high end.

Lastly, I would be remiss if I didn't take time to thank those who defended me overnight against the continued attacks of Spalding "maradona" Smailes. As you know, I can no longer afford the time and energy it takes to tackle the trolls one by one so I appreciate the help. That said, it's probably best for everyone to simply take the same course and ignore them. Without the attention, they may just drift away.

Hang in there and have a great day! TF

p.s. For those looking for a crude chart this morning, here it is. No change you can believe in.

Waiting For The Bernank

2011-06-07T14:50:00.003-04:00

Of course, I have no idea what ole HellyBenny will have to say this afternoon. Because the POSX sits so precariously upon support between 73 and 73.50, I think you have to expect him to try to talk up the dollar. However, as you know, there is reality and there is fantasy. There is fact and there is fiction. There is TRUTH and there is MOPE.

MOPE:
Management of Perception Economics. A term, coined by Santa himself, to describe the idea that by convincing citizens that all is well, all will actually be well. The Bernank's belief in the "Wealth Effect" is proof of his devotion to MOPE.
http://www.federalreserve.gov/newsevents/other/o_bernanke20101105a.htm

TRUTH:
Fiscal 2011 U.S. Federal Government outlays: $3.6T. Fiscal 2012 U.S. Federal Government revenue: $2.1T. Total Deficit (need to borrow): $1.5T
Fiscal 2012 U.S. Federal Government outlays: $3.75T. Fiscal 2012 U.S. Federal Government revenue:
$2.1T. Total Deficit (need to borrow): $1.65T
http://online.wsj.com/article/SB10001424052748703361904576143253522341850.html

WHAT QE IS "ABOUT":
1) Funding the deficit spending of the U.S. Federal Government
2) Providing free cash for insolvent TBTF/PD banks
3) Funding the deficit spending of the U.S. Federal Government
4) Creating the inflation necessary to service existing debts
5) Funding the deficit spending of the U.S. Federal Government
6) Infusing cash into the Primary Dealers which they, in turn, can use to buy S&P futures and prop up the stock market (see "Wealth Effect" above)
7) Funding the deficit spending of the U.S. Federal Government

Before The Bernank, takes the podium, please take a moment to ponder from where the U.S. government will find its $1,650,000,000,000 needed for next year without continued Quantitative Easing.
1) China? Nope.
2) Japan? Good one.
3) Europe? Mmmm, no.
4) The Middle East? Negative.
5) TBTF banks. Jim Rickards says so. He's fooling himself. $1.65T? From the banks? Hahaha.

Be not afraid, my friends. The Bernank and his willing accomplices/stooges in the media may preen and posture all they want but MOPE cannot win long term. MOPE may get them by for a day or a few weeks but TRUTH shall prevail in the end.

4:25 PM EDT UPDATE:

Never before have I heard The Bernank take so much time discussing individual commodities. He even mentioned wheat and the drought in Western Kansas, for crying out loud! It seems that The Chairman was taking great measures to shift the blame of commodity cost inflation to supply disruptions and global demand and away from Federal Reserve monetary policy.

Why and why now? To me, The Bernank is again trying to buy himself some time. As stated above, money must continue to be created from thin air if the U.S. Federal Government is going to continue to operate. As austerity is not forthcoming, further quantitative easing is the only possible funding solution. By shifting the blame and focus away from the weakening dollar and onto miniscule, specific events, The Bernank can continue to print money while blaming the attendant continuing rise of all dollar-denominated commodities on "transitory" events.

Again, MOPE can buy you time but TRUTH shall prevail. It's unavoidable.

Watching Gold

2011-06-07T10:22:00.003-04:00

I'm getting a bit uneasy this morning.

As expected (hoped) last evening, 74 provided too much resistance overnight for the POSX and it rolled over, making a low on the June contract of 73.57. On the chart below, it is quite clear that the pig should catch a bid near 73.50. As it bounces off of there, it will once again encounter that down-sloping trendline. If it can break through, it will rally as buyers emerge and shorts cover. It would likely make it all the way back up to 74+.

When this happens, you can bet that it will put pressure on the PMs. Silver will retreat back toward the bottom end of this pennant.

And gold is not going to be looking very good, at all. A concerted effort has been made to contain gold below 1550, as you can plainly see on this 30-minute chart.

I think I now know why. By capping price and momentum at 1550, the daily chart begins to take on a nasty-looking double top. When we called Turd's #2 back in May, I mentioned that 1560-80 was my June target for gold. It reached 1555 yesterday and that's pretty close. Watch this daily chart in the coming days. I'd say that trendline is pretty important so, IF gold rolls over, we're going to want to pay particular attention to the action in the 1520 area.

All of that said, please keep in mind that these are simply words of caution. The PMs may continue higher and all will be well. The POSX may trade all the way to 73 before finding support and, even there, it may just bang around between 73 and 73.50 again, like it did back in April. Let's hope so. In the meantime, keep an eye on the charts. TF

12:20 pm EDT UPDATE:
Sometimes it sucks to be right.
As if on cue, The Cartel took the opportunity presented by a lack of buyers and jammed gold down about $10 an hour ago. Fortunately, I took my own advice and sold one of my August 1550 calls before the beatdown. I'm now looking for a spot to buy a dip with a tight stop. That spot looks to be somewhere near 1530. We'll see.

Of course, today's action presents another possibility that we must be aware of. Namely, that The Fed has warned their friends that The Bernank is going to give a "hawkish" speech this afternoon, seeming to disavow QE3 and attempting to give support to the lifeless, dying POSX. This has caused a rush to the exits from the connected, inside money. Wouldn't be the first time this has happened, now would it?
More later.

Half-Full or Half-Empty?

2011-06-06T14:38:00.000-04:00

I guess it all depends on how you choose to look at it.

Half-full: In the face of a rising POSX, a falling euro, negative crude and sharply lower grains, the PMs performed admirably in eeking out slight gains on the day.

Half-empty: After rallying all morning, gold stood just $3 away from a headline-grabbing, all-time closing high at noon EDT. The buyers had seized the day and the EE was on the run. Sadly, the buyers seemed to simply give up and call it a day before their work was done. This allowed the monkeys to take over and drive gold back down almost $10 by the close. Yuck.

By the descriptions above, I guess you can tell how I feel about today's events.

Oh well, today is over and its onto the overnight and Tuesday trade. Without question, the item of the day for tomorrow will be the performance of the POSX. It faces two very strong lines of resistance that are both intersecting around the 74 level. IF it can clear 74, the newly-energized bulls will seize the day and quickly drive it back toward 75. IF, however, it acts like it's supposed to, the 74 level will cap today's meager rally and the index will head lower, toward 73.50. Let's hope the latter scenario plays out as it will activate the "risk on" button of WOPR and send stocks and commodities higher on Tuesday.

Today's weakness in crude presents traders with another opportunity to get long near support and with limited downside risk. I gotta tell ya, if I was some big $ hedgie, I'd be all over this one. You can buy right here, between 98 and 99 and put a stop below the recent lows of 95. That's about $4 of downside risk. Your upside, however, is almost infinite.

The PM charts are simply updates of the charts I posted this morning. Sadly, gold failed to hold 1550 and was successfully beaten back for the fourth time in four days. Again, why The Cartel is so determined to keep it below 1550 and why buyers are so reluctant to drive it through are questions for which I don't have an answer. Feel free to posit your own theory in the comments section.

Lastly, here's a piece from one of my favorite commentators, Mark Steyn. It's about two weeks old but still relevant to the discussion here.
http://www.steynonline.com/content/view/4084/28/

Have a great evening. Keep checking back as I may have more for you later. TF

Oh Monday Morning...

2011-06-06T09:42:00.000-04:00

...you gave me no warning of what was to be.
http://www.youtube.com/watch?v=h81Ojd3d2rY

As we begin what will surely be another unpredictable week in the PMs, there are just a couple of things to note. First, The Evil Empire has made it known that they do not wish to see gold trade above $1550. Why, exactly, this level is so important to them remains to be seen but their desire to suppress can clearly be seen on this hourly chart. Note how quickly that spikes UP to 1550 are quickly met with spikes down.

And look what I found in silver...a perfect pennant on the 3-hour chart. It's perfect in that the points line up almost exactly. As we've discussed here, pennants are interesting formations because they eventually close and the commodity in question has to break one way or the other. Usually, the break goes in the direction of the line with the greatest slope. In this case, the rising line of the bottoms slopes greater than the declining line of the tops. I'll try to update this chart several times per day as we go through this week as it will give us clues for when silver will encounter resistance and when it will find support. For now, IF silver can clear 37.50, it looks clear for a run to 38.50 or so before it encounters the resistance of the down-sloping line.

Lastly, we had an interesting discussion here over the weekend regarding GLD and SLV.
http://tfmetalsreport.blogspot.com/2011/06/considering-gld-slv.html

I found this on ZH today and it furthers the conversation. You should take time to read both.
http://www.zerohedge.com/article/js-kim-max-keiser-discusses-banker-manipulation-gold-silver-futures

As I close, I see that the PMs have spiked UPward (for a change) while I've been typing. I have lasts of 1547 and 36.93. Maybe Monday may still give us some kind of warning of what lays ahead. TF

Let's Get It On!

2011-06-05T19:05:00.001-04:00

As we begin a very fun and exciting week here at TFMR, I thought I should give you some numbers to watch overnight.

First, here's crude. It continues roughly in the same range its been in for nearly four weeks. At present, it is swinging higher again and needs to break $101 in order to attract more substantial buying interest.

Silver is perking up this evening. Its initial target is crossing and holding 36.40 but what we really want is 37.40, the point from which the Evil Empire launched their latest selling barrage back on Thursday.

Gold is sitting idly as traders seem to be waiting to see how Pigatha Christie fares in Asian trading. The pig closed so poorly on Friday that weakness should be the order of the day on Monday so look for gold to move higher and challenge for the third time the 1550 level. Third time is a charm???

Lastly, please take a moment to read this article by Jeff Nielson. Though I don't agree with all of his conclusions (particularly confiscation), much of what he states is factually correct and in line with common Turdology.
http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=19325:hyperinflation-warning-for-us&catid=47:us-commentary&Itemid=132

I am convinced that, in the end, the U.S. will lose/surrender/forfeit some measure of monetary sovereignty. More on that later this week.

Have a great overnight and early Monday. TF

Considering GLD & SLV

2011-06-04T15:52:00.000-04:00

In case you missed it, earlier this week I felt that it was important for all of us to begin to look for the telltale signs of Comex default so that we can consider strategies to cover our individual rear ends. What I wrote can be found here, in case you missed it:
http://tfmetalsreport.blogspot.com/2011/06/what-i-think.html

I'd like to use this thread to prompt a discussion among Turdites. First, please take a moment to read this email that I received earlier today. It is from a loyal reader "H.M.". H.M. posits that the recent activity within and depletion of SLV indicates a growing shortage of physical silver. He makes a compelling case:

Hi Turd:

My name is H.M. I enjoy reading your posts regularly. Your practical, objective, to the point, no non-sense, no BS approach is refreshing in today's investment world. It vindicates the real, main-street people.

Cutting to the chase, I would like you to comment, if possible in a specific post, on an observation that seems to indicate that, due to the extreme shortage of physical silver currently in the market, the bullion banks/Comex seem to be using desperate alternatives to attempt to meet their delivery obligations.

One such alternative is the redemption of physical silver through the SLV ETF (yes, it is possible! - if you have about $1.8 million).

SLV is not actively managed. It is designed to track the price of silver bullion held in the trust (supposedly). So, when you buy or sell shares of SLV you are not necessarily putting or removing pressure in the price of silver, it is not analogous to buying or selling the physical stuff.

And, contrary to what many people think, it is possible to take physical delivery, redeem silver from the SLV trust, in bullion equivalent to baskets of 50,000 shares, through an Authorized Participant.

On page 24 of the SLV prospectus, found on the iShares website:

"Authorized Participants, acting on authority of the registered holder of Shares, may surrender Baskets of Shares in exchange for the corresponding Basket Silver Amount announced by the trustee. Upon the surrender of such Shares and the payment of the trustee’s applicable fee and of any expenses, taxes or charges (such as stamp taxes or stock transfer taxes or fees), the trustee will deliver to the order of the redeeming Authorized Participant the amount of silver corresponding to the redeemed Baskets. Shares can only be surrendered for redemption in Baskets of 50,000 Shares each."

As of last Friday, 6/3/2011, the SLV closing price was $35.34, which means that the redemption basket of 50,000 shares at that instance in time amounted to $1,767,000 (plus applicable fees, expenses, taxes and charges, as it is stated in the prospectus).

The Authorized Participants are listed on page 23 of the same prospectus:

"As of the date of this prospectus, Barclays Capital Inc, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, EWT, LLC, Goldman Sachs & Co., Goldman Sachs Execution & Clearing L.P., Intrade LLC, JP Morgan Securities Inc., Knight Clearing Services LLC, Merrill Lynch Professional Clearing Corp., Newedge Group USA, PruGlobal Securities, LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc., UBS Securities LLC and Virtu Financial BD LLC are the only Authorized Participants."

So, one can think of a plausible scenario, one can presume that, in order to meet the delivery demands from clients, the Comex and the bullion banks are redeeming baskets of SLV through their buddies, the Authorized Participants.

To wit: in the Historical Data section of the SLV ETF website, it shows that, on 4/25/2011, the trust held 11390 tonnes of physical silver in the vaults. Merely 39 days later, on 6/3/2011, that tonnage had been reduced to 9885 tonnes.

A drop of 1505 tonnes in just over a month! This equates to a 13.2% drop in the stock of silver bullion supposedly then held by the SLV trust. (Incidentally, this begs the questions: was all this physical silver sold in the market? how and to whom all this selling was done?).

And, if I am not mistaken, this drop is also equivalent to one full month of the entire world silver production.

So, it seems someone is plundering SLV for a lack of better options to obtain physical silver in the marketplace. It may even be the cheapest alternative at this point in time for an institution under pressure to meet delivery commitments.

The above observations certainly seem to point in the direction of a growing premium in the days ahead in the price of physical over paper silver. In fact, this premium could explode higher in the not so distant future if this trend continues and the Comex is proven to be indeed in dire straits.

I would appreciate if you could comment on the above thoughts. Thanks in advance.

Be well…H.M.

PS: And, just to make it crystal clear, that 13.2% drop in the tonnage putatively stored in the SLV vaults is actually bullish in my opinion. It shows stronger hands, I assume, are taking delivery of the metal, that is then taken out of circulation, stored away as a safe haven, in preparation for rainy days ahead.

Reading this reminded me of something that FOFOA wrote back in January. I did some googling and managed to find it. In the context of H.M.'s email, please take 5 minutes or so to read this:

http://fofoa.blogspot.com/2011/01/who-is-draining-gld.html

In the end, there are several questions to ponder and discuss:

1) Are GLD and SLV being plundered for deliverable metal?
2) Are GLD and SLV being plundered by high net worth investors, seeking large quantities of metal?
3) Are we in a physical supply squeeze? If so, are we early in the event? The middle? The endgame?
4) If you own GLD and/or SLV, does this make you want to re-position out of them?
5) What are the best ways to diversify away from paper or synthetic metal?

Thank you all for participating in what has become the best precious metal blog and forum on the internet. Yes, I suppose that I have some input but it is you, my dear reader, who have made this site what it is. The new site now has its servers up and running and final preparations are being made. I really, really hope to have it ready for you by late next week.

Have a great and relaxing weekend! TF

Dollar Index Breaks 74. World Yawns.

2011-06-03T12:11:00.004-04:00

The depth and breadth of the current attempt to hammer all things dollar-denominated before QE3 is muting the reaction to the complete rollover pukejob currently taking place in the POSX. See below.

A close below 73.94 in the June POSX would clearly signal a retest of the lows from late April near 73. Since I'm not the only one who sees this, it will likely hold here for today. Next week, however, will be a different story. When this weakness will finally be allowed to be reflected in the price of commodities is anyone's guess. For now, just keep in mind that The Truth is on our side and, eventually, truth-based sanity will return.

p.s. I just noticed that Trader Dan has posted on this, too. He even touches upon the "conventional wisdom" that so annoyed me last night that I had to personally smack around a troll who was claiming I was a dope for suggesting that a weak BLS would send the dollar lower. Anyway, this link is definitely worth reading.
http://traderdannorcini.blogspot.com/2011/06/employment-data-undercuts-us-dollar.html

5:00 EDT UPDATE:
The POSX will, in fact, settle down under 74. This clearly has negative implications for it next week.
The CoT must have been OK for silver as it has rallied nicely on the Globex. It's actually UP on the day after reaching as low as $35 overnight. We'll see what happens Monday but, heading into the weekend, our situation doesn't look nearly as dire as it did 10 hours ago.
Lastly, check out the weekly chart of the June gold. Sure looks like the terrible, barbaric investment that those in the MSM would have you believe it is. A popping bubble, that's for sure. <sarc>. TF

Overriding the Fundamentals

2011-06-03T09:39:00.001-04:00

The desire to smash commodity prices to pave the way for QE3 is now so complete that fundamentals are completely ignored. In a real "market", terrible economic news such as we had this morning would be greeted with a spike in commodity prices as it all but ensures further government efforts to "stimulate" the economy.

http://www.zerohedge.com/article/birthdeath-adjustment-206000

Of course, in the end, this is exactly what is going to happen. In fact, QE isn't even about economic growth anyway, its about funding the federal government while at the same time floating free money to insolvent TBTF primary dealer banks. The lousy U.S. economy just gives political cover and distraction for the Fed to keep the presses humming.

Remember Econ 101...Increasing the supply of an item decreases its value. More dollars equals a less valuable dollar. A declining dollar causes all things denominated in dollars (gold, oil, corn) to rise. The dollar is going to be declining farther with the advent of QE3 so the way must be prepared by smashing commodities first so that they start their next UPleg from a lower point. Thus, the fundamentals are overridden today. The prop desks of the primary dealers are the ones responsible, at the behest of their Fed masters.

Eventually, good defeats evil and truth defeats lies. I see that just in the time it has taken me to type this note, gold has rallied $10. Maybe truth will even win the day today. We'll see. The key may be in watching the POSX. It has now made a complete roundtrip from its "Calvin" bounce last month. The bounce took it to 74. It then rallied to 76+ and now it's back to 74. A move back down through 74 and it will move quickly back toward 73.

Lastly, here's a silver chart for all the other sick, pathetic gamblers such as myself. Frankly, I'm about to give up on silver for a while, even though I did get filled on another July $40 call overnight. The fiat price obtained through action on the Comex is now so disconnected from physical reality that it seems ludicrous to even participate in the nonsense. As we've often discussed here, physical silver is your insurance protection as you seek to preserve your ability to purchase everyday items. Physical gold is your insurance as you seek to preserve your wealth. As the Comex edges closer to default, the price of paper silver set by the Comex will increasingly separate from reality. The simplest strategy is to avoid the Comex, altogether. Do not play their games. Leave the "speculation" up to us lobotomized fools. Just keep stacking your physical and look the other way,

OK, I have lasts of 1542.60 and 35.60. I don't know about you but I'm ready for the weekend to start right now. More later...maybe. It depends on whether or not I go make myself a Bloody Mary. TF

Oh Happy Day

2011-06-02T17:06:00.000-04:00

Yes, today was challenging but what day isn't? On the brightside, Mr. Postman brought me another present today. This little gift was particularly fun because I had forgotten all about it. Behold one of my new "Silver Keisers"!!

Secretly, I'm hoping that someday, someone will mint a "Silver Turd". Just a hunch but I think we could out-sell the Silver Keiser. Seriously, who wouldn't want to lug around a Silver Turd for good luck??

Someone on the previous thread asked for some longer-term, daily charts. I am happy to oblige because I had planned to anyway and I knew that the longer-term charts would provide you with some clarity and comfort. So, here you go.

First up and most important is the POSX.

You can see this coming plain as day. The POSX today traded exactly as high as yesterday but closed right at yesterday's low. This very likely means that it is going down tomorrow. With the 8:30 release of the BLSBS, I expect a weak number to lead to dollar selling. Dropping through the lows of 5/6 at 74.11, ole Pigatha Christie will plunge toward 73.50 and, eventually, 73. The only thing that can prevent this would be an upside BLSBS surprise (unlikely) or some MOPE and SPIN regarding the PIIGS (somewhat likely).

Now take a look at a chart of crude that goes back to before the announcement of QE2. Note that the significant resistance of 98-100 has become significant support. As I stated earlier, this is a very attractive trade from a risk:reward standpoint. You can buy right here if you want or you can wait and hope to get a chance to buy closer to $98. Then, you put a tight stop in below $95. That gives you $3-5 of downside risk. However, with MENA issues, supply disruptions, pending QE3 and possible WW3 on the horizon, you've got...ohhh...maybe $200 of upside. Just sayin...

Here is gold, which presents a very clear technical picture. The trend off of "Turd's Bottom in January is still very much intact. I still firmly believe that $1560, maybe even $1580, is your next target.

Lastly, here's poor ole silver, the object of much chagrin and gnashing of teeth. Yes, in hindsight, there was clearly a blow-off, short-term top that drew too far away from the primary trend to have solid underpinnings. However, you can clearly see that silver has settled comfortably back into its rising range. While there will be dips and bumps along the way, why would anyone not expect silver to be in the $45-50 area by December? (Unless, of course, the Comex collapses and futures are no longer trading while spot is around $200. Don't laugh. I'm serious.)

That's it for today. Gotta get ready for tomorrow. Beginning at 8:20 EDT, I'll be in front of the tube, watching CNBS, listening to The Shill, The Coug and LIESman preen and project before the big number. After the number, I'll take a moment to listen to them backtrack and play CYA while I gather my thoughts. I'll have a new thread for you shortly thereafter.

In the meantime, go relax and enjoy your evening. Mrs F is sending the LTs over to a friend's house for a sleepover tonight. This means that The Doctor of Love Is In. I've got the "do not disturb" sign on the door and a roll of quarters beside the vibrating bed ;)
Turd out.

Turd DumDum

2011-06-02T12:27:00.000-04:00

http://www.youtube.com/watch?v=hCnEHSJX9UY
"I'm sorry, my name is Turd".
"No, your name DumDum".

Look, I try to do everything right on this end but I'm not in control...(yet)...so I'm at the mercy of TPTB just like you are. The stock market is down a little. The dollar is down a little, too. Yet the entire commodity complex, with the exception of the grains, is getting whacked. The PMs are getting hit particularly hard as silver is down about $2.50 from yesterday at this time. Why? Is it the Primary Dealers of the Fed doing their Master's bidding through their prop desks, ruthlessly driving back commodity prices in preparation of QE3? I think you know the answer to that but ZH chimes in to help you along the way:
http://www.zerohedge.com/article/commodity-complex-pummeled-preparation-qe-3

As mentioned in the previous post, The Comex isn't failing tomorrow but the supply of physical silver for delivery in July is below the level to settle even 5,000 contracts. This fundamental must, eventually, carry some weight in the "market". However, with QE to infinity assured, we can't know for certain how far the C/C/C will go in trying to collapse PM and crude prices at the behest of The Fed. Here are some charts for your guide but caution reigns supreme. This is still not for the faint of heart and nothing is certain. If you must play, play just a little. Right now, I have 2 July 40s and 2 July 45s. I have 1 Aug 1550 and 1 July $102 crude. That's it. No big positions and no big risk.

Hang in there. More later. TF

What I Think

2011-06-02T10:04:00.000-04:00

Please keep in mind and never forget that The Turd is just a regular guy. I'm not some former working Wall Street stiff with an agenda. I'm not a paid agent of disinformation. I'm not trying to sell a newsletter or anything else for that matter. I'm just a dope with a MacBook. I have a few very strong beliefs about the future of the American and world economies and I seem to have an ability to forecast price movements in gold and silver.

Longtime turdite, TurdleGG, wrote me in the very early days of this blog. His advice was: "If you're going to do this, don't hold back. The world is full of obfuscating investment analysts and it doesn't need another one. Give it to us straight. Tell us what you think. It is up to us, the readers, to decide its merit." With that terrific advice in tow, we set out on this journey. Perhaps because of the honesty, this site has grown exponentially. The just-completed month of May (our sixth full month in existence) saw the site attract 2,066,434 pageviews, placing it easily within the top 10 busiest precious metals websites in the world. In light of this, it would be quite simple now to go back on my pledge to Turdle but I won't. I will continue to make predictions such as "Turd's Bottom" and "Turd's #2" because it's what I believe. Not what I know, no one can know the future, but what I believe to be true. Take or leave it. Do your own research and draw your own conclusions. Do not ever rely simply upon this blog and my opinions. Ask Mrs F and she'll tell you that I'm more likely to be wrong than right.

With that said, here is what I have come to believe: The Comex is broken and failing. The evidence is circumstantial and I can't prove anything to you. However, after fully considering facts (Scotia et al) and contemplating the recent market action and the increasingly heavy hand of C/C/C manipulation, my experience tells me that the end is drawing near for the Comex as a reliable price discovery and metals delivery vehicle. Very near. Maybe not in July but, with each subsequent "delivery" month, the likelihood of Comex default will increase.

As a precious metals investor, this seminal event has major implications for you. First and foremost, we are about to discover whether a Comex failure will be bullish or bearish for paper silver contracts. This will no longer be an academic exercise. We will see this play out in real time. I fully expect the price gap between paper and physical to widen significantly. Investors will finally take notice that paper silver is indeed just that, and, in the end, there will be a mass awakening to the true availability of physical silver. At once, it will dawn upon the investment community that the amount of silver available for investment and insurance purposes is much, much less than previously thought. Your paper futures contract or your paper ETF shares will be worth less or worthless while your physical coins and bars will skyrocket in price.

Additionally, I'm spending a lot of time contemplating how these events will effect my forecasted "roadmap" for the rest of this year. As you know, my method of prediction relies heavily upon unchanging fundamentals and repeating cycles. A collapsing Comex certainly alters the fundamentals and, since its never happened before, there are no cycles that can repeat. For now, I still expect $42-44 silver before the end of this month. From there, we'll have to wait and see how the July delivery process plays out.

In conclusion, we are very near the point where you need to begin moving out of all paper and synthetic silver. The common shares of miners, particularly those with unhedged books, will do extremely well. Your physical stack of ASEs, Maples and bars will rapidly appreciate in value. However, paper and synthetic silver will be seen as dubious, perhaps even fraudulent, investments. At the end, you do not want to be the "greatest fool".

One of the more bizarre parts of this whole experience has been my sudden ability to correspond with very well respected individuals within the precious metals community. I've learned and confirmed a lot so, in the coming days, we'll discuss the timing of the Comex collapse as well as other "big picture" revelations I've had. The world is going to be changing rapidly over the next 24 months and those who prepare will survive and even flourish. Those with buried heads are in for some very big surprises.

Deserving of Its Own Post

2011-06-01T18:12:00.001-04:00

Please read and take time to fully consider this. We now know why The Empire chose to aggressively pursue silver on the Globex this afternoon. This is a war that the C/C/C (cme/comex/cartel) will lose but they will do everything in their power to prevent their collapse and prosecution.

http://www.zerohedge.com/article/scotia-mocatta-loses-60-its-physical-silver-one-month-reclassification-total-comex-registere

DO NOT LET THE MANIPULATING, CRIMINAL CARTEL FRIGHTEN YOU OUT OF YOUR PHYSICAL METAL. BUY PUTS FOR THE SHORT TERM IF YOU MUST BUT CHERISH YOUR METAL. IT IS YOUR ONLY INSURANCE AGAINST FINANCIAL DISASTER.

Staying Grounded

2011-06-01T15:12:00.004-04:00

Here's the only thing that really matters today:

In the midst of all the silliness, a friendly postal carrier stopped by to deliver a tube of these lovely Maple Leafs. A gentle reminder that, even though the day-to-day volatility can be crazy, I know I'm doing the right thing by stacking some precious metal. The Truth will one day prevail and I'm going to be awfully glad that I took my own advice and prepared.

Today was another classic day of market schizophrenia.
Economy Bad: Sell stocks, crude, copper and grains.
Bad Economy Means More QE: Buy bonds and gold.
Rest assured, just as quickly as WOPR sold stocks today, WOPR will buy them back tomorrow. In fact, here's an ES chart to guide you:

WOPR will also turn around and buy back the copper it sold today, the crude and the grains. Just be patient.

Silver is still an odd duck, though. As you know, it didn't tag along with gold today. Or did it? From a different perspective, since late Thursday, gold has rallied from 1515 to high today of 1551. That's 2.38%. Over the same time period, silver has moved from a low of 36.26 to a high today of 38.50. That's 6.18%! So don't dismay, silver has good buying support from 37.50-60. Someone or something seems to want to keep it below $39 but they won't win. As we enter June with the critical "delivery" month of July on the horizon, silver will continue to find a bid. Of that you can be confident.

Gold is what intrigues me the most here, though. Did you realize that today's Comex close was the third highest ever? The only higher closes are $1557.70 and $1558.40 on 4/29 and 5/2. That's it. Today is ranked #3 on the all-time list! Something tells me you haven't heard that mentioned on CNBS. At any rate, on the chart below you can begin to clearly see why I expect such tough sledding between 1550 and 1560. Let's just wait and see what the end of this week brings. Either the BLSBS will confirm ADP and gold will soar through 1560 and attempt to make an alltime closing high or MOPE will allow for the media shills to SPIN the number into something gold-negative. I guess what I'm saying is: No sense buying more here. The upside is capped for now. Let's wait to see how things look on Friday at around 9:00 am EDT.

Again, today was just another day in the crazy world of investing and preparation. Keep the faith, relax and be happy. Have a great evening! TF

p.s. It just dawned on me that I should have mentioned crude. I wouldn't want anyone to think I'm hiding from it. Obviously, today's move caught me by surprise, which is certainly going to happen from time to time. Eight hours ago, the chart looked like 104-05 was coming today. Now, I'll just be happy to see it stay above $100. Yikes! It could decline further but the upper 90s still look to provide excellent support so I'd be looking to be a buyer somewhere around $98, if it reaches down that far.

4:10 EDT UPDATE:

The Criminal Evil Empire has chosen to once again raid the metals on the afterhours, thinly-traded Globex. Using a weakening equity market as cover, The Cartel sent out the monkeys and successfully clipped $1.20 off of the price of silver in just 13 minutes. They even managed to turn gold negative for a few minutes, effectively wiping out all $16 of hard-fought pit gains. Fuckers. It reminds me of this now-famous rant:

http://tfmetalsreport.blogspot.com/2010/12/ok-now-im-pissed.html

Our "markets" are a sham and a farce. Endlessly manipulated by the Fed's primary dealers to create the illusion of a sound dollar and a stable economy.

In the end, re-read the top of this post. Keep stacking physical metal. It is your only insurance against the thievery and destruction brought about by our Monetary Masters.

ADP v BLS

2011-06-01T09:47:00.004-04:00

Some background. At 8:30 am EDT on the first Friday of each month, the Bureau of Labor Statistics (BLS) releases the employment report (BS) for the previous month. Usually two days before, the business services company ADP releases their own version of this report. Traders use the ADP report as a guide/signal of what the BLSBS report may be 48 hours later.

Today, the ADP Report was abysmal. This caused the dollar to drop, bonds to rally and gold to spike $10.
http://www.zerohedge.com/article/horrible-economic-data-continues-adp-plunges-38k-expectations-175k-downward-nfp-revisions-ne
That this is "news" to anyone still amazes me. Look around. Do you see robust economic growth? Are your friends secure in their jobs? Are homes selling quickly in your neighborhood? Is your company expanding or simply trying to get by? Only on Wall Street and in academia, where everyone exists in a fantasyland ruled by charts, studies and statistical anomalies would someone seriously believe that all is well. Don't listen to these fools. Trust your instincts.

On the subject of the pathetically weak U.S. economy, you can bet that the ADP report and the BLSBS on Friday will spur plenty of discussion about QE3. I found this story and video from CNBS. This guy, Maughn, makes some excellent points so I suggest you take 4 minutes to listen.
http://www.cnbc.com/id/43233866

That the Long Bond is rallying is simply a continuance of the trend we discovered and discussed here about a month ago. Please take time to review this, too. As a bonus, it's perverse fun to see the gold and silver charts from late April. Gosh, that was an interesting time. Hard to believe it was just a month ago.
http://tfmetalsreport.blogspot.com/2011/04/where-were-you-on-super-bowl-weekend.html

The POSX continues to slide backward though, oddly enough, it has rallied in the hour since the ADP report. Regardless, as it heads lower, all eyes will be on the 74 level. Failure there will send it rapidly back to 73. Therefore, you can expect all kinds of SPIN and MOPE in the next few days. Come to think of it, SPIN and MOPE are the likely cause of the latest bounce this morning, too.

Lastly, here's gold. Keep in mind how this works in an UPtrend. The target was 1525. It approached 1525 then fall back to support at 1515 before finally besting 1525 and moving onto the next target of 1540-45. It hit 1541 yesterday before falling back near support at 1525, reaching a low overnight of 1530. It is now tackling 1540 again. It may make it through this time and it may not. Resistance is great enough that it may take three stabs to push through. We'll see. What is certain, however, is that gold will soon break through 1540-45 and then head off to the real fight above 1550 and approaching 1560.

OK, that's it for now. I've got 1538, 38.02 and 102.50 for gold, silver and crude. Let's see what the day brings us. More later and as conditions warrant. TF

p.s. I, like Tyler, received quite a few emails last night regarding the nonsense that was posted on the "EU Times". Having been fooled by them before, I tried to warn some of the emailers that this "source" was not to be trusted. In fact, the site seems to be home to plenty of viruses and spyware.
http://www.zerohedge.com/article/quick-note-internet-hoax-stories
Full disclosure: Based on an EU Times report last year, I walked around for a weekend telling everyone I knew that the Deepwater Horizon was torpedoed by a North Korean submarine. Oops. Live and learn, I guess.

p.p.s. Given the weakness in silver, I figured I should reprint this from late yesterday.

12:05 EDT UPDATE:

I'm sensing a lot of frustration at the lack of participation by silver today and last week. Yes, The Cartel would like to keep it under $39.50 so we have that to deal with. More important, however, is sentiment and psychology. Consider, for a moment, your personal feelings and hesitation regarding the silver "market" following the events of early May. Now ponder those feelings writ large for the entire market. It matters not whether you have 100 ounces or 100,000 ounces, you feel the same angst and worry. As I've stated before, the psychological damage done to the silver market in May will take quite some time to heal. It's the main reason why I think the upside in June is only $42-44. We'll need lots of new money and lots of new open interest to drive price back up to $50 and it's going to take a while for the confidence that is necessary to make that happen to return.

May Wrap

2011-05-31T21:32:00.000-04:00

As the month of May draws to a close, just one more note on the premeditated massacre that took place between May 1st and May 17th.

Remember and never forget that the Comex is owned by the CME. A failure to deliver by the Comex would result in a failure and endless lawsuits against the CME.

By the end of April, it was clear to almost everyone actively paying attention that the Comex was failing. To this date, it is still failing. The total amount of available, deliverable silver stands at a record low of 31,000,000 ounces. This number is down from over 100,000,000 ounces just two years ago. In an effort to squelch demand and buy time, a deliberate and premeditated attack of Cartel selling and CME margin increases drove price down nearly 35% in 10 trading days.

Do not believe the nonsense that volatility caused the margin increases. This is not a chicken vs egg argument. The margin increases created the volatility. Period. End of story. The CME "used" the volatility they created to justify a total and unprecedented 5 margin increases in 9 days. Breathtakingly bold manipulation and, when contemplated from a distance, only offers further proof of the desperate situation in which the CME/Comex/Cartel finds itself. The CME's decision today to lower margins on equity futures contracts, despite contrary volatility evidence, proves once and for all their active role in managing our "markets".
http://www.zerohedge.com/article/and-scene-cme-lowers-es-sp-ym-margins

Therefore, we must resist the urge to be complacent and/or overconfident. Yes, The Truth is on our side and, as always, The Truth will win. However, the C/C/C has shown that they will not go down without a fight. Can margins be raised to 100%? Yes. Will they? Who knows? Maybe, and we must be prepared for that and any other eventuality.

In the end, as Santa says, your best option may just be to simply continue stacking your physical. Let traders such as myself guarantee an early grave for ourselves by stressing over the daily machinations. Believe me, you'll have just as much fun following the markets and watching to see if Ole Turd is right again even if you don't have any "skin in the game". Don't be afraid to simply buy physical on every 5% dip and avoid all the other nonsense. You'll be much happier, I can assure you.

To that end, The Wicked Witch seems obsessed with keeping silver below $39. We've seen this behavior before and it usually ends badly for her. I'm convinced she will lose this battle, too. The fundos are stacked too high in our favor. Silver will soon trade through $39 and then $39.50. Before the month of June ends, I'm supremely confident that it will trade to $43, maybe even $45. Could I be wrong? Of course. Maybe margins will be raised to 200%. Who knows? But, in the short term, gold is strong, crude is up, the euro is rebounding and the dollar is rolling over. This is a recipe for silver strength, not weakness, so keep the faith and let's see what tomorrow brings. TF

Our Nascent Ascent

2011-05-31T09:54:00.003-04:00

After the 3-day weekend, things are looking quite positive this morning. I know there were a lot of nervous moments back on Friday but those who hung in there have been rewarded today.

As we begin the week, let's start with the dollar. "Calvin" appears to have run his course and now it's just a matter of watching it bounce off of potential support areas. Nearly all bounce buying will be purely technical in nature because who, in their right mind, would be buying on the dollar's fundamentals? Seriously.

The PMs are getting, and will continue to get, a lot of help today from the crude pit. As we've been discussing for the past 10 days or so, once crude got past 101.50, it was going to be clear sailing to 105. Today's action proves that to be correct as I have a last of $103.10, up $2.50. The pace of buying will begin to slow above $104 and selling will emerge as we approach $105. I'd expect $105 to serve as rather significant resistance for a while as, beyond there, it's straight back to $109-110 and our esteemed and supremely qualified president has clearly stated his desire to keep prices down.

Gold continues to climb higher as it builds toward The Wicked Witch's hoped for double top. It made it's first foray into the 1540-45 area overnight and it will continue to ram into that area today. However, just like 1525, 1545 will fall, too, and we will head toward 1560. Beyond there, 1570 awaits and with it, all the firepower that The Cartel can muster in what will be a desperate attempt to paint a double top and convince their shills and disinformation agents to proclaim the long-term bull market in gold to be kaput.

Lastly, here is silver. As if on schedule, it is making its run to $39.50 as we close out the month of May and flip the calendar to June. I expect some tough sledding between 39 and 39.50 but, ultimately, the fundamentals will trump the technicals and silver will once again eclipse 40 and head higher. Our goal before the end of June is still somewhere around $43. Let's call it a range of $42.50-45.00, somewhere in there. Again, I would expect silver to reach that level sometime before "first notice" day of the July contract, which is June 30.

OK, that's it for now. Keep an eye on the headlines today as the Greek "situation" is just another step in the collapse of the Great Keynesian Experiment. Have a fun day! TF

1:00 EDT UPDATE:
Frankly, I'm a little disappointed in myself that I didn't see this coming today. Moving too fast, I guess, and I apologize.
After silver reached 38.85 on Thursday, the Cartel brutally beat it back 36.25. In rallying back, I should have realized that they would cap today near that 38.85 level. Bad Turd. Silver reach 38.77 and the monkeys were unleashed.
From here, let's look for an FUBM. Let's hope it is already underway. If not, another wave down should lead to the area of pretty stout support between 37.50 and 37.75. Either way, I still expect silver to re-group and test 39.50 very soon.

2:00 EDT UPDATE:

So far a very nice FUBM. This afternoon and evening, watch 38.60. Getting back UP through there should lead to a successful passing of 39 and then on to 39.50. Failing at 38.60 will lead silver back down to a retest of the 38-38.10 area.

Saturday Charts and The Sunday Night Massacre Revisited

2011-05-28T16:04:00.002-04:00

First of all, I've made it clear now that I believe everything from mid-April to mid-May was an orchestrated, manipulative event courtesy of our friends in the bullion banking cartel. I've summarized my feelings here and I stand my opinions and my projections.
http://tfmetalsreport.blogspot.com/2011/05/its-finally-over-now-what.html

Along these lines, I found found Ted Butler's consenting opinion via Harvey:
http://news.silverseek.com/SilverSeek/1306416249.php
Harvey also posted a letter to the CFTC from GATA member James McShirley. This is a must-read for those of you who have suspected that the daily price swings around LBMA fixes seem too consistent to be "natural".

Here is a follow up letter sent by GATA member James McShirley to the CFTC:

Dear Sirs, Madams,
This is a follow-up to the letter I sent you last Friday, May 20th. I have subsequently compiled data for all of 2010 regarding the highly suspicious Comex gold trading. In particular, I have focused this time on the London AM and PM fixes. As you probably know the AM fix occurs at 10:30 AM London time, prior to Comex trading. The PM fix occurs at 3:00 PM London time, putting it squarely in the middle of Comex trading hours. Many gold watchers have for years noticed peculiar Comex selloffs into the London close, along with sudden weakness after the London market closes. To see the intensity of Comex selling statistically is rather stunning. Keep in mind this data occurred during a year when gold rose 26.7% y/y. As you will see gold prices rose almost entirely outside of Comex trading hours. The Comex "price discovery" was, and continues to be a one-way street lower. I reiterate that the short seller(s) in suspect are certainly well-funded, HFT savvy, and without care for true price discovery.
Total trading days 254
Trading days PM fix over 2% higher than AM fix ZERO
Trading days PM fix over 1% higher than AM fix 2
Trading days PM fix either lower, or no higher than $5 211 (83.1%)
It should be obvious to anybody with a trained eye for sleuthing that something is badly wrong here. I find it incredible that for all of 2010 only TWO out of 254 trading days resulted in a PM fix higher than 1%. There was an 83% chance of either a lower close, or very minimal gain. This is totally consistent with the trading patterns for the first 5 months of 2011. Since the beginning of 2010 gold has rallied 41.5% without a SINGLE PM fix above +2%, and only 7 above 1%. There is an obvious seller who wants ALL Comex trading days capped at 1%. This is illogical from a trading perspective, and defies all fundamentals, technicals, and news-driven events. I can't imagine a more obvious example of tape painting, and am again requesting you investigate Comex gold trading manipulation in addition to the silver investigation. I realize your tools for identifying manipulation are undoubtedly sophisticated, so you should have no problem modeling the odds of this happening in a free trading environment. It must be so many standard deviations off norm that you will give up counting zeros on the end. The advent of HFT systems has only accelerated the trend of manipulative trading by gold short sellers. Until the CFTC or anybody else decides to crack down I am confident this tape painting will not only continue, but worsen.
Any CFTC ruling (and crackdown) on concentrated short silver manipulation will likely put a chill into the gold manipulators as well. That doesn't mean however, that gold manipulators should be exonerated. The quickest, and only way to restore faith in the U.S. financial markets is to finally prove to investors that manipulators, including short sellers, will be held accountable. That, for many years now, has been nothing more than wishful thinking.
Sincerely,
James C. McShirley

There is also this, straight to you from the desk of Santa:

Dear Friends,

Long speculated upon in our community, the rock and the hard place has finally become a reality. An economy not accelerating at an accelerating rate is declining at an accelerating rate. The mirage of a recovery is getting harder and harder to MOPE about. It simply is not there. We are entering a declining phase that will not end in any kind of a soft landing.

Stimulation monetarily, QE, and fiscal are like controlled substances in that the real high is on the first injection. After that, each additional stimulation of an economy must be multiples of the first stimulation in ever increasing size just in order to hold the line. QE3 is guaranteed unless the powers that be want to see a depression that will make the Great Depression look like kindergarten in the pain department.

This week we saw a European Bank forced to sell their US mortgage derivatives and the loss was a shocker. These pieces of crap are not worth the digital bits they are written on. Smart money has not let this event pass their view, and know now how broke the US financial system really is. This event broke the camouflage of FASB's selling their souls out to politics by allowing the banks to value their mortgage derivatives at any price the bank wanted on the bank's cartoon balance sheets. The western balance sheets of their financial institutions are raging misstatements. The system is broke. This is why there is no recovery of merit but rather a statistical aberration, which was until recently only holding the line.

Here we are at that place we have anticipated for the past 45 years knowing that all the games being played had to play out at that point where super stimulation had no effect and it became totally appreciated that even many trillions of printed money will only impact the currency and not business.

The rock and the hard place is a time when the Western World is simply screwed.

The risk of not stimulating is stagflation at a spiritual level. The risk of stimulating is stagflation at a spiritual level. The risk of doing nothing is both an economic and currency collapse of biblical proportions.

This is what the three illustrations of the skier teach. Should the Fed lose control of this, which is predictable, then currency induced cost push inflation would take gold to Martin Armstrong's $12,500.

The odds are 70/30 right now that hyperinflation occurs. That takes gold over $1650. If the odds shift then gold starts a run to balance the International Balance Sheet of the USA and will secure Martin Armstrong's target of $12,500.

And here are some quick, daily charts. My Lind site is down temporarily so I had to use futurestradingcharts. They don't give me much room to write so I will leave much of the interpretation to you. The POSX looks particularly bad and, if you're stocking up on beef, now is the time to do it!

I hope you have a safe and fun weekend. Please try to take a moment to remember all those who have died in the service of their country. TF

Good Morning

2011-05-28T09:53:00.000-04:00

Just a quick note to start your weekend.

When you have 10 minutes or so, please utilize the time to read this guest post from ZeroHedge.
http://www.zerohedge.com/article/guest-post-economic-death-spiral-has-been-triggered

We talk often here about the "end of the Great Keynesian Experiment" and its implications. The missive discusses how and why the "end" will come about. If I, The Turd, had the time, the mental tools and the talent to write something such as this, I would have done it. As it is, this Mr. Long has done it for me.

I'll check in later today with some weekly chart updates that all look very positive.
Have a great Saturday. TF

Charting Friday

2011-05-27T08:45:00.001-04:00

It's only 8:30 am EDT and I'm already behind schedule. Gonna be one of those days.

However, all signs point to a very good day in our precious PMs. Here are some charts for you to peruse as we head into the morning.

First up, the POSX. Uh-oh. I'm glad I'm not long this pig right now.

In the words immortal (paraphrased) words of Hootie and The Blowfish, "gold's the one I love the mo-o-ost but crude's not far behind".

Those two sure look similar again, don't they?

And silver is still working hard to repair all of the technical and psychological damage done over the past 4 weeks. However, I think it was last Friday when I told you it would approach 39.50 by late May and it's right on track for that so I guess we shouldn't be too disappointed.

Lastly, I've read in the comments that there is some concern regarding holding positions over the 3-day weekend. Recent pattern on 3-day weekends has been for a rally on the holiday, only to have The Wicked Witch immediately claw back the gains on Tuesday for a net effect of zero. No reason to expect different action this time around. Be not afraid.

Oh, and here's a link to that Hootie song simply because I know it's stick in your head now.
http://www.youtube.com/watch?v=1aVHLL5egRY

Have a great Friday!!! TF

p.s.
Lots of talk about "Linda Green" on ZH and in the comments here. If you haven't yet watched this, please take 15 minutes to do so. Really, really disturbing.
http://www.cbsnews.com/video/watch/?id=7361572n

The Small Businessman

2011-05-26T21:22:00.000-04:00

Man-o-man. This small business stuff is fun but it can sure wear you out. On one hand, it's very cool to make all your own decisions and be responsible for getting things done. On the other, it's exhausting having to make all you own decisions and being the only one who will get things done. Thank you for your patience as this week is a very important one for Mrs F and she requires my attention. I promise that by next week we will return you to your regularly scheduled blogging.

A couple of things...

Having had 12+ hours of hindsight, I'm stunned now at the blatancy of the EE smackdown back at 5:00 am EDT. A brutal, $1.50+ bloodletting courtesy of your friends in The Cartel. From a distance, I was also surprised by my reaction to it. I used to get all strung out and pissed off over such things but now I'm just like, "whatever". It's such blatant criminality and manipulation but no seems to care so why should I? Seriously, the CFTC couldn't give a shit. The SEC looks the other way. Congress passes a law with position limits and the law is simply ignored. You don't like the law? Screw it! Who cares? Ignore it! That's how it works these days in The Land of The Free and the Home of The Brave.

A bunch of interesting "conversations" in the comments section of the previous thread. Please allow me to touch upon a few:

1) I don't know who this "Trinity" person is and, frankly, I don't care. If it comes back, that's perfectly fine with me. It can post whatever it likes so long as it stays within the bounds of decorum we all follow. Never forget that, in the end, this is my blog and I have final say on content. I'm also the one who ultimately gets to judge readers/commenters as either "helpful" or "douchebags". Trinity's initial comment here was deeply into "douchebag" territory and it was labeled as such. If it chooses to participate in the future, it has the opportunity to work to remove that label. Until then, the label sticks.

2) Greek default and euro weakness is not PM negative. Oh sure, maybe on a one-day basis the euro may fall, the POSX may rise and WOPR will sell some PM. However, we are now at the endgame of the fiat currency, keynesian experiment. The number of folks protecting themselves with PM is growing each day. Going forward, all dips will be bought. Maybe not the next day or the next week, but all dips will, most surely, be bought eventually. Count on it.

3) We all disagree from time to time but please try to keep the name-calling and profanity to a minimum. I will disable comments before I allow threads to become the cesspool of pettiness that plagues every other PM blog available today. Got it, you f***ing c**ks***ers? OK.

Now, here are some quick charts. The silver chart has almost completed its FUBM from this morning. It just needs to move now through 37.70 and then it will head back to 38. I've got a last of 37.68 so things are looking up!

I don't recall when but, sometime last week, I told you that gold would struggle to clear 1525 and then pull back to 1515 before mounting a successful, final charge through that level. Lo and behold, looky here! (If it wasn't me that was doing it, I'd swear that this Turd guy was either some kind of witch or a mole/plant of the Evil Empire. The frickin guy is almost kind of spooky sometimes.)

Lastly, the POSX is once again in danger of rolling over like the dog it is. This "calvin" bounce needs to continue higher...and soon...or it will restart it's death spiral and the hounds will be unleashed.

My buddy, Trader Dan, has a better picture and more complete analysis of it. You can find it here:
http://traderdannorcini.blogspot.com/2011/05/us-dollar-running-into-some-selling.html
He's such a nice guy, Trader Dan. Almost everyone else I know is a cynical, dour narcissist like me but not ole Dan. How he's able to remain so pleasant and cheery after all these years of commodity trading is beyond me. You should be sure to read his blog daily.

That's it. I have to head back over to wifey's new store to work on a few more details. Have a great overnight and let's see what tomorrow brings. Fridays before 3-day weekends are always extra exciting.
TF

Changing Sentiment

2011-05-26T10:05:00.001-04:00

Of course you recall earlier this month when all rallies were sold. The PMs could never seem to get any upside traction because rallies were ultimately viewed simply as opportunities to sell at a higher price. These market "sentiments" are very powerful and often difficult to change.

Fortunately, over the past few days, sentiment has shifted back in our favor. Do you recall the big dips of last Thursday, last Friday and Monday? If not, here's a gold chart that can serve as a reminder:

Note the stark contrast to the action from earlier this month. Instead of piling on and driving lower, market participants are now once again looking for support levels that can be bought. We've jokingly referred to these chart formations as FUBMs as if all selloffs were brought about by The Wicked Witch herself, only to have Turdites everywhere rebuff her and rally the victim back above the level at which the assault began.

You can see a pretty, little FUBM forming on today's silver chart. After a waterfall decline that climaxed with $1.03 being taken out in 3 minutes, silver has reversed and is now well off its lows. Earlier this month, such a savage beating would have resulted in additional selling but not today. This is very important. IF we have truly rounded the corner and prevailing sentiment is now back to "buying dips", we can feel even more confident in our purchases and we can also resume aggressive dip buying for a while. Let's watch and see if today's FUBM is taken to completion as this will be a clue.

Unfortunately, that's it for now. Today will be a long day so I may not have another thread for you until later this afternoon. Keep the faith! TF

p.s. And these are for Art Lomax or anyone trading the DAG.

The Silver Bullet

2011-05-25T16:59:00.000-04:00

Truth be told, only readers of this site would have been confidently buying last week at $34 silver. It is my sincere hope that your faith in me has rewarded you with some nice gains over the past week. We took a lot of grief for the beating The Cartel mercilessly applied earlier this month but we kept our heads in the game and, with the creative use of a little white-out, came up with an actionable game plan.
http://tfmetalsreport.blogspot.com/2011/05/its-finally-over-now-what.html

Silver is now being quickly drawn toward $39.50. I'm a bit surprised at how quickly it is getting there as I didn't think it would approach that level until next week. Who knows, it may still wait until then to get there. However, as you can see on the chart below, there is nothing from a technical standpoint that stands in its way.

Gold continues to struggle with 1525 but copper is back above 410 and crude is at 101 so, provided extraneous events don't cause an unforeseen dollar rally overnight, silver should continue to climb toward our short-term goal.

Lastly, I've received several inquiries regarding my current option strategy in silver. In summary, it is this:
1) I bought 2 July $45 calls earlier this month, trying to "catch the knife". Oops.
2) I also bought 2 July $40 calls last week at the actual bottom. Hooray!
3) My stated goal for July silver is somewhere around $43.
4) This means I expect the July $45s to expire worthless.
5) I also expect resistance and a pullback once silver reaches above $39.
6) When silver reaches above $39, I plan to sell a total of 4 July $45s. These are the two I currently own plus two more. Selling 4 July $45s may bring in about $10,000 for my account.
7) I can sell the additional two $45s because I own (long) the two $40s.
8) This creates a "spread" whereby I am long the 40s but short the 45s.
9) This means that, once silver exceeds $45, I no longer make any money.
10) This trade is optimized IF silver closes right at $45.00 on option expiration day in late June.
11) My upside gain potential is now capped. I'll make the same amount of money now if silver closes upon expiration at 45.01, 55.01 or 65.01. It doesn't matter. The most I can make is:
$5000/point X 5 points X 2 contracts = $50,000 total
12) IF silver retreats and closes upon expiry below $40, all of my calls are worthless but I get to keep the $10,000 I received when selling the $45s.
13) IF silver closes upon expiry at $43, the $45s are worthless but the $40s are worth $15,000 each.
$5000/point X 3 points X 2 contracts = $30,000 total

I fear that I just made that about as clear as mud for most of you but I wanted to try.
Again, if you have detailed questions or if you have an interest in opening your own account, here's a link from last year that provides some help.
http://tfmetalsreport.blogspot.com/2010/12/opening-options-account.html

Thanks again for reading. TF

The Empty Suits

2011-05-25T09:38:00.003-04:00

I just wasted 5 minutes watching Bart Chilton on CNBS. Please allow me to summarize:

1) Politicians now want to delay imposing position limits until January of 2013.
2) Speculators cause prices of commodities to rise.
3) Volatility must be contained.

What an incredible farce this all is. Again, please allow me to summarize:

1) Politicians can't/won't control spending so money is printed and dollar collapses. Rather than accept blame, politicians deflect blame onto rascally, shadowy speculators.
2) Commodity markets, designed as a facility for producers to "forward" sell their products, cannot function without speculators. Just who do you think is buying when the producers are selling? Hmmm? It always takes "two to Tango".
3) Volatility must be contained. While we're at it, maybe Congress can vote to "contain" hurricanes and earthquakes, too. Ridiculous. The very nature of commodity markets is volatility. It cannot be removed or contained. You know it, I know it and they know it but that doesn't mean it's not a good talking point when you're trying to deflect attention from yourself.

The U.S. economy remains stagnant, even after all of the trillions spent purportedly to "stimulate" it. This is complete nonsense and SPIN, too. The Fed has printed and spent trillions in following their dual mandate: prop up the balance sheets of their primary dealers and provide funding for a cash-starved federal government. This will continue, for a while it may not be as overt as POMO but continue it will. As tax revenues continue to decline, where will nearly-bankrupt states and municipalities find cash? With interest rates this low, where will treasury auctions find buyers? No, the printing/creation of dollars will simply continue, whether you see it or not.

This leads us, of course, to gold. Individuals and central banks around the world are increasing their reserves. Why? It is store of value and recognized currency since the dawn of time. Investors are increasingly returning to silver as monetary "insurance", as well. This will continue. No amount of politician or bureaucrat double-speak will change these underlying fundamentals. If you have not already purchased physical metal, the question is why? If currently own metal, the question is why not buy more? If you're truly worried about the price you pay in fiat, keep reading this site and we will guide your way. Likely, the only "financial system" you know is the one that is dead and gone and not coming back. You must prepare for what is to come, the shape and scope of which even I am unsure. Keep educating yourself, however, and you will survive. Learn, trust your instincts and have faith in yourself and you will prosper.

Have a great day! TF

Noon EDT UPDATE:
Led by the ever-resilient crude and surging copper (back above 410), the metals are driving away now from their resistance at 1525 and 36.50. As mentioned above gold looks clear all the way to 1540 or 1545. Silver may meet with some resistance near 38 but that won't keep it now from trading back up to the major 39.50 resistance level. Watch crude closely as a move through 101.50 will set it on a course toward 105 and this will help the metals cause in the coming days, as well.

Just a quick word about the passing of Mark Haines. I've criticized him often mainly because his on-air arrogance often rubbed me the wrong way. He was even worthy of his own turdism "FOAD". However, I was personally interviewed by him on 2 or 3 occasions and I never found him to be hostile or unprofessional. In the end, he seemed like a very nice man and I am sorry to hear of his untimely demise.

A Really Good Day

2011-05-24T18:46:00.001-04:00

How are you feeling about Turd's #2 now? So far, so good, huh?

Having reached our critical resistance points, both metals rest this evening in important positions. Gold has made it to 1525, even reaching as high as 1529 before being beaten back. We really want it to hold on now. Not that it can't give some back but we don't want to see it move below 1515. Look for it to continue to base overnight around the 1525 level. Maybe as soon as tomorrow, it can make a second assault on 1525-30 and burst through once and for all. Above there, it should only encounter minimal resistance as it heads toward 1545.

Silver is much the same. The Cartel would love to contain it under 36.50 and they may very well succeed as I wouldn't be at all surprised to see it dip back down toward 35.80-36.20 overnight. The buying interest seems significant, however (hello again, BoS?), and it looks like the next trip up near 36.50 will be the one to drive it through. You can clearly see on the chart that very little resistance is indicated between 36.50 and 39.50, other than a little at 38. Let's sit back and see where this takes us over the next 24-48 hours. It should be very interesting.

Unfortunately, that's all the time I have. Sorry. Mrs F's 2nd yogurt store is opening later this week and things are a bit crazy. Thanks for your patience.
For now relax, smile and be happy. We survived the most brutal assault The Cartel has ever amassed and now things are rebounding almost exactly as planned. Truth is winning once again! TF

p.s. It's time for another "Hat Contest"! Please use this thread to enter your guess for the date and exact time (New York time) that silver prints $40.00 again. Contest closes when I start a new thread tomorrow morning. Good luck!!!

Turnaround Tuesday

2011-05-24T09:47:00.000-04:00

In a reversal that, once again, leaves The Turd shaking his head, today is the polar opposite of yesterday. Everything that WOPR was discarding yesterday is being repurchased today. It's enough to make you crazy if you let it. This is why, here in Turd's World, we believe in the primary trend and try to buy long-term options only. Trying to outguess the whims of the algos or anticipate Fed-speak MOPE will either bankrupt you or put you in the Nut House...or both.

On the bright side, most everything continues to improve from a technical standpoint. First, take a look at gold. The trendline from Turd's Bottom back in January is still very much intact and it is looking to keep churning higher. As mentioned repeatedly, 1525 is your first hurdle. Through there, gold can move quickly toward 1540 and 1550.

Overnight, silver broke out of the pennant I drew for you late yesterday. The battle at $36 now begins. If you need a refresher on the challenges of that number, read this:
http://tfmetalsreport.blogspot.com/2011/03/clinging-to-36.html
And this:
http://tfmetalsreport.blogspot.com/2011/03/curious-case-of-36.html
Add to that the peaks at $36.50 which you see below and you've got the basis for a gargantuan struggle. Additionally, there is very little to contain silver between 36.50 and 39 so we can all expect quite a fight to keep it below $36.50. Despite the action overnight, I still expect that it will take multiple attempts over several days to finally get $36.50 to fall. If we can pull it off by the end of the week, I'll be very happy. Silver will be right on schedule to go tackle 39.50 by early June and then roll toward 42 or 43 by mid to late June. In case you've forgotten, this was your "roadmap":
http://tfmetalsreport.blogspot.com/2011/05/its-finally-over-now-what.html

I got all excited about crude late Friday only to have it beaten back sharply before I could even have a cup of coffee on Monday. Well, it looks better today. $96 has held again and, sometime soon, encouraged longs are going to feel confident that their downside is limited so they will aggressively plunge back into this market. A move UP through the trendline will be your first clue. A close above $101.50 will be next and then crude will rush toward $105.

Lastly, physical metal continues to be scarce so I beg you to NOT sell your precious "insurance". If you are worried about falling prices and volatility then, by all means, call up a broker and buy some put options in order to hedge your position. Here's a link to help you with that:
http://tfmetalsreport.blogspot.com/2010/12/opening-options-account.html
I've received several emails lately, mostly from European Turdites, concerning the safety and availability of gold in Swiss accounts. I don't know a lot about that as I'm just a simpleton here in Anytown, USA, but where there is smoke, there is often fire.
http://www.businessinsider.com/jim-rickards-take-gold-out-of-the-bank-2010-12
http://www.shtfplan.com/precious-metals/precious-metals-storage-scam-sorry-delivery-is-not-
possible_04192011
Delays are getting longer and multi-million dollar lawsuits are piling up. If you wait to physically deliver your metal or if you blindly trust in your custodian, I fear you may deeply regret your procrastination.
Physical is physical and paper is paper.

Have a great day. Let's see if we can add to these gains. TF

Surviving Monday

2011-05-23T16:48:00.004-04:00

Well I don't know about you but I, for one, am glad to have this day behind us. Ever since The Sunday Night Silver Massacre, Mondays have made me very nervous. Things certainly didn't look too rosy this morning with the euro getting crushed, the dollar rallying and WOPR in charge. Fortunately and as hoped, humans reclaimed the market and the metals trended higher virtually all day with both putting rather impressive mini-FUBMs on their intraday charts. With this day behind us, we can begin to look forward toward the rest of this week.

Here's a 2-hour gold chart. It looks very good. You've got the spike down to a panic low of 1462 about 15 days ago. A snapback rally was followed by seven trading days of a beautiful looking base between 1475 and 1515. It now appears to be breaking higher and ready to take its first stab at 1525. Because that level is so technically significant, I have a hard time imagining that it will break through in its first attempt. Maybe some "news" will help it but I think it's more likely to fail at 1525 and then take a day or two to regroup between there and 1515. Then, after that pause, the next attempt at 1525 should carry enough momentum to blast through and send gold on a trajectory to take on 1545.

Silver continues to get its act together but doesn't seem quite ready yet to move as strongly higher as gold. Again, the technical and psychological damage done to the silver market was great and it's going to take a while for enough convicted money to return to move things substantially higher. Nevertheless, the open interest and the CoT report leads us to believe that there should now be more buyers than sellers in the silver market and this alone will help silver firm up and drift higher in the coming days. Where gold has 1525 to conquer, silver has 36.50 so silver clearly has a lot of work to do to catch up.

One last thing, Gonzalo Lira has decided to convert his site to a subscription service. Here's the announcement:
http://gonzalolira.blogspot.com/2011/05/money-in-blogging.html
Given the current, unprecedented economic conditions, those attempting to manage significant portfolios should give his service a look.

Have a great day and evening. More sometime soon. TF

p.s. As you've probably heard, the city of Joplin, Missouri was devastated by a tornado yesterday. They are desperately in need of water and basic supplies. If you can help in any way, here is a link you can follow:
http://www.uwheartmo.org/
You can also donate through the local chapter of the Red Cross:
http://www.redcross-ozarks.org/donate/
If you've ever wondered what it's like to be caught in such an event, watch and listen to this:
http://www.youtube.com/watch?v=cQnvxJZucds
Very sad and tragic.

Beware WOPR

2011-05-23T09:32:00.000-04:00

You know, sometimes the charts can only take your so far. You shut down on Friday and all of the charts look great. Go back and look at my post from Friday afternoon. I was really excited to get back to work on Monday. Then, here comes the old PIIG boogeyman out of the closet and down goes everything. If you know what you're looking for, there are definitely times when the charts can predict the future. Unfortunately, in an era when computer algorithms can be tripped and swayed by simply managing the headlines, you've got to learn to take your lumps and be patient. Today is such a day.

I guess if there's a fundamental "rationale" for today's trade it's this: The global currency structure is going to be dramatically changing. The economic disruption caused by this will be significant. Therefore, sell commodities such as copper and crude but buy gold as a "safe haven" asset. Sounds nice, doesn't it. Sounds perfectly rational. Too bad that's not what's going on. Instead, mindless computers which have been programmed to "buy X and sell Y" at the push of a button are in charge and moving markets. As an example, last evening the grains were all UP about 10 cents on supply and weather concerns...real fundamentals. But that doesn't matter to WOPR. Nope. WOPR see rising dollar. WOPR sell everything.

For today, let's see if humans intervene and begin buying back what the computers sold. IF there is genuine (non-artificial) intelligence in the trade today, established support levels will hold once again and the commodities should turn. Crude looks very firm at 96. DrC should be well-bid between 393-395 and silver should not trade below 34.

Eventually, perhaps even in the not too distant future, today's euro is going to be replaced with a new "Nordic" euro. Then the East Asian nations will all combine to sponsor their own, regional trading currency and the dollar will be left for dead. WHEN this happens, gold and silver will be much, much higher in price than they are today. That doesn't matter much to WOPR, though. WOPR only knows today and, today, WOPR is selling.

More after the close. TF

Not Raptured

2011-05-22T10:13:00.001-04:00

In looking over the comments from the previous post, I'm not surprised to find that many of our regular contributors are also still here on earth this morning. But seriously, if you are one of those lunatics who blew their entire life savings betting on the end of the world yesterday, what are doing today? I mean, today can't just be another day for you. Are you pissed? Are you hopeful that maybe The Grand Poobah was just off by a couple of days and now today is the day? Maybe tomorrow? Like Art Cashin says: "You never want to go around predicting the end of the world because you're only going to be right once". That's some sage advice right there.

Along those lines, the PM world did not end last week, either, as some would have led you to believe. I'm extremely confident that "Turd's #2" is now set and in. Now we just need to move away from our bases and it looks to me like that is going to happen this week. Here are some hastily drawn weekly charts for you to consider. First up, the POSX. The trend is clearly down. After breaking support at 74, it immediately popped back up. It will now certainly head lower and test 74 again. IF 74 holds, then maybe we can start thinking that the dollar has stabilized but not until then.

Here's a weekly CRB. Note that following the big drop, it has since stabilized and is now heading back up. I'm looking for this to reach back above 660 this week.

Gold looks great and, after a higher close last week, looks ready to move higher still. Like we discussed Friday, I expect a run toward 1525 then a pullback toward 1515 before running higher again toward 1540-45 by the end of the month or early June.

And here is silver which has three, consecutive weekly closes almost right at $35. I find that very interesting and I look for it to close UP this week. Maybe all the way back up toward the 37-38 area.
IF it does, then we'll go tackle the 39-40 area the first week of June.

That's it. Time's up. I hear our overnight guests stirring upstairs so I'd better go make some more coffee. They're going to need it after the night we had last night ;)

Have a great Sunday. I'll try to check in this evening after everything opens. TF

Friday Wrap-Up

2011-05-20T15:45:00.001-04:00

OK, admit it now. How many of you, at 10:00 EDT and gold at 1488 thought ole Turd was plum crazy with his "1515 by later today or Monday" statement? How many of you were ready to give up on Turd's Bottom #2, also? Faith. We must have faith. The truth is on our side and the truth always wins. (The most notable exceptions being "I did not have sexual relations with that woman" and the OJ trial.)

As we look to wrap up this really wild and significant week, let's begin with a summary of my trading today.
I sold: 2 of my 4 July $7.50 corn calls and my 2 June $1500 gold calls.
I bought: 1 August $1550 gold call, 1 July $40 silver call and 1 July $102 crude call.

For charts, let's start with our two nominations for best supporting actor: copper and crude.

Ole DrC looks great. On this 12-hour chart, you can clearly see a reverse head-and-shoulder bottom. Copper then closed the week above the critical 410 level that had acted as support and then resistance. Closing back above 410 returns it to the support category and copper is now poised to run back toward 420-25. Longtime Turdwatchers know that a recovering copper price will certainly add resilience and excitement to the bid for the PMs.

Now take a look at crude. At this point, it looks like the only thing that can drive crude below 96 would be if those lunatics that are predicting the 2nd Coming for tomorrow are proven correct. Outside of that, the 96 level looks to be about as strong of chart support as your ever going to see. Note that you don't just have rounding bottoms at 96, either. You have sharp, quick reversals off of that level, particularly today. I printed this chart and immediately called Lind-Waldock and bought that July $102 call I mentioned above. It clearly looks like it will go thru 101.50 early next week and, from there, it should move rapidly back to 105.

Gold is still proving to be the champ in the PM arena. For now, silver is still to psychologically damaged to mount a major, sustainable advance. Give it another week or so. Gold, though, looks terrific! $1515 may continue to offer resistance into early next week but, once it falls, gold will scoot toward $1525. It will likely pause there and re-group for a day or two between 1525 and 1515. However, it should then resume its recovery and trade toward 1540-45 by the end of this month.

Lastly, here is silver. The fact that it turned on a dime this morning near $34 and that it couldn't muster additional downside momentum is just another clue that the bottom of this manufactured "correction" is now in. It, too, will dilly-dally and fiddle around a while longer between 34.50 and 36.50 but, once it clears 36.50, shorts will be forced to cover while new buyers rush in. It will spring from 36.50 toward 39 in very short order. I expect this to also happen by the end of May.

Well, that's it. I hope you all have a relaxing and wonderful weekend.
Thanks again for making this the absolute best PM blog on the face of the earth! TF

p.s. A nice, tidy little stack of these came via Fedex today. I was able to purchase them directly out of the PayPal account you into which you all have donated money. I own some GPL stock, too. What a deal!!

Points For Friday

2011-05-20T09:45:00.000-04:00

A couple of things before we get to the charts.

A) Keep in mind that today is option expiration for equities and ETFs. Always lots of weird price action on these days. Don't get all freaked out if your favorite miner has some strange price movements.

B) Just to address this "ending of QE" issue again. By some estimates, the U.S. Federal Reserve and their primary dealers (the PDs are the agents from which they buy back recently issued bonds via POMO) make up as much as 70% of the bidders in the overall treasury market. If they were to now exit this market, even in part, interest rates will rise dramatically as prices of bonds will fall due to lack of demand. The latest $600B QE/POMO schedule lasted 6 months. What was the U.S. federal deficit over those same six months? A little more than $600B. Even Stevie freaking Wonder can see the direct connection.
If the Fed halts QE:
1) Rates skyrocket
2) U.S. economic activity grinds to a halt
3) Tax revenues plummet
4) Even more deficit spending is then required
5) Rates go even higher
6) Interest on national debt component becomes an even larger % of federal budget
7) Even more deficit spending is required
8) Rates go higher still
9) Tax revenues fall further
10) The Great Keynesian Ponzi finally ends
DO NOT believe this silly notion that QE is about economic growth. QE is about funding the deficits of the U.S. government. Every other effect is ancillary. The only thing that would allow the Fed to end QE would be a dramatic reduction in the annual federal deficit. This would lead to a deficit spending level that the "market" in treasuries could absorb. Until then, the presses will run. Period.

C) I'm very intrigued by the current plot to defame and discredit Meredith Whitney. First of all, she's kind of hot, in a slightly-chubby, sorority-girl kind of way so I can't help but take her side. But, as you know, Meredith is one of just a handful of "analysts" who correctly saw the entire CDO/CDS fiasco coming over the horizon in 2008. To this day, she still correctly points out that many large, TBTF banks would be, in fact, insolvent were in not for the changes to the FASB rules in 2009. Because of this, she must be considered a very sharp thorn in the side of the Fed/TBTF/MSM/Govt complex. They've been waiting to pounce on any weakness or any slip-up so that they can begin their efforts to discredit her and her ongoing message. Read this:
http://washpost.bloomberg.com/story?docId=1376-LLGTH31A1I4H01-
2NSVPIJ5TTTS6432JHE7ESMMTH
Now I don't know if we're going to have "50 sizable defaults" over the next 7 months but I do know that there are still 7 months on the clock. (And I know a little something about having critics jump all over your predictions well before the clock has expired.)
While I was working out yesterday afternoon, I also saw this:
http://video.cnbc.com/gallery/?video=3000023035
Imagine that. "Dumb Money" on CNBS rolls out some chick (got to be a woman because Meredith is a woman. Can't let it seem like the boys are ganging up on her.) muni manager to claim that all is well in the muni market. Really? No! A muni manager who runs a muni fund for a living is claiming that the muni market is great! I'm stunned. All must really be well. Unbelievable.
The point is: Meredith Whitney doesn't fit the narrative that the banks are all great (they're even increasing dividends!), government spending levels are just fine and that QE can end at any time. She is an enemy of MOPE and SPIN and, therefore, must be discredited/destroyed.

Onto the charts. First of all, the daily euro chart should look vaguely familiar to most of you. DO NOT make the sophomoric mistake of confusing euro weakness with dollar strength. They currencies are simply inverses of each other. In this case, prospects for the dollar are not improving. The euro had simply run up too far, too fast and into resistance near 1.50. The resulting correction has created the illusion of a dollar rally. It is nothing more complicated than that.

And here are 30-minute charts of gold and silver which conveniently take us back to the lows of Tuesday which convinced me that the beatdown was finally over and behind us. Both metals are now consolidating above their lows and looking for an opportunity to trade higher. I would suspect that you'll see that move either later today or Monday. Silver will make a run toward next resistance around 36.50 and gold will jump toward 1515.

OK, that's it for now.
Have a great day and a relaxing weekend. Can Animal Kingdom take The Preakness?
TF

Certainty and Other Concerns

2011-05-19T14:48:00.001-04:00

I've read, with more than a passing interest, most of the 500+ comments to the previous post. I'd like to clarify a few things.

1) I've given you my projection for the next 6+ months. Of course it's not going to be accurate on a tick-by-tick, daily basis. Jeezo-pete, I would hope all of you are smart enough to understand that.

2) My price projections by December are not "purposefully conservative". Do you have any idea how much financial and psychological damage has been done over the past three weeks? It's going to take a lot of money and a lot of new open interest to get silver back up over 40 by late June. A lot. Then, after drifting lower all summer, it will take an almost herculean effort to lift it the 40%+ I project it will take to get silver to run from the low-mid 30s all the way to 50. If anything, my projections are outrageously aggressive but I still have very high confidence that they will be proven to be generally accurate.

3) I do not list potential fundamental impacts because, in doing so, I would be slipping into seer and psychic BS and that's not what this is about. I can confidently give you this "roadmap"because I know that the long-term, structural fundamentals have not and will not change. The short-term fundos such as the discontinuance or restarting of QE. margin hikes, wars etc are all impossible to predict with any accuracy.

4) My certainty and confidence in this are no different than my certainty and confidence in this:
http://tfmetalsreport.blogspot.com/2011/01/1600-gold-by-june-10-2011.html
Or this:
http://tfmetalsreport.blogspot.com/2011/01/end-is-near.html
Or this, for that matter:
http://www.youtube.com/watch?v=9FGVtJRWP6k
It's what I do and, until the new site is ready, it's one of the primary reasons people visit this site. What kills me is how new posters show up and immediately begin to defame this site and its readers without first doing some background and research. Everything I've ever written is conveniently archived in the right hand column of this page. Anyone wanting to criticize or lampoon should first review some of the discussions we've had here over the past six months. And, as someone said, this is NOT just another Yahoo message board. We are all adults who are responsible for our own decisions. My job is simply to offer my guidance and thoughts while keeping the blog current and interesting. Take it or leave it.

OK, here are your closing charts for today. First, the POSX. It looks more and more like it won't be able to break 76. IF this pig continues to roll over, it will add fortitude to those wanting to establish new positions in the PMs.

Gold is still basing and bottoming in the range between 1485 and 1500. Bad for my June 1500 calls but good for the long-term recovery.

Like gold, silver is still basing and bottoming, too.

Lastly I feel like I must repeat myself as there are so many these days that only seem to skim what I post, if they read it at all. I've not been expecting the bottom and breakout that everyone else seems to be looking for to be fully in place before tomorrow or early next week. Nothing in today's action violates that or anything I typed yesterday. If it all goes to shit and gold falls through the floor while silver drops to 31, then we'll have to get together and re-evaluate. Until then, the metals are simply basing after the correction. Be patient.

Thanks again to everyone for being a part of this blog. I'll try to have more later on this evening. TF

It's Finally Over. Now What?

2011-05-18T16:46:00.001-04:00

I'm about to tell you "now, what" but first some background.

Yes, this forced "correction" is now over. There will still be dips and bumps but I'm extremely confident in the area around 33 and that there is no way the people predicting $28 silver are going to be correct. That said, silver is not going straight back up nor is it going back to $49 anytime soon so be patient. Gold has found its bottom as well and will not be seeing 1460 again for a while. Here are your updated hourly charts showing our current position. Taken in context with copper at 410, crude back near $100, the absolutely screaming grains and the shrugging off of the FOMC minutes, we can conclude that Turd's Bottom #2 is in and it's time to make some money on the long side again.

OK, now bear with me. I've got to somehow bring all of this together for you in the written format. It would be much easier in person or on the phone, as I explained it to Mr. Hyde earlier.

First of all, you need to go back and reacquaint yourself with this part of the note I gave you back on Sunday. Read this very carefully and thoroughly as it is tremendously important that you understand it:

(Begin)
"Finally, this morning, I want to spend some significant time discussing silver and where it may head from here. First of all, for the short term, here's another look at the two-hour chart. We'll know very soon whether a bottom has formed or whether silver is headed to new lows for this correction.

Here's the thing, recent history would strongly suggest that silver will not head lower and that support around 33-34 will hold. Why do I say this? Well, I think you all know by now that much of my prognosticative ability is due to pattern recognition and, for the immediate future in silver, here is the pattern of which you need to be aware.

Keep in mind that the Comex continues to run extremely low on physical silver. Of this, there is no doubt. The latest data showed only 32MM ounces on hand. That's only enough silver to physically settle about 6000 contracts.
The last three "delivery" months for Comex silver were Dec10, Mar11 and May11. On the chart above, note the consistent pattern in the weeks leading up to "first notice day" of those contracts. (Again, first notice day is put-up-or-shut-up day. It's the day by which you must supply 100% margin in your account to signal your intention to actually take delivery on your contract.) Corrections came and lows were made in the early to middle weeks of the months preceding first notice day. Specifically, a corrective low was made on10/22/10 before a rally toward the first notice day of the Dec10 contract, 11/29/10. Next, silver bottomed on 1/25/11 before rallying toward the first notice day of the Mar11, 2/28/11. Finally, silver rallied from3/17/11 clear through first notice day for the May11 on 4/29/11.
This cycle has indicated to me for weeks that silver would peak sometime between 4/29 and 5/6 and then "correct" between 5/9 and 5/23. Also, if you look closely at the chart, notice that the pattern had been for silver to rally for about a week past first notice day. This is why I kept looking for one more run toward 50 and even 52 back during the first week of May. As you know, that didn't happen. Instead, the correction began in earnest on Monday, the 2nd, and has continued to this moment. Because the rally from 3/17 was steeper than the previous two (42% vs 26%), it follows that the "correction" has been more steep, too.

Now, here's where it begins to get even more interesting. To me, the "proper" percentage gain for a rally into first notice day is 26.23%. This is coincidentally(?) the exact gain made from 10/22/10 to the margin hike highs of 11/9/10 and the gain from 1/25/11 to 2/28/11. If we can now all agree that the price action of late April was a blow off top, where The Cartel stood aside and let silver roll all the way to $50, then we can assume that silver should have rallied only to about $43.25. Had it stopped there like it should have, we'd be left with a chart that looked like this:

Ultimately, this post is concerned with what we can expect for the next six weeks as we head toward first notice day for the July11 contract, so here's what I anticipate:
1) Silver continues to base this week between $33 and $35.
2) By Friday but no later than next Wednesday, silver will be chugging higher.
3) Applying a 26.23% gain to a low of $33 or $34 gives us a price target of $42-43 by 6/30/11, the first notice day of the July11 contract.

For those keeping score at home, two weeks ago I was expecting silver to only correct to about 45, not 35. I then expected a 40+% rally toward $65, not a 26% rally to $43. The severity of this correction has forced me to alter these forecasts but the pattern remains.

Therefore, I will look to be a buyer this week if/when silver retreats again to the area between 33 and 34. I will probably be buying July $40 calls. (I did.) I may even sell some 43s or 45s against them to create a spread. (I haven't yet.)
I'll let you know.
The main thing and the point of this exercise is to illustrate for you that the savage beating silver has taken over the past two weeks was brutal but not unexpected. Pattern and timing now strongly suggest that silver will once again swing higher very soon. Be patient but have faith. Opportunity again awaits just over the horizon."
(End)

But all of this shouldn't be news to anyone who has been reading this blog for the past month. I've been discussing this "pattern" since mid-April. The swings have been more wild than anticipated but nothing that has happened has been outside of the pattern.

Here's what I want you to think about. If you're like me, you've often wondered how the metals would trade without the daily interference and capping of The Cartel. I believe now, in hindsight, that we finally saw this transpire in the period of April 15-25. In those seven trading days, silver went up almost 20%, rallying from the area around 42 to nearly 50. The unprecedented plan was already in place to ruthlessly raise margins 5 times in 9 days so The Cartel and their monkeys "stood down" and allowed the chart to be painted with a blowoff, parabolic top that coincidentally peaked right at the old, all-time highs. The brutal, margin-inspired smashdown that followed has trimmed open interest by a third and has resulted in many speculators leaving the silver markets, most of them for good.

Under this working assumption and with the creative use of some white-out, we're left with a daily chart of the July silver that looks like this:

And here is where the entire pattern now comes together and we can wrap things up in a neat little package.

1) Silver should have made it no farther than 42 or 43 back in April. It was allowed to trade to near 50.

2) The anticipated correction between 5/6 and 5/20 should have only been 10-12% but since the top was overbought all the way to resistance at 50, the bottom has been oversold all the way to support at 33.

3) Following pattern, silver has bottomed this week and will now trade to 36.50, then on to 39.50 and finally back up to a "double top" near 42 or 43 sometime before the July silver "first notice day" of June 30.

4) Gold, having also been "let go" to overextend to 1577 has now corrected and consolidated above 1480. It will also rally well into June before finally peaking somewhere between 1560 and 1580. (Sorry, no 1600 by 6/10/10 but considering we've already come within $23, I'd say that's close enough.)

5) Having accomplished all of this by the end of June, the metals will enter their typical summer doldrums. Silver will have painted a double top on our "white out" chart. Gold will have a near perfect double top on its actual chart. The PMs will selloff through July and into August, just like they did in July and August of 2010 and then January and into February of this year. Gold will likely retrace all the way to $1450 or so. Silver will trade back down to this 33-35 area.

6) By this point in late summer, all will seem lost. Every two-bit technician and topcaller will be proclaiming the end of "The Great PM Rally", just like they did back in late January. But it won't be the end, it will be the start of a new beginning.

7) The metals will rally from late summer into December. Gold will trade to a peak near $1750. Silver will again trade near $50, this time for real.

So there you have it. That's how it's going to work. Call me crazy but do you really have reason to doubt me? My advice to you is to bookmark this page or maybe even print it for posterity. Forward it to your friends. You'll want to review it from time to time, particularly during the dog days of August when it will take a lot of courage and fortitude to step to the plate and go long.

Finally, I had a 90-minute conference call with my web developers yesterday. The new site is coming along beautifully and I am extremely excited to share it with you. It should be "live" sometime in early June and it will be a handy tool for us to cope with the summer doldrums and prepare for the autumn charge. As mentioned before, it will be free for all to use but only registered "members" will be allowed to comment on the blog notes or the forums. Registering will not be difficult, however, as you will be able to sign in through Facebook, Google and many other social media.

That's it for today. I will not be posting again until tomorrow morning as I want to leave this post up and "above the fold", for all to read and ponder, for as long as possible. Thank you for all your input and for making this blog the absolute best PM-focused site on the internet.

TF

Searching For Confirmation

2011-05-18T09:36:00.003-04:00

The scenario I laid out last night in"Turd's #2" is very much intact and alive this morning. Therefore, instead of the usual gold and silver charts, today I give you some backup info to watch.

First, the POSX. We began looking for a dead cat bounce about four weeks ago. It has certainly come to fruition, even exceeding our goals for the rally. However, it has met its match at 76 and looks ready to begin rolling back over. Dollar weakness will clearly ease the pressure on the PMs.

Next, have you noticed yet the correlation between gold and the S&P? They've been moving almost in unison for about two weeks now. If you believe like I do that The Bernank will not allow stocks to head dramatically lower as that would be detrimental to his beloved "wealth effect", then you must expect stocks to turn higher again soon. Watch the 1315-1320 level in the ES for clues.

Ah, now here's a real interesting chart. Our old friend, DrC. IF it can move UP through 410...and I have a last of 406...there will be an undeniable reverse H&S on the chart. Without question, a bottom and a rally in copper will provide buying support for our PMs.

Lastly, here's crude. The damage inflicted buy the O'bottom Administration was large but it has left us with a clear chart pattern. A break above 100 and we can safely feel like the lows are in. A break below 95 and you need to be out. Given the political uncertainty and general unrest of the MENA region, a break down through 95 seems highly unlikely.

OK, that's it. Please go back and re-read "Turd's #2" if you're looking for levels to watch today in the PMs. I have lasts of 1493 and 34.70 so things continue to look up. Be on the lookout for raids but, more importantly, be on the lookout for FUBMs. The re-emergence of the FUBM will be your most certain sign that the storm has passed.

I'll be out for most of the day. I'll update through my phone if absolutely necessary otherwise look for another post this afternoon. TF

ps Gold at 1500 and silver at 35 are very encouraging. Also, July copper just tapped 410.
You can start getting excited above 1505 and 35.50. Until then, just stay encouraged.

Turd's Bottom #2

2011-05-17T22:03:00.000-04:00

I just like typing that. It could go down in history as the greatest thread title, ever.

I'm not ready to declare Turd's #2 just yet but I really want to. I mean I really want to. Honestly, the only thing stopping me is the brutally manipulative way that this "correction" in silver has been forced upon us. If the goons at the CME hadn't already shown their willingness to do anything to restrain silver, I'd feel a lot more comfortable sticking my neck out. I mean, I'm already on the record predicting a turnaround by early next week but to come right out and say it is happening tonight would be foolish given the circumstances.

That said, we are really freaking close. Right now. Tonight.
Silver has rebounded all day from the shellacking it took this morning. It is back above $34 and has now held the $33 level 3 times in past 7 trading days.
Now, do me a favor. Print off the 3-hour chart below. Walk into your bathroom with the chart. Turn it upside down and look at it in the mirror. What do you see?
Seriously, go do it. I'll wait right here until you get back.

OK, glad you're back. What did you see? I'll tell you what I see.
I see a chart that, if looked at in the inverse, would tell you to sell. Fast.
I see a sharp move higher to a spike top, followed be a brief selloff.
Then it reverses and spikes again but fails to make it much past the original high.
It then back off again before attempting another run to a new high only to be rebuffed and roll over.
(And what if it made all these thrusts higher on sequentially lower volume, too?)
If you were long (something, anything) and the chart you just saw in the mirror was your chart, you'd be awful nervous and ready to sell at the first sign of failure. To me that failure, that terminal sign, would be a breakdown through the lows made after the second stab at the new high.

Now, turn the chart back around and look again at present-hour silver. None of the dynamics listed above are different. They all apply. We're just looking for a bottom instead of a top. The nervous longs in the outline above are the nervous, smartypant shorts that currently rule the silver pit. Right now, right this instant, silver has triple-bottomed. In fact, it's even a H&S bottom as the middle bottom is deeper than both shoulders. This could all change, of course. The bottom could drop out overnight and we could be under $32 by tomorrow morning and all the shorts will be contentedly counting their newfound wealth. However, IF silver continues to grind higher overnight, every single tick increases the shorts' nervousness. A move through 34.50 would cause them to cover a little. Above 35.50 and they're covering more and, if silver gets back above 36.50, they'll be covering the rest of their shorts faster than you can say "Bob Moriarty".

So, hang in there tonight and let's bring home a victory. I've got a last of 34.20 and gold is rallying, too. It's back up to 1491.
We're close. We're very close.
See you in the U.S. a.m. TF

Reason For Hope

2011-05-17T15:05:00.000-04:00

Gold is bouncing back from the early morning smashdown and is now $10 off its lows. Silver held 33 twice! By no means are we out of the woods and it won't take much to really blow things up at this point. However, today is very much like Turd's Bottom in January. Things could go either way and we must be cautious...BUT...if we can turn here...bargain silver buyers will see a pretty stout, 10-day base near 33 and feel encouraged. Keep an eye on $34 in silver. A move through there may encourage some short-covering and, well, you get the picture.
More later this afternoon. TF

Relentless

2011-05-17T09:02:00.002-04:00

This will be short as gold is collapsing through all the points I wanted to discuss.
It is clear that gold will need to hold and double bottom around 1470. Silver needs to hold 33.
We're about to find out if that's going to happen. More later.

p.s. Keep in mind that (other than gold retesting 1470 rather than breaking higher) nothing happening today is inconsistent with what was discussed here:

http://tfmetalsreport.blogspot.com/2011/05/interesting-week-ahead.html

The object of the note above was silver and silver is still above 33 and basing. Until and unless 33 fails and silver heads to 30, the timeframes in the note are still valid.

We shall see.

And this is for "shill".

Lastly, I try to keep up on current events so as not to look foolish by making hopelessly inaccurate posts. I need a little help. Everyone now says that QE is ending in June, as if its a fait accompli. Did I miss the formal announcement? Was there a press release sometime in the past two weeks that stated this? Seriously, I don't remember anything of the sort.

I remember that weird Bernanke "press conference" which caused the metals to skyrocket in the hours after but I don't recall anything from the Fed since that officially declared QE over.

Can someone help with this?

An Overnight Read

2011-05-16T20:59:00.000-04:00

Hang in there tonight. Silver is desperately trying to paint a reverse H&S on the hourly chart. We'll know a lot more by tomorrow. In the meantime...

My Australian buddy, Turdle, just brought this to my attention and I thought it was worthy of publicity here. It comes from this site:
http://babybulltwits.wordpress.com/2011/05/16/ranting-andy-unity-in-common-sense/
To save you time and effort, I've c&p'd it below. I have no idea who "Ranting Andy" is but he's certainly got the right idea. Thanks, Andy, wherever/whoever you are!

Ranting Andy: Unity in Common Sense

RANTING ANDY – As another week of horrific market manipulation concludes, my mind is aflutter with thoughts. Yes, the Fiat Age is nearing its end, led nose down into hell by the U.S. dollar. But we know that already.
Yes, gold and silver represent the ONLY successful currencies, and stores of value, in human history. But we know that already.
Yes, the gold Cartel, which is essentially Washington, Wall Street, and their puppets in London, spend the entirety of their working days (if you call robbery work) manipulating markets in order to maintain a status quo in which they own and rule everything in the Western world. But we know that already.
And yes, it’s blatantly obvious that these manipulative efforts, particularly suppressing Precious Metals while simultaneously supporting the Dow and U.S. Treasury markets, have taken a quantum leap skyward in recent weeks, starting with the May 1^st SUNDAY NIGHT SILVER MASSACRE.
Yes, we already know that, and yes we know they did it because gold, silver, and the Euro were all making new all-time highs just as the end of QE2 is planned to end.
Given all this “common knowledge”, which I say facetiously because 99% of Americans haven’t the slightest clue, what is it about this week’s markets that stands out in my mind? And here’s the answer, yet again:
Occam’s Razor.

The simplest explanation is usually the right one, and in this case it couldn’t be more simple. I have no problem with the aforementioned ignorant 99% not getting it, and frankly most of them never will. But what irks me more than anything, more than Goldman/Morgan, Paulson/Geithner, Greenspan/Bernanke, and Bush/Obama combined, is the inability of the 1% to consistently unite in their quest to depose the evil and instill the just.
Every day for the past nine years, I have watched my net worth, employment prospects, and sanity get besieged by illegal acts by psychopathic criminals bent on my destruction. As have my small band of allies that believe gold and silver are the market’s most attractive investments in the world (the only ones I’ve owned during this time, and likely the only ones I’ll ever own). I haven’t met them all, but feel a strong kinship with these hearty souls, whom as a group have dedicated their lives to not only self-preservation, but helping others to do the same. I believe the fight for real money is my calling in life, and nothing I’ve ever done comes close to the passion I feel for this issue, particularly as we stand at the precipice of the most earth-shattering currency events in the history of mankind.
It’s bad enough to watch GOVERNMENT COMPUTERS naked short Comex futures, GLD, SLV, and Precious Metal miners all day long (just watch SLW or SLV trade for an hour, and you’ll know what I mean), while fabricated economic statistics, lies, and propaganda are spouted on the TV and internet all-day long. But to watch so many of the so-called “gold bulls”, for years and years on end, continually shoot their followers in the back with doubletalk, top calling, and, worst of all, FLAWED CHART ANALYSIS, is what puts me over the top.
These people will one day talk about PM manipulation, and the next (usually after an attack occurs, citing “technical damage”) talk about how the “charts have turned bearish”, and if they don’t turn around soon all will be lost, or something of the like. My favorite such drivel is the type that says “if gold breaks below $1,490, it could fall to $1,460, and if it breaks $1,460 it could fall to $1,420.” Well DUH! Of course it could fall to $1,460, or $1,420, or ZERO for that matter. But then again, it “could” rise to $1,530, or $1,570, or a ZILLLION.
We have been in a gold bull market for eleven years, and likely will be for the rest of our lives. And the people writing this commentary (many of whom have paid followers) are for the most part highly intelligent believers in the cause. But for some reason, they refuse to fully grasp what is going on, which in essence is the same battle that has repeated itself for centuries. And that is the 24/7 SUPPRESSION OF GOLD AND SILVER! Every time I read them write that gold fell due to “the rising dollar”, “risk trades being turned off”, “economic worries”, or “the swooning stock market”, I realize that perhaps I will never see the day when our “team” for once works together against the evil that is out to destroy us. Not only is this information completely wrong, and easily refutable (especially because 99% of gold’s declines occur at the same three times of day), but it creates an immense amount of fear to those looking for guidance in a financial world gone mad.
I really don’t want to name some of the most egregious culprits, for fear of making enemies, but there are some very prominent people that still cannot stop looking at their silly little short-term charts, which are all MEANINGLESS IN A RIGGED MARKET, and consequently fear-mongering. But I do want to single out one such person, whom I have never met, simply because he is so revered as a prophet of some sort. I have a great deal of respect for Martin Armstrong’s writings, as he is obviously a very bright man. However, aside from flowery language and his deep knowledge of history, Mr. Armstrong is not writing anything different than I and many other lesser-knowns have been writing for the past decade.
Surely, someone as knowledgeable about the concept of “money”, and as revered in the PM sector, should be a true champion of the cause, one who can rally the troops in the manner that true leaders such as Sinclair, Sprott, Embry, Turk, Willie, Keiser (Max), Maloney, and Murphy do.
Surely, by now someone of his caliber has figured out that the gold and silver markets are the most manipulated on earth, just as they ALWAYS HAVE BEEN, and thus if the government can buy stocks all day via the PPT (sorry, the President’s Working Group on Capital Markets”), and T-Bonds all day via the Fed, than they certainly can be naked shorting PAPER gold and silver all day via the Gold Cartel (sorry Ted, Goldman Gary Gensler has NOT done a thing to help us out, and NEVER will!).
But just as my idol Richard Russell refuses to acknowledge that his beloved Dow Theory was rendered USELESS a decade ago by market manipulation, Armstrong refuses to acknowledge that his “Long Term Primary Channel” analysis is equally useless for the same reason. In fact, the following paragraph from his latest piece, “So you thought the Sovereign Debt Crisis Was Over?” (the conclusion, by the way) is what inspired this article, and states the following about one of his proprietary gold charts:
“Now that we exceeded the top of this channel, it will be the test to fall back to make it support, which lies at $1,227.90 in 2011 and $1,239.30 in 2012 (mathematically calculated). Technical resistance stands at $2,000.90 in 2011 and $2,037.20 in 2012, with initial support at $1,374.10 in 2011, rising to $1,410.50 in 2012. So those that think I am long-term bearish by merely saying a retest of support is the next stage to prepare for the big rally, need to understand that this is simply a pattern that unfolds in how markets trade.”
When I read drivel like this, particularly from someone so well educated and versed in history, I tremble with anger. The fear-mongering this creates among the poor souls desperate for guidance through the Gold Wars is incredibly counter-productive to the cause, which in essence is a real life saga of good versus evil. Such double talk only reinforces fears the Cartel creates through its daily attacks on gold, silver, and PM shares, and to see it come from ‘gold army leaders’ such as Armstrong (and many others) only makes it worse.
YES, MARTIN, YOU ARE “LONG-TERM BEARISH” (in terms of the average person’s investment horizon and ability to sustain losses to the Gold Cartel)!
If gold falls to “$1,227.90 in 2011”, that would represent an 18% decline (or 22% from last month’s all-time high of $1,575), which by definition is a BEAR MARKET. Not to mention, if gold falls to “$1,227.90 in 2011”, silver would likely fall further in percentage terms, perhaps to $25 or so to throw out a round number, which for non-mathematicians represents a 50% decline from April’s all-time high of $50. And I won’t even broach the topic of how much the HUI would decline if gold falls to “$1,227.90 in 2011”, which would probably wipe out the remaining PM investors that have survived to this point, particularly through the horrific, GOVERNMENT-ENGINEERED PM MASSACRE OF LATE 2008.
Of course, anything in the markets is possible, and certainly gold and silver could decline further. However, to intimate that gold is likely to dramatically plummet in the current environment is not only ridiculous, but insulting to my intelligence. Unlike in 2008, when the government was able to attack PMs under the guise of “deflation fears”, today’s environment is much different. Back then, the Fed and its pathetic puppets in Europe and Japan at least had some ammo left, such as lowering interest rates to zero and promising that printing trillions of dollars, pounds, yen (and other currencies) could fix what was wrong. However, today all those bullets have been shot, and what we have now is a ZIRP society with massive inflation, rocketing debts and deficits (especially in “King America”), and soaring inflation. And further declines in the Western economies (which, by the way, will occur with 100% certainty) will only expose the situation more, in other words that the dollar (as well as the pound, Euro, and Yen) will continue to decline against ITEMS OF REAL VALUE under essentially all scenarios.
The rush to PHYSICAL GOLD AND SILVER, as well as NECESSARY ITEMS such as AGRICULTURAL PRODUCTS, has begun, and will NEVER END until the fiat currencies are destroyed and replaced with REAL MONEY, in other words the re-establishment of a GOLD (and possibly SILVER) STANDARD in the not-so-distant future.
Years ago, I would have been too modest to challenge leaders in my field, but no longer. I believe I have proven my ability to understand what is going on in the world as well as most (but definitely not all) of my peers in the “gold army”, and if no one else is going to call bulls—t than I will do it, and do it proudly. My goal is not to make friends in this fight (although I’d certainly like to), but to help as many people as possible to navigate through these shark-infested waters.
The Precious Metals manipulation this past month escalated from “Phase 1” to “Phase 2”, as my brilliant friend Mike Krieger penned last week, as the Cartel was nearly destroyed by the PHYSICAL SILVER EXPLOSION in late April that led to the aforementioned SUNDAY NIGHT (PAPER) SILVER MASSACRE. The amount of despicable, illegal acts they will perpetrate in the coming months (such as non-stop margin increases, incessant naked shorting of GLD, SLV, and PM shares, propaganda, falsified economic data, double dealing (such as pretending to end QE2 when in fact they’re still doing it), etc., will only increase dramatically in 2011, I assure you. The end game is nigh, and this is the last stand by the EVIL EMPIRE to try and stamp you out, and thus maintain the status quo. They will win some battles, such as they have with this month’s PM bashing, but listen to what I am about to say, and listen carefully:
No matter what they attempt in the paper markets, they WILL NOT be able to stop the Chinese, Indians, Russians, Arabs, and others from buying every available ounce of gold and silver, and it WILL NOT be at $1,227.90, I assure you! Technical charts are for free markets, which no longer exist in America. The America we have grown up with is GONE, and with each passing day its ideals will more rapidly distance themselves from the rear-view window. The unholy alliance of Washington and its “massas” from Wall Street know the U.S.S. America is going down, and their only goal is to take as much of what’s left (from YOU) before the final bell rings on the dollar.
PROTECT YOURSELF, AND DO IT NOW. Buy gold, silver, food, and other ITEMS OF REAL VALUE. These items CANNOT, and WILL NOT, depreciate in value against paper currencies in the coming maelstrom. I cannot speak for stocks, even PM stocks (although the odds are they will rise), but I can speak with certainty about the value of REAL, PHYSICAL ITEMS such as the aforementioned.
And for those of you writing commentaries to the public about the gold wars, including free articles such as those by Mr. Armstrong and subscription based works by others, PLEASE UNIFY IN THE CAUSE OF THE JUST, AND STOP SCARING YOUR READERS, PARTICULARLY WITH MEANINGLESS TECHNICAL ANALYSIS!

The Moment of Truth Cometh

2011-05-16T12:24:00.002-04:00

We are rapidly approaching The Moment of Truth, at least for this current correction. Either it has ended and the PMs will begin the UPward consolidation that I'm expecting or things will break down and silver will head lower to test last week's lows and beyond. Gold would then roll back toward 1465-80.

Here is the gold chart I gave you yesterday:

And here is a 15-minute chart with roughly the same trendlines drawn upon it:

The two ends of the pennant look like they will meet in about 12 hours so gold will break out, either higher or lower, before then.

Now let's do the same with silver. Here's the longer-term chart from yesterday:

And here is the latest 15-minute chart, again with the same trendlines drawn.

Like gold, the downtrend line is going to intersect the baseline in about 12 hours so resolution is coming.

I, of course, have no idea how this may play out. The fundos still have not changed so I expect natural demand to kick in and stabilize/increase price. However, the CME/Comex/Cartel/Govt complex has already shown that it is willing to go to any lengths to suppress and cap price at these levels so we'll see. Maybe more silver margin hikes are coming. WTFK.

Hang in there. This should be very interesting to watch. TF

p.s.
WTFK is another Turd acronym. Any guesses as to what it stands for? Mr. Hyde knows, that's for sure.

5:30 EDT UPDATE:
The short term fate of the PMs hasn't been decided yet but its getting awfully close.
Here are two updated charts...an hourly silver and a 2-hour gold.
Overnight breaks of 1485 and 33 would be very bad.

On the bright side, IF, for any reason, the metals can reverse and rally here, breaking UP through 35 and 1510, we can begin to get excited about their short-term prospects.
Again, we should know very soon. More later. TF

Value or Growth?

2011-05-16T10:02:00.002-04:00

Wanted to lead with this today. Please take a moment to read and consider this brief article.
http://money.cnn.com/2011/05/11/pf/anne_gudefin_pimco.fortune/
Be sure to take notice of how this money manager is described, a "veteran value investor".
From Investopedia:

What Does Value Investing Mean?
The strategy of selecting stocks that trade for less than their intrinsic values. Value investors actively seek stocks of companies that they believe the market has undervalued. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with the company's long-term fundamentals. The result is an opportunity for value investors to profit by buying when the price is deflated.

Hmmm. I thought the precious metals were in a bubble due to rapid growth of price.
Hmmm. What is a "veteran value investor" doing buying gold as her largest holding?
Hmmm. "Protection against what can go wrong". I thought only we "insects thought that way.

OK, to the business at hand.
I got filled overnight on some July silver $40 calls. Paid the price I wanted to pay so The Turd is very happy...so far. Because I don't expect silver to exceed $45 before expiry in late June, I'll be looking to raise some additional cash by selling the 45s I currently own and a few more against them.

Here is an hourly gold chart. Note the sideways action. On the plus side, we continue to hold 1480 and even make higher lows. Now, if we can just make some higher highs...

Silver looks much the same. It continues to find very strong support in the area around $34, stopping overnight right at $34.00. The more times that level holds, the stronger it becomes. Eventually, nervous buyers will begin to sense that the storm has passed and see a winning risk:reward. Big buyers could enter right now, if they wanted to. I'd buy at $35 with a stop below 33.80. That gives you only $1.20 of downside. I don't see any real, significant resistance until the 39.50 area. That gives you $4.50 in upside. That's a risk:reward of almost 1:4. You'd think that would be strong enough to prompt some buying. We'll see.

Lastly, I very much appreciate all of the diverse feedback regarding the implementation of a nominal "troll" fee for the new site. After much consideration, I've decided against adding any kind of membership fee. The new site will be completely free of charge and will remain so. However, in order to participate in any of the discussions, you will have to register with the site, become a "member" and provide a valid email address. No fees, though. Again, the site is dedicated to reaching and educating as many as possible and charging fees would only limit that purpose.

That's all for now. I have lasts of 1499 and 34.93 so maybe, with a little luck, we can turn things green today. Have a great one! TF

p.s. You'll want to read this, too. Louise Yamada is the only technical analyst that I listen to. She is the best. Period. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/14_Louise_Yamada_-_$5,200_Gold_is_Long-Term_Channel_Target.html
And here is the full audio interview:
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/5/14_Louise_Yamada.html

An Interesting Week Ahead

2011-05-15T12:57:00.000-04:00

OK. After 48 hours of MacBook freedom, The Turd has returned with a vengeance. Well, not really...but I have returned with a handful of interesting charts. Let's get straight to it.

First up, here's the bouncing POSX, which is currently the "tallest midget", again. (I'm sorry. I didn't mean to offend our diminutive readers such as Chairman Ben, SecTreas Timmuh and Robert Reich. Let's instead say that the dollar is currently the "most upright of the vertically-challenged.) As it certainly looks like a new intifada is beginning,
http://www.reuters.com/article/2011/05/15/us-palestinians-palestinians-idUSTRE74E1NT20110515
it's probably safe to assume that the index will trade higher overnight, eclipsing resistance at 76.06 and heading toward 76.75. This does not concern me in the least. however. It is what it is.

Now let's take a look at gold as it is going to be reaching a point of critical mass this week. Review, for a moment, this 8-hour chart. Note that the pennant formation will soon be closing. The question is: Which way will gold break when it closes? The no BS answer is that it could go either way. However, since the uptrend line dates all the way back to Turd's Bottom in January, there is a much higher likelihood of a break higher than a break lower. Let's put the odds of a break UP at 80% and a break down at 20%. IF the break is higher, our short term target should be about 1545.

Also, take a look at this chart that I lifted from Harvey's site. Trader Dan has been discussing this, too, and it's very important. We tend to only look at gold priced in US dollars. Look at the price in euro. As the price in euro makes new all-time highs this week, dollar-priced gold will likely rally, too.

Finally, this morning, I want to spend some significant time discussing silver and where it may head from here. First of all, for the short term, here's another look at the two-hour chart. We'll know very soon whether a bottom has formed or whether silver is headed to new lows for this correction.

Keep in mind that the Comex continues to run extremely low on physical silver. Of this, there is no doubt. The latest data showed only 32MM ounces on hand. That's only enough silver to physically settle about 6000 contracts.
The last three "delivery" months for Comex silver were Dec10, Mar11 and May11. On the chart above, note the consistent pattern in the weeks leading up to "first notice day" of those contracts. (Again, first notice day is put-up-or-shut-up day. It's the day by which you must supply 100% margin in your account to signal your intention to actually take delivery on your contract.) Corrections came and lows were made in the early to middle weeks of the months preceding first notice day. Specifically, a corrective low was made on 10/22/10 before a rally toward the first notice day of the Dec10 contract, 11/29/10. Next, silver bottomed on 1/25/11 before rallying toward the first notice day of the Mar11, 2/28/11. Finally, silver rallied from 3/17/11 clear through first notice day for the May11 on 4/29/11.
This cycle has indicated to me for weeks that silver would peak sometime between 4/29 and 5/6 and then "correct" between 5/9 and 5/23. Also, if you look closely at the chart, notice that the pattern had been for silver to rally for about a week past first notice day. This is why I kept looking for one more run toward 50 and even 52 back during the first week of May. As you know, that didn't happen. Instead, the correction began in earnest on Monday, the 2nd, and has continued to this moment. Because the rally from 3/17 was steeper than the previous two (42% vs 26%), it follows that the "correction" has been more steep, too.

Now, here's where it begins to get even more interesting. To me, the "proper" percentage gain for a rally into first notice day is 26.23%. This is coincidentally(?) the exact gain made from 10/22/10 to the margin hike highs of 11/9/10 and the gain from 1/25/11 to 2/28/11. If we can now all agree that the price action of late April was a blow off top, where The Cartel stood aside and let silver roll all the way to $50, then we can assume that silver should have rallied only to about $43.25. Had it stopped there like it should have, we'd be left with a chart that looked like this:

Friday The 13th

2011-05-13T20:07:00.001-04:00

This day has been brutal. If it could go wrong, it did. I'm exhausted but you need a new thread so here it is.

In summary, the metals had a great day. Gold rolled all the way up to 1515 before being savagely attacked and driven back to 1485 (a higher low, once again). It settled this afternoon at 1495, however, so it looks good for next week. Silver got to 36.50 overnight last night and then got kicked all the way back to 33.90 (a higher low) before rebounding. This, too, looks good.

Next week will likely be one of upward consolidation. The risk:reward profile is rapidly shifting in our favor. There will likely be another attempt at a takedown sometime next week but the higher lows on gold and the strength in silver between 33 and 34 is eventually going to bring buyers back into these markets. Of that, you can be certain.

That's it for tonight. It's been a long day and I think I'll go knock back some fine chianti to take the edge off. I promise you a comprehensive week in review/preview tomorrow. The Wicked Witch has a few things to say, too, but she may not have time to make an appearance. I'll let you know. Turd out.

Back Up

2011-05-13T13:00:00.002-04:00

It looks like Blogger is finally working again.

I bought some June 1500 calls about an hour ago.

I'll have a full update in a few hours. TF

Our Criminal Opposition

2011-05-12T08:50:00.000-04:00

For once, I don't mean this as it relates to the precious metals. We'll get to that later.

If you haven't yet watched this, I BEG AND PLEAD WITH YOU TO TAKE 15 MINUTES TO DO SO. When finished, please forward the link to anyone who you sense does not quite understand the predicament we are in.

http://www.cbsnews.com/video/watch/?id=7361572n

Now, ask yourself, how is it that this criminal corruption is not being prosecuted? The fact that there are merely "investigations" while the foreclosures continue gives you an idea of just how powerful and dominating the Fed/TBTF/Govt complex is. (Also, I guess we know why Sheila Bair is resigning.) How is it that no one has called for a halt on all foreclosure proceedings until and unless proper documentation can be found? I'll tell you why: Because the criminal element controls the system. Here, in the supposed "land of the free and home of the brave", we live in extremely dangerous times. The one thing that has always distinguished the U.S.A. from most every other nation on earth, the one thing that has caused the U.S.A. to be the ultimate safe haven in the free flow of global capital, is at least some measure of respect for the Rule of Law. Well, throw that out the window and kiss it goodbye, my friends. Maybe not today or tomorrow but certainly in the weeks and months to come. There will be no rescue. There is no centrally-planned, keynesian salvation coming. All you can do is protect yourself and warn as many others as possible to do the same.

To that end, I read several comments overnight from people who are selling their silver and gold to lock in some fiat-conversion profits. If you are one of them or if you are considering the same, let me state this as clearly as possible: YOU ARE ONE OF THE DUMBEST PEOPLE ON THE FACE OF THE PLANET. You knew what was coming so you prepared. You bought PMs some time ago as protection and insurance. Now, because of a manufactured correction in fiat price, you sell? Again, if you are now converting your metal back into fiat YOU ARE ONE OF THE DUMBEST PEOPLE ON THE FACE OF THE PLANET. If you are truly concerned about your fiat-conversion, call Lind-Waldock for pete's sake and buy some puts but DONT, FOR ANY REASON, SELL YOUR METAL. One "put" option hedges 5000 ounces so its not hard to do. I've even give you this link to use:
http://tfmetalsreport.blogspot.com/2010/12/opening-options-account.html
If you feel the need to hedge but you're too lazy to do it the right way, maybe you need to find another blog to read. This one is about "preparing for the end of the Great Keynesian Experiment". Precious metals are your financial insurance against that series of events. As a physical metal owner/buyer, you were smart enough, at one time, to separate yourself from the sheep. Do not let the Fed/TBTF/Govt complex manipulate you back into the herd.

Here are your charts for today. First, here's Porky The Pig:

Next, here's gold which, for all the bluster, huffing and puffing, still maintains it's position above the trendline from Turd's Bottom in January. After dipping below 1495 overnight, I'm looking for the next dip toward 1480 to begin buying some calls.

And I'm starting to get a very good feel for how silver will finally bottom, once and for all. Recall last night's post about how yesterday looked like last Thursday, all the way into the overnight lows last night. Since we made new lows down near 32, there is a very high likelihood now that, after a brief bounce (which we are already seeing develop), silver will drop one more time into the 32-33 area. Probably tomorrow or early next week. At that point, we will have an opportunity to buy. I'll keep you posted.

Thank you for reading my rant. Please hang in there and don't be discouraged. The TRUTH is on our side and TRUTH will always win. TF

ps I forgot to include this link. Solid, brief article.
http://www.zerohedge.com/article/history-repeats-itself-silver-futures-manipulation-2011-mimics-gold-futures-manipulation-20-0
And who gives a shit about "The Law", anyway. Apparently, if you don't like it, you just ignore it.
http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201105111542dowjonesdjonline000477&title=treasury-auctions-to-take-us-over-debt-ceiling-on-monday

Yikes

2011-05-11T15:03:00.002-04:00

Wow, this stuff can sure turn around in a hurry!

I expected the mid-month weakness to begin last Friday. It began, instead, a week earlier.
I expected a dip of 10% or so. Instead, the dip was over 30%.
I saw a turnaround bottom on Cinqo de Bottomo and looked for a rally to 1520 and 39.50.
I expected a gradually steepening, 4-day selloff back down toward 35 in silver and 1495 in gold. Instead, my gradually steepening selloff took only 4 hours and here we are. What's next?

How the hell should I know? Seriously.
The only thing that I can see is a POSX that has maxxed out its Calvin bounce and commodities that are being intentionally driven off a cliff to give the Fed room to posture. It's all bs. However, IF you are attempting to trade this nonsense, you'd better be buying yourself some time and, once you get long, you'd better have the courage of your convictions to hang in there. You'd also better have some significant capital reserves.

For now, here are updates of the exact same four charts I gave you a scant six hours ago. First up, our fearless leader. In percentage terms, gold continues to hang tough. If it were moving like silver and crude, it would be down $75-150. I told you this morning that I want to buy some June calls at $1500 but there is no sense in getting in a hurry. I'm going to sit idly by again tomorrow and wait for Friday. If Lady Luck smiles upon me, I'll get a chance to buy then near 1490.

Silver is simply remarkable. Notice something potentially important, however. Take a close look at the two areas I've circled. They are today's action and last Thursday's. Note that they are almost identical. Since I am "pattern recognition boy", this immediately caught my eye. Let's watch this thing very closely overnight. IF we consolidate this afternoon and evening around 35 and then dip tomorrow morning toward 34, it may very well be an opportunity to do some bottom fishing. We'll see.

Crude reeks of manipulation. Not the Cartel-type we see in the PM pits where paper contract issuance overwhelms the bid and drives price lower. No, this is the heavy hand of government manipulation.
1) President and dipshit AG declare economic "war" on evil speculators.
2) Start rumors to scare longs and create volatility.
3) Raise margins ostensibly to "control volatility" YOU created.
4) Start fresh batch of rumors.
5) Longs rush out, fearing more margin hikes.
6) Halt trading to really freak out longs.
7) Raise margins again to "control volatility" YOU continue to create.
Did the crude market see 4-5% daily moves before or after O'bottom got involved? Answer this question and you'll have your answer as to why commodities are moving the way they are.

And here's an updated picture of the POSX:

The Living Dead.

OK, seriously. It's gone about as far as I can see it going on this bounce.

Hang in there. The next 24-48 hours are going to be rough and crazy volatile. Do not be foolish and try to impress your friends by calling a bottom. Let this nonsense play out and I'll try to tell you when its safe to get back in the water.

I'll be out for the rest of the day and evening but I'll try to stop by the comments section every now and then and add thoughts, if necessary. TF

An Unbelievable Six Months

2011-05-11T09:54:00.001-04:00

Time to celebrate, I guess. It's hard to believe that it was already six months ago today that Mrs. Ferguson encouraged me, over lunch, to start this silly blog. In the time since:

1) I've written 395 posts! I've always wanted to be an author and that's certainly enough for a small book.
2) As of this moment, we've had 5,891,335 individual pageviews. 2,003,481 in the past month, alone.
3) I added a "donate" button in December and now I'm in the process of spending almost every penny you've given me on the development of a dedicated, new site. Trust me, it's worth it. You deserve it and it's going to be very cool.
4) Gold closed on 11/11/10 at $1410. Silver was $27.59.
5) The U.S. has added over $1,000,000,000,000 to its national debt.

Sheesh! Can't wait to see what the next six months hold.

Onto today, as discussed here ad nauseam, the PMs peaked overnight and have now begun their downward consolidation phase, right on schedule. Gold reached 1526.80, exceeding our target by almost $7. Its now back to 1509. Silver maxed out at 39.47, coming within 3 cents of our stated goal of 39.50. That'll work. I just wish I'd gotten filled on the on the July 45 calls I was trying to sell overnight on the Globex. Nuts.

Again, don't get all itchy to buy this dip as there is almost certainly a ways to go. I, for one, am going to let this play out all the way into next week before making any moves. If you wish to trade against The Turd, as many were discussing yesterday and overnight, do so at your own risk.

Let's start with gold today. It continues to be the "leader" as it has not had the wild price swings of silver and crude. (It also hasn't had any margin increases...yet.) With all of the uncertainty in the world, gold is still your best, and least volatile, investment. Also, did you see this today?
http://www.humanevents.com/article.php?id=43439
This is definitely coming. Maybe not to a dollar near you but I am 100% certain that the new global or regional reserve currencies will have a tangible asset backing, be it precious metals, energy, land or some combination thereof.
I'm so certain of a golden rebound at $1500 that I will be buying June calls which expire two weeks from today. I'll also be buying some August.

Now, here is silver. Catching a bottom on this down move is going to be quite challenging as it will probably overshoot again, just like it did last week. For now, I won't even think about buying anything until we see $36.50. Once that is hit, I'll watch for a dip near 36 and, if I'm lucky, I'll be buying July calls sometime next week with the price between 35.50 and 36.

OK, here is crude. This looks like it will be dipping to at least $101, if not $100 or slightly below. I will be buying there, too. And please, for the love of pete, don't get caught up in the hype and find yourself short this greasy stuff. Are you even aware that another "Gaza Flotilla" is being planned for later this month? MENA instability is not going away.
http://www.haaretz.com/news/diplomacy-defense/activists-new-gaza-flotilla-in-final-planning-stages-1.358249
Much to the chagrin of President O'bottom and our esteemed and accomplished Attorney General, crude isn't going down much farther regardless of how much they vilify traders and raise margins.

Lastly, the POSX has gone about as far as its going to go and now, with everyone from Santa to Bill Gross to Jim Rogers wanting to short the long bond, you can bet your batooty that the Fed will re-engage active support of the bond at the expense of the dollar.
http://tfmetalsreport.blogspot.com/2011/04/where-were-you-on-super-bowl-weekend.html
The index may linger around up here between 75 and 75.50 for a little while longer but it will, eventually, roll back over. Your first clue that its headed back down to 73 and 72 will be a break of 74.

Again, thank you for allowing me all of this fun for the past six months. I hope you've learned something and made a little fiat along the way. Have a great day! TF

Objectives Met

2011-05-10T16:25:00.000-04:00

Gotta admit that, so far, this is coming together almost exactly as planned.

June gold today reached a high of exactly 1520.00. I'd say that's pretty close to our 1520 objective.
July silver has a high of 38.82. Not quite the 39 or 39.50 I was hoping for but close enough, that's for sure. From here, if gold can linger between 1515 and 1520 overnight, silver make take one more stab higher and still get above 39. However, whether or not it does is of no consequence. Our objectives from the Cinqo de Bottomo lows have been met. Next, we wait for the pullback. No reason not to think it's coming.

As discussed this morning, we even had a Happy Tuesday. Not a big, dramatic rise but certainly an absence of EE selling. Even when the PMs were rolling over this morning at 9:30, the downside momentum never got cooking...your first sign that the EE was on the sidelines here on CoT survey day.
Just another reason to expect some downward consolidation in the coming days. No doubt The Cartel will be back in the pit, selling their unbacked paper silver, trying to scare out all the dip buyers. Let em! We need to silver in particular to come back some, base and consolidate. IF we can get this to happen over the next 4-5 trading days, we will be set up for another great, money-making run into late June and the first notice day for the July contract.

Here's your hourly gold chart. You can plainly see what I've been looking at as resistance around 1520. You can also plainly see the support gold will find on any dip back toward 1500.

And here's your silver chart. It has really flattened out just below 39 as I'm not the only one who loses buying interest above that level. Like I said above, it may take one more stab toward 39.50 but I don't expect it to. Instead, I'd expect us to gradually roll over, head back down through 38 and 37 before finding quite a bit of buyers in the area between 36 and 36.50. I'll certainly be one of them.

That's it for now. Too much other stuff to do.
The LTs have a "spring concert" tonight so I won't be able to give you another update until much later this evening. Hang in there, relax and have fun. TF

The Return of Happy Tuesday?

2011-05-10T09:11:00.003-04:00

We've discussed this phenomenon often. Here's one such example:
http://tfmetalsreport.blogspot.com/2011/03/another-happy-tuesday.html

I doubt that today will be a really happy Tuesday simply because we are close to the target areas where buying interest will wane. However, given all of the Cartel activity late last week, it is doubtful that they will want to significantly add to positions today. Though the metals have taken quite a beating over the last 45 minutes, I'm still looking for one more push toward 1520 this week. I still expect to see silver with a 39 handle, too.

The pain-in-the-neck last night was the 25% margin hike in crude. As you know, I do not believe in coincidences when it comes to these bs manipulated markets. The 10% drop that crude suffered last week was undoubtedly brought upon by news of this hike being leaked. Otherwise wouldn't crude be down 10% today, instead? Additionally, I'm sure there's no connection between O'bottom's declared "War on Speculators" and the margin hike. None, whatsoever. As I've stated many times before...Martha Stewart can get a year in the hole for trading a couple hundred shares of stock on "insider" info but these bastards fleece and manipulate thousands of people everyday and your public "servants" like Chilton and Gensler calmly look away. An absolute and total sham. As I type, I see that gold is now down to 1507, off about $10 in 45 minutes. Maybe the crooks are raising margins on it later today? We'll see. Maybe the push to 1519 overnight was as close to 1520 as we're going to get.

On a lighter note, Jim Willie sent me the lyrics to a rap "song" he's written. I think in the rankings of The Great White Rappers, he falls somewhere between Eminem and Vanilla Ice. I'll let you be the judge. (Be sure to get a little rhythm going in your head before you try this at home.)

WILLIE RAP SONG

Housing market still feels the screws

Bank owned homes are buried with blues

The Economy stuck in toxic ooze

Job Growth is such a ruse ... ooo aaa ooo aaa

Ben Bernanke is looking confused

Central banks have no clues

USDollar is still abused

Sovereign debt is such a ruse ... ooo aaa ooo aaa

Expect more Japanese Yen rescues

QE3 is what they will choose

Purchasing power is sure to lose

Fiat money is such a ruse... ooo aaa ooo aaa

Negative home equity endless, turn to booze

No retirement as workers sing the blues

Big Banks get the money, people the screws

Change never came, all just a ruse... ooo aaa ooo aaa

Bin Laden dead is to confuse

Propaganda is the only news

In the end, expect blame in Moslem spews

The War on Terrorism is such a ruse ... ooo aaa ooo aaa

Soon to crumble, the Ruling Elite continues

Hang the Big Bankers without their shoes

Have a great day. TF

ps Your "one-trick turd" forgot to add this link. Thought it was pretty good.
http://www.zerohedge.com/article/false-myths-gold-silver-bulls-promoted-gold-silver-bears

1520 & 39.50

2011-05-09T13:31:00.004-04:00

Like this morning's post, let's start this thread by reviewing the relevant information from last week. This time, you need to go back and read this.
http://tfmetalsreport.blogspot.com/2011/05/cinqo-de-bottomo-part-ii.html

Of that note, here is the most important section. Again, this was written early last Friday:

"I have a last in July silver of $36.13. Above $37, the new shorts will begin to get squeezed and older (24 hours+) shorts will begin to sense that the fun is over and lock in some profits, thereby adding to the buying pressure. If we've indeed found a bottom, silver may, by Monday, trade back UP near $38-40.

In a traditional bottom, silver would then trade back DOWN toward $35 later next week. At that point we'd have the makings of a solid double bottom. THAT WILL OUR ENTRY POINT.

If you're not currently long, I would advise you against buying this rally. With a potential short-term upside of $3 vs a downside of $2, its just not a tradable proposition. IF, however, the next week or so plays our as I've described above, the risk:reward will swing dramatically in our favor and we can act decisively then."

Everything is going as planned for us. If you bought the dips last Thursday, the time to take profits would be IF we can approach 1520 and 39.50 tomorrow or Wednesday. Because I see such significant resistance there, I'd expect the PMs to stop and reverse, head lower and form a permanent bottom. By next week, gold would probably trade back down to 1490-1500. Silver could still go all the way down toward 35-36. DO NOT DESPAIR, however. IF this develops as I've projected, those levels would be fabulous entry points that would also coincide with the timing pattern I've been mentioning for about the past three weeks. All in all, I'm extremely confident that this CME/Cartel-induced bloodletting has reached its selling maximum and that happy, fun days are once again just over the horizon.

That's it for now. TF

4:45 EDT UPDATE:
Very, very nice afternoon action. 39.50 & 1520 look even more likely now than when I wrote this note 4 hours ago.
PLEASE take the time to click this link and read the entire article. A couple of things you need to know:
1) I am not "Avery Goodman" though its quite clear that he is a Turdite.
2) He still has hope for Bart Chilton, I don't.
3) He thinks QE will be ending. I don't.
4) It is definitely NOT a myth that the Comex can default.
5) The BoS are not a myth, either.
http://www.zerohedge.com/article/guest-post-anatomy-silver-manipulation-how-low-can-it-go
In the end, though, this article is so well written that it is a must read.
More this evening. TF

The Passing Storm

2011-05-09T10:08:00.000-04:00

So far, so good. The storm has either passed or we are simply in the eye. I guess we'll know if a few days.

For now, you might go back and re-read this:
http://tfmetalsreport.blogspot.com/2011/05/cinqo-de-bottomo.html
In silver, we can finally feel like we're making progress, maybe not so much in price but certainly from a technical perspective. All the panic liquidations seem to be over and we now have clear levels to watch for support and buying/selling points. Here's a 30-minute chart to help for today:

Gold stopped and reversed last Thursday. as well. The chart isn't nearly as damaged as silver or crude, reflecting that it has reassumed the role as the leader of the group. The area around 1520 will likely impede its progress for a few days but, through there, it looks positioned to head right back UP toward 1550 and 1570.

I'd also like to encourage you to go back and read this:
http://tfmetalsreport.blogspot.com/2011/04/where-were-you-on-super-bowl-weekend.html
As a bonus, there's a silver chart in there from before the meltdown. Ah...the good old days.

Anyway, as discussed in that note, the only tools the Fed has left in their "controlled demolition" of the dollar are talk and fear. They tried "talk" a few weeks ago but the "calvin" didn't hold. This time they're trying fear: "OOhhh, dat spooky EU gonna bweak up. Bettuh buy da dollah. Safe haven, ya know".
This latest "calvin" has once again spiked the POSX back up to its primary trendline. Where it goes from here is the real question. History would suggest that the next move is straight back down but, given all of the unusual and desperate craziness of the past week, it's impossible to say for sure.

Finally, here's crude. President O'bottom got his wish and price has been driven almost 10% lower. The prez may be able, by wagging his tongue and finger, to get his goons to spark a margin hike-induced selloff. Something tells me, however, that his bully pulpit power does not extend to the MENA region where the latter part of this month promises to get...(uhhh, shall we say?)...unpredictable.
The damage to the chart is real though and it will take some time to fix. If you're long, you need the area around $98 to continue to hold as it has become rather critical support.

OK, let's go get em.
I have lasts of 1502 and 36.83. Good luck today. TF

Calling Mama Ferg

2011-05-08T21:29:00.000-04:00

Just a short note this evening. I didn't want you to think I'd forgotten about you.

I still have to call Mama Ferg to wish her a happy Mother's Day. She reads this blog every day and has even taken to calling me "Turd" on some occasions. I must admit that its pretty funny to hear a 77-year old lady refer to her son as "Turd".

At any rate, silver is worth watching for the next few hours. The chart looks like it is going to break sharply, one way or the other. Because the ascending line in more steep than the descending line, chances are that silver will break higher and go test 36.50 and, beyond there, 37. However, since for the time being there are absolutely no limits to the shenanigans The Cartel is willing to pull, it could break lower, too. If it does, 34.25-50 has become pretty important support so we'll need it to hold or we're going to end up retesting the 33-33.50 area.

Either way, the action overnight is going to be technically significant so I'll be very curious to see where we are when I roll out of the rack tomorrow morning (U.S.).

Best of luck to all the Asian and Australian turdites. Please try to keep us afloat. TF

A Reader's Idea

2011-05-08T14:09:00.000-04:00

It's Mother's Day and while mother is being tended to by the LTs, I thought I'd try to clear my inbox. Fat chance I'll make it all the way through...I still have 132 unopened and unread. Sorry.

At any rate, reader "Jim" sent me this. I thought I would C&P it to start a discussion.

"Go to
http://www.store.firstmajestic.com/

and look at the prices.

And then go to ebay and see the prices there.

It's time to break away from the Comex. Everybody reads you, Turd. Wanna show the Comex that the pen is mightier than than the margin increase? Maybe you could say something and suggest that some producers and big retailers might want to look at making their own price based on demand, and not based on the Comex. What good does it do to sell at the Comex price if you sell out and then got nothing to sell? First Majestic is doing their own price discovery. And it's working. The best thing to do is for the real, physical, silver world to just walk away from the Comex. They have no silver. They represent no more than 5% of the market anyway. They sell a few million ounces every other month. The US mint sells way more than they do.

The Comex is about finished and you can hurry it along. All it takes is one or two others to do what FM is doing and the crowd will get the idea. No need to wait til they self destruct. We, the physical market, are so much bigger than the Comex. Screw them. They can't deliver real silver anyway. All it takes is some balls to do what FM is doing. I'm a seasoned business man. I know it, and I can feel it. It's the right time. Screw the Comex, we don't need them for price discovery. If a retailer does it, he can easily tell if his price is too high or too low. If there's more demand than you got silver, raise the price. If there's less demand, then lower it. Once a few biggies jump on the band wagon, it will all fall in place.

This will make you famous, Turd. You will do more to help all those people get through the coming hard times by doing this, than anything else you can do. The only thing that the Comex, owned by the EE, does for us is set the price, and FM is showing us you don't need them for that.

The price of most everything is tied to the wholesale price and to local supply and demand. Ultimately supply and demand rules, and the silver market is no different. The retailers can price the market, you don't need crooks in $2000 suits to do it for you.

If a dealer sets his own price, and a customer says, "Hey your price is way above spot." The dealer can say politely, "It's Ok, if you want to buy your silver from the Comex, go ahead. They don't have real silver for sale, I do." If some big dealers do this, at first maybe customers will flock to some on line dealer who has a lower price, but he will quickly sell out. In this time of short supply, it's the right time to do this. The market will make the price.

Tell the people to wake up. No need to be hypnotized by a bunch of scheming crooks in New York City in $2000 suits. They are scumbag thieves who take advantage of everyone they can. Let them screw each other over. If people want to play futures, let 'em. We don't need those crooks to tell us how much an ounce of silver should cost. It's time for the tail to stop wagging the dog."

Have a great day. More this evening after everything re-opens. TF

Derby Day

2011-05-07T08:40:00.000-04:00

After an historic week, I'm very much looking forward to relaxing with a mint julep while watching The Kentucky Derby. Instead of hourly and daily charts, I'm spending the day today with The Daily Racing Form. If I get time later, I promise to give you my Derby pick. Can't promise the same general accuracy of my PM picks but ole Turd has certainly been known to play the ponies from time to time.

For now, here's your reading list for this weekend:

First, my South American buddy, Gonzalo, has penned a great new missive:
http://gonzalolira.blogspot.com/2011/05/fiscal-spendingthe-steroids-of-gdp.html

Gonzo also links a very interesting interview of the great Bill Black:
http://gonzalolira.blogspot.com/2011/05/best-description-of-mortgage-mess-ever.html

Mark Steyn wrote this great piece a couple of weeks ago. He's just great. I wonder if he's a Turdite?
http://www.steynonline.com/content/blogcategory/13/99/

Silver was obviously the big story this week. First, here's a take from Santa:
http://jsmineset.com/2011/05/04/silver-being-silver/

Next, Jeff Nielson chimes in and he's pissed off:
http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=18630:the-new-operation-in-the-silver-market&catid=49:silver-commentary&Itemid=130

Trader Dan has a great chart on the gold:silver ratio:
http://3.bp.blogspot.com/-Q_waTQC2x3M/TcSFUuZmOLI/AAAAAAAAAZw/P2qUjRrB9p0/s1600/Gold-Silver.PNG
He also has a great gold chart:
http://traderdannorcini.blogspot.com/2011/05/gold-weekly-chart-analysis.html

Ole John Browne wrote a good piece yesterday:
http://www.europac.net/commentaries/silver_takes_it_chin

We're always talking about fundos here and this article sums them up quite well:
http://www.commodityonline.com/news/Silver-Strong-fundamentals-to-beat-transient-speculation-38740-3-1.html

I thought that this was kind of interesting:
http://www.resourceinvestor.com/News/2011/5/Pages/Silver-Clobbered-on-Multiple-Fronts-.aspx

And, hey, it may not matter anyway. The end is near:
http://beforeitsnews.com/story/602/771/Edgar_Cayce_Predicted_WW3_In_2011.html

I've received a lot of positive feedback regarding the WebBotForum interview I gave a few weeks ago. If you need some background noise today, you might check it out:
http://tfmetalsreport.blogspot.com/2011/04/hours-of-easy-listening.html

Finally, in the interview, I mention that I'd nearly chosen the pseudonym "Colonel Angus" instead of "Turd Ferguson". Many have inquired from where the Colonel Angus name originated. The link is below. Personally, I find this and the infamous "Cowbell" sketch to be the funniest SNL skits from the last 10 years.
http://www.hulu.com/watch/4109/saturday-night-live-colonel-angus-comes-home

For laughs, here's "Cowbell", too:
http://www.funnyordie.com/videos/80a71ef8cb/more-cowbell

OK, that's it. If I can come up with a Derby pick I'll let you know.
Have a great Saturday! TF

Cinqo de Bottomo, Part II

2011-05-06T10:52:00.004-04:00

OK, you can begin to see now how this is going to work. The final capitulation appears to have come this morning before the BLSBS report. We have since rallied over $3 in silver and are about to turn positive, taking back all of the losses since noon yesterday.

I have a last in July silver of $36.13. Above $37, the new shorts will begin to get squeezed and older (24 hours+) shorts will begin to sense that the fun is over and lock in some profits, thereby adding to the buying pressure. If we've indeed found a bottom, silver may, by Monday, trade back UP near $38-40.

In a traditional bottom, silver would then trade back DOWN toward $35 later next week. At that point we'd have the makings of a solid double bottom. THAT WILL OUR ENTRY POINT.

If you're not currently long, I would advise you against buying this rally. With a potential short-term upside of $3 vs a downside of $2, its just not a tradable proposition. IF, however, the next week or so plays our as I've described above, the risk:reward will swing dramatically in our favor and we can act decisively then.

More later. TF

2:10 EDT UPDATE:
If you are encouraged by today's action, I invite you to go back and re-read this post from Wednesday. Other than hoping for higher bottoms for silver and the HUI, the timing of it all and the buying points for the individual miners looks pretty good.
http://tfmetalsreport.blogspot.com/2011/05/return-of-nostradumbass.html

Silver failed to keep rolling today but it didn't get any worse, either, and, believe me, that is significant.
We have to start somewhere.

Hang in there. Relax and enjoy your Friday afternoon. TF

Stabilizing

2011-05-06T09:20:00.001-04:00

Just a quick note this morning.

As expected, the BLSBS report "surprised" this morning with an NFP number of +248M. As you know, I'd expected the metals to hang in there this week and then have the BLSBS cause a spike in the POSX which would begin a two-week downward consolidation in the PMs.

I thought the POSX could rally to 74.50 - pretty good.
I thought gold could trade down toward 1525-45 - not so good.
I thought silver would trade down toward 45 - only off by $10. What's the big deal?

Anyway, the point is, pattern is still present and there are some things that are still predictable. This string of 5 consecutive margin hikes is as cruel as it is unprecedented. The central planners are taking great pains to cover their policy mistakes and blame the evil "speculators". Even that worthless, empty suit Chilton has finally shown his true colors. Just another bureaucrat hack.

However, for now we still have a relatively free flow of capital around the globe. The tide has rushed out but it will, most assuredly, come rushing back in at some point. My thought all along (go back and watch the last Wicked Witch video for a reminder) was that after rolling over by today, the metals would consolidate through May 20. In the end, we rolled over earlier and much deeper than I'd expected but, nonetheless, the time schedule remains the same.

Let's see if the metals can begin basing from here. Perhaps silver will spend the next two weeks between 34 and 40. Gold should stay between 1480 and 1520. Then the fun begins anew as we turn the corner into June.

WOW! I'm pleasantly surprised to find that I have a last of 35.25 in silver and 1494 in gold! OK, that's a start. Let's keep it going, finish green and try to relax over the weekend. TF

Cinqo de Bottomo

2011-05-05T22:00:00.000-04:00

I'm really liking the action tonight. Frankly, I was expecting this last night and $4 higher but I digress.

Take a look at this. Note that just as the top last week came as a parabola, today's action has put a downward parabola on this hourly chart.

Remember, parabolas can't be maintained because, tangentially, you're going either straight up or straight down and, simply, that can't continue. We are ripe for a bounce for a number of reasons:

1) POSX has already run into the top-end of its Calvin near 74.25 on the June.
2) Silver down over 25% in 4 days.
3) Potentially lousy BLSBS report tomorrow am.
4) We already know that margins are being raised again Monday night. This removes a lot of the overhanging uncertainty, at least for a few days.
5) Seemingly everybody and their brother is now short silver.

IF silver can continue to rally, a virtuous cycle will develop. If you shorted anytime from noon yesterday to today, you're sitting on a healthy profit. As silver moves higher, you start thinking about ringing the register. Above $37, it gets pretty tempting to cover. At $39, the chart starts to look like a panic/capitulation bottom is in. Buyers begin to see a market whose fundamentals haven't changed yet is priced at a 20-25% discount to it's highs. Shorts begin to get squeezed and begin to cover even more quickly. This is what I HOPE will happen.

A word of caution, however. The pace and duration of the rebound will dictate whether we see a V-shaped or a double bottom. This must be closely monitored. Thankfully for you, I will be happy to do the monitoring. All you have to do is check back regularly for updates.

Good night and good luck. TF

Maybe?

2011-05-05T16:37:00.001-04:00

Though surely can't give you a bottom call with the certainty of "Turd's Bottom" back in January, if we are to have any hope that silver will halt its decline and reverse, it will happen here. This is a re-post of the chart I posted this morning.

As you know, it is useless to use traditional technical analysis in grossly manipulated markets such as the PMs. Regardless, we have to try to find spots where buyers might emerge, cause a reversal that leads to some short-squeezing and then, eventually, allow the market to stabilize.

IF we are going to see that happen with any kind of predictability, it will happen in the area around $34.
The POSX has finally "calvined" and has already moved to it's first resistance level around 74.50.
Gold is now $100 off of its high set on Monday (3 days ago).
Crude is down almost 10% on the day and is back under $100/bbl.

Everything that I would traditionally look at for a bottom is in place. Now, will it happen? Unfortunately, its impossible to say. The extent of the long-side liquidation is enormous and cycling (more selling leads to more margin calls which leads to more selling which leads to more margin calls...).

However, maybe just maybe, silver will bottom overnight around 34 and then trade higher. The BLS BS "disappoints" and the dollar sells off, back under 74. The metals turn and actually finish tomorrow in the green. We'll see. I'm hopeful but not necessarily optimistic.

Hang in there. TF

ps This note from Trader Dan is fantastic. Sounds like he needs to get drunk, too.
http://traderdannorcini.blogspot.com/2011/05/collusion-by-fed-officials-and.html

Guaranteed Silver Support Level

2011-05-05T09:33:00.001-04:00

I've spent the night poring over charts.
I've dried out 3 sharpies and broken two rulers.
My printer has blown through its warranty and is out of toner.
I'm existing on nothing coffee, Skittles, No-doze, amphetamines and meth.
And I've finally found guaranteed support for silver!

The charts clearly show that in the area between $0.00 and $1.00, silver looks great! I pulled up some 6,132,000-hour charts and found that silver has never been valued less than dust or navel lint. It has always retained value! So get ready with your orders to buy in the area around 50 cents. IF that area is breached, look to buy some more around $0.20. Use a tight stop at -$0.10, though. IF silver blows through there...

In all seriousness, this just a joke. At this point, God Himself could come down and declare that only physical silver can guarantee you entry into Paradise and still the algo-driven douchebags would be selling. Of course, they sold their souls long ago so, why would they care anyway? Amazingly, the ECB announces permanently low rates, jobless claims are incredibly bad, the POSX is in the shitcan and the entire Comex only has enough silver to settle 6500 contracts and yet silver is down another $2. All I can do is laugh. This is what sucks about trying to trade the PMs. You can see everything clearly and be 100% correct in your fundamental analysis but the Forces of Darkness can be so powerfully aligned against you that it simply doesn't matter. We are right however and, in the end, sanity will return. Until then...

Screw em and, for crying out loud, don't sell your physical metal. If you're really worried about the price at which you can convert it back into fiat, then call Lind-Waldock and buy yourself some puts. Here's a link that tells you how to do it:
http://tfmetalsreport.blogspot.com/2010/12/opening-options-account.html
In the meantime, kick back and watch the action. Here are some charts that give you some levels to watch.

It is Cinco de Mayo so maybe you should take the rest of the day off. If you need to make a few extra dollars to cover your margin calls, you could go out and mow lawns around your neighborhood as you can be assured that the regular crew is on holiday today. If not, kick back and maybe nail a shot of Patron every hour on the hour until none of this matters anymore.

Hang in there. TF

The Return of Nostradumbass

2011-05-04T15:52:00.004-04:00

Got to admit, the last time I felt this lousy and defeated was the night of January 27, when I wrote the entry linked below. Please take a few minutes to review. Not only are all of the points I made still valid, maybe my emotions have once again called the bottom. We can only hope.
http://tfmetalsreport.blogspot.com/2011/01/sour-grapes.html

Many have asked about the miners. First of all, I guess we now know why the miners stunk up the joint for the past two weeks. For years, the miners have been used as a reliable indicator of future, short-term price trend in the metals. In our euphoria, most of us failed to fully heed their recent warning. Live and learn (again), I guess.
Now, the question becomes, when do we buy them again? Well, first, we have to look at a silver chart, a gold chart and the HUI.

All three look like they could go a little farther down but not much. A bottom in the metals and the miners may be close at hand. For buying the miners, let's watch and see if the HUI can move just a shade lower, down near 540 or slightly below. At that point, it would be very close to it's 200-day moving average, which is an area from which it has rebounded before. As you look at all of the individual charts below, notice how many are just a shade above their critical buying points, too. To me, this says that we should give this all a couple more days. Let the HUI move toward 540, gold toward 1490 and silver toward 38. The convergence of all three at support levels should be enough to stop the bleeding and begin the reversals.

Here are your silver charts. Pick your favorite and pick an entry spot with which you're comfortable.

And here are your gold miners:

OK, that's it for today. I think I'm gonna go get drunk and forget about shit for a while.
I'll have more later only if I sober up and/or something significant happens. ;)
Turd out.

p.s. The new site will have a live chatroom. We're looking to perhaps integrate the current offline chatroom to save time and expense. Does anyone have the web address and current password?

7:00 pm EDT UPDATE:
I'll try to type legibly but this is how I feel right now:
http://www.youtube.com/watch?v=DYusPRre07k
I want you to re-read this:
"Second, you absolutely must read this. If you don't fully grasp it the first time, go back and read it again.http://www.zerohedge.com/article/another-decline-registered-silver-brings-total-comex-physical-multi-year-lows
33,000,000 ounces means the Comex only has enough silver to settle just 6,600 contracts. That, my friends, is the financial equivalent of blood in the water.
Please understand, all of the recent Cartel-inspired bloodletting is directly related to this issue. They needed to scare sufficient quantities of specs out as well as remind potential "sharks" that they still make the rules and won't go down easily. They also desperately need to buy time, too. It's worked.
But the sharks are still there, watching and waiting. If you observed the action Sunday night, you saw that the steep drop was not so much an EE beatdown as it was a total absence of bids (buyers). This trend has continued yesterday and today. Our BoS seem to be regrouping and planning their next move, all the while the price continues to come in and offer even more attractive entry points for them."
And then read this:
http://www.zerohedge.com/article/cme-margin-hike-4th-and-5th-charting-parabolic-rise-cme-silver-margin-hikes
Be patient. We've lost a battle but the war continues.
A moment is coming where, in their arrogance, they will have overplayed their hand.
This may be it. TF

Givers and Takers

2011-05-04T13:16:00.000-04:00

Wow, the hate and the venom that is unleashed when things don't go according to plan certainly is disappointing, though not unexpected.

Please never forget that this site and the new one are, first and foremost, about preparing for the end of the current, global financial system. The desperate events of the past nine days should only serve to reinforce in your mind that this end is certainly coming. Sooner rather than later.

Our work here (yours and mine) is about helping the 99% of the population that is in the dark, blinded by normalcy bias and distracted by their everyday stresses. We must help them prepare. It is our duty. The new site is being designed to allow us to leverage each other's individual knowledge and expertise. The goal is obviously to grow it and give it as wide of visibility as possible. To that end, I share with you my insights and projections on short term movements in gold and silver. If that is what drew you to this site, great. Once you're here, though, it is hoped and expected that you will stick around and help the overall community.

So, with that in mind, I have a message for all the hatemailers and hateposters: Please leave this site now. A "first time poster" or "lurker" who only now joins the conversation in order to vent and complain is of no value. These people are TAKERS not GIVERS. Being lurkers, all they've ever done is steal from the information given freely at this site, never posting before today to add their own insights and knowledge. And now, without ever giving anything back, they complain and try to pass off responsibility for their own personal over-leverage and greed. Shameful.
I repeat...IF you are one of these people, please go away and don't return.

The Knife Catcher

2011-05-04T09:15:00.002-04:00

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

Smells Like Capitulation

2011-05-03T15:37:00.002-04:00

At least for now.

I like it when I'm right about the UPside. Unfortunately, I seem to be able to predict the downside, too.

"In silver, I think its pretty clear now that a test of the Sunday evening panic lows of 42.20 is coming. Maybe as soon as later today. I expect a bounce there and that may be it but I doubt it. Momentum now is to the downside in silver so it looks like even further weakness is coming. Combine that with the short-term dollar strength that I expect later this week and I think we're going to get a look at 40. If you miss it, don't dismay. Next week, we'll probably get a re-test of whatever the bottom ends up being before basing and heading higher into the end of the month and early June."

I hope that you are surviving this freefall and have not found yourself in a position where you have been forced to liquidate. Santa has cautioned for years against using any kind of margin and I must concur. The long-term trend for the PMs remains intact. The fundamentals have not changed. The only way you will consistently lose money in the PMs or any market is if you let your emotions (and margins) get the better of you and force you to buy high and/or sell low. The last month, particularly in silver, has been nothing but a gravy train ride higher and, in markets like that, its very easy to get complacent. Over the long run, the key to making money in the PMs is to sell when everyone else in buying and buy when everyone else is selling.

To that end, though we are about 10% lower (and two weeks earlier) than I thought we would get in silver, pattern still suggests that lows will be found soon and silver will reverse. I am currently waiting with orders for July $45 silver calls that should get filled if/when we get to $40 or slightly below. I'm also trying to buy some August $1550 gold calls that should fill if/when gold reaches $1525.

Remember this one very important point that we discussed last week. Highs are not made and "bubbles" are not "popped" when everyone is telling you to sell and the risk seems to outweigh the reward. Peaks come when everyone is telling you to buy and no one sees any risk at all. Think Nasdaq in early 2000 or real estate in 2007.

Hang in there this afternoon and tonight. These endless margin hikes are certainly aggravating and, based on today's action, it looks like another one is on the way.

I'll have more later when I have a few minutes to calmly contemplate all of this week's events. TF

8:45 pm EDT UPDATE:
Two quick things.
First, I fully expect silver to test the lows from earlier today, perhaps as soon as later this evening. That level may hold but I still expect a final dip toward $40 or slightly below. When I buy, I will also be buying time. The July calls won't expire until late June. August gold calls won't expire until late July. Lots of time built in to make up for timing inaccuracy in my purchase.

Second, you absolutely must read this. If you don't fully grasp it the first time, go back and read it again.
http://www.zerohedge.com/article/another-decline-registered-silver-brings-total-comex-physical-multi-year-lows
33,000,000 ounces means the Comex only has enough silver to settle just 6,600 contracts. That, my friends, is the financial equivalent of blood in the water.
Please understand, all of the recent Cartel-inspired bloodletting is directly related to this issue. They needed to scare sufficient quantities of specs out as well as remind potential "sharks" that they still make the rules and won't go down easily. They also desperately need to buy time, too. It's worked.
But the sharks are still there, watching and waiting. If you observed the action Sunday night, you saw that the steep drop was not so much an EE beatdown as it was a total absence of bids (buyers). This trend has continued yesterday and today. Our BoS seem to be regrouping and planning their next move, all the while the price continues to come in and offer even more attractive entry points for them.
After successfully buying the time needed to escape May, The Cartel will have a few weeks now to round up more silver for July. They're going to need it.
TF