Preparing For Sunday

With just a little over 24 hours to go until the Globex re-opens, I thought I would chime in with what I expect tomorrow night. Many are concerned that current circumstances in gold resemble silver from the first weekend of May. If you're not sleeping well out of concern for tomorrow, The Turd is here to put you at ease.

Yes, there are enough coincidences to make you nervous. Back then, silver had had two margin hikes. So has current day gold. Back then, the following Monday was a UK bank holiday. This coming Monday is a UK bank holiday,too. Throw in Hurricane Irene and the current, possible H&S top formations on the charts and you've got all the ingredients of a sleepless night.

However, there a couple of significant and crucial differences. First, the second silver margin hike was effective at the close of business on Friday, the 30th. Traders had all weekend to panic into Monday. The second gold margin hike was last Wednesday and it's safe to say that, after yesterday, it is behind us.

Next, the OI picture is significantly different in both metals from May. On Friday the 30th, total gold OI was over 532,000 contracts. Silver was already down about 15,000 from its high but still was around 130,000. Where are we today? Gold has an OI of 514,635 (3% less) and silver stands at 118,443.

Lastly, look at these charts. Here are intraday gold and silver from April 30:

paper_4-29pmgold.jpgpaper_4-29pmsilv.jpg

I remember this day well. As you can see, gold rolled all day and finished at a new alltime high. Silver just would not participate. I remember, at about noon, thinking that silver was a great buy because it was bound to "catch up" to gold either on the Globex or on Monday. It seemed very strange that, as hot as silver was, gold was up 2% and silver was flat. In hindsight, we all know why silver was unchanged. The smart money was getting out while the dumb money (mine) was getting and staying in.

Compare those charts to the two below. These are the intraday charts from yesterday.

paper_8-27gold.jpgpaper_8-27silv.jpg

As you can plainly see, there is no resemblance at all. Silver was a little sluggish but that was mainly due to the fact that it had run up so much on Thursday. Anyway, the object of attention here is gold and the gold chart from yesterday is completely different from the silver chart of April 30.

Therefore, regardless of how eerie the situation feels, it is not deja vu all over again.

That said, don't expect wine and roses on Monday. As predicted late last week, the metals have rebounded right to points where The Cartel can attempt to create head-and-shoulders tops. I don't think I can ever remember a time when, given the opportunity to paint the tape, The Cartel did not pounce. Early next week could still get a little dicey while The Forces of Darkness make their moves. Frankly, I hope they do. Ole Turd has built up a little warchest of dry powder and I would love the opportunity to buy another dip.

Lastly, I sense that the big story of the next couple of weeks will be the POSX. The Pig is playing a dangerous game of lower highs versus a baseline of critical support. This all looks to come to fruition sometime next week or after Labor Day. Note on these charts that the current decline began from a high on July 12. Recall that the current rallies in the metals began about a week earlier. If we are going to see a continuation of this powerful PM rally through the fall, it will likely be upon the back of a broken down Pig. The Sep POSX closed on its lows (73.77) Friday and it really needs to hold 73.50. Once that fails, critical support is at the lows of early May of 73.32. Below there, The Pig will find support near the ultimate lows from March 2008 between 71 and 72. Below there be dragons.

paper_8-27pig6.jpgpaper_8-27pig.jpg

paper_8-27pigw.jpg

OK, that's it. I'm going to go fix myself a stiff Hendrick's and tonic and begin to pray that I'm right about tomorrow. See you then.  TF

471 Comments

speconomist's picture

(No subject)

Just 24 hours for the opening!!! Anyone else excited?!?! Thanks for the update as always.

By the way, #2 of Al-Qaeda just killed, possible destruction in East Coast caused by Irene... does anyone remember the sell-off in March 15 after the incidents in Fukushima? Many conflicting forces if we consider how strongly the metals closed on Friday, we shall see tomorrow!

Legendary Jim Sinclair (Mr. Gold) on his $1 million dollar bet.

LongGoldLongSilver's picture

Bernanke out of Jackson Hole

opalboy's picture

Turd

YOU RocK!

Studs Egon's picture

Patterns

Hello Turd,

Is it just me, or does the current POSX chart look eerily similar to the Silver chart of April 30 ?

Keep up the good work, you are a refreshing blessing!

Studs

¤'s picture

Thanks TF/ Hi Doc

Repost. Another last thread, last post situation.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Hi Doc..........Nice article at that link and I like your thoughts on the majors accumulating juniors of different persuasions. A lot of the miners are way wayyyy undervalued to the PM itself as we all know. I'm not sure what it might take to knock the heavy short presence off the backs of the miners they afflict and the low share valuation that they create.

I can't help but think (and hope for ) that the the small flurry of share buy backs recently by some miners is an indication that they are fighting back at the shorts by not paying out dividends (like Santa and others have suggested) but by aggressively repurchasing their wayyy undervalued shares and then retire them out of circulation. I think that would accomplish the same thing. The shorts would have to abandon ship if the prices starting going up based on just the shares outstanding consolidation. I think if we continue to see that trend then we'll see the shorts start to abandon ship.

I like your thinking and theory on this. The reason I'm so high on Gold Corp and hold it as my principle paper gold holding is because of it's enormous gold resources naturally, but all of the silver they seem to have in their resource portfolio. They have enormous silver production potential, not to mention the production that is already taking place. One of the other aspects of GG I like is that they are next door to some very desirable properties that are big producing juniors and explorer/developers in both gold an silver. I'm not sure what other metals might be involved in those next door properties. Some of these companies are literally next door neighbors. It would make sense at this point for the majors to start buying up juniors and explorers/developers because they are undervalued at this point. Next year they may not be this cheap. So from a business standpoint, it seems like what you lay out is very close at hand. Consolidation!

Some seasonal digging results from the miners will be coming out pretty soon and things will be heating up soon I think.

So I'm excited about GG. If we continue to see the share buy backs I think we'll see the shorts have to flee the scene because of it. And we all know what will happen at that point. Skyrockets!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The Lagarde, IMF thing.

I agree with you and StrongSideJedi on all of this.

I know you both agree that we all don't like it or see the need for anyone else to possibly meddle or even be part of an effort to steer the U.S. a certain way going forward. But as you said, it is what it is, and that's not a surrender statement by me at all.

The fact of the matter is that there is this guy called Bernanke that a lot of other countries can't understand why it's so important what he says and why U.S. policy or monetary policy effects or disrupts there countries entire structures.

Now, Lagarde is no Bernanke in the monetary sense but she is definitely part of the machine at present that is doing things not on a U.S. or French, or British etc. agenda but on a NWO agenda . (I'm sure some eye's rolled right there. So ask yourself....Just how many times does it have to be repeated by politicians and lead bankers from across the world for the last 30-50 years for the stated goal of a NWO to become a reality and stated goal of theirs? ) Say what you want about her being small fish in the larger picture, or even her need to be in the picture at all, or even her significance on the world stage. But there is no denying she does occupy the position as International Head of the IMF and she will merely be the face or mouthpiece who delivers these forward looking communiques.

That whole DSK scandal and him being released with no charges was a total political hit job on him imo. He was probably in the way or reluctant to do what "they" needed him to do in his position at this point in time. You have to ask yourself if that whole scandal was normal by any stretch and didn't Lagarde seem to transition into it smoothly after others were vetted before her.

In all truth, they probably had no chance at the job. In a month from now, this Trichet character will be gone and replaced with whoever they have selected (well ahead of time) who is on board with integrating the worlds banking system into one new global system where the currencies are balanced more competitively from a Anglo-American banking viewpoint

This is what the Anglo-American banking system wants to happen imo. Go globally integrated financially where the Central Bank (whatever it may be called in the future) makes all of the monetary rules up for the planet.

Right or wrong (wrong imo), there is no denying that the Europeans and the Americans are tied at the hip regarding monetary policy because they are after something that transcends the U.S. and the EU in their OCD power thirsty view of the world. It's been this way for centuries.

Here's a original DPH : "Bankers have no flag, nor loyalty to any flag. The flag they follow is one of paper, no matter where it flies."

Lagarde and others like her matter, because as Doc put it, she's one of the dots in our "connect the dots game" that we do just to stay ahead of the MSM game and more importantly, to alert others to things they may have never connected before.

lostinspace's picture

I'm not long the dollar so

beinki's picture

I have prepared

mrgneiss's picture

Awesome charts!!!!!

Silver_watchdog posted some awesome charts of Indian gold/silver demand!  Holy crap!  If the charts for China, the Mid-East, Europe, the US and South America are even half as strong as these the shorts will be toast really soon!

http://www.tfmetalsreport.com/comment/39926#comment-39926

¤'s picture

Stiff Hendrick's...whoa

"...fix myself a stiff Hendrick's and tonic and begin to pray that I'm right about tomorrow."

Hey TF, take it easy on Mr. Jimi tonight. wink    Have a good one!

Justin's picture

Irene what?

Is there a yellow hat award for the first person to comment on a post while in the eye of a hurricane? 

Thanks for the update Turd. I might lean more towards being bearish on metals lately, but it is still nice to get a warm fuzzy from the man himself.  Tip o' the hat to you! 

And an FYI to TWC viewers keeping track of this hurricane, Irene hasn't been much more than strong summer thunderstorm minus the thunder, conditions locally in Tidewater aren't as severe as national media is making it out to be. But, gotta keep viewers from changing the channel somehow!  I'm currently in the thickest part of the storm and conditions were worse earlier than they are now(thankfully).

¤'s picture

Picking them off, one at a time...

 

Al-Qaeda Second-in-Command Killed in Pakistan

Q

Al-Qaeda’s second-in-command was killed in Pakistan earlier this week, according to a U.S. administration official.

Atiyah Abd al-Rahman was killed Aug. 22 in Waziristan, a tribal area of Pakistan along the border with Afghanistan, according to the official, who wasn’t authorized to comment publicly on the matter.

No information was immediately available on how al-Rahman died. A strike by an unmanned drone aircraft in Waziristan was reported that same day. CIA drones are used by the U.S. to hit terrorist targets in the mountainous and lawless border area.

A Libyan national, al-Rahman rose to the number two position -- behind Egyptian Ayman al-Zawahiri -- after the May killing of Osama bin Laden and was deeply involved in directing al-Qaeda’s operations even before bin Laden was killed, the official said.

Documents pulled from the bin Laden compound after he was killed by a U.S. military team showed that al-Rahman had multiple responsibilities in the organization, making his death a significant blow to al-Qaeda as he will be difficult to replace, the official said....

http://www.bloomberg.com/news/2011-08-27/al-qaeda-no-2-al-rahman-killed-in-pakistan-on-aug-22-u-s-official-says.html

Revolucion's picture

Jim Sinclair's Math

Thanks speconomics, here's a link to the paper Jim Sinclair refers to in the vid.

http://www.contrahour.com/contrahour/files/ItsJustTimeMartinArmstrong.pdf

speconomist's picture

@Revolucion

@Revolucion Thanks, will take a look at it!

Also can anyone provide some background on Martin Armstrong? I know plenty about Jim, and have heard people mention Armstrong many times, but don't know much about him.

lostinspace's picture

This guy has a great youtube page.

beinki- I love the bug out bag! Little heavy on the toilet paper though?  The bank video with the 10trillion Zimbabwe note was pretty funny too laugh

pheeseas's picture

Hugh G Rection, I agree.  He

Hugh G Rection,

I agree.  He has his own website at http://sgtreport.com/

TheGoodDoctor's picture

@beinki Man I don't know how

@beinki Man I don't know how you could keep a straight face through that! Kudos again to your humor and another hat tip for you always! laugh

beinki's picture

Thanks to all

Unlike many of you and Turd I don't have the financial intellect to dissect and plot graphs, I'll leave that to you guys, I'll just add humor when I can.

Maryann's picture

TP.....

Beinki, that was too funny.  I was right there with you going, "um-hmm, got that," but then on that third roll of tp starting thinking, "wait, that's a lot for 3 days..."

Ginger, prayers for your brothers family.  That is heartbreaking, but you are right that it's just stuff.  Prayers also for anyone else in Turdville similarly affected....

Thanks TF, waiting for tomorrow night.

TexAsh's picture

pins and needles

I took the chance of being long 2x gold and silver ETFs over the weekend.

Hopefully, I won't see the same kind of waterfall as occurred on Sunday night, May 1st - nothing I could do but watch and weep as silver prices looked like a spear launched straight into the ground.

Thanks for the hopeful note, TF.

cpnscarlet's picture

@TexAsh - Okay, so you

@TexAsh - Okay, so you decided to go long and I decided to take money off the table for this weekend.

How about a side bet for some fun - we'll see which of us is "smart" or "lucky".

mrgneiss's picture

Here's a more clear link of

Here's a more clear link of the charts I posted above, these are a MUST SEE!

http://i51.tinypic.com/2hxqc9h.png
 

Courtesy of Silver_watchdog from here but these were lifted from where he posted them on HO today.

BagOfGold's picture

Scott J...

In response to "the Green Police" raiding Gibson Guitars...this is just the beginning...& I can't say we weren't warned!!!...

The "greening of America"...is an excuse to take away our civil liberties...

& turn us into "slaves of the system"!!!...

Swing & sway...my ass!!!...

Bag Of Gold

Timber Tim's picture

Thanks Turd,I to want another

Thanks Turd,I to want another crack at buying the dip.Didn't quiet get it right last time.But I think we might be coming to the rescue of the Posx over here in Europe.Greece is in trouble again or should I say continuing to be in trouble.Pushing more of its Bank debt onto it's  people.I am sure they are trying there hardest to keep it low Key.With elections in Germany over the next few weeks.There will probably be alot of talk of Germany leaving the Euro or the Euro leaving Greece.So everyone will rush to the safe arms of the POSX .Of course they might go to gold.But dam it that thing is in a huge bubble that has popped.CNBC told me and I nearly believed them until I closed there page to see the debt clock Ticking up and up and up and up,now that looks like a bubble.

Check out Jims vid's from friday,where he is talking about Greece and Germany.May I also add.That nothing beats turds site of course.But especially for newbies which I am too.Bookmark Jims video.He seems to be a straight up bloke who loves the market and the metals.He can be another avenue of info that will help with your thinking on how and what effects the metals.Even though it seems to me that everything effects them.They are so sensitive these days.Just incase any thoughts of this kind.I do not work for MF global or have an account with them even.I enjoy there daily videos to help me understand, how I need to be thinking across all the commidities.

Jims morning vid

and the afternoon one

Timber Tim's picture

Sorry everyone I didn't get

Sorry everyone I didn't get that embedding thing right

Revolucion's picture

Indian Market Saturday

From what i can figure the Indian market was up 2.15% on Saturday's trading to what equates to $43 per ounce. 

I am still trying to learn about the Indian market and whether their Saturday trade is a good indication for our Sunday trade or not. 

Here are my findings so far - All Globex figures are taken each Sunday from Spot price between open and midnight (Standard time not daylight savings time). $ figures 'Wins and Losses' are just based on $40 at open not the actual price on the day just as an indication - to save me trawling the actual price rather than the % difference.

The wins and losses are based on only trading the Globex when the Indian market is positive on Saturday. If you only took a Globex SI contract from open and closed it at midnight (presently 1am daylight saving time), you would be up for the year and saved a serious bashing in May.

If there is anyone out there with good Indian data or a source of it, end of day or 5 minute, I can build a program to compare regularly. I am just starting into this comparison and getting data from the MCX spot board download - please don't bet your house this post.

¤'s picture

Nice vid beinki

Thanks for the laugh, I had a smile on my face the whole timelaugh

bobby's picture

I have come to the conclusion

after watching Wolf Blitzer that he is a bonafide talking dumb ass

cpnscarlet's picture

To All - When Does it End?

Fines for lemonade stands and Fender Guitars shut down - Your gov't at work.

So when does it stop. I don't think an election will stop it since, in my lifetime, the last advancement of "practical freedom" was when Reagan had the interstate speed limits increased. Aside from that, governance over me and mine has just grown and grown. The only thing that will stop this is the "Great Correction", "Great Collapse", or a civil war. A correction is where the gov't is forced to scale-back due to lack of funds. A collapse is where the gov't crumbles away. A civil war....well you know how that goes. I am trying to prepare for any of those events.

Is there another option? Something more radical, less radical? I'd like to hear your thoughts.

bobby's picture

this is interesting

Tesla's picture

@beinki

LOVED the video... "Got Toilet Paper (and Fiber pills)"

Beinki your too cool man! Thanks!!

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