On The Chopping Block

While it seems that "everybody and their brother" is now expecting a sharp pullback, I'm not on that bandwagon.

Please don't accuse me of having my head in the sand. I mean, seriously, if anyone knows about The Cartels, the CoTs, the charts and the lease rates...it's me. I know all about it and you, as a Turdite, likely learned a few things from me. And who knows, maybe all this short-term bearishness will turn into a sort of self-fulfilling prophecy? If enough people pull their bids (especially for physical) because they expect a pullback, a pullback will then develop. However, there's also potential for quite a few people to get caught flat-footed and if a breakout rally develops, many will be left chasing.

Again, what I see is this:

  • As stated here often as of late, all reports are that physical demand in London remains robust, regardless of dips or rallies in paper price
  • Gold priced in euro and Swissie just made new all-time highs last week and have been preceding gold priced in dollars by about 4-6 weeks.
  • The desperate move by The Cartels, particularly JPM in silver, to add shorts and contain price creates a condition of extreme UPside potential if longs don't capitulate and are, instead, emboldened.
  • RSI levels in both gold and silver have worked off excesses built up during the 4-week rally from mid-August to mid-September.
  • The silver smash of 5/11 and the gold smash of 9/11 both came during periods of ending or non-existent QE. The Fed just announced QE∞ last month and those $ are just beginning to slosh around. Give it time. Additionally, QE∞ only adds to and increases global demand to exchange fiat for hard assets.

So, call me crazy but I'm a contrarian here. (Even though, as I type, I see gold being smashed down to 1766 and silver well under $34.) The dollar has rallied and reversed from its head-and-shoulder top of last week. This has surprised many (including me). The algos then use this $ strength to game the metals and any weak hands with sell-stops. The Forces of Darkness might throw on some new shorts, too. Again, though, I do not expect any serious downside momentum to develop. I suppose you could get a dip toward $1750 but that's about it. As long as the QE∞-inspired physcial demand remains strong, prices will ultimately reverse and head back higher.

Anyway, here are two charts of The Pig showing the surprise reversal:

Here are some gold and silver charts that, because of this current raid, seem a bit obsolete. Oh well, I'm posting them anyway. Take them for what they're worth.

And here are daily charts with RSIs printed below. Most of the "overboughtness" has been worked off and this current selloff has only served to work off even more.

And a just a few words about crude, too. The chart below certainly doesn't look too scary but, if I were short, I'd sure be nervous about a move back up through $92 and then $93. Especially after reviewing headlines like these: http://www.zerohedge.com/news/2012-10-09/turkey-deploys-25-f-16s-syria-border & http://www.debka.com/article/22422/US-sources-US-Israel-plan-October-Surprise-Others-Israel-can-do-it-alone

So, I'm going to go ahead and hit send on this post, even though I currently look rather foolish with gold down $14 and silver at $33.60. By later today, I could be completely wrong and maybe the newsletters writers will have been proven correct. We'll see. But this is my story and I'm sticking to it. C'mon, baby! Daddy needs an FUBM!!

Have a great day!

TF

322 Comments

csquared13's picture

first

first

HAHAAHHAAHHA YES!!! Finally, I get to say it!

Okay...that was fun

Mr. Fix's picture

Second..........

That was fun........

Off to work I go now!

csquared13,

Enjoy the glory,  you earned it.

silverwood's picture

foist

oh shit! I will be so happy when the totally BS elections are over with.

ReachWest's picture

Rabbit Hole.

And so begins another week in the rabbit-hole that is the manipulated-fake-bogus-BS Silver market.

This post QE∞ sideways grinding is growing old. We do need a rather large FUBM

Thanks Turd.

Capt. Willard's picture

Santa 1764

fourth

Silver Alert's picture

You are putting an aweful lot

You are putting an aweful lot of faith in the longs. They've always turned tail and run when barked at by Blythe.  What makes you think they will stand their ground this time?

SV's picture

Next step of manipulation

This jerky manipulation model seems to be new: keep the metal rangebound until its breakout, then keep it rangebound again, for weeks. The same remains true, though - The Cartel is Undermined.

http://silvervigilante.com

Zoltan's picture

Thanks Turd

Thank you for the update and the wonderful site.

Z

PS Started reading "Atlas Shrugged" last week.  Going to be a long haul (well over 1,000 pages) but already see where it is going.  Meanwhile I am "gone Galt".

SIlverbee's picture

Where is the short covering for the those put on last week?

Do they not care anymore. I guess we would have had to go back to $34.50 at least to make a difference and that takes away almost any advantage gained.

Beastly Stack's picture

All HAIL TURD

I'm with You 1000%.I hope you bought OIL today my friend!

Mantis's picture

would love to see an FUBM about now

It really feels like a game of chicken between the shorts and longs just now, trouble is those shorts have an endless supply of fiat. However despite that  I was starting to feel confident we'd ride through this selling pressure but then I log back in and see this latest dip. 

To hell with all these dips are a blessing, I want to see a serious price rise. 

FUBM

Urban Roman's picture

$33 is the new $28

in silver -- not a parabolic/asymptotic move but it still makes a better investment than FB.

Istack's picture

Chopping Block

Mr. Fix's picture

To our fearless leader...

Dear Turd,

Today, I completely agree with your blog post.

All of this “bearishness” is contrived.
I don't think it makes you a “contrarian"
for simply recognizing that.

Of course, the paper price could drop drastically if all confidence in paper gets lost, but if that's the case, then honest price discovery will shoot the precious metals into orbit.

Wishing you a nice day.

Mr. Fix's picture

@ Zoltan:

Groaner's picture

Here is Clilve Maund celebrating his call?

Go 5:16 in!

SIlverbee's picture

It is only very interesting if the findings are that the

prices have been made artificially high. Then it fits with the PTB's agenda to crack down on the market. However, if it was to make the price artificially low well that's another matter; no LIBOR gate here move along.

This will not role out to silver as it does not suit the PTB. 

Turd Ferguson's picture

Hmmmm........

MODERATOR

Maybe it's just this simple? In a world dominated by HFT, maybe it is. Note the action since mid Friday.

bnick's picture

The Story of Today's Raid

Distribution at 1775-80, with some bid-hitting and stop running just below.

Comicus's picture

Jim Sinclair & Silver

I emailed Jim Sinclair seeking clarification concerning his remarks about silver.

This is what I wrote:

You recently stated, "Gold will protect you in this transition. Silver will give you a cheap thrill followed by a spiritual experience devoid of a teacher."  I am unsure of what this means. Could you explain it further?

5 minutes later, I received his response:

Silver will go ballistic, and then fall as fast. 

Jim

foscotanner's picture

Im with Turd

Turd,

I am with you. I see strength. The fact everyone is calling for a crash is exactly the wall of worry we want.

Tops in Au and Ag are not formed this way. They do not have a wide topping formation. They get bl00dy hammered. This does not feel like a top.

I had today or weds as the end of the Ag correction. So i would not be shocked to see a reversal as we progress today.

The take down was timed with the PM fix. Surely someone wanted some cheap Phys?

My gut says a weekly close between 34.6 and 34.9. Then the break up next week. Could actually be sooner.

SIlverbee's picture

What is sprott going to do

with the rest of his offering? is it 700Bn left. Does it not make sense to buy low?

Maximillion's picture

Well said Turd

There's so many things different this time around, not least the amount of time the lease rates have been this negative (ie they're still playing the doubling down gamble as per the COT). The big problem for them IMO is that there are simply no players other than JPM who'll take the short side, and today there's 40Billion pieces of extra so called monetary paper IOU's floating around over that from only 4 weeks ago.

Eventually even the thickest person will realize value is based on supply and demand, not paper IOU's, especially when the IOU supplier just keeps printing more of them. I'm still not selling my stack, especially in order to convert it to something that's value can only decrease as more are produced, so any smack down is just another opportunity to get a bit more before the less well informed work it out.

SIlverbee's picture

is there a way

I can see how many hat tips I have received in total?

Fr. Bill's picture

Waiting eagerly for the rent check ...

... which the tenant is hand-delivering this morning.

Then off to the bank to deposit it.

Then off to the wire window in the bank to send it flying to BV.

GO SILVER SMASH!! HOLD IT THERE TILL THE RENT IS AT BV!!

Hoping [fingers crossed tightly; knocking on every bit of wood here in the office] that I can add to my recent mad-money stack at or below $33.75.

SRSrocco's picture

THE BLIND LEADING THE BLIND...

PRECIOUS METAL ANALYSTS GONE BAD

There comes a time when we just have to say "ENOUGH IS ENOUGH".  I have to agree with Turd on the issue of the "SUPPOSED BIG PRECIOUS METAL SELL-OFF".  It looks as if everyone now expects gold and silver to enjoy a bloodbath.  Below we can see that CLIVE MAUND is once again showing his true colors:

I would like to remind those who are now becoming convinced that Maund is right... he was calling for silver to crash to $18 in the beginning of this year.  He got that one wrong.. and had to recant and produce charts that show silver could actually head higher.  Typical of those who bow down to the art of TECHNICAL ANALYSIS.  Again, Technical Analysis is completely worthless in a rigged market.

Hey listen, silver and gold can sell-off from here.  But to use those words on the top of his chart to state that the SHEEP ARE GOING TO GET SLAUGHTERED... just makes me realize Maund is nothing more than a TWO-BIT PAPER JUNKIE. 

Does he not realize the precious markets are manipulated?  Does he not realize that a judge just announced last week that "POSITION LIMITS ARE NOT TO BE ENFORCED"?  Clive is part of the group of analysts that I now term "ANALYSTS GONE BAD".

Another one of my favorite DEAD-BEAT ANALYSTS is Ned Schmidt.  In Ned's most recent article, he presented a graph showing how soft commodities have outperformed the S&P.  On the bottom of the chart he was nice enough to include Gold.  However, for some strange reason he did not include SILVER in his chart.... so I thought I would add it for him.

Ned Schmidt has an aversion to SILVER.  I remember he stated on his website that he was the only one to correctly forecast the SILVER BEAR MARKET.  Furthermore, he also had said that silver would hit $15.

I am so tired of these RUN-OF-THE-MILL ANALYSTS who don't really understand the underlying fundamentals.  Ned Schmidt as well as Clive Maund have no idea of the manipulation taking place or the coming peaking of energy.  They make their charts and write their articles based upon information that is PAINTED FOR THEM.  I believe Maund is just inept... but I believe Schmidt has an agenda.

I AM PRAYING FOR A MASSIVE SHORT SQUEEZE

Just to let you all know, I have my Alan Greenspan lucky rabbit foot and I am rubbing it hoping for a massive short squeeze similar to the one that took place in gold last year.  We may not get it, and yes... we could get a paper sell-off of the precious metals.  However, it would be wonderful to see both of these analysts EAT THEIR LOUSY CHARTS.

That is my main reason to want this HUGE SHORT SQUEEZE.  I do realize the price of physical gold and silver will win in the end... so the ups and downs throughout the move much higher is part of the journey.

ONCE GOLD & SILVER TAKE OUT THEIR PREVIOUS HIGHS... I GOT AN ARTICLE IN THE WORKS FOR......ANALYSTS GONE BAD.

Be Prepared's picture

The U.S. Wage Timeline....

1950's - one wage earner for a four-person family. Mortgage paid off in 25/30years. Comfortable retirement.

1960's - one wage earner (plus overtime) for a four-person family. Mortgage paid off in 25/30years. Comfortable retirement.

1970's - two wage earners (plus overtime) for a four-person family. Mortgage paid off in 25/30years. Modest retirement in own home.

1980's - two wage earners (plus overtime) for a four-person family. Mortgage not paid off - has to be rolled. Sell home on retirement for a modest retirement experience in a retirement home.

1990's - two wage earners (plus overtime) for a four-person family. Mortgage interst-only basis. Sell home on retirement for a modest retirement experience.

2000's - two wage earners (plus overtime) for a four-person family. Mortgage interest-only basis plus necessity to make repeated "equity" drawdowns from housing value in order to enjoy life and send the kids to college. Sell home on "retirement" from main job. Continue working in deadbeat store/Mc-job until drop dead in harness.

Victory's picture

....nice post!

it's nothing special to make the same call everyone else is making...this post right here is why I read your analysis every day.  No one has a crystal ball but at least I know Turd has the stones to put out his analysis real time when most would wait for the post game show

Nana's picture

Find Out Why and You Will Have the Answer

The question to ask/think about is why do TPTB absolutely hate silver with such an undeniable  passion?

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