Expecting A Bounce

Well this week has certainly played out as expected, hasn't it? The question now is: Will tomorrow be the final piece of the puzzle? Will price rally off of a lousy BLSBS report? I'm quite sure that it will. Come on in and I'll explain why.

At the risk of seeming to beat a dead horse, regular readers of TFMR (and subscribers to TTM) know that this week is playing out almost entirely as expected. Last Friday, I had hoped that his week would be an UP week but I put the chances at just 25%. The more likely outcome was an early-week rally, followed by a mid-week beatdown, followed by a Friday rally that leaves the week virtually unchanged. If you haven't yet, you can read all about it here (complete with the obligatory images of the spec sheep being sheared).

http://www.tfmetalsreport.com/blog/4053/get-ready-next-week

So what do we have so far? The early week gold rally never quite materialized as prices mainly attempted to consolidate last week's gains. Silver rallied though, rising by 54c back on Monday. But the rally toward the top of the ranges never happened because the HFTs decided to front-run the Fed and they began to sell in earnest Tuesday afternoon. From there, the gold price fell over $30 from Tuesday high to Wednesday trough and the selling has continued today. After a brief, Draghi-induced rise toward $1615 this morning, The Gold Cartel was able to smash price and even succeeded, by around noon or so, to drop price back through the 50-day MA, which is currently near $1593. Further HFT/algo selling ensued and, before you know it, price dropped all the way to $1583. With the HFTs and assorted other specs sufficiently short, price has reversed and stabilized just below $1590.

So, why do I expect a rally tomorrow?

  • Well, first of all, why not?? So far, the week has played out almost exactly as forecast so why wouldn't it continue? Seriously. The BLSBS will likely drive price back UP through the 50-day MA...which will inspire short-covering...which will push price back above $1600...which will inspire even more short-covering...and so on and so on.
  • Physical demand in London remains robust sub-$1600 in gold and near $27 in silver. This demand continues to put a floor under the paper price and will soon cause another rebound, as well.
  • And look at these charts. The correlation is undeniable. Note that, over the past month, every single time the RSI drops below 40 on these 6-hour charts, price almost instantly rebounds. The average short-term bounce in silver is around 85c and the average bounce in gold is around $30.

The final part of the "prediction" from last Friday was that, in the end, price would finish roughly unchanged for the week. (Upon further review, I'd expect The Cartels to step in late in the day with the intention of assuring a slightly down week and a red candle on the weekly chart.) Last Friday, the Oct12 gold closed at $1618. An "average" rally tomorrow would push it back to...drum roll, please... $1618. Last Friday, the Sep12 silver closed at $27.50. An "average" rally would push it back toward $27.75, up on the week but still below the early week highs near $28.30.

Of course, how would I have any idea what the NFP number will be tomorrow? I'm not a Fed governor or sleazeball, WallSt banker with inside info. I'm simply stating that, because the metals markets are so grossly manipulated on a daily basis, sometimes it's rather easy to predict what will happen next. We'll see.

Of course, if tomorrow does, in fact, play out almost exactly as forecast above, I will graciously accept all platitudes and honoraria. If it doesn't...well, I'll simply delete this post and pretend that I never typed it. wink

Have a great evening! TF

5:00 pm EDT UPDATE:

​I can't confirm it yet but it appears that silver margins are being reduced on Monday. Keep checking the comments of this thread for updates and/or confirmation.

Also, I just came across this GoldMoney podcast. Alasdair Macleod interviews John Butler. I haven't had a chance to listen to it yet but I'm supremely confident that is is well worth your time.

238 Comments

Jan Roos's picture

First?

Bam

question's picture

Closest I'll Ever Be

Not again, I promise.

Byzantium's picture

Explosive summer?

Right,

these rumours of an historic and explosive summer for the metals, if valid, are nonetheless toying with our emotions so far, so I just wanted to check with the group what we know about the root basis for these rumours. Remember, we are not concerned here with the countless theories and opinions of when the market ought to take off, but instead with supposed insider info. Please feel free to correct me or add to what we know.

  1. Bill Murphy of GATA; he is not party to the hows and whys, but his informant was described as one of the wealthiest people in Europe, who Bill has known for a long time and whose knowledge and integrity he trusts. 
  2. Jim Willie; I can't remember whether he has publicly cited summer as blast-off, or whether his views reached us through an intermediary like Turd. If Jim is calling for summer, then it is not by deduction, but as with Bill, by a tip-off. 
  3. Turd himself (who has numerous contacts, including Andrew Maguire, 'Winston,' and others) seems to be convinced by something that he cannot divulge, that blast off will be this summer. I am presuming that this is based on a concrete tip off rather than supposition, and that the root source of this loop is not 1 or 2 above.

In addition to the leaks, technicians such as Gene Arensberg and Turd, are saying that the COT report is historically favourable to an explosion upwards in prices, if there is something to ignite a rally. We just need that spark.

Finally, we need to be mindful that cartel mischief makers might be spreading disinformation, to exploit or expose those they suspect of leaking info (e.g. Bill's & Jim's sources, who I will presume are not the same individual, might be passing on info in good faith, but might have been duped themselves). It is clear from the behaviour of both the Bernank and Draghi, that misinformation and deceit is now their most prolific policy tool.

Lets face it, though a rally will be nice, half of us will only believe it when we see it, and I count myself as one of those. Too many false dawns, & now too wary of bull traps.    

Can anybody update, clarify or add to this summary?

Turd Ferguson's picture

Just checked yesterday's OI #s

MODERATOR

Probably should have included this in the post. Oh, well.

Absolutely amazing.

Silver OI still stuck between 121M and 124M, and has been since 6/28/12. It surged yesterday, though, by almost 1600 contracts. This while silver was falling 38c. No doubt, the specshortsheep being led into the shearing house.

Gold is really remarkable. August contracts have been sold but not rolled. Yesterday's total OI fell by 6700 (while price fell $7) and stood last night at just 396,778. This is the lowest total OI number since 4/24/12.

Between all the specs that are short and all the money on the sidelines, both metals are poised for a HUGE rally should they ever be able to generate some positive momentum and break out of their ranges. Stay tuned.

bluefish's picture

4 hour up trend still intact

An up trend on spot silver started June 28 and visible on the 4 hour chart remains intact with around half a dozen touches to the floor of the trend including a nice one today.

Turd Ferguson's picture

Yes, I can

MODERATOR

The "root sources" of my optimism are not Murphy or Willie, though it's certainly possible that they could have come in contact with some of my sources. 

My intention in predicting a "hot, explosive and historic summer" (And remember, I was the one who began all this speculation. I'm on the record with this prediction way ahead of everyone else.) is not to "toy with your emotions".

Simply stated, I am supremely confident that both metals will soon begin a game-changing, fundamentally-based rally to new all-time highs and I'm trying to encourage Turdites to hold/add positions and not panic sell here at the bottom. The rationale I've shared with you has been deliberately opaque but, once things start cooking, you'll likely be able to discern why.

Response to: Explosive summer?
SE's picture

Byzantium, I have always been

Byzantium,

I have always been of the opinion post-crash last year that silver would be range-bound between 20s and 30s until late this year, possibly early next year, and then finally reach the $50 range in May 2013, and that is a little optimistic of me.  I feel that it's very possible that we might not hit $40 until early (or late) next year and not get over $50 until May of 2014.  Yes, 2014.  Take a look at the silver data of the last 12 years, and you'll see the pattern of peak-to-peak every 2-3 years.  That has to do with manipulation over the long-term, and there is influence on an annual basis coming from India and holiday seasons elsewhere, and now China is coming into the picture with Ghost month being August.

I'd like to be proven wrong and see my black swans land so I can feed them.

philconn01's picture

Bronze hat for third

The devastation continues – and  the next support is 1580 if 1592 doesn’t hold.  We have a double bottom there but that doesn’t mean anything.  This is turning into a total washout.   THE JOBS REPORT ON FRIDAY will probably not be good--- unless they fake it.
 

THE STOCK MARKET LOOKS TERRIBLE ALSO.  Perhaps the major sell off due in August is already under way.

Nana's picture

Bouncers

Waiting for a bounce, hoping for a bounce.

PS- would like to bounce the CONgress, SINate (misspelled for the drama), Federal Reserve, TPTB, well you get the point.

Dolomite's picture

Turd, I loved reading those

Turd, I loved reading those words.  

I'm remaining steadfast... and you have my continued trust and loyalty amigo smiley

exiledbear's picture

Bitcoins have the $10 handle!

O.M.G.

And gold is doing what? Sitting there. Yeah, free markets, my ass. Give me communism any day than this communism-that-looks-like-capitalism.

When the suppression field on the gold price goes down, there's going to be a fireworks show like you've never seen before.

And I'll be quietly sitting on a hill a safe distance away, munching on popcorn...

SE's picture

@ philcoon01

Do you have your swan caller handy?  I think my black swans seem to be lost.  They're hungry.  I need to feed them.

Short Stack's picture

TF Please...

Don't delete this Thread.  Some of us are working on hat tips as I speak.

Speaking of Hat Tips,  shouldn't last months Leader board be reset ?

SV's picture

BTC Up

BTC is up today as the metals move sideways and every which way. Looking to September for these metals which have been controlled forever! Nonetheless, the price doesn't matters! What matters is that we breakoutta dollah paradimed.

http://silvervigilante.com

Loud Noises's picture

Not sure if this has already been shared

But Goldmart is having a really good looking Re-opening sale for the next few weeks.  I am so tempted to make a big buy here.  I just got a line of credit at 0% until the end of 2013 and I'm thinking about deploying my dry powder without even using the real funds.  Cash flow the purchase over the next 12 months and keep my actual dry powder the entire time.

So tempting.... using this credit system against itself. 

Cleburne61's picture

Jim Willie on hot August action

"Internal word from the Monaco source who spoke with Murphy indicates that a repeat of August 2010 is soon to occur. JPMorgan is out of time, and their illegal devices will be halted. The event for release of the Gold & Silver prices could occur again in August. The actual enforcement is not clear. But be assured that forces pitted against evil are involved. The JPMorgan machinery might be stalled in ways unclear even to those informed within the gold community. Confirmation of the Murphy source has come from a highly reliable Jackass source. An exciting move is coming for the precious metals markets. Any delay to the revelations of criminal action in the gold market by JPMorgan will be a result of threats and intimidation by the big bank against the whistle blowers. My main hope is that as the price rises, the exposure of corrupt controls is also made more available for public view. The people must see what has occurred to both the gold market and the currency market. The potential energy is growing to incredible levels, as a corrupt lid has been placed on the true money of the world for seveal millenia, gold. The conflict and pressure will grow until the pressure spills over."

http://www.silverdoctors.com/jim-willie-conflicts-pressure-points/

Thanks for the continued consistency, Turd.

Big Buffalo's picture

Buffalo's Daily thoughts...

Knight Capital was $11/share just two days ago. It's current at $2.09. This makes Silver's drop from $49 to $26 look like child's play. Not that most of us care about the company, but maybe the event is fairly important.

Facebook: "hahahahahahahaha"

Smith and Wesson: Damn, I missed reentry at $9.00 by 3 cents.

Silver: Good news= I bought some more today, Bad News= I bought some more today at 8:30 am.

Gold: See silver above

TFMetals: I learned today that if you rub and sniff and it stinks, it's a good thing. (very contrary to my high school experience)

Byzantium's picture

Thanks for the clarification

Hi Turd,

I wasn't suggesting that you were toying with our emotions. Rather, the idea or prospect of a rocket launch, and the reasons for it,  are doing that.

Basically though, if I understand you correctly, then the only sources citing inside knowledge therefore (rather than citing the conclusions of one's own analysis), that the cartel are going to retreat and allow prices to substantially rise this summer, are Bill Murphy, and maybe Jim Willie, and I am still not sure whether Jim Willie is saying that.

I am just trying to summarise and classify the various strands of bullish sentiment, and am particularly interested in supposed leaks from insiders, to make sure that I / we haven't misunderstood the tea leaves.

Admiral Ag Bar's picture

Thanks Turd

It is reassuring to hear Turd double, and triple down on his ballzy call.  I can respect that.

I am most certainly ready for the take-off because I am underwater as all-get-out even with aggressive buying on this multi-month long protracted dip.  And... my wife is taking great pleasure in torturing me every time she sees me reading TFMR with "so...this is the week silver takes off, huh?" with a big sh*t eating grin.

I am holding fast.

Byzantium's picture

Aha

Thank you Cleburne61 for that important clarification.

Stressing that there may well be excellent reason to expect a rally in PMs (and long overdue I might add), we are nonetheless down to only one source from the inside who is saying that.

I didn't know that before this thread, so all power to this forum!

Boggs's picture

Turd, I have tried twice now

Turd, I have tried twice now to sign up for the turdtalksmetals site and I keep getting errors.  It's probably my fault as my fingers have swollen due to liver failure but I need help.  Last time I emailed the site and crickets.  Who should I contact?

ancientmoney's picture

@Turd 4:10pm post

Are you thinking that paper markets and physical stay conjoined for the hot summer explosion?  I'm assuming you do, and if so, do you think they will go separate ways at some point?  Thanks for your thoughts.

Lumpy's picture

Explosive?

I would love to hear an explosive interview/podcast with Turd and Blythe Masters.

In the spirit of being innocent until proven guilty....I think it would be explosive to give the Silver Guru herself the opportunity to defend herself on the blogoshere rather than CNBS.

It would be pretty interesting to see Zero Hedge, TFmetalsreport, Max Keiser etc. actively court the Silver Guru for her explosive interview, and collectively fill us in on her/JPM's response to such requests.

I want to hear from the people who have the power to rip me off at will. 

Lanikai's picture

Keep on truckin' and stackin'

just like Alf says in the post by JS, they can't say when.  Summer is just warming up is some places, an with luck the mid-West-cropland will cool and get rain while the metals zone heats up to scorch the banksters.

Istack's picture

Double Big Gulp

picked up 64 oz of SAE.   One of these days will be the last day that we will ever be able to purchase silver at $27.   Maybe it was today

Turd Ferguson's picture

No, it's not your fault

MODERATOR

We had an issue with the merchant processor and are implementing a new one. Therefore, we can't take new members until the issue is fixed. sad

Dyna mo hum's picture

@Big Buff

Hahahaha  Facebook seems to have admitted today that they have 1 million fake accounts in third world countries etc .  Accountability my ass.

Turd Ferguson's picture

I just got a note from Andy

MODERATOR

I just got a note from Andy stating that the CME is reducing silver margins, effective Monday, but I can't seem to find the news anywhere.

Has anyone else seen this?

I can't reach him now as it is near 10:00 pm in London. However, as I refer to the "Turd Army" feed, he states that the initial margin is being lowered from $18,500 to $16,875 and the maintenance margin is falling from $14,000 to $12,500. Sounds official to me.

Keep an eye on the headlines and please post any links confirming in this thread. Thanks!

proformatrillionaire's picture

@ Dyna mo hum

I was in my bosses office earlier and CNBS said it was 83 million fake accounts or roughly the population of Egypt.

Dyna mo hum's picture

Margin reduction

Can we all hum a few bars of that old gospel favorite "Bringing in the sheep"

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