Bring It On Down To Liquorville

Man, this has been a long week. Craziness. Madness. Downgrades. FOMC minutes. Bank runs. Margin hikes. I can't take much more and we still have tomorrow to go. I may need to hit Liquorville tonight!

Before we get started, Santa posted some wisdom a few moments ago. C&P'd for your convenience:

Dear CIGAs,
Now that we have reached $1800 gold, what should you do?
1. Those holding gold to hedge the systemic risks of the Western Financial world simply stay in your position.
2. Traders lighten up your positions as gold approaches the next two Angels.
3. No market fails to have reactions at some point.
4. Reactions in this market will be deep, but brief when they occur.
5. The undervaluation of good gold shares has passed manic.
6. Utilization of some of your gold profits into good gold shares is pure logic.

Yes, I know this was a tough day for everyone, particularly after how rosy everything looked yesterday at this time. Once again, the old adage is proven true: When everything looks great...when everything looks ready to roll...Sell. The EE always stands ready to change the rules and complicate things at the most inopportune times. The key from here will be two things:

1) Will there be more margin hikes coming? If so, I suggest that you seriously consider selling your current trades and moving what you have left to the sideline.

2) How will gold respond when it approaches 1800 again? Notice how I typed "when" because it most assuredly will approach 1800 again, probably by early next week.

The stock market is extremely volatile but it is not making new lows. I take that as a sign that the current selloff is almost complete. A recovering equity market will remove some of the "safe haven" bid from gold. The overall commodity market is rallying for a second day in a row, confirming our suspicions that the 5-day selloff ended back on Tuesday and we are now back into a general "risk on" mode for the next 3-4 weeks. Though "risk on" is generally good for gold, the further removal of the safe have bid will serve to contain price, too. I guess what I'm saying is...Even though I'd gotten pretty excited just 24 short hours ago about the near-term prospects for gold, I think I'll use the rally I expect tomorrow and Monday to lighten some of my trading longs. I'll keep you posted.

For as lousy as today felt in gold, is was still only down about $30 from yesterday's Comex close and, frankly, you'd be foolish not to expect a 3-5% correction after a margin hike. It was possible that gold could shrug off the hike but, when the hike was combined with the 300 point stock market rally...well, that was just too much for gold to withstand. Regardless, just two days ago gold traded as low as 1725 so 1745 isn't really that bad. From here, we could still see 1725-30 overnight. It wouldn't surprise me if we did but we don't necessarily have to. Gold will rebound tomorrow whether or not the selloff continues. Why, you ask? Let me put it this way. Would you like to be long or short gold heading into the weekend? Would you like to be long or short stocks headed into the weekend? If you answered short gold/long stocks, you're crazy. Way, way, way too much real and imagined risk to take that position. Nope, I expect gold to rally tomorrow and stocks to pare gains simply because the smart move is long gold/short stocks. Given all the dramatics around 1765-1775 this week, don't be surprised if gold goes out tomorrow, somewhere right in that range.

paper_8-11pmgold.jpg

By the way, did anyone help out poor ole Turd by compiling all of the gold guesses from back on Monday? The contest ends at 1:30 EDT tomorrow. What did you guess? I hope it wasn't something in the 2000s.

Speaking of silver...It still can't seem to get out of its own way. It's a commodity when commodities are going down. It's a precious metal when gold is going down. Nuts! Driving me freaking crazy and I'm the one who has it dangling in the wind with a pick of $44 by Labor Day. I still think that the next three weeks will prove me right as it's clear that the entire commodity complex has found another short-term bottom. Like gold, it may bottom tonight or early tomorrow. When it does, I'll be trying to buy that dip.

paper_8-11pmsilv.jpg

That's it for now. Perhaps I'll see you at Liquorville later. If not, relax and chill for a while. Tomorrow promises to be another crazy day and you're going to need to be ready.  Turd out.

264 Comments

notmessenger's picture

First!

Since this seems to be the tradition...first!

murphy's picture

1st

1st?

never mind

bobby's picture

demon rum

won't help anything

of course, it couldn't hurt much

TheGoodDoctor's picture

Yeah the weekend should be

Yeah the weekend should be interesting again. Seems that the same things are happening to Europe that were happening to the US in 2008. Denials of insolvency. Emergency meetings. The ban of short selling. And soon failures? Their going to need a lot of duct tape! devil

SilverTree's picture

A shift

New-Paradigm-Shift-Ahead.jpg

images?q=tbn:ANd9GcSHj5aQxCeUQAG6ev-PXRL

Turd Ferguson's picture

Homer says it best

MODERATOR
Response to: demon rum
Dr G's picture

Does anybody else feel like

Does anybody else feel like there is a new crisis happening every day now? And not just little stuff, but medium-to-big stuff; stuff that would have been front page news for weeks if this were 4-5 years ago.

It's all coming down the chute so quickly now that I'm having trouble reading, studying and processing everything that I should be. I'm grateful to all of you who help me parse the massive amounts of information down into bite-sized chunks.

Long live Au/Ag!

Eric Original's picture

Save_Am

or anyone else looking for a nice picture of Mex pesos, check out what 97guns posted on another thread!  Nice!

Left to right, those are Mex 20 pesos, Mex 50 pesos, and Austrian 100 Coronas.

http://www.tfmetalsreport.com/comment/30687#comment-30687

TheGoodDoctor's picture

@DrG It certainly does feel

@DrG It certainly does feel like the quickening is here! laugh

SilverBoy's picture

Silver time is coming!

I feel that! See oil and stock market. Gold down 2 percent and silver down 2 percent not 6 as usual.

SilverTree's picture

Fibonacci Spiral

golden-ratio2.jpg

Dr G's picture

Silver is having an FUAu

Silver is having an FUAu moment. FU Gold! LOL.

7366991444dabe020844c5.jpg

cpnscarlet's picture

Math is great when you have

Math is great when you have some nice curves to show the data!

Shill's picture

(No subject)

LongGoldLongSilver's picture

Looking for Retesting Former Resistance

Shill's picture

Miners look great going into

Miners look great going into the close. A close of $60 on the GDX would be very nice.

silver squirrel's picture

Premium on Silver Dollars

On my regular trip to the local coin shop today was told there had just been a premium placed on 90% silver dollars. I had been buying them for weeks with no premium, but the dealer said demand had spiked so much they added the premium to  buy silver dollars.

rotbrador's picture

CME Margin

Effective Thursday, initial margin requirements to trade gold rose 22% to $7,425 per 100-ounce contract, from $6,075. Maintenance margins increased 18% to $5,500 from $4,500, CME said.

$ for $, you can controll 20% less number of contracts compare to yesterday. If you had max up your margin yesterday longing 100 contracts, you would have to close out 20 contracts today.

SilverTree's picture

@silver squirrel

Turd Ferguson's picture

This is very bullish...

MODERATOR

...if you have the patience to wait for it.

Silver OI (Down 2034 total contracts - WOW!)

 

Daily Settlements for Silver Futures (PRELIMINARY)

Trade Date: 08/11/2011

Month

Open

High

Low

Last

Change

Settle

Estimated

Volume

Prior Day

Open Interest

AUG 11

38.225

38.795

38.225

-

-.669

38.656

128

15

SEP 11

39.285

39.860

37.935

-

-.658

38.669

47,491

43,721

OCT 11

39.165

39.310

38.280

-

-.657

38.687

47

32

DEC 11

39.430

39.890

37.995

38.250

-.658

38.704

9,628

39,049

JAN 12

38.410

38.410

38.200

-

-.658

38.710

3

142

MAR 12

39.045

39.045

38.825

-

-.657

38.717

441

6,433

MAY 12

38.700

38.700

38.700

-

-.652

38.705

69

2,225

JLY 12

-

-

38.830A

-

-.654

38.686

3

1,952

SEP 12

39.730

39.730

38.645

-

-.654

38.651

18

299

DEC 12

39.255

39.690

38.120

-

-.653

38.584

77

8,356

JAN 13

-

-

-

-

-.653

38.557

-

1

MAR 13

-

-

-

-

-.653

38.495

-

435

MAY 13

-

-

-

-

-.653

38.449

-

35

JLY 13

-

-

-

-

-.653

38.375

5

2,210

DEC 13

38.855

38.855

38.855

-

-.653

38.255

271

6,900

JLY 14

-

-

-

-

-.653

38.027

-

232

DEC 14

-

-

-

-

-.654

37.909

-

1,186

JLY 15

-

-

-

-

-.653

37.677

10

156

DEC 15

-

-

-

-

-.653

37.535

16

488

JLY 16

-

-

-

-

-.653

37.415

-

38

Total

           

58,207

113,905

¤'s picture

Silver?

I thought TF asked for the close of Au on Friday?

Guess my $1721 will be a little off the markblush

philly's picture

Spreadsheet

Turd, I compiled a list of contest entries, but can't find a way to either post it or email it to you. Let me know how to send it to you and I'll get it there ASAP.

¤'s picture

U'mmm......

."P.S. Time for another contest. Please post your guess for the Comex closing price of the September gold contract for this coming Friday, the 12th. The winner gets a hat!!"

SilverTree's picture

DPH! Someone found your dog.

tmosley's picture

Looks like I picked the wrong

Looks like I picked the wrong week to quit...

Perhaps my call for $1852 was a bit off?  Nah, we'll get some more catastrophic news and we'll be up $100 in no time.

Eric Original's picture

With the miners sailing

With the miners sailing nicely into the close, I'm off to the coin shop!  Got my eye on another Double Eagle. heart

Kumanari's picture

Moon Phase - Margin

New moon and full moons usually bring reversals and highs or lows (+- 3days). Add margin increase and serious run up from 1535,  I figured it was only prudent to take some serious profits off the table. Closing dec 1800s, and 2250s leaving dec 1700 calls and oct. 1600,1650,1675 puts, along with a 1900 dec call I wrote. For once I am well prepared for the beatdown which I anticipate in the next 2-3 weeks. ( commercials are at about 6% 20k contracts  off high short  position) Either way I be sitting on 100% gain from June 26th. And ready to load up for the real show which should commence after labor day. Good luck to all, I can now turn my full attention to my makuakane who is knockin' on heaven's door.

A hui hou malama pono kakou.

survivalwstyle's picture

do i hear 39? or do we go back and test 38.50

AG is performing like a champ right now. way to go lil bro! get yours! 40/0z tonight, actuaLLy it wiLL be 2 22 oz of alpine bEEr co. tOO old for that malt liquor shEEt. drink the kind bEErs.

44 labor day. 50 9/11. everything is about to go into high gear.

right here AG is cheap. b-e-leave it. if you have not taken a trip to the coin shop this month. what is stoPPin' you. i have learned you can always go back. i am not a one shot johNNy mac. we have to be able to buy aLL weakneSS from here. EE serves it up. backhand. take that. 

wild action into the close today...imin bars show BTFD if we get it here, 38.50 goNNa hold? 37.75 was my coin shop low for the month. if we break down through that this afternOOn you know where to find me before asia opens. that 1 27x face place. thX.

SilverTree's picture

DOW +422 @ CLOSE

DOW +422 @ CLOSE

diegeiro's picture

SVM

I tried to post when everybody else did and got timed out.

"Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX:SVM)(NYSE:SVM) announces that to date it has acquired, pursuant to its normal course issuer bid, 558,200 of its common shares through the facilities of the TSX and it has acquired 218,258 of its common shares through the facilities of the NYSE for a total of 776,458 common shares (collectively, the "Shares"); the average price paid per Share is CDN $8.185. All Shares will be cancelled."

Maybe now the price can go up?

I caught it on the knife down in the May massacre and have yet to recover. In my defense, my grandson was getting born and I did not have time to really wait and watch, although none of us were expecting that.

And hasn't the entire week been liquorville? I am soooo tired now.

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