Malicious Intent

I would imagine that most of you have already spent time last evening and today, digesting and learning from all of the information regarding the events of yesterday. Frankly, I have neither the time nor inclination to give you a full rehash of the events. So, for the sake of brevity, let's get right to it.

First of all, if you haven't yet listened to Santa's interview with Eric King yesterday, please do so now! Click the link below and keep the audio running while you examine the rest of this post. Be sure you listen to the entire thing. The last 3 minutes are extremely important!

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2012/3/1_Jim_Sinclair.html

First of all, yesterday was nearly an exact repeat of 9/6/11. That day, gold was ruthlessly attacked in the minutes before the announcement by the Swiss National Bank that it was pegging the Swiss franc to the euro, effectively devaluing the franc by about 10%. At the time, the Swissie was considered to be the only "safe haven" on a level with gold and the devaluation should have resulted in a massive rally for gold, a rally that would have driven it to new all-time highs and toward $2000. Instead, we got this:

paper_9-6amgold5_0.jpg

Yesterday, the ECB "loaned" another 530B euro to over 800 different "financial institutions". This is a huge amount of fresh liquidity (money) (cash) (QE). And from where does this money come? From the ECB. And from where does the ECB get their cash? Two places:

  1. Infinite "swap" lines with the U.S. Federal Reserve
  2. The IMF, which is partially funded directly by the U.S. Federal Reserve

All of this brand spanking new cash should have driven gold sharply higher, just as the Swiss announcement back in September should have done. Instead, gold was raided. Chairman The Bernank also conveniently used his scheduled House Financial Services testimony to mention that (paraphrasing) "because of a slightly improving U.S. economy, perhaps not so much QE will be needed in the future". This is bullshit.

  1. As noted above, just yesterday morning, the Fed provided over $600B in fresh money.
  2. The Bernank's economic optimism is based upon the fully-nonsensical, manipulated and distorted BLSBS report from last month, documented ad nauseam here and elsewhere on the internet.

But gold was perilously close to breaking out and through $1800. IF this had happened, algo dollars would have rushed into gold in a fashion similar to what occurred in silver on Tuesday. Gold would have soared and rolled immediately toward the old all-time highs. Silver, too, would have rallied. It would have left The Battle Royale in the dust and began an assault on $40. THIS COULD NOT BE ALLOWED TO HAPPEN!

The decision was made and the plan was executed. As we know through sources like Goldmania3000 and several others I won't list here, the initial attack came from JPM in the form of a 10,000 gold contract sell order that was initiated with complete disregard for effective price execution. The sole intent was to influence price lower and set off WOPR sell signals. Sadly, this tactic succeeded again and here we are.

All of that said (and the reason why JPM was the instigator in gold), I firmly believe that this was primarily about silver. As you know from reading the research of Ted Butler, JPM is currently short about 22,000 silver contracts, up from 13,000 in late December. By late Tuesday, they (JPM) were getting crushed and, with fundamental changes to the global silver market coming over the horizon, their only option was to attack in the hopes of driving price lower, forcing the new specs out in a panic and using this spec selling as cover to "buy" and exit as much of their short position as they could. That silver failed to fall $5 yesterday had to be amazingly frustrating and disappointing for them. You can be certain that they will attack again...and soon. Though next time, they won't attack silver indirectly, through gold. They will, instead, attack silver with a full-frontal assault and try to drive it lower. Will they be successful? Probably, but not to the extent to which they've grown accustomed.

Look at the action yesterday. Gold was driven lower and silver followed, in tandem. The attacks ended at about 11:30 EST and the dust was allowed to settle. After bottoming at $34.20, silver began to rebound and, by the close, it was back up to nearly $35. What happened next had to befuddle the EE. Gold was viciously attacked on the Globex at approximately 3:15 EST. However, silver barely budged. In fact, it again rebounded and, by last evening, was again trading over $35. In the words of MrsF to an LT: "This behavior will not be tolerated!". The EE will, undoubtedly, come for silver again. They may be successful in driving price marginally lower but all this will do is create a buying opportunity.

paper_3-1amgold15.jpgpaper_3-1amsilv15.jpg

Again, silver is headed significantly higher from here. Maybe not tomorrow but definitely by later this spring. It will be higher still this summer. Even higher still this autumn. If The Forces of Darkness are successful in drivig price to $33, buy some. If they drive it to $31, buy some more. Keep buying it and take delivery. You will be rewarded but, more importantly, you will be insured against the further monetary destruction that is most assuredly coming, regardless of what The Bernank may have mumbled yesterday.

paper_3-1amsilvd1.jpgpaper_3-1amsilvd2.jpg

paper_3-1amsilvw.jpg

Just as further attacks on gold followed the initial attack of 9/6/11, you can anticipate that they will come for gold again, too. So far, gold stopped right on cue above 1680 yesterday. Beautiful, and that may continue to act as impenetrable support. However, as you can see below, gold may be about to form a massive, reverse head-and-shoulder bottom on the daily chart. Fine with me if it does. If gold were to actually fall another $100 from here, toward 1650 and 1600, it would present an extraordinarily wonderful buying opportunity. Please, Cartel. Please drive paper gold even lower for us. We'll be waiting for you!

paper_3-1amgoldd.jpgpaper_3-1amgoldw.jpg

OK, that's it. It's already 10:30 and I've got to get this published. More later. TF

p.s. A "shout out" and an "atta-boy" to all the regulars at Pailin's Trading Corner. Yesterday, they crossed the 1,000,000 pageview mark in their own little corner of Turdville. If you don't make reguklar stops there during your trips to this site, you are sorely missing out. They do fantastic work there and consistently share insightful and helpful information. Congratulations to you all for helping to make this such a great site!

http://www.tfmetalsreport.com/forum/pailins-trading-corner/242?page=606#new

p.p.s. The February "Turd Hat" contest ended yesterday. Here are the results:

The April12 gold contract closed on the Comex at $1711.30. Pining4thefjords guessed $1711.10. WOW! He's as good with the crystal ball as he is with photoshop!

The May12 silver winner is Murphy who guessed $34.74 when the actual close was $34.64. Spectacular!

Please email me your mailing addresses, boys, and the hats will be sent on the way. 

p.p.p.s.  Look very closely at the chart below. You will see that previous drops on the order of magnitude seen yesterday were not stand-alone, singular events. They are almost always followed by additional attacks.

IF more attacks come tomorrow, your ultimate buy point will be the area near the two intersecting lines on this chart. Note that the area coincides with the potential reverse H&S targets, too.

Important: I'm not saying this will happen. I'm saying that it could, based upon Cartel history. Currently, I'd put the chances at 30%. If trading, be cautious of this dip. If stacking, be hopeful for this "sale"!

paper_3-1amgoldd2_0.jpg

229 Comments

bellyacre's picture

FIRST

First!!!!Thanks Turd, keep up the good work.

Alijo's picture

2nd

cool!

RTMoney's picture

Still looks like like we are right on schedule to me

Still looks like we are right on schedule to me.  The white is Feb 2011 - Apr 2011, the black is Jan 2011 - yesterday.  This looks eerily like the 45 degree incline from last year, one month ahead of time.  I'm with Turd, its got plenty of room to move up from here.
 
agrock's picture

3rd

third

lairdwd's picture

The criminals are still at it

Sell pressure is relentless. Can't have a good raid without at least one day follow through I suppose. Tell you what though, silver has held 34.50. Even when gold was selling off, silver held 34.50. If it was going to crater lower, that would have been the time. Specs are stepping up - albeit tepidly at this point, still waiting for the all clear. 

It's still a time to be very careful.  We're not out of the woods yet. As long as the criminals are still so active, there is danger in the air. That said, longer dated options like April/May/June are the bargain of a lifetime. The cartel has 5 1/2 days and counting to get those short numbers lower to have a COT that looks even somewhat remotely non-criminal. Happy Tuesday should be a blast this week. 

MrSteed's picture

Jesse Cafe (repost from end of last thread)

"....I have seen reports that 225 million ounces of paper silver were dumped on the Comex in less than thirty minutes. 

The last time I checked there were less than 35 million ounces of silver registered with the dealers for delivery in at the Comex.

First day notice is when holders of paper futures give notice to the exchange that they intend to take delivery the silver claims they hold from the Comex warehouse. The amount of paper held is multiples of the bullion that can be delivered at current prices.

The 'tell' is the lack of a serious sell off in equities. The yawning divergence in the risk trade is hard to miss.

This notion that gold and silver are selling off because Bernanke is not going to do QE3 is ludicrous.  He does not need to do QE3.  The Fed is all over these markets in Operation Twist.  Jim Rickards has explained this scenario many times that I have linked here.

What is the answer? Unless you are a full time experienced trader playing with 'cool money,' stop trading. This market is far too thin and given over to gimmicks for the average person to participate. It really is...."

http://jessescrossroadscafe.blogspot.com/2012/02/today-is-first-notice-day-for-silver.html

iceman321_2k2's picture

Ron Paul vs Bernanke

Turd Ferguson's picture

Trader dan on silver

MODERATOR
Dr G's picture

Meh. Here is the YTD

Meh. Here is the YTD performance chart. Silver is kicking A$$ and taking names.

And then this embalmer in Colorado has been stealing gold crowns off the bodies and pawning them for cash. What a barbarous relic:

http://denver.cbslocal.com/2012/02/29/embalmer-allegedly-stole-gold-crowns-from-the-dead/

LaMachinna's picture

Adrock!

You were proudly - THURD!  Sometimes known as a more coveted postion than first wink

LaMachinna's picture

Adrock!

You were proudly - THURD!  Sometimes known as a more coveted postion than first wink

tpbeta's picture

Is that correct?

You wrote:

"And from where does the ECB get their cash? Two places:

  1. Infinite "swap" lines with the U.S. Federal Reserve
  2. The IMF, which is partially funded directly by the U.S. Federal Reserve"  

I thought they could just print the stuff themselves, so long as they had collateral on the  loans in questions (which they do.) Maybe I'm wrong. Certainly that's how they fund their bond purchases. It should be noted that most LTRO money ends up back in their coffers anyway when the banks use the money to buy said bonds with their LTRO money. Bit of a Euro-ponzi circle jerk.

ps  I raise this because anything bad for the Euro is probably going to strengthen the POSX, and so the effect on PMs is somewhat muted. It's $ QE that hits the PMs in the sweet spot. So the connection between ECB and US $ is quite important.

agrock's picture

when does...

when does the whole system completely break free of the cartels hands and the comex implodes?  seems like it has been on the edge now for a long time.

apex101's picture

Question

On the weekly chart dating back to 2009 for gold. Where is the bottom of that trendline? is it 1600 or 1650 i cant see it clearly for some reason? Any one can see it?

diegeiro's picture

CNBS

"Direct exposure by US banks to European debt is limited."I guess it depends on what your definition of direct is.

Groaner's picture

Groaner was not that far off

look at the steady sell pressure the last 45 minutes! Crooks are at it. for sure

Groaner's picture

They will Never Never give

They will Never Never give up. Lawless Kleptocracy in action

SteveW's picture

Comex silver

Over 16 million oz is standing for March delivery. If most of that goes as metal the cupboard should be pretty bare.

Dr G's picture

Yes, the Comex silver was the

Yes, the Comex silver was the one thing Turd didn't touch on today. How many standing for delivery and how does it compare to previous months. Standing for delivery is hereafter known as a raid ON the Comex.

And for the record, the Kitco 3-day charts make me want to puke. Can't wait for Andy to rant on this.

beardeus's picture

Some crazy shit going on around here

This has probably been posted above but is well worth the ~9 minutes.

Haha! I love when Paul asks Bernank if he does his own grocery shopping. Not to mention Ron Paul just destroys Keynesianism every time he opens his mouth.

Dr G's picture

What is with the crazy silver

What is with the crazy silver swings in Crimex today? Sheesh.

From $35 to $34.50 is a 50 cent swing.

Then, from 34.80 up to 35.40 is a nice 60 cent FUBM.

Then from 35.40 back down to 34.88. Another 50 cent swing.

I'm getting seasick.

And a big LOL directed at CNBS for their crappy headline: "Weak Manufacturing Data Raise Questions about Recovery". Well no $hit. We are screwed and entering a depression. Just keep those blinders on, MSM.

SteveW's picture

Financial system on life support

According to the ISDA:

1. The fact that the ECB gets paid in full while others take at least a 75% haircut does not make privately held bonds subordinate.

2. The above mentioned 75% loss of value does not constitute a default.

3. The ISDA reserves the right to alter these interim findings should the situation change.

http://online.wsj.com/article/BT-CO-20120301-709939.html

Santa was entirely correct. If things aren't working out well then one needs to simply change the rules. There are no longer any rules, anywhere.

lairdwd's picture

Only around 500 first day delivery notices filed

LOL. The criminals are desperate for physical. 500 out of 3200 standing (as of yesterday)  Should be interesting to see how many more notices come over the next week. 2700*5000 = 13.5M. So much for the 30M in the vaults. NOT.  

Turd - also FYI - the CME data showed a 33.75 print as the intraday low for yesterday on silver. That makes a nice even 10% selloff from top to bottom. 

bullwhip29's picture

Thoughts...

sorry, this was posted at the tail end of previous thread.

http://www.tfmetalsreport.com/comment/136327#comment-136327

Dr G's picture

@lairdwd, good point about

@lairdwd, good point about the even 10%. I heard that first from BrotherJohnF last night. A perfect 10% drop in the price of silver. You can't make this stuff up. Yeah, that's normal trading.

Doc1800's picture

Looking at the chart

I have my catchers mit out at $33.80 support.  Some powder that is getting a little stale will be put to good use.  Folks we need a nice 3 wave pull back to get rid of some stale powder.  I am interested in the deliveries bc again supply and demand of PHYSICAL will be what drives the market.  The paper shenanigans are only going to last until the physical supply is down to absolutely nothing and suppliers get nervous and start to stack their inventory.  

Turd Ferguson's picture

March12 delivery

MODERATOR

At 4,200 contracts, there were almost 1,000 more contracts standing for delivery last March vs this March.

As a percentage of total open interest, however, it's about the same.

lairdwd's picture

My take on todays price action

As one of the other guys mentioned. As soon as gold/silver hits key resistance - they slam it back down.  On silver - 35 , and if that gets away from them 35.50. Gold, 1725 - slamathon. Today's action is still a continuation of yesterday, with the London goons doing their part taking it down 20 points to start off the day. 

DXY action is the key thing from here. Keep an eye on it. 

Jan Roos's picture

Why do we think JPM is scared?

I've been reading on this site and others for over a year now that JPM has this huge short position in silver and they are desperate to get rid of it because it is about to blow up on them and bankrupt the company.

I am not too sure anymore. Why would JPM go from 13000 short contracts in December to 22000 today if they are so desperate to get out of their short position?

Doesn't make sense to me.

Cheers

Jan

Turd Ferguson's picture

Jan, wait until tomorrow

MODERATOR

Jan, wait until tomorrow afternoon and I'll have some answers for you.

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