Three Things To Consider

As we all ponder the pretty little FUBMs on the charts to the right, I thought I'd touch upon a few basic, fundamental questions this morning.

First of all, a chart. This is a 15-minute Dec11 gold. Say what you want about the helpfulness of short-term charts right now but I contend that they can still help you to see some patterns of resistance and support. In this case, note the almost perfect double-bottom. You should ask yourself, "why does that happen?". In this case, I suppose it indicates a significant buyer at 1600. Whether or not that buyer(s) is great enough to stem the overall tide lower is an important question but, for now, at least this buyer has given us a level to watch going forward.

paper_10-5amgold1.jpg

OK, onto the fundamental questions. The first item I'd like you to consider is the article below by Charles Hugh Smith, made available on Chris Martenson's site. While we must always be willing to consider reasoned, contrarian views, the issue I have with the general thesis here is one of normalcy bias. Yes, IF the current economic system survives another 5 years and IF life and business continue on as usual, THEN perhaps the idea of a long-term dollar rally has merit. Anyway...presented without further commentary:

http://www.chrismartenson.com/blog/heresy-and-us-dollar/63178

This next item is something that was emailed to me over the weekend. I was going to write an entire post about it but now I don't need to as the link below is an excellent summary. Understand this is a very important development in the fight over U.S. "states rights". This movement away from the Federal Reserve system will have enormous constitutional consequences. We must all watch these developments very closely.

http://www.zerohedge.com/contributed/utah-monetary-declaration-freedom-tyranny-central-bankers

Lastly, an item that went largely unnoticed by the regulars here at TFMR. Statusquotians see this story as no big deal. On its surface, it's simply the CME further legitimizing the value of gold. I contend that there is much more here than meets the eye. Never forget that the first "C" in "C/C/C" is for CME. The CME owns the Comex. Owns it. As in it is their property and they are liable for it. In this case, by raising the gold collateral maximum to $500MM, they are inviting (begging) the holders of physical, allocated gold to throw it back onto the unallocated pile. If you need another primer on the unallocated/allocated system, here's a link (http://gold.bullionvault.com/How/UnallocatedGold). Once the gold is back into an unallocated account, the bullion banks can lease it out for further price suppression and even use it to settle physical contracts. No one in their right mind should allow this but, as the adage goes, a fool and his money (gold) are soon separated.

http://blogs.wsj.com/marketbeat/2011/10/03/cme-boosts-limit-for-gold-used-as-collateral/?mod=google_news_blog

That's all for now. I wish you a happy and pleasant day but keep an eye on those gold levels I mentioned.  TF

386 Comments

silvergoldsilver's picture

3 am smash fest

Whats new?  So much for that COT report.....

MonkeySmoke's picture

Question...

With the CME allowing more gold to added to the vaults, will this allow JPM or HSBC to load their vault from the GLD?  I would have to agree with you, Turd, this seems fishy at best and seems to allow for more fire-power for the criminals.

Vincent's picture

Good morning

Thanks TF!

Turd Ferguson's picture

Green October?

MODERATOR

News Headline Summary

Sources have revealed that Iran is building a new semi-heavy submarine equipped with highly advanced weapons

Brimstone's picture

Magic 8-ball

My magic 8 ball spit out some numbers this morning.

Copper is looking hot and heading for 3.9

soybeans are about at the bottom and heading for 1350+      go long!

corn is about at bottom and heading to 685+

oil looking for 85 - 86

Gold  has a current floor around 1590 and still looking for 1760 before another run on 1550 or so.

Silver  still a screaming buy and looking for 37, we could easily see a test of 28 before primary upward movement begins.

My magic 8-ball also says its time for a bloody mary!

If my magic 8-ball is even close to correct, that the commodities are looking at that sort of upward move, then this should tell us that QE(X) or a mini QE is imminent, would it not?????

Brimstone's picture

As always, thank you TURD for

As always, thank you TURD for building such a great community!

DeltaCharlie's picture

The Silver In My Palm

Nice post, Turd! 

I could let the last couple of weeks get me down (even miserable) watching the hammering of silver/gold prices, but NOT today. 

Today, something arrived in the post.... check it out, folks! 20 x 1oz silver rounds and my 1st kilo bar, at discount.  

Thanks you, BM! xx

Wanted to buy more today, but First Majestic told me there's a wait of a few weeks. 

Brimstone's picture

DJIA

Sheeple

looking for about 11900 on the DJI once it turns in the next week or so.

ScottJ's picture

Repost: When is the dollar's expected time of death?

Repost from last thread, as I feel it is an important concept to talk about/understand.

We all know that gold prices are going to go through the moon, but when is the question everyone wants to know?

A timeline of when the dollar will perish and an approximate target (~somewhere over $10,000) should help give understanding to where we are in this cycle with respect to the endpoint, and thus when will such a level be achieved.  It may very well be achieved in the final days of the dollar retaining its role as a currency used for goods and services, shortly after the dollar is dethroned from the world reserve currency.  The unwind of this will be of epic proportions.... and cause those who wish to seek safety to flee into physical tangible assets that the world is wanting in increasing demand... even at "higher prices" (silver too... poor man's gold).

The eventual reality will be that dollar bills will lose confidence in totality.

Be aware of this situation, because the end point is clear, it is the journey on how we get there and how long it takes that we are all trying to describe.

When I make predictions such as 80-120$ physical silver by the end of 2011, and $2500-3200 gold by the end of 2011.... and 300-500$ silver in 2012, and 7000-10,000$ in 2012... it is because I believe that the dollar will be extinct in the last months of 2012.  I also expect a push for a new global currency in this time period.. offered by those who led us to this situation....

The spiral of dollar decay will perpetuate upon itself, gaining momentum and just waiting for the striking blow.  Just look at treasuries with all-time low yields, and foreign countries dumping en masse... even Israel... an obvious display of of the reality of the situation, with the central banking crew buying all of these debts en mass (QE to inifinity).  Ummm.... this will not end well...and not continue "forever..."

When things happen they will be quick, and they will catch the majority off-guard.  It is up to us to be prepared and to have the solutions as individuals, for those who speak with unawareness risk leading others astray from the challenge in front of us.

-

Tom L's picture

As Turd Said

The short term charts may be of little overall value but they can provide clues as to the changes in market behaviour.  So, again, I have to stress watch the H&S top in Pigitha today.  A break of that neckline could spark a significant move in the markets... a harbinger of some as yet unseen bit of news. The neckline is at around 79.35 on the Dec 11 USDX chart.

Ta,

damijan's picture

http://yfrog.com/hssmahfj

syntaxkat's picture

trading scalps for phys.

a long time ago I read that 80% of the volume in the NYSE is HFT.  if those algo's are tied to tech analysis that means you can't fight the trend.  I scalp at pivots n important news and just buy phys with the profits.  I still got a long way to go.

Brimstone's picture

If my tech analysis is even

If my tech analysis is even close then we should be about to see a mini QE with a very short halflife that will drive up commodities at which point it will be pulled and we will see commodities and gold take another nose dive.  This is of course all sort term as the current version of modern fiat is gasping for air.  Alas even when this mess settles down in a few decades there will still be fiat, just new forms of it.

LongGoldLongSilver's picture

EU

Politicians pushing the EU-disaster down the road...

http://www.economicfreefall.com/2011/10/what-mess.html

Brimstone's picture

Tom, My money is where my

Tom,

My money is where my mouth is, and that is currently short USDX futures.  I am looking for 76.  I dont know what the news will be, possibly the official launch of Euro TARP, but it will pop up in the next week or so

grinners's picture

Some say the end is

Some say the end is near.
Some say we'll see armageddon soon.
I certainly hope we will.
I sure could use a vacation from this

Bullshit three ring circus sideshow of
Freaks

Here in this hopeless fucking hole we call LA
The only way to fix it is to flush it all away.
Any fucking time. Any fucking day.
Learn to swim, I'll see you down in Arizona bay.

Fret for your figure and
Fret for your latte and
Fret for your hairpiece and
Fret for your lawsuit and
Fret for your prozac and
Fret for your pilot and
Fret for your contract and
Fret for your car.

Some say a comet will fall from the sky.
Followed by meteor showers and tidal waves.
Followed by faultlines that cannot sit still.
Followed by millions of dumbfounded dipshits.

Some say the end is near.
Some say we'll see armageddon soon.
I certainly hope we will 'cause
I sure could use a vacation from this

Silly shit, stupid shit...

One great big festering neon distraction,
I've a suggestion to keep you all occupied:

Learn to swim.

Mom's gonna fix it all soon.
Mom's comin' round to put it back the way it ought to be.

Learn to swim.

Fuck L Ron Hubbard and
Fuck all his clones.
Fuck all those gun-toting
Hip gangster wannabes.

Learn to swim.

Fuck retro anything.
Fuck your tattoos.
Fuck all you junkies and
Fuck your short memory.

Learn to swim.

Fuck smiley glad-hands
With hidden agendas.
Fuck these dysfunctional,
Insecure actresses.

Learn to swim.

Cuz I'm praying for rain
And I'm praying for tidal waves
I wanna see the ground give way.
I wanna watch it all go down.
Mom please flush it all away.
I wanna watch it go right in and down.
I wanna watch it go right in.
Watch you flush it all away.

Time to bring it down again.
Don't just call me pessimist.
Try and read between the lines.

I can't imagine why you wouldn't
Welcome any change, my friend.

I wanna see it all come down.
suck it down.
flush it down.
 

 

Eric Original's picture

Gut Check Time on the Miners

Folks are wondering what to do.  Stress levels are high.  I spent a lot of time on a post summarizing my feelings on it this morning on my miner thread.  Thought maybe some here on Main Street might benefit from it.  Here's a copy & paste:

This is toughest period I've been in with the miners in quite a while.  I was out of them completely in 2008-2009 (don't worry, I managed to get creamed in other sectors instead), but had spent a lot of time from the mid 90's to the mid 00's learning the ropes.

Whether you need to trim back, or whether you can add at this point depends almost entirely on your own particulars.  It all depends on whether you are in too deep already.  If you've overextended yourself, and you've put yourself in a position where an adverse market can literally ruin you, then that is always a mistake.  You need to lighten up, and the sooner you do it the better you'll feel.

If you've stayed within the bounds of reason, involved in the sector enough to profit but not so much as to court ruin, then you've got staying power.  You can afford to wait this out, and even buy some dips.  

You need to size your exposure to miners with possibility in mind that the whole sector can lose 50% at almost any time, and with frightening speed.  Will the loss of 50% of your miner money cause you to have health problems?  Marriage problems?  Delay retirement?  Change the college plans for your kids?  If yes to any of these, then you've got too many miners.

Look at the psychological differences between holding physical vs holding miners.  With physical, people have no problem holding for years and years at a time, through all kinds of ups and downs, buying regularly, buying dips, and not losing any sleep over it whatsoever.  With miners, it always seems to be ​panic in, and panic out all the time.   The added volatility seems to change everything from an emotional point of view.  Staying power is hard to find.

My advice to all of you is to keep your miner exposure low enough, as an overall portion of your wealth, so that you can begin to treat your miners the same way as you treat your physical metals.  Low enough so that you can find the nerve to just keep stacking them.  Stay with the best of the best, as near as you can determine it, and just keep stacking.  Buy regularly, buy dips.  But don't ever get in so deep that you start to lose sleep, fear and greed take over, and panic mode rears it's ugly head again.

Tyler's picture

Repost from previous thread - millions of bees die

This is absolutely disgusting.  Of course spraying this stuff around is good for humans though.  Ridiculous.  How is this allowed? 

http://www.naturalnews.com/033781_honey_bees_pesticides.html

SS121's picture

Cancerous Tumors Never Win

This cancerous tumor on the head of society gets it's power from the host as it tries to kill the host.  Theres always going to be a limit as to the growth and power of the tumor as checked by the status of the host.  When the host becomes weakened, there is less resources for the tumor, and it shrinks accordingly.  The tumor shrinks, the host strengthens, the tumor (fiat system) then grows again, etc etc..   Failing to understand this causes a lot of flawed predictive analysis when someone looks only at a snapshot of the growth rate of the tumor, and assumes it can continue to grow at it's current rate.  It's just a tumor, it can never overtake and become the host!  Neither can one particular little section of the tumor (individual currency) become the host, apart from the rest of the tumor.  Patience folks, see James 1.5, and have a good day!

EagleDave's picture

Long-term TA on the Dollar (and PMs) is Rubbish

I like Chris Martenson a lot and I appreciate his willingness to bring in contrarian viewpoints, but when people write stuff like this I just have to laugh:

That same timeframe comes up again in another long-term chart of the DXY, which identifies a 15.5-year cycle from peak to peak. Other analysts have measured this cycle at 17 years, so the precise number is open to interpretation.
If this cycle plays out—and of course there is no guarantee it will—then the next cyclical high would be reached around 2016: 2001 + 15.5 years = 16.5.
Interestingly, these projections of a potential high in the 2015-16 timeframe align with stock market cycle calls which project a major market bottom in late 2015. Is that a potential correlation to count on? In my view, no; the stock market and the DXY should be analyzed as individual, uncorrelated trades. But the possible alignment of these cycles certainly suggests that the current trends—down in the stock market and up in the DXY—might well continue for another four years.

Doing technical analysis on a 40 year chart of the dollar is ludicrous at this point. The events we see right now are unprecedented and anticipating a rise in the dollar because of some long term trend is laughable.

The dollar is going up because the Euro is tanking. That's it. When attention turns back to the woes of the dollar, any chart trends will be mostly meaningless.

Shill's picture

10:32a BREAKING Oil supplies

  1. 10:32a

    BREAKING

    Oil supplies down 4.7 million barrels on week: EIA

beinki's picture

Max's new Plan

¤'s picture

Good morning all

Agreeing with shill and others on the markets from yesterday at the end of the day. Wow! What a messed up market this is.  It appears to be almost untradeable unless your real quick and have some type of clairvoyant gift. But we'll never be as fast as the HFT systems in place. It's set up that way for that very purpose (among others).

TomL...pretty disturbing seed theory but it doesn't sound  far fetched. That's not a stretch of logic when you consider what the big corporations will stoop to in regards to profitability and market control and people control.

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

My dad told me he got a voice message on his answering machine yesterday from his AGA (anti-gold ass-clown). My dad put some money into bonds recently and it's been positive so far. The AGA guy leaves a slightly manic and sarcastic voice mail patting himself on the back for the bonds move and then asks my dad in a very weird way how gold is down and "I see gold is getting butchered again, how are those gold stocks working for you today?"  in a very taunting way. I listened to the message and it was pretty childish and he was trying to make himself look and feel good I guess.

What a ass though. He never once called this whole time and told my dad to get out of the market before any of this happened. I did so awhile ago. I'm pretty sure he resented it and needed to do that for his own sake.

My dad's AGA broker will never call or acknowledge what happens to gold or the miners in due time when they do breakout.  It's almost shocking that a money manager for Wells Fargo just doesn't get it or even want to consider the whole PM thing.

illyasviel's picture

Today silver is at around ~30

Today silver is at around ~30 USD, but what would be the immediate consequences  it were to peak to say $80 tomorrow? Would there be any short term reactions to this?

RuNuts's picture

Re: Ran Prieur, young man in the video?

sniff's picture

Resistance should be $1637 (instead of $1537)

Hi Turd and all, obviously, the price on the gold graph should be 1636.50 and 1637  (instead of 1536.50 and 1537). Just saying... :)

MIDDIE's picture

@ TF

TF, quick edit for your sake.  I'm sure you mean a move through $1637 (not $1537) in your 15 min DEC gold chart would provide relief.  I have $1615.70 last; steady.

BlackHawk's picture

@ grinners

Seek immediate medical attention for depression lasting the length of time it took to write that comment.

¤'s picture

Iran with a sub...

...capable of launching a missile(s) probably is the last straw if your Israel. Seriously, what would we do in a similar situation if we had a guy like Irans. prez. Nutjob saying the things he does about annihlation?

I wonder how much of this being floated out into the MSM for a pre-arranged conflict we've all seen coming?

Hope not.

Shill's picture

Dollar just kicked into high

Dollar just kicked into high gear, something is up.

Watch that market.

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