No Raid Today?

Ole Pigatha Christie looks so awful right now that The Forces of Darkness have seemingly decided to stay away from the PMs today. Don't get too comfortable, though, because they are definitely lurking in the shadows.

Longtome traders know that the Forex markets are where the real action is. Individual equities, bonds and commodities can always be searched for clues but, if you really want to judge global opinion and trend, you look to the currency trade. With that in mind, I think I can now predict when the U.S. debt ceiling "crisis" will end. Take a look at this chart of the POSX:

paper_7-26pmpig.jpg

We've seen this movie so many times before that we know the ending. The POSX is now just a scant 50 basis points above the low/bottom made in early May and, below there, all that remains is hoped-for support near the lows of early 2008. I fully expect a "deal" will be reached and a "grand compromise" will be accepted at about the same time the POSX reaches or moves just below 73.30. Watch that level very closely in the coming days. As it effects PMs, you've already seen a couple of steep selloffs due to rumors. News of an actual "deal" will almost certainly be met with a similar reaction. The Cartel will pounce and we'll all get another opportunity to buy the dip.

Frankly, I'm ready for all of this crap to be over with anyway. Let's get a deal done simply so that we can get the obligatory dollar rally and commodity selloff over with. With that behind us, the markets can begin to focus on:

1) From where will the next $2T in debt come? More QE, anyone?

2) The terrible U.S. economy and employment numbers. More QE, anyone?

3) Possible downgrade of U.S. credit rating. More QE, anyone?

These charts all look terrific. I'd really like to buy some crude but I'm having "liquidity issues", myself. The fact that I want to but can't virtually assures that crude is finally headed back through 100 very soon. Copper is very strong and portends higher PM prices in the coming weeks. Silver, once it gets through 41 should move quickly to 42-42.50. Gold just keeps heading higher.

paper_7-26pmgold.jpgpaper_7-26pmsilv.jpg

paper_7-26pmcop.jpgpaper_7-26pmcrude.jpg

So, anyway, here we sit. I'm still long my spreads in Dec gold and silver. If we can get the spike to 42 and 1650, I might take them off and hope to reposition. Until then, I'm just stuck watching and waiting for something to happen in DC.

More later if necessary. TF

207 Comments

Dr G's picture

Funny that we are all waiting

Funny that we are all waiting for a raid (and corresponding debt deal) so that we can get on with our lives and stack it up!

That's why today's nice gain are so hard to stomach--they are fake and inflated and will come crashing down the moment the debt deal is announced. Very frustrating indeed, but at least we know the game they are playing.

I loved CaLawyer's comments in the prior thread about the gold/oil/silver ratios. They are all stalling at 1600/100/40 waiting for the market to open up so we can play ball. What a great summer we are witnessing for the metals and commodities.

Morpheus's picture

Silver once again beat down

Silver once again beat down from 41 ...

FunCity's picture

Beak dancing

We cant break 100 oil, 1620 gold or 41 silver, wtf..........come on obama, tell the truth like you told everyone you would, thats we why we like you....................

Dr Durden's picture

Keep stacking your

Keep stacking your FRN's kids...

http://www.wtfnoway.com/

I'm long wheelbarrows.

buzlightening's picture

CONmex gold/silver futures OEX today.

Nice to see the EE running out of dry powder and needing to take an illusion stand at much higher prices for gold/silver.  The bankster gANGSTER fraudsters have done it now for over a decade.  NOT SURPRISED WE GO HIGHER! Turk had great comments Monday and Embry today at KWN.  Certain most here check & read those comments from those who know the plight of future fiat; Zeroooooooooo. 

Shill's picture

U.S. Debt Visualized: How It Literally Stacks Up (GRAPHIC)

http://www.huffingtonpost.com/2011/07/26/us-debt-visualized-graphic_n_906239.html

Lol we have some serious problems afoot.

Please excuse my LOL, I mean all you really can do at this stage is laugh, at least that is free.

Monedas's picture

Doldrums, Doldrums go away !

There is no basis to the rumor that Monedas will be replacing perma-bear Jon Nadler at Kitco ! Monedas 2011 Although it would be an excellent idea !

sevin's picture

ZSL is very close to 52 week

ZSL is very close to 52 week low(within a cent). tempting to pick some up before the debt deal is reached

silverwood's picture

PM miners giving metal rise a big YAWN!

I've watching the volume on GBG on a 1 minute chart. I find it interesting that every attempt to rally the stock price is met with a 20K to 50K share block being sold. HMMM!

Violent Rhetoric's picture

How ironic if we get a US

How ironic if we get a US downgrade and treasuries rally. UST's are certainly strong today.

murphy's picture

A Cali re: oil/gold ratio

Don't know if you caught this from the last thread.

Apologies for the repost. Very lengthy article in the link.

@ Cali

There is definitely something to what you say. Here's a snippet from FOFOA.

To collectors, however, the most interesting Saudi gold coins weren’t coins at all; they were “gold discs” Similar to coins, they were minted by the Philadelphia Mint in the 1940’s for Aramco, and bore, on one side, the U.S. Eagle and the legend “U.S. Mint, Philadelphia, USA” and, on the other side, three lines on the fineness and weight. They looked like coins, they were used as coins, but, technically, they weren’t coins.


In the 1950’s, numismatists were puzzled by these “discs” until - in 1957 – the story emerged in The Numismatist. Aramco, required to pay royalties and other payments in gold to the Saudi government, could not obtain the gold at the monetary price fixed by the United States so the U.S. government specifically began to mint the “discs” – actually bullion in coin form for these payments. In 1945, for example, the mint turned out 91,210 large discs worth $20, and, in 1947, 121,364 small discs worth $5, according to The Numismatist.
(Saudi Aramco World, 1981 print edition)

The coins were struck in Philadelphia by the United States Mint in 1945 and 1947 to satisfy the obligations of the Arabian American Oil Company, or Aramco, which had been set up in Saudi Arabia by four American oil companies. The company was obliged to pay the Saudi Government $3 million a year in oil royalties and its contract specified that the payment be made in gold.

The United States dollar at the time was governed by a gold standard that, at least officially, made the dollar worth one thirty-fifth of an ounce of gold. But the price of gold on the open market had skyrocketed during World War II.

For a time the Saudis accepted payment in United States currency, but by 1945 they were insisting that the payments in gold be resumed. Aramco sought help from the United States Government. Faced with the prospect of either a cutoff of substantial amounts of Middle Eastern oil or a huge increase in the price of Saudi crude, the Government minted 91,120 large gold disks adorned with the American eagle and the words "U.S. Mint -- Philadelphia." (New York Times, 1991)

US Mints ‘Gold Disks’ for Oil Payments to Saudi Arabia

here's the link

http://fofoa.blogspot.com/2010/10/its-flow-stupid.html

SilverWealth's picture

good call

Its a good call by the Great Turd of Oz. They will move to prop the dollar the second it threatens to blow thru the floor.  Tiny Tim will just commandeer the controls and start punching orders in whatever time of the day. This is the Forensic Trade based on past criminality.

Its always very tempting to 'buy strength' into highs like this and most of the time its the jab that sets up the big right hand down on top of the head from the banksters. But if you buy in increments you can have it both ways so a foot is definitely in the door I just hope their is not a hungry Valosiraptor on the other side . Small slivers for this potential top because I have no idea where it goes from here.

LongGoldLongSilver's picture

The yen is laughing

Japan has been pumping money into the economy for 20 years. Still the yen just laughs at the US dollar...

http://www.economicfreefall.com/2011/07/king-dollar.html

ginger's picture

Paging EricO... Gotta a bone

Paging EricO...

Gotta a bone to pick with you. ...Your conversation with Margarita this a.m. made me decide to run on over to my friendly neighborhood Walgreens to pick up some Celebrity hams because I started thinking, 'maybe Eric has a point there and those hams would be great prep additions'. ..So, off I go. .....I was stunned ...STUNNED I tell you to see that the tiny little canned hammies were just under $5! surprise

So much for $1.99 - $3.99. .....I guess price inflation has hit hard in my neck of the woods already. angry

(I will keep a watch on the sales though and online.... THANKS for the tip as usual;)

exiledbear's picture

All I know is the Mon/Tues correction you usually get was muted

And it's a low probability event, seeing $20 spikes like that at the open on Sun night. But then we get to the Monday/Tuesday selloff and it's quite slow and sideways.

I dunno, I think all of this could be more serious than anyone's seeing right now. Gold is sensing something out there in the future.

Eric Original's picture

GInger!

Didn't I say to watch your Sunday sale fliers?  Patience, Patience!!!!!

Sometime soon they'll go to $1.99. Or maybe 2 for $5 in your Zimbabwean neck o' the woods.  Usually limit 2.  So I make several stops and get a dozen or so.  Of course, by me there's a Walgreens on every corner so I just go from one to the other and get two at a time until I got enough.   Do it again the next day if needed.  Sales generally run Sunday to Sunday.

Still, when the time comes, hold out for the Denmark ones.  Really pretty darn awesomely good little hams for the (on sale) money.  yes

EDIT:  I think you can also check your Sunday sale flier right online too, just in case hubby already wrapped fish in it or something.

I hope I'm not being biased just because Mrs. Eric #1 is second generation Danish!!  Seriously though, the Denmark ones are way way the best.  I'm mostly German so I know quality when I taste it. Not interested in second best.  haha.

Dr G's picture

@Morpheus

41 will happen sooner than later. In the last 1.5 hours, silver has attempted 41 multiple times (9 times by my count?). Looks like gold 1620 and silver 41 may happen in the same breath. How fitting.

Violent Rhetoric's picture

The New York Times notes that

The New York Times notes that Obama expressed doubt about the legality of using the 14th amendment to force an extension during remarks last week. "I have talked to my lawyers," said Obama. "They are not persuaded this is a winning argument yet.

FIXED!

LaMachinna's picture

SW wanted to say thanks...

for your wisdom.  Sure is helpful to me.  Thanks buddy. 

Dr Durden's picture

I guess they can let sliver

I guess they can let sliver come up a bit, JPM's stock is over $41 now.

proformatrillionaire's picture

Gold disks to Saudi Arabia for oil?

All the more reason to believe there is no gold in Fort Knox or any other place in the USA (in large quantity).

LaMachinna's picture

Hams/Spams/Wams

Ginger, so totally understand.  Saw Eric's post earlier too.  It's great advice and is an idea that I adopted about a year ago, too.  The trick is watch their weekly ads...once a month or two or so they have these hams and spam couponed for $1.99 each.  That's when I stock up too.  You have to present the coupon in their add though.  They limit you to 2 or 3 a visit, I can't remember for sure.  Hope that helps. 

timpa's picture

enlightening

this is how the Secret Service sees those they protect...Odumba and Moochel are of particular interest...

sevin's picture

@Ginger

Speaking about inflation.. It has hit the local taco bell. At the beginning of the year they gave out keychains giving you a free taco every time you went (Valid until 12/31/2011) and now they won't even accept them anymore. Also the Beefy 5-layer burrito was $.89 earlier this year and now is $1.59 a 79% increase. OUCH!

timpa's picture

trying again

Dr G's picture

@sevin

regarding Taco Hell, inflation or diarrhea? Looks like you can get both now. And, as an aside, that $1.59 fake burrito has to be a mark-up of at least $1.25. Probably more.

ewc58's picture

Lotsa happy PM options campers

tonight! But like Turd says, watch out for that other shoe to drop...

some observations:

- in an otherwise down day in the stock market, in addition to lots of PM miners many REE's were up nicely too.  Medallion Res and Ucore are finally heading in the right direction and I saw that Tasman Metals, QRM and others had nice days too.

-Kaminak Gold has snuck it's way up on 5 bucks, now just .o2 away from the 52 wk high. Nice!

-My greens beat my reds by more than 2:1 today. I guess even the algos couldn't prevent that, PMs kicked some ass.

Stay focused. Watch for a miner stomp as a possible signal for the next PM price raid to commence, likely in concert with debt ceiling deal announcements, etc.

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