What Happens Next Is Key

The last time gold and silver both closed above their respective 200-day moving averages was May 18 of this year. The next day, silver was smashed for nearly 10%. With both metals once again above this key technical indicator, what happens next is clearly quite important.

The two-year charts below tell the story. The squiggly red line is the 200-day moving average:

So, can the metals grab and maintain a toehold above their 200-day MAs. If they are able to do so, speculator interest will flow into the paper markets and drive prices even higher in the short term. Already just yesterday, on the first day the paper gold price pierced this key indicator, the preliminary open interest numbers show a 19,000 contract surge of new buying. Silver saw its open interest rise, too, by nearly 4,000 contracts.

All of this late-coming and momo-chasing cash can just as easily be flushed right back out of the "market" with a dip back below the 200-day so we must be very careful here and mindful that a Cartel raid could be right around the corner.

Already this morning, gold was hit for over $15 when jobless claims came in a bit low and inflation (due to soaring rents) came in a bit high:

So, be cautious out there. Yes, the charts looks attractive and, yes, The Bottoms might be in. The world is slowly realizing that central bankers are liars and that the only option is unlimited QE. However, that does NOT preclude The Evil Ones from playing their same old games. Therefore, a swift raid of price back down and under the 200-day MAs is a distinct possibility.

On the bright side, things are definitely looking better and there are certainly several reasons for optimism. To that end, please be sure to read this: http://www.acting-man.com/?p=40685

And the USDJPY just continues to plummet. Though it bounced on the US economic data (which of course means that a Fed rate hike is right around the corner), it saw a low earlier of 118.06. Whoa! Watch this closely but don't be surprised if you see some manipulation here, too. The Bank of Japan has had their printers working 24/7 for several years now amd they won't want to see their efforts be reversed without a fight.

Just another October "delivery" update for you before we go...

Recall that 3,092 Oct15 contracts remained open at "expiration" on Sep29 and there were still 2,831 open at the close on First Notice Day, the 30th. Since then, the total open interest of the Oct15 contract has fallen to 1,016 as of last evening. However, the official "delivery" totals from the CME only show 190 TOTAL deliveries as of yesterday:

Does this seem a little fishy to you? Especially when you consider that the total Comex vault registered inventory remains near a record low of just 171,613 troy ounces? All the while, the sham GLD can magically find 250,000 ounces to add to their "inventory" just yesterday?

I tell ya...When the music stops, this is going to be a calamity of epic proportions.

How's your stack today? More shiny than ever?



silver66's picture


Who knows


TF Metals fan's picture

and a second

It is starting to shine!

LostMind's picture

Tres Amigos

Just missed it....Come on Marchas, get your arse out of bed!

Chiron's picture

New thread!

Watch the S&P for a close below the 9 day EMA @ 1991.33.  A close below that will increase selling pressure.  

That will confirm the bear market in most people's eyes, despite the shills of the "financial news" networks.  This all is a last ditch effort to maintain sentiment.  The gold bull will rise once the sentiment changes in the secular market.  I think it has already happened, but price needs to confirm it.

Things looking "hopey and changey" here.

Marchas45's picture


I missed 4th Keep Stacking

Ned Braden's picture

Charlie I must say....

You've a nice rear end wink

(From prior thread)

Orange's picture


I prefer her rear end, especially as she is suitably dressed.

Edit: now should I take a $2+ profit in NUGT now or wait and see if we edge back up tp $1190 in gold. I think I will wait.

LostMind's picture

Looking at the FXY

Looking at the FXY, which is what I've been watching... I'm beginning to believe the new "fix" is in at 81, where it had been at 80...

Please Craig, correct me if I'm missing something. I'm looking at graphs and futures and it seems the market has shifted from the 80 to 81... I think that would shift the algos from your 120 to 118?

I'm just looking for any correlation to the peg?!?! Any help?

tyberious's picture

October 15, 2015 Toronto,

October 15, 2015
Toronto, Ontario, Canada

I’ve long-stated that the government of the United States is completely insolvent.

And that is 100% true statement.

The government’s own numbers show that official liabilities, including debt held by the public and federal retirement benefits, total $20.7 trillion.

Yet the government’s assets, including the value of the entire federal highway system, the national parks, cash balances, etc. totals just over $3 trillion.

In total, their ‘net worth’ is NEGATIVE $17.7 TRILLION… a level that completely dwarfs the housing crisis.

If you include the government’s own estimates of the Social Security shortfall, this number declines to NEGATIVE $60 TRILLION.

And it gets worse every year.

Now, is this balance sheet an accurate reflection of reality? Do we really trust the bean counters to tell us what the United States of America is really worth?

Surely there must be significant intrinsic value to the United States military, for example.

Or the US government’s ability to collect taxes.

Or what about the value of all the natural resources underground?

These must all be HUGELY positive and would swing the government’s net worth back in the right direction.

Guess again.

The US military is certainly one of the best-trained and most effective forces in history.

But it’s difficult to place a substantial value on it when the government can no longer afford to use it.

And even when they do use it, the overall cost of doing so is negative.

The wars in Iraq and Afghanistan have cost the taxpayers $4 trillion. But where’s the financial benefit?

Aside from a few defense contractors profiting handsomely, the Chinese got most of the oil.

ISIS ended up with much of Iraq. And Iran made out like a bandit, with the US government taking out its most threatening neighbors free of charge.

Mission accomplished.

Bottom line, even the best asset in the world can end up being a big liability if it’s used improperly.

So what about the tax authority of the US government? If Uncle Sam can collect $3 trillion in tax revenue each year, surely that must count as a huge asset.

And it absolutely is. If you conduct a Present Value calculation of the future tax revenue of the US government discounted by the official 2% rate of inflation, the US government’s ability to tax its citizens is ‘worth’ $150 TRILLION.

But... if you’re going to count the government’s tax authority as an asset, you have to be intellectually honest and consider the expenses as liabilities.

Think about it: yes, the government brings in tax revenue every single year. But for nearly every year over the last seventy years, they’ve spent far more money to deliver on the promises they’ve made to their citizens.

Those promises are liabilities. And given the government’s spending history since the end of World War II, the liabilities far exceed the tax authority asset.

More importantly, though, isn’t it a little bit scary to consider that the government’s #1 asset is its ability to steal money from you?

Or that the only way the government can make its liabilities go away is by defaulting on the promises it has made to its citizens?

That’s their only way out: steal from you, and default on you.

Join me in today’s very sobering (and inspiring) podcast as we dive deep into the government’s own numbers and discover the truth… and what you can do about it:


Until tomorrow,
Simon Black
Founder, SovereignMan.com

realitybiter's picture

markets, metals

when one steps back and looks at the markets, does some real analysis, it is simply befuddling.  Take netflix.  Please.  Sales of $1,740 and profit of $29.4.  7c a share and the stock is $102.  Digest that.  Consider that we are in the best of times in the cycle.  This  is the time when earnings should be raging.  It makes no sense.  If anything the stock is overvalued by 10X.  Or Sandisk says it is putting itself up for sale and it surges 15%.  All of the possible suitors of course fell.  They are all about the same size, Mu, STX, WDC...the next big thing in tech for flash memory which SNDK makes is 3D - samsung has been making it in size for over a year and sndk won't even begin until next year....so paying up for somebody who is late is coocoo....3D flash is very cool, though....we all will have TByte drives soon -with no moving parts.  You will never ever crash a drive again....

if only pharma behaved in a free market similar to the chip industry......

PMs.  Relax.   We have another spike today and tomorrow, then a rest until the end of the month parlor games...then a November to remember.   Somebody yesterday was trying to finagle the market on silver, suggesting the risk because we had moved up so much....and somebody chimed in basically saying "risk?  are you nucking futz?  we are $16 to zero and $34 away from the old high."  Essentially saying we are not on the ledge but on the first step of a high rise.  Volumes in miners was solid yesterday.  It is quite obvious that the equity to gold ratio has flipped.  This is not something that happens daily or weekly or monthly...but is a techtonic market shift, indicating YEARS of future underperformance of paper and overperformance of PMs....relax

LostMind's picture

Interesting read from Stockman..

More Reasons Why Bubble Finance Will Fail

By David Stockman

David StockmanDead wages and soaring financial assets has been going on for several decades now. Let the stock market’s rips serve as a portal into the ugly interior history of how central bank bubble finance has fostered an existential crisis in what remains of American capitalism.

On the main street side, this isn’t a matter of sluggish recovery from a mysterious financial crisis that arrived, apparently, on a comet from deep space in September 2008.

Alas, for three decades running now, the constant dollar weekly wages of full-time workers have been flat as a pancake. And let’s be clear. We are not talking about after school jobs held by quasi-perpetual students, the meager pay of moonlighting moms or the episodic work gigs of society’s tens of millions of loosely attached drifters.

To be sure, the ranks of these marginal job holders have become immense according to recent Social Security Administration data. It is “authoritative” compared to most of Washington’s statistical mill flotsam because it’s based on the payroll records of millions of employers who generally do not withhold taxes from ghosts.

To wit, there were about 50 million low wage job holders (under $15,000 per year) who as a group earned an average gross pay of just $6,000 in 2013.

Unless there is wholesale violation of the minimum wage laws, upwards of one-third of the US labor force of 155 million is working about 15 hours per week at the lowest lawful pay rate per hour. Call that a giant social problem.

In truth, however, it’s not the half of the real crisis. The latter is shown in the graph below, which is for “full-time” workers defined by the BLS as being on the job at least 35 hours per week.

Thirty years after it was ostensibly “Morning in America,” full-time wage workers have gained only 0.1% per annum in their weekly pay envelope.

That’s a rounding error — even if you believe that the BLS’ statistical shenanigans have actually captured cumulative inflation since 1986. In the real world, of course, actual inflation is much higher. That means real wages have self-evidently been sinking for 30 years.

Nor does this stagnant trend in real wage rates tell the entire story.

Median usual weekly real earnings

The share of the prime work age population holding any kind of job -- even a few hours per week “coding” or delivering pizzas -- is now down by fully 10 percentage points from the level it gained after women had fully entered the labor force in the 1990s.

Needless to say, even as the main street economy of work and production has been going nowhere, the financial system has erupted skyward.

During the last 35 years according to the Fed’s flow-of-funds calculations, the sum of credit market debt outstanding plus the market value of equities has soared from $6 trillion to $95 trillion or by fifteen times. By contrast, since 1981, nominal GDP has risen by only five times.

This is “financialization” in its full brobdingnagian glory.

The financial sphere was 212% of GDP in 1981. Today, it weighs in at 537%. See here:

Total marketable debt + equities vs GDP

Indeed, the S&P 500’s path could not happen in a free market. Even one with far more healthy fundamentals that the floundering recovery of the past six years.

In an honest free market gamblers would have to pay more for their carry funding. They’d face much greater uncertainty as to its price and availability and dissipate far more of their winnings hedging their portfolios than is required under the current central bank driven regime of bubble finance.

The contra-factual thus presents itself. Would the value of corporate equity have soared from $1.3 trillion to $36.5 trillion -- or by 28 times -- since 1981 in an honest free market?

Throw into the mix the Fed’s severe interest rate repression in the bond market and you get more financial inflation. When debt is priced drastically below its economic cost and receives a deep tax subsidy to boot, a variation of the supply side theorem manifests itself.

Namely, when the cost of servicing debt capital is made artificially low, you get a lot more of it -- from the public and private sectors alike. The present day proclivity of politicians to kick-the-fiscal-can is a direct consequence of financial repression.

Also consider the explosion of corporate bond issuance, which in 1981 amounted to just $550 billion of outstandings or a mere 17% of GDP. Today that figure is $11.6 trillion or 20 times larger and amounts to 65% of GDP.

That explosion of new borrowings did not go into the acquisition of productive assets. If it had, real GDP would have grown a lot more rapidly than the 2.7% rate recorded for the 33 years ending in December 2014 and by the mere 1.1% recorded during the sub-period since Q4 2007.

Instead, the debt was overwhelmingly used for financial engineering. It is ultimately a Ponzi scheme by which new corporate borrowings are used to shrink the outstanding float of stock via leveraged buyouts, stock buybacks and cash merger and acquisition deals. Consequently, carry trade gamblers are enabled to bid up the shrunken supply equities to ever higher levels.

It’s no surprise that the US corporate sector’s market capitalization has exploded from $2 trillion in 1981 to $48 trillion at present.

That’s right. The nominal value of corporate debt at par plus equity at market has risen by 24 times. And most of that gain has occurred since the inauguration of monetary central planning under Greenspan in October 1987.

Bubble finance fosters dangerous instability. It is not by happenstance that the Greenspan Fed essentially threw in the towel when it authorized so-called “sweep accounts” on bank deposits in the early 1990s. That was a maneuver that essentially eliminated reserve requirements on traditional checking account money.

What central bank bubble finance has actually unleashed is a self-fueling form of asset-based credit creation.

Not only does this mean that required reserves in the banking system now amount to a laughably microscopic 0.4% of deposits, but the whole apparatus is irrelevant anyway because banks are now only a minor source of new credit in the bubble finance system.

What central bank bubble finance has actually unleashed is a self-fueling form of asset-based credit creation.

The options, futures and currency markets, for example, are based on what amounts to loans which are collateralized by small fractions (1-10%) of the underlying current market value. As valuations rise ever higher, collateral values follow and implicit leverage grows. It is a financial beanstalk.

At the end of the day, the collateral based finance embedded in the current $95 trillion level of US credit and equity outstanding is far more dangerous than the old fashioned fractional reserve lending of the pre-1990 banking system.

At least under the old regime, bank regulators and central bankers like Paul Volcker were steeped in the tradition of safe and sound commercial banking.

By contrast, the post-Greenspan central bankers have opened a Pandora’s Box of market based hypothecated-finance. They do not have a clue about the enormous resulting bubble they have unleashed.

Nor do they understand that this $95 trillion monster is a voracious rent-seeking vampire squid that makes Goldman Sachs look little a piker. The relentless trading, churning and synthesizing of assets and derivatives within the giant bloated system of finance has almost nothing to do with raising or allocating capital for productive use.

Instead, this giant $95 trillion pool is where honest savings from the household and business sectors go to be scalped, appropriated and stolen by the hedge funds, dealers, financial engineers and gamblers which populate the casino. It is the excess girth of it that does the damage, magnifying the rent extraction and deadweight economic costs by orders of magnitude.

This $95 trillion monster is a voracious rent-seeking vampire squid that makes Goldman Sachs look little a piker.

Stated differently, had the US economy not been “financialized” over the past 35 years and if the historic 200% ratio of credit market debt and corporate equity at market value still prevailed today, the size of the financial system would be $35 trillion, not $95 trillion.

On a playing field $60 trillion smaller would there not be far fewer fast money sharks churning, scalping and strip-mining the secondary markets in stocks, bonds, loans and their derivatives?

Maybe 100,000 people “live large” off today’s $95 trillion casino. By contrast, according to the Social Security Administration’s wage records, there were 100 million workers who held any kind of paying job during 2013, who earned a collective total of just $1.65 trillion that year.

That amounts to the incredibly small sum of just $16,500 per average worker. And not for a small slice of the labor force but fully two-thirds of all Americans with a job.

Full-time wage workers have been on a treadmill for decades. Average pay for the overwhelming share of jobs celebrated by the talking heads on payroll Friday is pitifully low. And the denizens of the Eccles Building keep their heavy foot on the monetary accelerator as they witlessly inflate a $95 trillion financial bubble. It’s a true financial vampire squid that they stubbornly deny even exists.

This is a clear and present danger to American capitalism fostered by an unelected monetary politburo in thrall to its own lust for power and mesmerized by its own doctrinaire group think.

The tragedy is that nothing can stop them except the thundering crash of the gargantuan bubble they have single handedly enabled…


David Stockman
for The Daily Reckoning

Turd Ferguson's picture

Good stuff from Chris P

Turd Ferguson's picture

Gold positive article from


Gold positive article from daily reckoning via business insider: http://www.businessinsider.com/gold-turning-ponint-2015-10

heathbr's picture

Down here at the Pawn Shop

Added another shiny 40 ozs to Freedom (not at the pawn shop though)

Mickey's picture

reality biter=rodney dangerfield

take netflix, please

you forgot to include the 15 billion liability that Netflix has to pay for content that's not on balance sheet.

PC sales down significantly as tablets and phones take over.

Philly Fed/NY Fed. Retail sales (only 70% of economy)

Illinois cuts lotto payouts to 600

and there is widespread optimism that things are ok.

TPTB are winning-most people are just buying into what ever is said.

How many of us here are being laughed at and  marginalized by friends and family? Come on, be honest.

This is what happens when you think out of the box.

Turd Ferguson's picture

USDJPY moving back toward


USDJPY moving back toward lows of day. Gold moving back toward highs of day.

heathbr's picture


For everyone going "nucking futz" about the risk comment ... entry here is risky IF you are using leveraged 3X daily ETF'S. The comment was made in reference to a turdite who was wanting to re-enter a long position after losing money  being in the Short 3X ETF (losing means risk). NUGT was up over 20% yesterday! It's down 3.5% today. It very well could be up another 20%, or down 20%. That is a lot to stomach. USLV is less volatile but is down on the day as well. 

Yes, I feel the ship is turning too and there is unlimited upside and $4 to the downside. An unbelievable long term entry!! But that doesn't mean you can't lose all of your money short term trading before it gets to $18. On the flip side, if you pick good entry points you can make a loooot of fiat.

I assume the majority of people here are MT to LT traders, but there may be a few short term traders that have some cash allocation for the 10% to 30% moves daily or weekly. Often long term traders will be enticed to gamble a bit in the short term markets with these big moves. 

If you're a long term buy and holder, why waste your time on the message boards it's just noise? 

Safety Dan's picture

The Truth About Cancer: A

The Truth About Cancer: A Global Quest - The True History of Chemo & The Pharmaceutical Monopoly

Uploaded on Oct 13, 2015

Please help us share the truth by sharing this video and this page https://go.thetruthaboutcancer.com with everyone you know.

Watch the rest of the series for free by registering at the link above or following us on facebook. www.facebook.com/thetruthaboutcancer.com

ratioarbitrage's picture

Backwardation afternoon update October 15

Dead flat still at $16.15, giving a backwardation free price of $16.15. Backwardation occurred on that beautifully timed spike at 08:30 CET, now back to dead flat. Nothing more to say about the cobasis.

Also of note the dead flat price means that the concave parabolic resistance line since the morning of October 12 has now not been visited for about 24 hours; if price did decide to pay it another visit the level has now risen close to $16.45 because it was beginning to rise steeply. No guarantee that price will go there of course - and the longer we wait the less likely it becomes - but I have often seen them revisit and continue after a break before, particularly after a period of low volatility/flatlining, on all time scales.

Orange's picture


Invested this morning and just sold, to be safe, took a $2 profit.

Risky, but it always seems to fluctuate intra day by several bucks.

Decided to put a water filtration system and uv system in our home. 

This trade just paid for it.

Danforth Coxwell's picture

Jays beat Rangers.....

gold doing nicely. Great day to be alive!smiley

jaw777's picture


The same clowns who said gold was going to $900 are now calling for it to go higher.  One of them even said that traders don't expect the Fed to raise rates this year or next!   Crazy bastards.  LIESman will probably have them kicked off the network.  When Peter Schiff says stuff like this on the air he is trashed.

I'm not sure if this is a good sign or not.  Chances are they are trying to suck in some novices so they can beat it down and get them out of the market.  

As a rule I only watch CNBC to do the opposite of what they are calling for.  Now I am confused.

mike97's picture

Turd - USDJPY moving back toward lows

Turd I have been looking at gold in terms Chinese Yuan vs dollar and it has shown good correlation over the past month. I like the idea of this as China has said it will devalue its Yuan over the next few months which is great for gold.

Turd Ferguson's picture

Somewhat encouraging


I really like the way gold (and silver) has hung in there today. 

Had every opportunity to get run at the Comex open but, after falling to a low of $1174 and under the 200-day, we're back at $1187 and bascially UNCH on the day.

I'll take it...

lakedweller2's picture



ArtL's picture

have we shifted to a BTFD mode?

when silver started it rise in 2008, it became obvious (after the fact) that BTFD was a good strategy. It would be good to know if we are entering a similar market phase. Of course, most of us stackers are underwater, and have been so burned, it will be hard to accept the fact that the silver market has changed.

Turd Ferguson's picture

The focus of today's podcast


Today we'll discuss, in depth, the two charts below. I'm posting them now as a primer. The expandable versions will be linked then for better viewing.

On this weekly chart, you can see the damage that has been inflicted upon the S&P. It is clinging to "hope" above its 50-day MA but notice that the 50 is below the 100 and the 100 is below the 200. This is pretty ugly from a traditional TA perspective.

But the main thing we'll discuss is all of this from a "Death Candle" and "Green Candle" perspective. As we've been saying, IF this continues to play out, not only is your 401(k) balance in jeopardy, but you'll also have a chance to make significant fiat by getting short. So, how will we "know" when the time to get out/get short has arrived? That's the ALL-IMPORTANT question.

Check this chart. The squiggly lines are 6-month, 12-month and 24-month moving averages. Now look closely if you can. During "Green Candle of Hope" months, note that the 6-month line (in red) negatively/bearishly crosses the 24-month line in blue. Once that happened, that was all she wrote! In 2001-2002, the S&P then fell from 1400 to 800 and in 2008 it fell from 1400 to 700.

Finally, notice that at present, the red and blue lines are only separated by 50 points and the gap is narrowing...FAST! At this rate, give it about a month and we'll have our crossover and that, my friend, will be your signal.

<MAJOR CAVEAT: Though the markets were under Central Bank influence back in 2001 and 2008, it was NOTHING like it is today. Additionally, the dominance of HFT was nothing like it is today. So, can this signal be invalidated by heavy CB intervention? Maybe. And this MUST be taken into consideration.>

braincramps's picture

Gold Chart

Take a look at a 6 month gold chart valued in Chinese Yuan... the inverse head and shoulders is looking pretty good.  (thanks GT...lol)

LostMind's picture

Nothing beats free speech, like well


free speech that gets you indicted for TERRORISM!

Me thinks we may have a very hard time communicating ANYTHING in the near future.... Very sad

For reference sake, I love the Battle Flag of the South, but do not like how it is used by numbnuts to do stupid things. I have a slave owning Yankee (great great grand dad) who fought through all four years and a non-slave owning Reb (Great great grand dad) who fought for two years... To this day, I'm still trying to get people to see what Lincoln did to the Constitution verses what the "war" was really about $$$$$$$....

Oh, I so digressssssssssss

Edit: http://www.activistpost.com/2015/10/doj-creates-new-position-to-target-anti-government-views.html    <---boy, they sure are acting FAST!

Turd Ferguson's picture

Everyone likely knows this


Everyone likely knows this but...for those that might forget...the yuan is still pegged to The Pig. Therefore, yuan-priced gold looks very much like Pig-priced gold.

To that end, note that we are very close to breaking the 3-year downtrend. We discussed this in terms of Pig-gold during yesterday's podcast.

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