It's Good To Be Wrong

Man, they had us set up. There was hardly any doubt that a raid was coming today. But then some unexpected news hit and...whaddayaknow? A rally! A big rally! It's good to be wrong. It's also very encouraging, too, for reasons I'll discuss.

I can't stress enough how surprising, helpful and positive this is. There's a reason I'm Turd and I have a website. Primarily it's because I can usually read The Cartel signals and accurately anticipate their next move. As of late yesterday, everything was set up for a Cartel raid and, like clockwork, it began on The Globex and continued into the early Asian trade. However, instead of accelerating in London, the trend reversed, no doubt helped by the stories out of India regarding a reduction/removal of the silly tariffs on gold: http://www.zerohedge.com/news/2014-01-23/gold-surges-speculation-india-may-ease-import-restrictions

That's all well and good. Cartel plans were spoiled and a mini-squeeze developed. By itself, this isn't unusual and really not much of note. What is unusual and worth noting is the follow on buying. This is, potentially, quite significant.

WHY? Again, my major thesis for 2014 is that the structure of the global gold market is rapidly changing. One of the components of this is the heretofore unheard of JPM NET LONG position in Comex gold futures. Add to that the latest non-U.S. bank net position which was only short about 6,000 contracts. I cannot stress strongly enough the potential impacts of this change. Are we seeing one of the effects today?

Classic Turd would have been 100% correct in calling today's downturn. The New Turd is seeing proof today that his "2014 Thesis" is playing out in real time. Instead of a raid, we get a rally. Instead of a cap, we get a continued squeeze that has extended through critical resistance near $1260 as I type. Instead of Spec longs getting fleeced, we have Spec shorts getting slaughtered. IF I'm correct about this...and that's a very big and important IF...then this is only the beginning of a significant sea change in the metals "markets". Stay tuned...

Here's your latest gold chart. Note the lines of significant resistance that have been breached this morning. Also note the very impressive, bullish engulfing candle that is currently being painted on this chart. It is very hard to imagine this being allowed back in the "old days". In this new paradigm, might this become the norm?

And I want you to look very closely at this silver chart. Yes, silver is forming a very solid base for the resumption of the bull market. However, look at the surges in price that I've circled and notice that they are accompanied by high volume. And this volume is sticking as total Comex silver open interest has risen by nearly 6% since the 2nd of December. To me, this shows significant, long-term, strong-hand buying interest coming into the silver "market". I am very encouraged by all of this and even more confident that an UPside breakout and bottom confirmation is a certainty. It's simply a matter of time.

Just one other item today because I want to get this posted ASAP...Look again at the surging price of NatGas and the bounceback in crude. For a consumer already stretched thin by a double in price of such staples as gasoline, milk and beef, a surge in NatGas to near 5-year highs is a most unwelcome development.

Though higher prices for NatGas are clearly a trend that began in 2012, this latest jump is almost certainly related to the continuing snap of bitter cold weather in the eastern U.S. Therefore, though I'm not one to get excited about jumping in front of runaway trains, there is likely an opportunity for a very risk-oriented gambler to short NatGas if it touches $5.00. There are several short NatGas ETFs that trade on the NYSE if you are feeling so inclined. I'd look to ring the register on any pullback to near the old $4.40 resistance level which would now be support.

As I close, I see that we did, in fact, see some capping after the post-1260 short squeeze. Silver is all the way back to the old bogey of $20.20, too. Regardless, today's action is still very surprising and a most welcome development. Be happy and confident but stay patient. The battleship is turning and 2014 is going to be a very interesting year.

TF

102 Comments

tyberious's picture

Furst

Furst

Mickey's picture

batting average

thats what counts

tyberious's picture

What an Inflation-Adjusted

What an Inflation-Adjusted All Time High in Gold Would Look Like

Gold has been in a bear market for some two years now. As a result of this, many investors believe that the precious metal is no longer a viable investment.

No investment ever goes straight up or straight down. During the last bull market in gold, the precious metal rose 2,329% from a low of $35 in 1970 to a high of $850 in 1980. However, during that time, there was a period of 18 months in which gold fell nearly 50% (see the chart below)

As you can see, from mid-1971 to December 1974, gold rose 471%. It then fell 50%, from December ’74 to August ’76. After that, it began its next leg up, exploding 750% higher from August ’76 to January 1980.

With that in mind, I believe the next leg up in Gold could very well be the BIG one. Indeed, based on the US Federal Reserve’s money printing alone Gold should be at $1800 per ounce today.

Moreover, at $1,800, Gold is Still Nowhere Near Its All-Time High

Now, a lot of commentators have noted that gold is already trading above its 1980 high ($850 an ounce). What they fail to note is that thanks to inflation, $1 in the ‘70s is worth a LOT MORE than a $1 today.

$1 in…

Is Worth Today

1970

$5.49

1980

$2.58

For gold to hit a new all time high adjusted for inflation, it would have to clear at least $2,193 per ounce. If you go by 1970 dollars (when gold started its last bull market) it’d have to hit $4,666 per ounce.

Bottomline: gold is nowhere near a peak adjusted for inflation. And when the next leg up begins, we could see a tremendous move.

http://www.zerohedge.com/contributed/2014-01-22/what-inflation-adjusted-all-time-high-gold-would-look

Turd Ferguson's picture

And what a goon this fool is

MODERATOR

I'm sure he'll be all excited and in full SPIN mode, too, when the "unemployment rate" falls to 6.0% in two weeks.

http://www.zerohedge.com/news/2014-01-23/14-million-jobless-officially-g...

 

Mickey's picture

Japan and USD

had a lot to do with this.

and the public still has not figured out that we do not have 1500 tonnes of german gold or probably the other 5200 tonnes held for others, or maybe even our 8100 tonnes.

then all the unallocated gold  promised around the world. and perhaps some "allocated" gold.

What is Germany's recourse? Can the Fed tell them to go pound sand? No wonder why Germany is aligning with Russia and China.

We are going to be screwed in so many ways we cannot count.

Turd Ferguson's picture

The site is very busy today

MODERATOR

Lots of traffic, as might be expected on such a nice rally.

A question for all Vaulters:

Would anyone object to me making Monday's "miner" post a public thread? I'd like to give newcomers and non-subcribers some meat for stopping by.

Just let me know in the comments below.

s1lverbullet's picture

And here comes the raid!

Haha, so predictable, someone really doesn't want a gold breakout right now.

Turd Ferguson's picture

More evidence of a stretched-too-thin consumer

MODERATOR
Turd Ferguson's picture

And with a print of $1267.00

MODERATOR

And with a print of $1267.00 as the high in Feb14 gold, it was almost EXACTLY a 2.0% cap.

Btw, there is no technical reason to stop there as the next MA is the 100-day and it's all the way up near $1285.

Heart's Yours's picture

post it Turd

It has been a few days already.....make it public and try to reel in a few more subscribers.  Thanks for all you do.

LFoote's picture

Making Monday's post a public thread

No objection here.

silver2013's picture

Turd. You did say metals will

Turd. You did say metals will go down for sure unless some big news arrived. Well here is the big news.

Maximus's picture

post it

think you post everything with a delay

Blythesshrink's picture

Fine with me - regarding the

Fine with me - regarding the miners thread & definitely beginning to feel like the market is a bit different this year - despite them pulling us back a bit right now.  Just feels like there's an invisible hand (cough cough large US bank associated with the Fed) putting a floor in the market every time it gets beaten back a bit.

perdman's picture

Public

Public

ag1969's picture

Turd, it seems to me...

...that you have an ongoing struggle on your hands.  You have a service that you deserve to be compensated for, but how will more people sign up to buy your service if they don't ever get to sample what they could be potentially buying?  For you own good, you need to put in place a mechanism to get some free stuff out there consistently, without having to beg your existing vaulters for permission.  Just put in place a policy.  I am quite confident we will all trust your decision.  Maybe you write a public piece once a week or twice a week, or you make the A2A public or whatever it is.  Vaulters need to understand that all of a sudden making yourself 100% private means that joining the vault was a one shot deal and you will never be able to expand your business, in which case we will all lose this wonderful place you have created.

I am guessing that everyone here who has paid for your service, wishes you nothing but continued success.  You need to get back out there to Joe Public and drive this place through the roof.  My .02...

ggnewmex's picture

TF

You run a great site, and giving exposure to new-comers could encourage more GOOD subscribers, and some change for you and your hard work.

no prob

Lintltj5's picture

Speaking of Consumers Who Are Stretched Thin

My heating bill has been outrageous lately.

This is just a taste of things to come.

http://boston.cbslocal.com/2014/01/21/nh-thieves-raiding-woodpiles-for-firewood/

tricyclegear's picture

Turd - Yes on posting the Monday post

share some of the wealth & thanks for being stubborn & persistent.

renozep's picture

@Turd

Post it.  Thanks for the great job.

whymenow's picture

A OK with Post

Unfettered  Capitalism  Rules                                                           

Turd Ferguson's picture

OKey-dokey then

MODERATOR

Thanks, everyone!

Levon's picture

Post it Man

I personally don't mind you posting the important stuff 2-3 days later. Heck, even tease the non-subs with a "this is what you would have seen if you were a subscriber" every now and then. Trust me, every other "expert" does the same thing. More subscribers are crucial to the success and growth of this site and community. More growth and success makes this a better site. One thing that I have noticed is that the quality of the posters on the subscriber side is 100 times better and no trolls!

hsofiak's picture

Posting the past

Select a period of time ... two weeks ... and make posts prior to that time public but do not allow comments from non subscribers.  I very much enjoy the reduced number of comments in your pay per view format ... you could say that the average of the comment quality has improved.

realitybiter's picture

dollar vs PMs

pigatha certainly looks like she has the door open and is easing herself through it.  If you look at both the micro and macro, she seems to be at the beginning of the beginning of the next leg down.  I know Armstrong says otherwise, but it keeps printing lower highs and fails miserably to take out look to the left highs that should be easy.  Weak action, regardless of "news".

Looks like the finance operators are picking on Ag today....I pity the fool.  Don't they know?  Ag may be tiny, but that stuff kills bacteria, viruses, all sorts of stuff...maybe even corrupt markets...

"It may be our dollar, but it is your problem......" soon to be updated and paraphrased again.

tyberious's picture

give it to the

Masses!!!

hsofiak's picture

maybe two weeks is too long a wait

Levon is of the same ilk as me.  The shorter time period would allow the potential subscribers to see what they missed in a more impactful manner.

Turd Ferguson's picture

Pretty much in line with ole Turd

MODERATOR

Though BoA sees $1270. I've always thought that a breach and close above 1260 was the key.

http://www.zerohedge.com/news/2014-01-23/bank-america-gold-squeeze-gets-explosive-above-1270

Dingo's picture

The biily's about to boil.

There's nothing much better than Billy Tea when camping out bush. Just patiently waiting waiting for the pot to boil - there's an inevitability about it even though it can be rather slow at times.  I draw some parallels with this gold bull market about to resume, with all of the fundamentals in place. The trouble is though, it takes a bloody  long time to boil if some bastard keeps putting in ice blocks into the Billy when you're not looking. That bastard is bound to run out ice soon though. I reckon those cartel bastards will soon run out of  their "ice " for the paper gold market soon enough. They'll be crying in their warm beers.

Turd Ferguson's picture

Maybe this?

MODERATOR

I still send out "This Week in Turdville" every Saturday to about 12,000 email addresses. Perhaps what I'll do is make several of the previous week's posts public by late Friday each week so that anyone receiving the email can get brought up to speed on what they've been missing.

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