Turd Tips His Hat

As you know, we moved from blogspot to this dedicated site for many reasons. The primary reason, however, was to capitalize on the collective knowledge and wisdom of Turdtown. I, The Turd, can only take you so far. I knew we needed a platform through which we could more efficiently share information. To see the effectiveness, all you have to do is look below.

Let me just state this clearly and for the record. If you are coming this site only to read what The Great and Powerful Turd has to say, you are doing yourself a tremendous disservice. The information copied and pasted below proves the point. These three comments were all posted to the "So, What's Next?" column from Monday night, when gold was still between $1890 and $1910. If you'd taken the time to read through the comments, you'd have found this. Perhaps you would have taken action. Note the time stamp:

Shanghai Gold Exchange Raises Gold Trading Margin To 12%

SHANGHAI, Aug 23 (Reuters) - The Shanghai Gold Exchange (SGE) will raise trading margins on three of its gold spot deferred contracts to 12 percent from 11 percent starting from Aug. 26 to limit trading risk, it said in a statement on Tuesday.

The next morning, another Turdite even provided a translation of the text:

Yes, here is the link - http://gold.hexun.com/2011-08-23/1327314

从8月25日(星期四)日终清算时起,上海黄金交易所将调整黄金Au(T+D)、Au(T+N1)和Au(T+N2)合约的保证金比例至12%;

下一交易日起黄金Au(T+D)、Au(T+N1)和Au(T+N2)合约涨跌停幅度调整为9%。

It syas that Sahnghai Exchange will increase the margin for 3 type of paper gold contract (Au(T+D)、Au(T+N1)和Au(T+N2)to 12%. and will stop the gain and loss to 9% during the same day trading.

The Exchange also warns the investors to be prepared for the vulnerability of international Gold and silver market. Some investors had huge loss last time when silver price dropped 25% within a week.

This event is now being heralded by some as the seminal cause of this latest $150 correction in gold. The links and translation were posted here well before ZH or any other PM site.

Another warning of the impending disaster was provided by a different Turdite:

re: Gold smackdown coming...

look at the options activity on GLD...

$4,040,919 puts at 175 bought yesterday

$1,019,046 puts at 170 bought yesterday

$1,221,472 puts at 165 bought yesterday

Even a trend down to any of these numbers, for those unfamiliar, will likely make these options double, triple, or more. GLD doesn't have to get to 165 to make the trade at 165 worth the purchase.

Can the EE make money shorting "Gold" on the crimex? Don't forget, in bringing down Gold, Silver will follow, along with its options, as well as miners (and, of course, their options). So once you knock over the first domino, the rest will fall.

They may take a loss on shorting Gold this time, as the physical demand will be overwhelming on the way down AND back up (they won't cover all their Gold contracts at a gain... it will likely be a net loss) BUT they will more than make up any possible losses with covering the miner stocks sold short while they are down, closing the put positions, etc.

There is still a gap in the 1500 - 1600 range, isn't there? (Seems like last week... but LOOOOOONNNNNGGGGG ago price wise). I don't know if that gap will be filled.... (It may be a 'flash crash' that only WOPR can fill orders for the EE in that range.. taking out trader stops only).

Here's the relevant data (http://finance.yahoo.com/q/op?s=GLD&m=2011-09)

Again, my point is not to rub salt in the wound. My point is simple and clear: IF YOU'RE NOT TAKING THE TIME TO UTILIZE THIS ENTIRE SITE, YOU ARE SERIOUSLY MISSING OUT AND IT IS COSTING YOU MONEY. The Turd tips his hat to "Dogstar76", "The Freeman" and "silver foil hat". Very nice job. Thank you for your help.

OK, back to the disaster at hand. Everyone wants to blame today's collapse on the Chinese margins. OK. The volatility makes C/C/C margin hikes a fait accompli so everyone and their brother is rushing for the exits. In the end, I suspect that the actual margin hikes can be used as a "sell the rumor, buy the news" event. We'll see. Lets' just hope the volatility settles down next week, thereby denying the criminals the justification to raise 3 more times like they did in silver. Again, we'll see.

I suspect that the story below didn't help matters, either. Anyone with a brain and chimpanzee-level logic can deduce that the report is absolute nonsense. However, that matters little when the WOPRs are busy trying to front-run each other out the door.

http://www.zerohedge.com/news/cbo-cuts-forecast-cumulative-2012-2021-deficit-50-admits-it-probably-dead-wrong

I could print some new charts for you but they wouldn't look much different from the ones I posted this morning so I'm giving you some re-prints. Gold now looks certain to test the 1725-1740 area. This would represent a nearly exact 10% correction so, anyone such as I that is interested in" catching the knife" might take a stab there. No pun intended. Silver is the same. I just betcha you get a look at 38.50-75 pretty soon. If you're going to nibble, that'd be the place to do it.

paper_8-24amgold3_0.jpgpaper_8-23pmgold_0.jpg

paper_8-24amsilv6_0.jpg

That's all for now. I hope you're hanging in there OK. If not, step away from your computer for a while and take a few deep breaths. Maybe go for a relaxing walk. None of this changes the fact the fiat money is headed down the drain and that the end of the Great Keynesian Experiment is upon us. Gold and silver will be higher again soon. You are doing the right thing by protecting yourself and your family.   TF

5:45 EDT UPDATE:

​In a stunning development that has caught everyone by surprise, the criminal C/C/C (CME/Comex/Cartel) just raised margins on gold by about 27%. In case you missed it, it's a development that was predicted here two days ago:

http://www.tfmetalsreport.com/blog/2155/so-whats-next

My mistake was that I thought that gold was going to be allowed higher in order to create the disorder that the C/C/C needed to justify their actions. I thought that they would want to suck in a few more latecomers before they put the hammer down. (But, as Ted Buter correctly points out, the last $300 or so of the gold rally was almost entirely all Cartel short-covering, so, there were no latecoming specs to add to the fold. If I'd remembered this on Monday night, the crash on Tuesday would have been more predictable.) In the end, it didn't really matter as the PMs were crushed on Tuesday before any of you could try to attempt to cash in on the last remaining upticks.

We need to dissect this, though, because there is a lot to be learned...and remembered...for next time. The primary rationale for raising margins (containing price) is volatility. However, by Monday night, gold was just $90 above the level where the C/C/C had raised margins on 8/11. Yes, it had rallied from a hike-induced bottom of 1725 but it had done so in an orderly manner and not in a way that made another margin hike necessary. But the CME desperately wanted to raise margins in an attempt to rescue their evil Cartel buddies who were trapped short in a market that looked to be headed to $2000 very soon. Hmmmm. What to do?

You start by letting word out to some select friends that margin hikes are on the horizon. You then catch a break as the Shanghai exchange raises margins, too. At about noon yesterday, just when it looked like the metals were recovering, you confirm to some EE and hedgie friends that a margin hike is coming. By the end of the day, gold is already down almost 5% and you're building a case for "volatility-managing" hikes. Uh-oh. Gold recovers overnight. It actually makes it back up to 1860 or so. Therefore, before the Comex open today, you sprinkle word around that margins are definitely being raised after the close. The selling begins at 8:30 and is relentless all the way through the session. Gold falls another 6% and...prestowhammo...you've got yourself all the volatility and justification needed to hike margins.

Next up, The Bernank will "disappoint" over the weekend which may further add to the selling pressure in the PMs. I'm not sure how much worse it can get as gold is already down almost 10% since Monday and 10% or so is the typical decline post a margin hike. As stated in the comments of this thread, I'm looking for a bottom in gold somewhere between 1700 and 1725. At this rate, though, I wouldn't be surprised if gold traded all the way down to fill the gap on the chart from two weeks ago when the U.S. downgrade announcement was made. A move that low would take gold all the way back to 1650 or so. The globex session finished at 1754 and we'll likely see some carryover selling in Asia and in Europe. Tomorrow will be interesting.

Lastly, don't forget that gold margin hikes are an indirect positive for silver. The C/C/C is unwittingly "leveling the leverage playing field" in the PMs. Much of the disparity in the relative performance of gold vs silver these past few weeks has been due to silver's much higher margin requirements. Higher gold margins flatten out this difference and make silver look more attractive than it did earlier this week. Combine this with the extraordinarily strong OI and CoT numbers for silver and you can clearly see where $50 silver is still a target before the end of the year.

Have a fun evening. TF

313 Comments

LongGoldLongSilver's picture

Relax, gold has a long way to go

When the sky is falling, nothing beats taking a good look at a long term chart. If you've bet your money on a secular bull market, a ten or five year chart should give you comfort.

http://www.economicfreefall.com/2011/08/relax-gold-has-long-way-to-go.html

silver squirrel's picture

First

First

TitanAe's picture

Mr Turd

I just learned a lesson !!!! Thank you sooo much !!!! I won't make that mistake again !!!

Regards

speconomist's picture

Thanks Turd, time to sit back

Thanks Turd, time to sit back in a relaxed manner, and wait for the bottom.

Will definitely consider options for the next time it's clearly anticipated by users here a massive takedown like this one, because I don't have the balls to short something that is going to infinity.

Turd Ferguson's picture

Agreed

MODERATOR

And I would add that there is a very high likelihood that gold is going to come all the way down to touch that center line (the old upper boundary) before it rebounds.

LongGoldLongSilver's picture

Silver is fine, don't worry

I might as well post a long term silver chart too! At least it gives me comfort:)

http://www.economicfreefall.com/2011/08/relax-gold-has-long-way-to-go.html

Don't forget though, that the whole system seems to be coming down relatively soon. These corrections mean nothing in the long term. Don't sell your physical!

Tesla's picture

Thanks Brother!

Thanks Brother Turd!

Silver is money's picture

I posted this on "So what's next?" on Monday.....

Pull back to $42?

I think that is really very optimistic considering that silver likes to overshoot constantly.  I'd expect a re-test of that $38-$39 zone that showed so much support recently in the case that gold gets hit hard enough. 

I should have gotten more hat tips :(

ScottJ's picture

Copper may be heading up soon

Don't Forget Copper! It was smashed down, and has been consolidating nicely... look to see which way it breaks soon....

LongGoldLongSilver's picture

It sure does

I agree to agree;) I actually hope it does. Nothing as a quick washout of the weaker foo...hands. Plus it feels a lot better with a $200 move in a few days instead of weeks/months. Hit me!

llaettner's picture

No hat tips given for negative comments on Ag Au

I also commented on overbought conditions. . . you wont get tips for that here.

silverbleve's picture

margin hikes

I think the fear of margin hikes has a lot more to do with the sell off than the actual margins themselves will, the ee is using the psychological effects of the silver smackdown to scare longs out without even following through with the actual hikes, as others have stated here, when the margins get too high the ee loses firepower too and they know this.

Genius from their perspective really.

Dr Durden's picture

The daily charts are your friend

Sure it looks brutal to go from $44 to $39 in a few days, but look at daily chart since QE deux nearly one year ago from today when we were slitting at $18. I'm saving some dry powder for the $36 and $1650 levels, but will add a little to the stack if I can net a roll for under $40 net.

The deflationary scare rambles on taking any weak hands it can with it.

stoneeh's picture

5$ swings in a few days.

5$ swings in a few days. Compared to what, a maximum of 50 cents or 1$ 1 year ago? This is soon becoming a playing field for short term or momentum traders and HFTs only. Volatility is off the charts. Or should we say manipulation is off the charts.

This is getting boring. Might as well go physical only.

Silver is money's picture

I am about as bullish as they

I am about as bullish as they come long term in the metals, but I try not to get caught up in the overly bullish downside targets when we come to these plunges.   

mespe's picture

who to believe

I just don't know who to believe in the comments section. With all the paid trolls and naysayers writing that PMs are going to take a dive, seems like a good portion of the comments section (and kitco's forum) is awash with the POG is going to drop posts.

It would be really nice to have a "Good call" icon similar to the hat tips for those members who are" in the know" and provide accurate forecasting of the direction of PMs.

PJH10's picture

Levels

Thus far, gold has bounced off its 1st Fibonacci level from the beginning of the July run, around the center line trend in EconFF's graph.

All the macro trends outweigh the chicken scratch, so don't sweat the small stuff.

Turd - love the site. You're doing God's work (now lawyer up :) 

metcoalfan's picture

Forums are definitely first rate here, best of the web imo

eom

Turd Ferguson's picture

Look at this, too

MODERATOR

Just to be fair and balanced, I present the chart below from May 2. When shit is going down, TA can only take you so far. Be careful!

paper_5-2pmsilv2.jpg

survivalwstyle's picture

take a walk

to the coin shop. repeat. you do not panic here. go out and get a piece of this 10% sale. thursday could bring 10 more. 

remember nothing has changed. we are strong here as each time the EE puLLs this shEEt our skin gets thicker. 

i just puLLed the triGGer. $4o40 leSS paper, 1oo oz more AG and more TRX @ 5.47

Dark Matter's picture

confused

I've been reading your Website (new and old one), but now I am seriously confused.

1st, the sell-off came far quicker than announced. Nobody can look into the future, so thats it.

2nd, and that is quite unfair, a prognosis for Gold going down to 1500 is actually no prognosis. Anyone can do that.

How do I invest with that knowledge? I can't. I really can't go long if Gold is going further down until 1500.

And my mining stocks will be worthless by then. Guess I am frustrated already...

¤'s picture

SVM newly acquired property info./Assay info.

press release

Aug. 22, 2011, 8:01 a.m. EDT

Silvercorp Acquires High Grade XBG Silver-Gold-Lead-Zinc Property in Luoyang, Henan Province, China

 

VANCOUVER, BRITISH COLUMBIA, Aug 22, 2011 (MARKETWIRE via COMTEX) -- Silvercorp Metals Inc. /quotes/zigman/33670 CA:SVM -4.70% /quotes/zigman/33653/quotes/nls/svm SVM -4.31% ("Silvercorp" or the "Company") is pleased to announce that its 77.5% owned subsidiary, Henan Found Mining Co. ("Henan Found"), signed a share purchase agreement to acquire a 90% equity interest in Zhongxing Mining Co. Ltd. ("Zhongxing") and Chuanxin Mining Co. Ltd. ("Chuanxin"), two local private mining companies, with common owners, in Luoyang City, Henan Province.

Henan Found's total cash payment for the acquisition of both companies is approximately US$10.4 million, including US$4.3 million for the equity interest and US$6.1 million cash payment for outstanding debt. Henan Found has made 80% of the required total payment and has taken over control.

Zhongxing's main assets include the high grade XBG silver-gold-lead-zinc ("Ag-Au-Pb-Zn") mine with a mining permit covering 26.36 square kilometers (km2) expiring November 2022 and the adjacent NTM gold exploration permit covering 2.54 km2. Chuanxin's main assets include a 350 tonne-per-day ("t/d") floatation mill and an associated tailings management facility built in 2009 within the mining permit area, and an environmental permit to construct a 1,000 t/d floatation mill.

The XBG Mine is located about 120 km southwest of the Company's Ying Mine and is about a three hour drive from Luoyang City and the Ying Mine. Due to the close proximity, the XBG project will be managed by the Ying Mine's management team.

Geologically, the XBG project area is situated in the east extension of the Qinling Mountain Belt near the margin of the Northern China Craton in the same regional mineralization belt as the Ying Mining Camp and is one of the largest silver-gold and base metal belts and largest silver producing region in China. The XBG project area is...

(Cont.)http://www.marketwatch.com/story/silvercorp-acquires-high-grade-xbg-silver-gold-lead-zinc-property-in-luoyang-henan-province-china-2011-08-22-81550

 ----
                                                        True
        Vein                                       Thickness    Ag    Au    Pb   Zn
        #     Location                                    (m) (g/t) (g/t)   (%)  (%)
        ---------------------------------------------------------------------------
        X1    YS Shaft, North Vein Drift                1.20   251  1.20 11.54 0.53
              ---------------------------------------------------------------------
              YS Shaft, South Vein Drift                2.30   128  9.47  2.56 0.74
                                             --------------------------------------
                               Including                0.30   856 63.18 12.78 0.41
              ---------------------------------------------------------------------
              Ore Stockpile at YS                Bulk sample    37 10.44  0.61 0.10
        ---------------------------------------------------------------------------
        X2    Road Cut Outcrop                          3.80    87  0.44  1.05 0.70
        ---------------------------------------------------------------------------
        X8    Adit at YS Valley East                 Stope's   165  0.55 19.32 0.53
                                                 Bulk sample
              ---------------------------------------------------------------------
              Vein Drift at YS Valley East              0.80    84  0.88  5.99 2.66
              ---------------------------------------------------------------------
              Vein Drift at YS Valley West              0.83   195  0.42 10.44 8.03
              ---------------------------------------------------------------------
              Ore Stockpile at mill              Bulk sample   352  0.28 65.93 4.76
                                             (massive Galena)
        ---------------------------------------------------------------------------
        X9    Vein Drift at YS Valley West              0.40    84  1.25  2.82 1.90
        ---------------------------------------------------------------------------
        X12   Vein Drift at Dachunshu                   0.80   151  1.31  0.77 0.81
        ---------------------------------------------------------------------------
        
      
 

Tesla's picture

Silver OI (+1,454 total contracts)

Daily Settlements for Silver Futures (PRELIMINARY)

Trade Date: 08/24/2011

Month

Open

High

Low

Last

Change

Settle

Estimated

Volume

Prior Day

Open Interest

AUG 11

41.295

41.445

40.995

-

-3.124

39.157

39

73

SEP 11

41.950

42.485

39.210

41.280

-3.129

39.162

89,738

32,396

OCT 11

42.140

42.290

39.255

-

-3.127

39.178

269

140

DEC 11

41.955

42.510

39.250

-

-3.129

39.201

43,324

57,858

JAN 12

42.280

42.280

40.100

-

-3.126

39.210

38

142

MAR 12

42.185

42.350

39.355

-

-3.132

39.213

1,867

7,300

MAY 12

41.945

41.945

39.340

-

-3.130

39.205

59

2,321

JLY 12

41.750

41.750

41.750

-

-3.129

39.192

104

1,988

SEP 12

42.120

42.175

40.510

-

-3.125

39.168

23

329

DEC 12

41.775

41.775

39.815

-

-3.121

39.111

133

8,579

JAN 13

41.600

41.600

41.600

-

-3.121

39.082

1

2

MAR 13

-

-

-

-

-3.121

39.016

-

440

MAY 13

-

-

-

-

-3.121

38.970

-

35

JLY 13

-

-

-

-

-3.121

38.897

-

2,207

DEC 13

-

-

-

-

-3.121

38.782

50

6,587

JLY 14

-

-

-

-

-3.121

38.549

-

232

DEC 14

-

-

-

-

-3.121

38.422

-

1,201

JLY 15

-

-

-

-

-3.121

38.187

-

156

DEC 15

40.890

40.890

40.000

-

-3.121

38.032

21

504

JLY 16

-

-

-

-

-3.121

37.912

-

53

Total

135,666

122,543

Last Updated 08/24/2011 01:32 PM

Tesla's picture

Gold OI (+3,204 total contracts)

Daily Settlements for Gold Futures (PRELIMINARY)

Trade Date: 08/24/2011

Month

Open

High

Low

Last

Change

Settle

Estimated

Volume

Prior Day

Open Interest

AUG 11

1833.0

1853.1

1759.6

-

-104.2

1754.1

907

759

SEP 11

1834.9

1853.7

1758.8

-

-104.2

1754.2

4,291

1,674

OCT 11

1830.4

1854.8

1758.8

-

-104.2

1755.0

25,186

32,812

DEC 11

1831.5

1856.8

1761.1

1765.5

-104.0

1757.3

369,716

364,026

FEB 12

1834.6

1857.7

1763.0

-

-104.2

1758.9

2,717

29,841

APR 12

1843.2

1858.6

1765.0

-

-104.3

1760.7

298

7,483

JUN 12

1848.5

1862.4

1774.0

-

-104.4

1762.6

287

16,459

AUG 12

1791.8

1791.8

1791.8

-

-104.4

1764.4

82

6,240

OCT 12

-

-

-

-

-104.4

1766.4

9

4,189

DEC 12

1850.5

1868.3

1775.0

-

-104.4

1768.6

556

13,669

FEB 13

1861.6

1861.6

1818.0

-

-104.4

1770.7

13

3,110

APR 13

1860.3

1860.5

1787.5

-

-104.6

1772.9

10

338

JUN 13

1861.7

1861.7

1857.2

-

-104.9

1775.3

12

11,890

DEC 13

1810.0

1810.0

1792.6

-

-105.2

1786.0

21

12,763

JUN 14

1882.7

1882.7

1882.7

-

-105.2

1799.5

267

3,669

DEC 14

1905.9

1919.3

1830.4

-

-105.1

1815.3

21

9,980

JUN 15

-

-

-

-

-104.9

1835.5

220

4,825

DEC 15

-

-

-

-

-105.6

1858.3

40

3,562

JUN 16

-

-

-

-

-105.6

1882.9

-

26

DEC 16

-

-

-

-

-105.6

1911.3

-

1,165

JUN 17

-

-

-

-

-105.6

1942.6

-

40

Total

404,653

528,520

Last Updated 08/24/2011 01:32 PM

Tesla's picture

RE Open Interest

Massive short positions account for huge gains in OI totals - IMHO

rotbrador's picture

orchestrated correction

this is a orchestrated correction .... 10% is likely in the card.

stoneeh's picture

Video's not half as random as

Video's not half as random as the PM markets now. But much better ;)

Fulgurite's picture

LBMA closed Monday 29th August!

Dunno if it's been mentioned already or if it's significant with regards to possible margin hikes, but Monday the 29th will be a Summer Bank Holiday in the UK and the London Bullion Market will be closed.

Dr G's picture

@Tesla. Has to be shorts. No

@Tesla. Has to be shorts. No way silver has a huge OI gain today any other way.

Cynicus's picture

144 day MA still relevant?

During dec 10 correction (turds bottom) gold dropped down to the 144 day moving average, and has done so several times before and since - do we think this is still relevant or is the angle of ascent increasing? if it drops down to the 144MA that takes us to around 1530 - any thoughts?

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