Man, I HATE Being Wrong

Hate it. Hate it. Hate it! As you might imagine, I take this "responsibility" pretty seriously so it bugs me to no end on the occasions when I am dead wrong. Two weeks ago, I proudly gave you another "Turd Bottom" in gold and, this time, I was wrong. The questions now are: 1) Why? and 2) What happens next?

Let's work on the "why" part first. Perhaps it's nothing more shameful than simply jumping the gun. Soon after the Leap Day Beatdown, I posted charts that showed that gold might fall as far as 1600 and that silver could see 31, maybe even 30. Maybe I just got impatient and went looking for bottoms too soon. This could be the simple answer but we'll only know for certain once we are granted the hindsight necessary to accurately assess the battle.

My underlying fear, though, is that post-MFG, The Comex is completely broken. I say this because everything that The Turd has traditionally used to predict price suddenly seems in question.

  • RSI and MACD point to oversold
  • Lease rates neutral
  • Occasional backwardation in price indicates physical tightness
  • Reports of significant physical demand at these price levels
  • Open interest at remarkably low levels
  • CoT reports undeniably bullish for both metals

I still expect that prices will bottom soon, in the area where I'd originally projected. Both charts will be painted with massive, reverse head-and-shoulder bottoms and happy days/smiling faces will return to this site. However, we must be aware of the possibility that a disconnect is finally occurring between paper and physical price. There should always be an arbitrage. The paper markets should always have some connection to reality. But, in the post-MFG world, are we seeing something different? If, as I've speculated, The Comex is now entirely ruled by The Cartels and The WOPRS, who is to say that price cannot continue lower? Yes, there are high net worth individuals, large institutions and even countries that are desperately accumulating gold. But do you think that they actually care if The Devils keep jamming the price lower? They likely welcome lower prices! A sovereign nation or central bank that is planning on buying significant amounts of gold this year certainly has an average price in mind that they are willing to pay. If The Forces of Darkness and some WOPRs are intent upon jamming price lower, the Sovereign will gladly pull its bids, let price fall and pick up physical metal at a later date and at a lower price. So, we must be careful here. Yes, price should definitely bottom very soon. IF the metals "markets" are still at least partially-linked to some level of reality, price will soon reverse and this manufactured correction will end. BUT, we must be aware of the possibility that this will not soon end. IF the Cartels and the WOPRs truly are the only remaining players of size in the pit and IF they just continue to sell, price will continue to fall regardless of the fundamentals and the technicals. It will, eventually, bottom and the stage will be set for The Mother of All Short Squeezes (TMASS), but that could literally be months from now and at a much lower price.

GOLD

paper_4-4amgoldw.jpgpaper_4-4amgoldd.jpg

paper_4-4amgoldh.jpg

SILVER

paper_4-4amsilvd.jpgpaper_4-4amsilvh.jpg

One more thing. I mentioned back on Friday that this week was going to be all about The Pig. Now, this hasn't overtly been the case but look at what the FOMC minutes did to the POSX chart. Note that, just as The Pig threatened to break down and through the trendline from the late August bottom, the Fed magically rides in for the rescue. Coincidence? Rrrrright...I think you know by now how I feel about coincidences.

paper_4-4ampig.jpg

OK, that's all for now. As I close, I see that things still look rather lousy at 1622 and 31.52. Hang in there and keep the faith. The truth, the facts and simple logic are all on our side. Brighter days will return soon.  TF

336 Comments

LaMachinna's picture

First

smiley

bellyacre's picture

FIRST

FIRST (NOT, Rats)

iceman321_2k2's picture

Nice pullback

No? APMEX has some 99 cents over spot sales for sunshine 1 0z bars.

Be Prepared's picture

The Sideways Year....

It might be time to see that this Year may be more of a Sideways type of action in the PMs.  It happens and has happened even during this bull run.... so it shouldn't surprise us that we might very well be subjected to only a slight increase over this entire year.  That is not to say that we won't have a world of crazy volatility!

The Only Chart that Really Counts.... these aren't going anywhere.....

dmanson's picture

This Raid sucks

I had just bought too but whatever, it's long term we all need to keep in mind.

Schwartz9546's picture

This sucks!

This really sucks!

TitanAe's picture

Hey Turd !!!!

Don't worry what could did you execpect !!!!!!???? After learning a lot from this site how could you not see this coming ??? Obama wants to win and he has to set things up so he does !!! Once he is back in the truth will show it self and BAMMMMM  !!! Reality hits debt to the moon and NOOOOOO one has A JOB !!! Ok maybe a few work LOL !!!!

Take care Turd !!!

Turd Ferguson's picture

Part III from Jim Quinn

MODERATOR

Jim just released Part III of the excellent report he's recently written. 

http://www.theburningplatform.com/?p=32482

squib's picture

dang

No dry powder here.

But what's a couple hundred fiats as one should not be focused on today (regarding PMs that is).

More ammo then.

Strongsidejedi's picture

TF: The issue is MF Global gold moving

I saw a report yesterday morning that MF Global's gold was moving.

I have to assume that the price fluctuations are part of the movement.
I can not locate the story now as it appeared for a short time on a morning FnTV program.

The story was that MF Global's creditors were being permitted to take payment in gold.  The story claimed that it was MF Global's gold moving, not clients.

Ask Celente.

exiledbear's picture

Don't sweat it too much

You wonder why I don't say more about which way things go? I've taken my lumps too.

I did say something about how I didn't think things would stay stuck on 1660 this week, just because markets in general don't like to sit still for very long (they're sorta like 2 year olds on three cups of double espresso). That's the sitting part that Livermore kept talking about, it's hard to sit, when the whole crowd is always moving and always wants you to move too.

Notice very carefully, I didn't say which way the move would be.

These bear interludes run as long as they want and then they're over. And it won't be obvious the bear interlude is over until probably several weeks after we've passed it. Even the manipulators will eventually run out of ammo, or screw up in some way that will take them several months or weeks to get things back. Or maybe enough people will figure out they're printing money no matter what they're saying on the TV and they'll get overrun.

In the meantime, if you're UNLEVERED and PHYSICAL - shoot the breeze and find something else to do, while the manipulators finish, um, writing their names in the snow.

If you're holding gold to get rich quick, you're holding for the wrong reasons. You're holding it because when you need it, you'll really need it. Until then, it's kinda inconvenient to own for the most part.

AGAU's picture

droolin'

I have some stink bids in for my fav miners and some cash in my goldmoney account just a- waitin' for sub 30 silver and sub 1600 gold come on down --  benny boy - we is waitin' it helps my heart palpitations when the SHTF ho ho 

peace

realitybiter's picture

miner non-confirm

It should have been a little more than disconcerting that the miners weren't taking out their Mar 26/7 highs two days ago, as silver was....sigh...I noticed this..of course, ignored it...

watched bottoms never bottom.  pots, boil...

LOUP-GAROU's picture

thanks

thanks for the update Turd, you cant blame yourself for what comes out of bernake's  mug! we should send B.B. some imodian  A D for his diarrhea of the mouth! keep up the great work!           If you don't hold it,you don't own it!

¤'s picture

Thanks Big Yellow-Hatted One

Yep, they have assumed control and they're riding the algo's like an oscilloscope in a steady up and down pattern within a range. That's what it looks like. 

The most powerful tool they actually have is the MSM and all the sound bites and speeches they've been engaging in have had a effect. The power (and fear) of their words to the big hedge's is what their after. Mission accomplished recently, so far.

It will need to be the big hedge funds and other big players who will eventually take the metals higher once they plow some serious money into the sector. If that big money is hesitant and fearful of getting short sheeted by the mere words and actions of the Fed and the minions they keep rolling out then that same big money might just be a little cautious and even avoidant until they get 'the word'.

It's a little more then odd that we have a CB that needs to and relishes in using the MSM as much as they do and it appears to me that it's actually becoming more frequent. They know they literally have a captive audience hanging onto their words. 

tanman's picture

Gold Trendline (Will Resistance become SUPPORT??)

FWIW, Gold is about to touch the downtrend (resistance) line from the 8/23/11 top. Would be nice if this previous resistance line became support. I have Gold touching the line at ~1610 - 1605ish.

JimmyTheHand's picture

Bull trap

Seems like recent up was a bull trap.  So will they run up on the short side for today to push things down and then cover those shorts and more at lower prices? 

I guess the COT will tell.

Maybe Bernanke is authorizing this smack down in order to get a lower starting point in the PM's before the next QE?

Urban Roman's picture

Decoupling

Yeah, that was me in the last thread. I hate when Turd is wrong too, if I personally put some money on it.

I suspect that there will be a time window here, where the brokers and dealers of physical metal, coins, etc. continue to honor the price set in the paper-shuffling market.

The decoupling, when it gets REAL, is probably going to be accompanied by other major structural problems. Currency controls, perhaps an outright ban on PM ownership. As the deflationist Stoneleigh has said, the government's reach will increase, even as its legitimacy declines. We can already see that happening.

When its legitimacy reaches zero, so will the POSX. But it won't be a time-linear decline, it will be a fractal.

Back to work, Turd, pick us a new bottom!

firstsilver's picture

When will Ben and friends flipflop?

Dow tanking.

Gold and silver tanking.

Oil and natural gas tanking.

Ben and boys' Fed minutes have knocked down everything. The drop of the general stocks will get their attention.

Expect Ben, or a surrogate, to make comments that hint, again of QE. That's especially likely if the stock-market can't find its footing.

These guys are alternating talking both sides of the issue. It's a dangerous game, for them and us.

Bond King Bill Gross on CNBS now commenting ...... says the "wordsmithing" relatively unimportant. Sees few buyers for bonds/treasuries beyond Fed. Still thinks Fed keeps twisting or QE-ing come June.

koan's picture

Mr F.

Don't sweat it mate. And you can always console yourself with the thought that you're not wrong as often as I ;^)

¤'s picture

Soothing distraction

If you need a nice and relaxing visual distraction from the B.S. you might want to check this out.

That's pretty much the reason I started the thread. 

http://www.tfmetalsreport.com/forum/3601/sanctuary-7-indigo-lounge

Turd Ferguson's picture

Good point

MODERATOR

"Gold is about to touch the downtrend (resistance) line from the 8/23/11 top. Would be nice if this previous resistance line became support. I have Gold touching the line at ~1610 - 1605ish."

Yes, I'm looking at this, too. I was going to draw it in the chart but I didn't want to muddle it up with too many lines. Watch that area closely.

ReachWest's picture

This will pass

Thanks for the update Turd - I think your Leap Day bottom targets of 1600 and 30ish are going to be hit.

PM miners are cratering in the vice-grip jaws of this manipulation. I'm outta cash to jump in for more at this point. Darn it. All of this will pass. Stack it up.

waxybilldupp's picture

It's never easy

If this scene looks familiar, it's because we've watched it play out all too often.  No mystery which side represents the EE.  Blythe isn't nearly as cute in her black cape.  We all also know how things ultimately turn out.  Hang in there fellow Jedi.  May the power of the Force be in your stack.

wax off

winemaker's picture

*Warning*

Just wanted to send out a warning that I am about to pull the trigger on some new gold Maples. 

Following nearly every purchase of bullion by me, the price gets immediately beaten down.

Standby for waterfall action...3...2...1...

ReachWest's picture

@IndigoStar7

Yup - I think I'll be heading over to the Indigo Lounge for a stiff drink, before lunch - today.

tread_w_care's picture

The only thing that upsets me about this price drop is . . .

I'm out of powder at the moment! 

Dang it!  Talk about a time to BUTT to BTFD!  

silverstarfox's picture

My first Comment

So I finally registered. I've been lurking since the old site, but here I am. Out in the open. Greetings turdites. 

Concerning present day sell off, my only concern is that something unforeseen comes out of the blue (like losing my job, something medical, weird lawsuit, irs, etc.) and forces me to liquidate all or part of my silver/gold holdings to pay some bill. 

Other than that, I'm just trying to align my portfolio to 20% cash, 20% physical gold, 40% physical silver, 20% mining/energy equities. So what if the price s**t the bed today. If I had some extra cash I would buy. I have become the strongest of strong hands. I would only sell (before a paradigm change) if I was forced FORCED to financially.

Cheer up Turd. The market is rigged. I don't put any money trading options or futures that I wouldn't set down at a card table with. Just sayin.

BagOfGold's picture

A hard lesson to learn...

Always have the money to BTFD!...He who buys at the lowest price...is the biggest winner!!!...

Bag Of Gold

Bart's picture

Interesting

Hi all. Just received this in my webmail account. Thoughts?

Dear Anonymous,

The purpose of this message is to inform you about the Revolution:

OCCUPY HOUSES OF PARLIAMENT IN LONDON ON NOVEMBER 5, 2012.
OCCUPY CONGRESS IN WASHINGTON D.C. ON NOVEMBER 11, 2012.

STOP WAR.
CANCEL ALL DEBT.
REDISTRIBUTE WEALTH.

Please, watch the "Nazi Banksters Crimes Ripple Effect" movie to find out why, how, and to have sound arguments to persuade others. The movie can be easily found with a search engine.

Please, print the flyers at 2012jubilee.info and distribute them.

Please, spread this message and the movie to everyone you know.

-Anonymous

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