July Silver Option Expiration

It's July silver option expiration day and it's Tuesday. Put those together and you have to expect some volatility.

So far, the activity has been light but, as of 10:20 EDT, it appears to be heating up. Silver just dropped about 20c and gold $5. Let's see if this continues. I haven't looked at the silver option open interest but I would imagine that there is some decent volume around $27, seeing as how that level has acted as support for the past 8 weeks or so. With that in mind, I would expect the activity in silver to center around that level today. I wouldn't look for the same volatility we saw in February and April as the "market" has been flat and rangebound for the past eight weeks or so. Nonetheless, a volatile trade that whipsaws around $27 is likely in order today.

Here are two daily charts. The silver chart is particularly nasty. Though I believe that silver is in a sideways consolidation and basing pattern, you can clearly see that silver remains in the down channel, as I've drawn it. Yuck. Gold, on the other hand, looks like it's trying to break out...if I draw the lines the same way. Not sure what this means, if anything, as I think the horizontal, basing pattern is more important.

And I need a little help with crude. Why on earth is it down 25% in the past 2 months? Is the global economy slowing that much? Is OPEC exporting record amounts? Is the U.S. economy so bad that surplus is stockpiling both on and off shore? Did the O'Bottom Regime scare out all of the evil, nasty speculators? Is there a coordinated effort being made to get U.S. gasoline prices down before the election? I'm open to all theories. I guess we should be happy that gold and silver have hung in there as well as they have in the face of this.

And this is interesting. "Out here in the fields, I farm for my meals. I get my back into my living." Well, lately, it's HOT HOT HOT and grain prices are going UP UP UP. I recognize, of course, that as soon as I post these charts, a new forecast will show up with cool and wet weather over the horizon. Regardless, check these out. If the heat continues and even gets worse, what's the limit for corn? $8? What's the limit for beans? $20?

In the news today, a couple of items merit your attention. First, this little number from Izabella Kaminska at the FT. Seems that gold swaps with the BIS continue. Where, exactly, do you think that gold ends up? Do you think it just sits in "central banks and commercial institutions"? Hmmmm???...

http://ftalphaville.ft.com/blog/2012/06/25/1058101/

And how about this...Uncle Ted referenced this article in his latest newsletter. It should provide some rather interesting discussion points.

http://economix.blogs.nytimes.com/2012/06/21/losing-faith-in-american-institutions/

And I thought I would give you this, too. Over the weekend, I remember seeing a comment here about how "Turd says gold will be $10,000 sooner rather than later". It always amuses me how my comments are often parsed together and taken out of context. So let me be clear on this: Gold could go to $10,000. It could go to $20,000. Heck if I know. What I do know is that it is headed multiples higher when the world finally reverts back to some type of gold-backed, international trade settlement system. Will this happen tomorrow, next month or by 2015? I don't know. It is, however, going to happen.

With that in mind, I give you the latest from our pal, Jeff Nielson, where he does give you a number and a date.

http://www.bullionbullscanada.com/silver-commentary/25569-my-last-forecast-on-silver-and-gold-prices

Jim Quinn has penned part 3 of his latest series:

http://www.theburningplatform.com/?p=36198

Lastly, I simply want to thank everyone that has signed up for TurdTalksMetals. It's going to be a very fun, new service and I'm confident that most everyone will find it well worth the subscription cost. I find it amusing that there are so many folks eager to tell me how stooopid I am and how undeniably worthless the new service will be. Thanks for that. To all of those seemingly excited by the prospect of our failure, I close with a little more Baba O'Riley:

I don't need to fight to prove I'm right. I don't need to be forgiven.

TF

p.s. And just because someone will post it anyway...

325 Comments

tpbeta's picture

First

Yes I know it's dumb. Token serious minded comment...do we think the current spike down is caused by Dan Norcini's spec short hedge funds following the CCI, or is Blythe just in a bad mood?

Istack's picture

oh yea

gonna buy some more today! i'm getting off the titanic

¤'s picture

Thanks amigo

You're right...I would've posted that vid devil

Thanks for the update and the effort that goes into all of this. 

We seem to be in lull right now and I think we're really  close to something significant breaking loose in many area's. 

Everyone have great day and appreciate all the little things in life as much as possible.

Dr G's picture

Fallin' like a rock, just

Fallin' like a rock, just like the big man predicted.

@Turd, remember, it's not volatility because it never occurs to the upside. Ranting Andy would be ashamed of you. :)

tpbeta's picture

@Quixote2

Just for the record, nothing to do with me

Larry L's picture

Option Expiration

Thanks Turd for keeping us up-to-date on the Options Expiration time. We get so busy with many things we tend to forget the opportunities around this time frame.

Many thanks for all you do!!!

Turd Ferguson's picture

It's like they're my

MODERATOR

It's like they're my stalkers. Not really sure why anyone pays attention to them. I don't.

LOUP-GAROU's picture

Thanks

Thanks Turd for the update, dont matter when! it just will. the big question I have is when will our gooberment wake up from their deep sleep and do something right for a change, wishful thinking right.

JohnG's picture

Crude

See here for crude price differential explanation:

http://www.zerohedge.com/news/guest-post-oil-price-differentials-caught-between-sands-and-pipelines

Short summary: Cushing is overflowing.

achmachat's picture

off topic... but major WTF moment:

The leader of Turkish Party DSP just announced "Turkish Jet was shot down by the Russian Warship Admiral Chabenenko. We have proofs.". The statement was given in an article of the turkish Medyafaresi magazine. 

source:

http://www.medyafaresi.com/haber/82836/guncel-ok-iddia-turk-jetini-rus-apanenko-gemisi-vurdu.html

¤'s picture

Good advice

Let's move away from it. I am.

Thanks for your patience and not letting it get to you.

It's just part of the wacky cyber world where anonymity allows for unrestrained commentary of all types.  I should know blush

I'm really tempted to buy something shiny and have been resisting for the past week or so. I've had probably 4-5 orders filled out and deleted them at the last second before checking out.

Mr. IRS man audited me about 4 weeks ago and wants another $20K for taxes 2 years ago so I'm a bit hesitant right now about using that dry powder and with good reason.  I remain optimistic.

G'rrr...angry

arcanix's picture

Pimco's Bill Gross...

...with an excellent article on the evolution of our current economic debt burdened system.

Repost from last thread.

Look for yourself, it's worth a read !

Wall Street Food Chain
  • Soaring debt/GDP ratios in previously sacrosanct AAA countries have made low cost funding increasingly a function of central banks as opposed to private market investors.
  • Both the lower quality and lower yields of such previously sacrosanct debt represent a potential breaking point in our now 40-year-old global monetary system.
  • Bond investors should favor quality and “clean dirty shirt” sovereigns (U.S., Mexico and Brazil), for example, as well as emphasize intermediate maturities that gradually shorten over the next few years. Equity investors should likewise favor stable cash flow global companies and ones exposed to high growth markets.​
 
The whales of our current economic society swim mainly in financial market oceans. Innovators such as Jobs and Gates are as rare within the privileged 1% as giant squid are to sharks, because the 1% feed primarily off of money, not invention. They would have you believe that stocks, bonds and real estate move higher because of their wisdom, when in fact, prices float on an ocean of credit, a sea in which all fish and mammals are now increasingly at risk because of high debt and its delevering consequences. Still, as the system delevers, there are winners and losers, a Wall Street food chain in effect.
 
These economic and/or financial food chains depend on lots of little fishes in the sea for their longevity. Decades ago, one of my first Investment Outlooks introduced “The Plankton Theory” which hypothesized that the mighty whale depends on the lowly plankton for its survival. The same applies in my view to Wall, or even Main Street. When examining the well-known wealth distribution triangle of land/labor/capital, the Wall Street food chain segregates capital between the haves and have-nots: The Fed and its member banks are the metaphorical whales, the small investors earning .01% on their money market funds are the plankton. Yet similar comparisons can be drawn between capital and labor. We are at a point in time where profits and compensation of the fortunate 1% – both financial and non-financial – dominate wages of the 99% and the imbalances between the two are as distorted as those within the capital food chain itself. “Ninety-nine for the one” and “one for the ninety-nine” characterizes our global economy and its financial markets in 2012, with the obvious understanding that it is better to be a whale than a plankton. Not only do Wall Street and Newport Beach whales like myself have blowholes where they can express their omnipotence as they occasionally surface for public comment, but they don’t have to worry as yet about being someone else’s lunch.
 

Full article to be found here:

http://www.pimco.com/EN/Insights/Pages/Wall-Street-Food-Chain.aspx

And for the german lurkers, like myself:

http://de.pimco.com/DE/Insights/Pages/IO-GER-Jun12.aspx

cheers,

Dave

¤'s picture

achmachat

Whew!  That would indeed ratchet it up to a whole new level.

I said it last week right after that G20 and Obama's parting comments there... this will start to move very quickly from that point on.  It has.

Whatever happens over there, it'll be epic and will decide or shape the balance of power and influence going forward for another 100 years. Jmho.

SV's picture

BTFD INDIA AND US

Nice little dip. It continues to fall over in India as well! East West Tag-Team BTFD

Spot Silver Prices in Indian Rupees

http://silvervigilante.com

achmachat's picture

Indigo...

it might just be your opinion... but we all know that as the time comes when they start throwing bombs on each other to distract from the fact that their entire system has collapsed, we'd all wish that we had bought a little farm in New Zealand or Fiji when we still could have... 

Tesla's picture

Thanks Turd

Can't help but nibble on these dips... Just a little bit <$27 the last few days. Thanks for all you do and best wishes for the success and growth of the new sister site. 

Larry L's picture

WHERE'S MY SILVER LADIES!?!

WHERE'S MY SILVER LADIES!?!  I think we should go shopping again!

California Lawyer's picture

Turd, Stalkers?

You have arrived my man.  Congratulations.

By the way, the new site is great.  Looking forward to the interesting variety.

I am still going to read all your posts here, and the comments here, and post when I can add meaning.  I am not leaving this site, I enjoy it too much.  The only thing I ask, and not from you, Turd, but from the others, is to keep posting.  

I enjoy ALL comments, opinions, etc., especially those that differ from mine.  The last thing I want is to read comments from everyone who thinks just like me.  I want to challenge my beliefs. I want to be held accountable for drawing my conclusions.  I want to be questioned about the assumptions I hold, that facts I believe to be true, etc.  If someone posts a comment that does that, I am all in favor, and I say thank you.  Just please avoid the ad hominem attacks.  I can get that anywhere.  Remember, I am a lawyer, so the ad hominems are everywhere for me . . .  [e.g., "How can you tell whether something is road kill or a dead lawyer?  There are skid marks for the road kill . . . bada bing!]

Go enjoy the outdoors this summer.  Come back refreshed.  I suspect the events of late summer, early fall will be historically momentous, for the ages.  I am excited for sure.

Preps: 

Cash on hand, check.  Gold, check.  Silver, check.  Food, check.  Water, check. Guns and ammo, check.  Running, cycling, swimming, workouts, check.  Tough Mudder preps, check.  Meeting up with SWS and Pining, check [Nice photo, Pining! Check out the cool shades . . .]

Disneyland with the kids - 

Camping with the kids -

Rafting adventure -

Beach -

Golf tournament - 

Shooting events/classes -

Making home-made ice cream - 

Sun-drying my garden's Roma tomatoes -

Note, nowhere on my summer-of-fun list does it say: "Obsessively reading and posting constantly at TFMR hours and hours each day, worrying about whether Turd has picked his bottom."  Just a suggestion, is all.

¤'s picture

achmachat

Yep....I wish I had a small place in the countryside. No question. And I agree, they can't constructively solve todays problems so they'll do the exact opposite and get destructive.

babaganoush2307's picture

@ Achmachat

Greece just discovered a massive natural gas field on the boarder of Turkey and Greece, it is enough natural gas to supply all of Europe for 50 years.  Greece doesn't want to tap it because they fear they will go to war over it and loose because they only have a population of 10 million, so Russia wants to tap it and sell it to Greece who will then sell it to Europe.  Hench why the Turkish drone was shot down by Russia.  Please note, I have no source on this except a friend who lives over there and that is apparently whats going on.  He told me everyone over there thinks that that's where WW3 will start :/ Scary stuff, hope he is wrong...

babaganoush2307's picture

Here you go achmachat

Nick Elway's picture

Screwtape did you a favor

I am thankful for the screwtape post.  I know I'm not putting my credit card into a web page that doesn't have https:// in the address.

http://screwtapefiles.blogspot.com/2012/06/on-being-right-and-wrong-at-s..

The screwtape post explains how some would be assured it was secure but this geek-for-40-years doesn't buy it. 

S Roche's picture

You know something....?

We all have friends who built on early success, they defeated the naysayers, they made new, important friends who encouraged them and they expanded into new ventures...and we supported them, but...we were fearful that they would ignore basic building blocks of their success and be vulnerable.

Turd, the guy (who has donated money to you) is pointing out a security flaw in your site and the reasons for it...and you shitcan him? Time for a timeout my friend.

Missiondweller's picture

BIS (BS)

So the BIS doesn't consider gold to be Tier I capital but it is facilitating currency swaps with gold. Interesting.

I'm sure the PIGS are making great use of this Swap facility to keep their country afloat. Perhaps this is why they cannot pledge them as gold backed sovereign bonds...the gold is already pledged.

OrangeAlert's picture

Not going to lie

I am a little worried about the non-https page when you enter the info in before it goes to https for the actual transaction.  I'm going to be watching the account closely.  So far so good though.

Excalibur's picture

Scheming Shysters- the lot of them

GREEK DEFICIT: How Berlin encouraged Papandreou to big-up the 2009 Greek deficit

Defence of German banks a key factor

Schäuble and Merkel….implicated in an incredible scam

How Venizelos fired ELSTAT moles to cover up the truth

Spanish European Commissioner backs story of international fraud

The Western MSM have never questioned the ‘received truth’ that Athens understated its liability and obligations for several years following the launch of the euro. But few if any outside observers know the truth behind what happened when Papandreou took over the Premiership in Greece….and for Machiavellian reasons, the debt was suddenly overstated.

http://hat4uk.wordpress.com/2012/06/26/greek-deficit-how-berlin-encouraged-papandreou-to-big-up-the-2009-greek-deficit/#comments

OrangeAlert's picture

Also not going to lie about Gold

I'm concerned when I hear Turd say, Gold 34 contract net change (no change) = a bunch of new shorts + a bunch of long closes.

To me, that would indicate a move down in price next, not up.  But what do I know.

averagejoe's picture

Good luck

Good luck with the new site Turd. First time actually logging in a few months. I have lurked once or twice per week just to see your thoughts though. I have been out of paper and working as much as I can lately and will be for a few more months. Thinking of joining now anyway just to support you. I just buy a little physical every month atm.

I hope your site makes Turdities some money. Which then gets converted to physical. yes

Gramp's picture

Just a quick search for Nat West troubles...

Message to Customers from Stephen Hester RBS Group Chief Executive

The problems of the past few days have caused disruption and inconvenience for our customers as well as for many customers of other banks.

I am very sorry for the difficulties people are experiencing. Our customers rely on us day in and day out to get things right, and on this occasion we have let them down. This should not have happened.

  Link  here

http://www.natwest.com/personal.ashx

This demonstrates the importance of  being financially viable outside the banking system...

We have guests here now, they are so wrapped up in nothing, I may as well  walk in the room dragging my fingernails over a chalkboard, as to try and start a conversation about Banking, PMs, ect...  ( shakes head)

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