The Dipman Cometh

Wow, what a brutal day today was, particularly in silver. The short-term charts of silver and gold both look awful and both look to head even lower. However, a trading opportunity may be about to arise so pay attention this week.

First up, the POSX is trying to rally but it has having a devil of a time getting by the 76.60 area on the chart. Note how quickly buying enthusiasm dries up each time it reaches near that level. One more failed attempt at that level may inspire the dollar bears and, as we all know, a weakening dollar adds buying support to the PMs.

paper_6-27pm.jpg

So, what does this mean for the PM trade? Both have been savagely beaten over the past three trading days. Silver is down about 9% and gold is off about 4.5%. Yikes! Hold on, though, a brief interruption is necessary:

[ Why was gold taken down? It looked so good last Wednesday. That's the point. In hindsight, do you really think The Fed was going to allow gold to make new all-time highs at a time when they are supposedly showing their "hawkishness" regarding additional QE? How could that be spun by their friends at CNBS? I can just hear LIESman: "Fed chairman The Bernank said today that all is well, inflation is under control and that the economy is just in a 'soft patch'. In other news, gold closed tonight at an all-time high of $1565". Not happening. Solution: Lower margins on gold to suck in some additional longs then have The Empire put the hammer down by creating extraordinary amounts of new paper. Did you see the CoT report from Friday?? Through last Tuesday, The Empire added an additional 9,805 new short contracts. That's almost ten fucking thousand! In a week! Then, add some more on Wednesday and Thursday to get the ball rolling downward but cover some on Friday and today while spec longs are liquidating because of margin calls. (Just watch, the CoT this coming Friday will show about a net neutral to the Empire cumulative short position.)  Oh, and don't forget the secondary benefit: Trashing gold provides cover for JPM to hammer silver. Taking 10% or so out of silver this close to first notice day has the effect of "persuading" those considering standing for delivery to instead roll out of July contracts and try again some other time. In the end, when you own the arena and you make the rules, it's pretty tough to lose and The Fed, through The Empire, just won again.]

OK, back to the possible dip buying opportunity. As mentioned above, the short-term charts look lousy so expect further weakness in the PMs tonight and tomorrow. Maybe the POSX will take another stab at 76.40, too. However, big moves in short periods of time invariably create overbought or oversold conditions and we are very close to oversold in the PMs. Both are also closing in on pretty stout support levels, too. Therefore, IF you are inclined to gamble a bit, a trade opportunity may be about to present itself. IF you get a chance tomorrow or Wednesday to buy some gold below 1480 and/or silver below 33, you stand a pretty good chance of catching a tradable bounce. Gold could easily spring back toward 1515 and silver looks like 34.50-35.00. It's not much, I know, but when you're in the doldrums, you've got to take what you can get.

paper_6-27pmgold.jpgpaper_6-27pmsilv.jpg

Have a great evening!! TF

p.s. Due to popular demand, we've opened two new forums. First, there's now a forum for foreign currency trading. Not my specialty but, if it's yours, go there and check it out. The other is a forum specifically designed for members to add their own charts on anything/everything they follow. Have at it!

80 Comments

robreke's picture

prima!

prima!

jaj64's picture

Encouraging...

Encouraging news on an otherwise typical summer doldrums day.

Thanks Turd!

Blue Sky's picture

Keep up the great work Turd

Hard to remain positive but let me be the FIRST tocongratulate you on the half full glass.

WineGuy's picture

Launch Time

As great as Turd is in reading the micro charts no one knows what tomorrow brings. This game is rigged! May 1st threw everyone a Ag curve ball. IMHO July 1st or better yet Monday July 4th (Tuesday July 5th for USA) will throw everyone another Ag & Au curve ball. This time in the opposite direction. If you own physical and quality miners and are not leveraged ...... Relax, the end feels near. 

kliguy38's picture

ITS THE GAME

If any of you on this board have any doubt now about the Power behind these levers still then you probably still think there is a tooth fairy. Of course there are many out there believing we are in a market that trades "fairly" and according to "market forces". Ultimately there is some truth to that but real control of these markets will never be changed and they will ultimately have a lot to do dictating how this PM trade unravels. Don't shake out of your trade. That's all part of the game. I still think we see silver trade below 30 but that is certainly NOT a guarantee. I also think they want to see the $HUI at 426 area..... NONE of this is certain and I maintain a healthy core of miners. I won't add unless I see the 426 or higher highs and higher lows.......This is where the trade reaches the maximum fear level..........thats their game. Couple dire predictions of gold and silver dumping by their MSM shills and many of you will puke. Keep that store of fiat in case they REALLY crush the prices but hold tight here. gl

Gont's picture

June 30th

Can't wait for June 30th  (or is it July 1st ?) to see who's gonna buy those pieces of sh*t US treasuries

Eric Original's picture

Bad Timing on this article

Here's an article about how the silver miners are oversold, dated 6/26.  Rather unfortunate timing, given today's action.

http://seekingalpha.com/article/276656-oversold-undervalued-silver-miners-have-started-to-rally?source=yahoo

Eric Original's picture

Dividend paying Miners

Here's a good source of info on miners that pay dividends.

http://www.buyupside.com/sample_portfolios/goldsilverdividend.php

TheGoodDoctor's picture

Turd and all. OPEC is very

Turd and all. OPEC is very pissed about the strategic oil release. I read of a rumor that they could reduce production further or even stop selling to the US to cause pain for said strategic oil release. I'll see if I can find the link.

http://www.zerohedge.com/article/iea-opec-nash-equilibrium-collapses-1973-style-opec-embargo-next

Duh! Of course. Zero Hedge! LOL!

So, my point is, what happens if the spigot gets turned to a trickle or even off? There are many things happening right now. And a lot of them could spike gold and silver at any moment.

Even earnings could suck this quarter. That could be a catalyst as well. What do you all think?

TheGoodDoctor's picture

Eric Original thanks for that

Eric Original thanks for that link but it is not complete. Two noticeable exclusions that have been left off are El Dorado Gold and Silvercorp Metals. There are probably others that I can't think of. Is there a way to submit dividend payers to that web site?

Greeno's picture

Falling gold price

OK, so the price of gold has taken a nosedive - thick end of 30 GBP in days.

So how come the price of physical has dropped all of 8 GBP?  Less on some online sites.

Is the much heralded disconnect underway, or is it a case of the vendors keeping their powder dry in anticipation of a rise?

Regards, Jim

Spinny's picture

I want to know when in the

I want to know when in the world the equity markets are going to price in the end of QE2???? I hope its this week as my shorts are gettin killed. I really wanted to sell today thus I decided to hold on. Surely equities have to sell off soon.

All this stock market going up when the greek PM itches his but is bull crap. We didn't have  a default priced in to begin with. This market is pathetic. If you are a rational/common sense person, decide what you think will happen and then do the opposite. You will be rich in no time.

Eric Original's picture

GoodDoc

I see it's missing Wesdome as well.  I just found it myself, no idea how to contact the site.  Maybe we should have our own thread on the subject?

TheGoodDoctor's picture

@Spinny when it is realized

@Spinny when it is realized that QEII was a farce due to the companies reporting Q2 earnings. That is my opinion. That and after June 30th which is the official end date. Someone either above or at the end of the last blog post had linked to an article that Eric Original posted about the Fed going to buy/reinvest 300 billion in treasuries over the next 12 months. So, how's this for a time frame. Between now and 12 months. LOL.

Seriously though, my guess is sooner rather than later. And don't forget this article from ZH.

http://www.zerohedge.com/article/prepare-surge-treasury-issuance-soon-debt-ceiling-lifted

Says that $265 billion in treasuries will need to be sold as soon as debt ceiling raised. That is bullish for gold and silver too.

TheGoodDoctor's picture

@Eric Original. Agreed.

@Eric Original.

Agreed. Dividend paying silver stocks thread and gold stocks. Sound great. And lots of people will be interested.

PS I started threads in both forums. We can get them stickied and I will edit once that gets granted on a sticky.

Darth Smoker's picture

Interesting Pattern Repetition to Monitor in Gold

Been following this guy for a while

http://blog.afraidtotrade.com/ 

Interesting Pattern Repetition to Monitor in Gold 

Jun 27, 2011: 4:50 PM CST

There seems to be a clean pattern repeating itself today that developed exactly one year ago which I’m finding interesting.

Let’s take a look at the pattern then, compare it to now, and over the next few weeks, see if the current future pathway of the pattern plays out as it did back in July 2010.

First, here’s the broader picture which shows the repeating pattern of price swings:

click on link above for more

 
BillAuAg's picture

Interesting how the dollar is

Interesting how the dollar is falling right after China says "We will save the Euro" and "We hate dollars"

Vypuero's picture

Spinny

...feel the same way.  Markets are strong despite vast amounts of bad news.  It makes little sense.

BillAuAg's picture

They will talk and bitch, but

They will talk and bitch, but oil is money for the moneyless rich

tmosley's picture

As a buyer of silver, I am

As a buyer of silver, I am happy when the price retreats.

Things are going to look quite different come July 29th.  If you're long physical silver, you're gonna like the way it looks.  

silver_hunter's picture

Lower margins on gold to suck in some additional longs then have

That's exactly I would say few days ago,  I had a gut feeling that it was a trap.

Raise margin for silver future contract and reduce margin for gold, wow, the EEs really kindly does speculators a favour, does it?

short general market to hedge my PM long position.

FriedEggs's picture

Sunny Side Up

Hey Fellow Turdidians...

It took 30+ years from the 80's for Silver to get back to the $50 range and like a smart individual said, "It wont take another 30 years to get back there again." Not even close - more like, 'months away' which of course is really positive...

And Gold, well geezzz, we all know that who ever owns the most of it... apparently rules http://www.usdebtclock.org/gold-precious-metals.html

Now, its a bit irrelevant if the numbers are not accurate and thats not there true holdings, the point is whoever owns it (or says they own a lot of it:) has power. Just how it is for the past 5,000 years...You dont see many poor countries on that list. You cant be a big country for the most part and have zero gold i dont think, please correct me if im wrong.

Anyway, don't let 'them' take your summer away too...i guarantee a few of you are mentally wishing we are in fall so we can  see those higher prices for our PMs. We are basically in July and August now...its vacation season, time to enjoy visiting our family and friends and do whatever else you like to do...Again, just a lil patience...ohhhhh yeaaaaa...I been walking these streets at nighhhttttt.... 

Also, remember that PMs are just a piece out of this game we are playing, there are other things that you need to pay attention to and lots of those other things are discussed in the forum section... Its time to get street smart, get back a bit to your natural instinct as we will need it...

Fried(e)

SilverTree's picture

BTFD

Buy that Effin dip!

Rusty Gates's picture

banconosis/sovereignosis

First post and shout out thanks to TF!!!

I always enjoy a Ben Davies read.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/6/27_Ben_Davies_-_Revolting_PIIGS.html

bensgone's picture

Who really manipulates the price of gold and silver?

Holidays are always a weak time for PM prices. We are also in the weakest time of year for PM's, i.e. the summer doldrums. So, in my opinion, we will not be out of the woods until the 5th of July. It does not mean we are all clear, as we have the rest of the summer doldrums to deal with. But, if things have fundamentally changed, with respect to the power of the EE, we could see an early start to the typical PM seasonal rally. Last year it started in mid August. This year it should start sooner. When is anyone's guess. But, if they are losing their grip on the market, then it should be sooner than last year. I am hoping the beginning of august should be the start of this years rally in PM's.

I guess we all now know that there appears to be no weakening in the EE's power to manipulate all markets, not just the PM's. It is my understanding that this power was consolidated over the last two and a half centuries. It was carefully, scientifically, and meticulously crafted with the same precision it took to create the first atomic weapon. Concocted in total secrecy over a very long period of time were their diabolical plans carefully laid.

Some have mistakenly believed that one institution, namely JP Morgan, was largely responsible for the manipulation of the silver prices. But, what I think most fail to realize is how integrated the global financial system really is. Turd suggested a great article by James West, entitled Dizzying New Heights of "Global Criminal Enterprise".
http://lewrockwell.com/orig11/west-j2.1.1.html   I implore everyone to read this great article, which outlines very succinctly just how pervasive this EE really is. It remains to be seen just if, when, and how this global cabal of criminals will be brought down. But, I am convinced that it begins with each of us extricating ourselves from the "matrix" combined with a mass awakening of the populace to this centuries old "global criminal enterprise". If you have not read this article, below is an excerpt from it:

Gold and silver, despite being tiny markets in comparison to the derivatives scam they support, are the focus of the cartel apparatus and management for the simple reason that within the performance of the unencumbered gold and silver spot price market, the smoke emanates from the gun in use during the crime. And as everybody knows, where there is smoke, there is, or soon will be, fire.

For now, however, the poor dumb bastards who bought gold and silver, and in a panic, have sold at a loss are now back in the hands of the pro-dollar-anti-gold majority that is the mentally enslaved canon fodder for the cartel. They will see gold and silver rise strongly in the inevitable next leg up of the gold and silver bull market, but they will willfully ignore the evidence of the broader trend, and warn anyone sufficiently naive to listen of the feckless injustice and stupidity of buying gold and silver, and use the example of his own stupidity to prove the veracity of his advice.

Such is the world we live in. Governed by misanthropes and sociopaths, the world economy is on the ropes, and the banking dynasties are in fine form. On August 9, 2010, Goldman Sachs reported to the Financial Crisis Inquiry Commission that 25 to 35 percent of its revenue was from derivatives. Something to keep in mind the next time you see the mainstream financial press publish a story in which Goldman Sachs says "sell" or "buy" commodities.

kingboo's picture

Context!

i love the insight on this site. Been reading Turd for 6- 7 months, love it. So, thanks to all.....not just Turd, thanks to everyone. Nuff of that. I justed wanted to say that it's tough for me to keep my macro-perspective AND keep a daily eye on the markets......one day i wanna jump, the next day i wanna hide in a hole. My point is this, the insanity and lack of predictability in the markets is way more indicative of their desperation than any other tell they could possibly give us, so, after i take a deep breath on a Monday night like tonight, i need to remind myself...they are desperate, i am not. Peace.

buzlightening's picture

Some good info from board members today.

Nice to have CONmex OEX futures out of the way.  Now back to upward business as usual with PM's.  If not now?  Between now and the end of the year, anyone buying physical will not be disappointed.  Paper fiat accelerates the burning breakdown to ashes. 

Seacap81's picture

SUMO Precious Metals Move

There is a technical move in Sumo Wrestling where an opponent rushes the other to pulverize him and move his body out the circle and win, but there is quick countermove to this Sumo move.  Instead of the Sumo Wrestler taking the full force of his approaching opponent he quickly sidesteps the on rushing Wrestler and whips around and pushes his opponent allowing his full momentum to take himself outside the circle.  This quick countermoves results in victory. 

So what does Sumo wrestling have to do with trading paper silver and gold you ask?  Imagine EE to be the big fat 500 pound sumo wrestler heading for us with their short positions upon short positions upon their glorious naked short positions as well as their unlimited fiat backing.  Yeah, that is a seemingly fat unstoppable Sumo monster heading in our direction.  So why does a smaller Sumo (all of us) stand there and try to pound back pound for pound when we have no chance?  

Isn't the object among us all to have our hard money not to be artificially priced anymore, to have the true prices reflected in our collective stashes.  Is Gold 5k, 10k, or 25k an ounce?  Is silver $100, 500, or 2k an ounce?  We will never know if we stand there and take the fat Sumo's body blow every day by getting long silver and gold contracts.   There is another way to fight using the countermove I described above.  We all need to walk away from the pits and stay away.  Do not provide any liquidity, but more importantly not take any LONG positions in silver or gold contracts.  Let EE, the 500 pound sumo wrestler, have all the momentum they want driving prices lower and lower.  The countermove occurs as we all move our fiat into the physical metals in ever increasing quantities as the Fat Sumo shorts and shorts and drives prices drive lower.  How long before the silver supply has vanished?  I realize the industrials will still be in the pits purchasing long contracts, but so what, they intend to take delivery.  That is what it is all about, removing all physical from the market.  

Let the EE have their way, let them short until their hearts content.  It would be great for us, as we would have a true price discovery in very short order IN THE PHYSICAL MARKET.  We would get that price divergence we have long dreamed about where the paper price is no longer relevant and the physical price has it's own market and price.  If the only thing that comes out of this Counter Sumo move is that paper spot and physical price diverge wildly, we will have won as it will expose the fraud on the Comex, thereby creating the likelihood this exposed fraud drives prices even the more.  Anyway, something to think about. 

kliguy38's picture

ben roberts

Nicely done......just remember though......when you are in this market......then that makes one not only a participant.....but an accomplice. Morally equivalent perhaps as those that compose the centuries old cabal. An insider of the cabal that "educated" me on the game made it very clear that playing in the casino makes you part of the problem that you have to be aware of.  As you stated this game is centuries old and the feckless participants will continue the same patterns. gl

mrgneiss's picture

tmosley.......

"As a buyer of silver, I am happy when the price retreats.

Things are going to look quite different come July 29th.  If you're long physical silver, you're gonna like the way it looks.  "

Is that when you anticipate the game of musical chairs at the COMEX coming to an abrupt stop?

It certainly seems like there is still a unusually large amount of open positions for July with first notice day only a couple of days away, when is first notice day for July exactly?

However, we have seen this movie before.  I think that day will come, and as time goes on it gets closer and closer, I certainly wouldn't bet the farm that it will be July, but on the other hand I'd certainly be willing to make a small bet.

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