Feeling Good, Louis!

OK, now that we've got that FOMC nonsense out of the way, the rallies can continue. How much farther and how fast? Those are the questions.

In case you missed it, the FOMC minutes were QE-bullish. Essentially, The Fed stands ready for more "accommodation" if the economy fails to improve "substantially". You and I know that this is all bullshit, anyway, as The Fed is nearly out of ammo for additional Operation Twist measures and rates must be kept low permanently in order to sustain/protect The Great Ponzi. Again, review this if necessary: http://www.tfmetalsreport.com/blog/4112/murmurs-10-year-note. However, nearly everyone should review that post because the CoT comments contained therein are also important for this current thread.

Anyway, from RanSquawk at ZH, here are three of the main headlines:

  • FOMC says many FOMC members supported extending the Fed late 2014 interest rate guidance, but agreed to defer decision to September meeting

  • FOMC says many FOMC members favored easing soon if no sustained growth pickup

  • FOMC says many FOMC participants saw new QE as bolstering US recovery

As you can see, these headlines speak for themselves. More QE is on the way, it's simply a matter of time. The only exception would be renewed, vigorous "growth". Does anyone rally see that happening anytime soon??

So where do we go from here? After bottoming in May and June, the metals are currently completing a 100-day consolidation and base. From here, we will rally back to the old all-time highs and beyond. Not that there won't be speedbumps and corrections along the way, there will be. However, prices are now headed higher.

Particularly silver. As mentioned in my CoT comments last week, it appears that the smaller "hyenas" are preparing to battle The Big Dog for silver supremacy. The hyenas correctly sense weakness and smell blood. The fat and lazy Big Dog continues on with business as usual, not knowing yet that it has been mortally wounded. As hyena confidence grows, they will up the pressure by forcing price higher and higher.

So here are your updated charts. At 1654, gold has clearly broken through the top end of its range and now looks to head toward its next battle, near 1675.

Silver is still battling to crawl above $30 but it is getting very close. With the FOMC behind us, I expect the hyenas to rage forward tomorrow and press their advantage. This should take silver to and through $30 and serve to draw in some momentum-chasing spec money to aid in the fight.

And here are two, additional charts for perspective:

I've mentioned how interesting last week's CoT was, well this week's should be a doozy, too. For the reporting week, gold rose every day, for a total of just over $40, and, prior to yesterday, total OI was down for the week. Again, prior to yesterday. I emphasize this because yesterday, while gold rose $20, total OI shot up by 12,000 contracts (over 3%!). This makes gold CoT data interesting because, clearly, some HOT money returned to gold yesterday in anticipation of today's breakout. But just who are these buyers? Cartel banks or specs? We'll get some answers on Friday.

The silver CoT will be even more interesting. After the big runup in the "hyena" long position last week, I've been looking forward all week to Friday's report. But now, consider this: For the reporting week, silver was UP $1.68 (6%!) but total OI fell by 1200 contracts. Clearly, to get a 6% move on declining OI, you've got quite a bit of short-covering going on. But, by whom? The SpecShortSheep? The Big Dog? Both? And how many contracts did the hyenas add at the same time? The CoT will shed some light on these questions and I can't wait to see it on Friday.

In random order, here's some stuff for you to read. First, this from Mark Grant via ZH: http://www.zerohedge.com/news/gathering-storm

Next, this little ditty that some have posted already into the comments of the previous thread: http://www.mineweb.co.za/mineweb/view/mineweb/en/page32?oid=157430&sn=Detail&pid=102055

Here are your impending war and destruction updates for today: http://www.zerohedge.com/news/israels-iran-strike-routes & http://www.debka.com/article/22293/Iranian-leaders-in-Israel’s-sights-after-calling-for-its-destruction & http://www.telegraph.co.uk/news/worldnews/middleeast/iran/9490878/Irans-supreme-leader-orders-fresh-terror-attacks-on-West.html & http://www.timesofisrael.com/iran-begins-construction-of-300-million-anti-aircraft-missile-base/

And here's a fun new piece from Mike Krieger where he discusses the greatness of Bitcoin: http://libertyblitzkrieg.com/2012/08/22/bitcoin-a-way-to-fight-back-against-the-financial-terrorists/

Lastly, I need your help with something. I spoke with Andrew Maguire earlier today. He and his business partner Paul seem to really like the idea of an "OptionsTrades" service. Her are some random thoughts on the matter:

  1. I'm quite uneasy at recommending options trading to anyone given the inherent risks involved and my oft-stated concerns for the viability of the current "system". After the MFG and PFG debacles, everyone should be wary of holding cash, or anything else for that matter, within the confines of a customer account. That said, I could be wrong. That Ann Barnhart gal could be wrong, too. Maybe MFG and PFG are simply one-offs and everything is fine. I recognize, too, that there are still literally thousands of people worldwide who are still actively trading. Therefore, I'm content to go forward but under the banner of "proceed at your own considerable risk".
  2. I've been trading options for over 25 years now. In my "career", I've always been forced to enter The Den of Thieves armed with nothing but my own experience, wisdom and charts. To think that I could enter again but, this time, have the experience of Andrew Maguire to guide me?...well that is pretty compelling.
  3. After 25 years, I do at least have some idea of what I'm doing. All trades established by Andy and I will only be placed if we are in agreement that the trade makes sense. This clearly doesn't guarantee success but I'd like to think it increases our chances a bit.
  4. It's not going to be cheap but it shouldn't be. First of all, we don't want totally inexperienced traders taking a stab at it simply because the subscription is just $20/month. Additionally, at $250/month, the service would be a bargain. Subscribers would need to maintain an account balance of $15,000-25,000 so we're only talking about a 1-2% monthly vig.
  5. For those that don't trade futures options but do trade equity options, we'll try to offer an alternative ETF option play whenever possible. For example, a Dec12 gold call trade might be matched with a DecGLD call.

So here's what I need you to do. If you think this sounds interesting and you think you'd be willing to give it a go, please hat tip the first comment below. Since currently only TFMR members can hat tip, any lurker who would like to indicate interest can send me a quick email at tfmetalsreport at gmail dot com. If enough folks show an interest, we'll likely go ahead and set up the system. Thanks in advance for your help.

As I head out, I see we're still looking good at $1655 and $29.90. Can't wait to see what tomorrow brings!

TF

316 Comments

Turd Ferguson's picture

Hat tip here

MODERATOR

Please use this comment for "OptionsTrades" hat tips. Thanks!

bernard's picture

QE sure worked well in the past!

Nothing but respect for the FOMC and our dear friend B.S. Bernanke. What would you guys do? Confronted with the problem of:

-Everyone wants a job

-'Everyone' is growing by the second

-Human labor becoming increasingly antiquated thanks to advances in robotics

The math equation to sum it up would be LIMIT as Time approaches infinity of function(JOBS) = 0 

How is this all going to work out? How can the world continue to grow at such a rate, without creating fulfilling work opportunities for the population? Watch movies from the 1960s where the "future" was everyone being a consumer, all day long, with robots to do all the work leaving the humans 100% leisure time.  Hollywood's depiction of the future sells: Be content with your iPhone and Air Conditioning, which is pure fantasy without a steady wage. 

Don't you wish you could just know the truth, the universally correct calculated sum of Unemployment, and all the graphs of what's to come? Everyone knows we are betting on an energy miracle (as per SRSRocco, the real problem is Energy Return on Investment), which may or may not materialize in time. 

The problem is so massive at this point where to even try to conceptualize it, let alone address it with policy, would be a joke. But then again, so is micro managing the economy and markets. It is at best a waste of tax payer dollars (the CFTC for instance) and at worst criminal : inflation, the hidden tax on savers - cough up your money, or else!

Silver is looking great. As Turd has always said and I have always agreed: The action of the last year was designed purely to contain a market into a volatile and exhausting churn, so as many contracts could change hands from the Non-Cartel hands to the Dark side. Let us not forget that in April of last year The Cartel was short over 47,000 SI contracts, compared to the ~10,000 of now. 

With OTC agreements, who knows -- they might even be long a hell of a lot of metal. I suspect we will see a pullback here, but let me be frank with you: never forget that silver can move dollars in a day, easily, with even the slightest attention or influx of money. Who knows how all this will play out? You must play the game expecting the next 60 days to be explosive either way. This kind of stock market : economy relation during an election year just wreaks of painting tape.

Where the Bernank Goes, The Money Flows

Your friend,

Bernank (www.comparesilverprices.com)

Swineflogger's picture

Oops! Placed in the wrong thread. Let's try it here instead.

Louie's picture

Fourth

Have not been in the top 10 in a while! 

Now that the TITS index is up, how long until the Turd-a-palouzia?

jaynutter's picture

?top 5??

First time ever!!!!!!!

gilmoujr's picture

Crossing fingers for $50+

Crossing fingers for $50+

MisesFan's picture

Tip of the hat, Turd....

I would be interested in the ETF option plays.

Pining 4 the Fjords's picture

It's very obvious

Turd has his mojo back.  Bitchez.

LongGoldLongSilver's picture

The Train Has Left the Station

Yeah, really interesting times ahead now. Easing is picking up all over the world. The miners have bottomed and will hopefully follow through and decisively move higher to create some real momentum in the whole sector. It feels a bit like we're going into fall of 2010 all over again, but instead of ~$1200 and sub $20 silver we're looking at whole other level of base building this time around. I can't really see how this train will be stopped with slowing growth, accelerated gold purchases by central banks, festival season coming up and a bond-buying frenzy in the works...

http://www.MiningStockValuator.com -portfolio tracker & analysis of gold and silver stocks

tyberious's picture

@TF

Having traded both futures options and equity options, I am infinitely more comfortable with futures. I had a wonderful experience with options until the SMACK DOWNS! I been thinking this one over! Though I am interested. Keep us posted.

dropout's picture

Feeling Good Billy Ray!

Bill Gross and Pimco can see the writing on the wall!

Lets face it, where Pimco goes the rest of the hedge fund world will soon follow.

Just 1% of their total assets turned into gold and silver will drive price to the moon!

Istack's picture

TTM

i signed up.  i wanna hear all the positive silver mojo

Be Prepared's picture

The Bottom of the Fed Bag...

Bernank and his band of merry bagmen are poised to dig deeper still into their bag of evil to wash the fruit of all savers away wherever they may be....  they will unleash the hounds of their printing press until the world is awash in cotton paper until it is only good to start a fire.  China is continuing its march to tie up all the world's resources and choke us off at the source.... it's not hard to see who will win and who will  lose that one... It won't be long before a VAT and a tax to live will be real and the jackboot will be heavy upon our neck...  The Fed will juice the system for $3 trillion and still only get a few weeks from it... Then it will be $6 and $12 trillion and bread will cost $5 and then $10....   Wait... we've heard this story before and it ends with a loaf of bread costing $82 billion....  the world truly is brighter with the Fedster on the prowl.  :-)

Physical_only's picture

RE: INFLATION........In the REAL world

AS a retailer I have been ordering Christmas merchandise since May of this year. I have forced myself every year for the last 25+ to do this. It's hard to even think Christmas in May. I know this as FACT every year past there has been about a 10% across the board price increase by the end of the year.

Any reorders I do will be at a higher cost.

Inflation is truly under control "sarc" a simple plastic model cost $4.00 when I opened the shop in 1987. Now the cheap ones cost $12.00

Lionel trains had a 20% price increase this year. 

Surely GREAT to see the metals upsmiley

Be Prepared's picture

Microbrew for Celebration...

worldend666's picture

Re: Andrew Maguire Services

Just wondering - instead of me sitting there all day following Andrew Maguire trying to keep up with him and replicating his spreads why couldn't I just add my money to his account and let him trade for me? This seems so much easier.

There are plenty of services which allow traders to trade with other peoples' money but where the money remains segregated so the trader cannot run off with it.

treefrog's picture

fubar

check the projected position for hurricane isaac @ 2 pm monday.  about a hundred miles south of tampa and headed north.   ......what else is scheduled for monday in tampa?  oh, yeah, the republican national convention. 

what kind of idiot would schedule something for tampa in the middle of hurricane season?

[Image of 5-day forecast and coastal areas under a warning or a watch]

kingboo's picture

Let's keep an eye out for the blindside.......

 these guys are not only smart......they're psychopathic.  (i'm talkin about the elite bankers.....not LT.   Hell, i love LT..     just in case he's reading..)

GM Jenkins's picture

Rickards, von Greyerz, Santa

Rickards stuck his neck out last week, and appears to be on the right track:

So look for the following sequence of events. On August 31, the Fed will give strong indications that more quantitative easing should be expected if economic conditions do not show substantial improvement. On September 6, expect the European Central Bank to lower its main lending rate by 25 basis points to 0.50 percent. Then on September 7 look for an employment report weaker than consensus estimates due partly to quirks in seasonal adjustments. This will give the Fed economic justification and political cover for the start of a new quantitative easing program on September 13. This double-dose of ECB and Fed ease should give stock markets a lift through the fall at least until the twin dangers of the fiscal cliff and war with Iran stare investors in the face later this year.

http://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/20/how-china-is-driving-federal-reserve-policy

Egon von Greyerz is a permabull, but one of the smarter ones:

Gold and silver have now started a major move to the upside. This move will be relentless with only minor corrections before we reach $4,500 to $5,000 in gold and substantially over $100 in silver.

Investors now have a last chance to invest in gold and silver at prices which will never be seen again. But for wealth preservation purposes it must be physical metals and it must be stored outside the fragile banking system.

http://goldswitzerland.com/gold-silver-off-to-the-races/

But Jim Sinclair is properly cautious:

My Dear Friends,

Now the media has everyone looking at Jackson Hole for Bernanke to act.

That is not the way it tends to happen.

Regards, 
Jim

http://www.jsmineset.com/2012/08/17/in-the-news-today-1280/

 
Louis Winthorpe III's picture

Looking good Billy Ray!

Now if we can just get the crop report for Frozen Concentrated Orange Juice...

tyberious's picture

BMG CEO Nick Barisheff – $10,000 Gold within 5 Years

USAWatchDog’s Greg Hunter has released an excellent interview with Bullion Management Group’s CEO Nick Barisheff.

Barisheff manages more than $500 million in physical gold, silver and platinum for BMG.  He has a new book coming out titled “$10,000 Gold.”  You think that is an overly bullish prediction?  Not if there is hyperinflation.  Barisheff says, If we get into hyperinflation, $10,000 will be a conservative estimate.
How likely is hyperinflation?  According to Mr. Barisheff, There’s never been a fiat currency that didn’t end in hyperinflation and then complete collapse, not one in all of history.”  He expects gold to hit “$1,900 an ounce by the year end.”

Gold prices will rise with U.S. debt levels, and they are skyrocketing.  Barisheff says, If you plot a chart, the price of gold compared to the U.S. debt is almost a perfect correlation.” 

Greg Hunter’s full interview with Nick Barisheff below:

http://www.youtube.com/watch?feature=player_embedded&v=3H-aHhSKOJ4

TomMack's picture

2 traders are too many

many ideas are fine but only one lead dog trader IMO

Istack's picture

What time?

around what time are new TTM podcasts posted?

exiledbear's picture

Bitcoin

Ignore the political implications and just focus on the fact that it's OUTSIDE the banking system, and that it's a distributed payment system. The whole internet would have to go down to make BTC go away.

Turd, put up a bitcoin address to take donations in. It's a no-brainer. Just post a BTC payment address already.

I really can't complain today. BTC are recovering again and it looks like gold has finally decided to get back in gear. Everything I care about is green today. 

Well, I suppose I could find something to bitch or moan about like some people do in these chatrooms, but no, I refuse. No bitching from me today.

Byzantium's picture

Gold ceiling still being set by the Euro

Two weeks back, I was posting that the Eurogold price was the effective cap; the record price in Euro had been 1345 and it seems that effective resistance was showing itself at 1320 Euro.

Here is a screenshot from the surge on the 10th August; note that at 1320 Euro, the dollar price was 1621.

As I type, the dollar price is still hovering near today's peak, & is currently at 1654 (yay!), but the Euro price is still only 1320, just as it was on the 10th.

To all intents and purposes, the gold 'breakout' as such, is a misnomer (just dollar weakness), and resistance is so far at least, still the Euro price of 1320.

When that 1320 Euro resistance gives way, we will be within striking distance of a Eurogold record high; crossing 1325 will be significant, but crossing 1345 will be a major event, & then fireworks can begin.

Fingers crossed......

tectospinal's picture

Tip of the hat, Turd...

I would be interested in the ETF option plays.

gatortrader's picture

Re: Byzantium

I in 100% agreement with your assessment. However, that will fall very soon, 1.25 euro will not last very long IMHO, a week or 2 max, euro @ 1.22 or lower should break it, you better believe we will see that soon, def in sept, and def before any fed action is announced.

Tube's picture

TITS are definitely up!

Short Stack's picture

Pant... Pant....

Trying... to.....keep......(hhhhh).....up .....with the......spot..... prices.... with ..... enough......dry.....powder.....for..... another....(pant...pant).....purchase.

But .....the ......(hhhhhhhh).....price.....keeps....going up......(pant)...too....fast !!!!

pforth's picture

Options...

I might give the service a go, but I'd need to do some work educating myself first.  All my experience is just in Futures not options. 

In the meanwhile:

  • Can you give us any guidance as to what kind of account balance would be needed?
  • and what kind of returns could be expected?
  • What would the holding period be... are these 2 minute or 2 month long trades?
  • Would you have to react as quickly as you currently do to the futures service?
  • And last but most importantly, is there enough liquidity in options to support 100 turdites when they all pile into the trade at the same moment?
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