The Return of The Comiskey

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Just a bit ago, I was able to track down our old pal, Jim Comiskey. Given the current state of affairs, I thought it might be fun to get his take on everything from the S&P, to the metals to the latest report of Mad Cow Disease in California.

Ole Jim didn't disappoint. To listen to the podcast in its entirety, just click the microphone icon to the left. While you're listening, here are some other items that I found relevant as we passed through the day.

First up, a story from late yesterday about China bypassing the dollar and using gold to purchase Iranian oil. Santa's pretty worked up about it and rightfully so. He discussed this situation and more during his latest with Eric King. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/24_Sinclair_-_Shorts_Now_Trapped_%26_Gold_Could_Gap_Up_to_$3,000.html. The article that brought all of this to the fore can be found here: http://www.forbes.com/sites/gordonchang/2012/04/22/the-best-reason-in-the-world-to-buy-gold/. And here are my thoughts from last night:

"The question you need to ask is: If true, what will the Iranians do with the gold they receive in exchange for oil? They'll most likely convert it into some type of currency which they can then exchange for gasoline, food, etc. Which currency would they convert it to? Dollars? No. Euro? Doubtful. Pounds. Not a chance. Yen? Be serious. Maybe they trade the gold to Russia in exchange for wheat, fuel and weapons?
I dunno. Maybe this story has it all wrong and they don't take gold at all? Why not just take renminbi for your crude and begin building reserves in it instead of dollars? Much easier than shipping gold around and an account at the PBoC is a lot safer than storing your gold at home. Ask Gaddafi or Saddam about that one."

As a follow-up, you should also read this interesting note from Izabella Kaminska at the Financial Times:

http://ftalphaville.ft.com/blog/2012/04/23/970271/the-unwitting-move-towards-a-global-gold-standard/

Next, there were two items I found today from Charles Hugh Smith. This first piece is about the "disappearance" of money. You've likely heard me state before that gold provides protection for your wealth and the silver provides you protection to purchase basic necessities. This article is along those lines:

http://www.oftwominds.com/blogapril12/when-money-vanishes4-12.html

This second piece comes via Chris Martenson's blog and it follows on the theme of fudged and manipulated government data. As we barrel toward another BLSBS report next week, I thought this was timely:

http://www.chrismartenson.com/blog/what-data-can-we-trust/74361

Oh, and this is fun. Santa posted this link earlier. It's a map of every U.S. police department that has the authorization/capability to launch and use aerial drones. How nice. God Bless the U.S.A. Land of the Monitored and Home of the Surveilled.

https://maps.google.com/maps/ms?msa=0&msid=214769660919529725423.0004bde31d74fe6eb1ece&hl=en&ie=UTF8&t=m&ll=45.336702,-110.039062&spn=58.987964,112.5&z=3&source=embed

Next, here's a video from Paul Coghlan. Paul is one of Andrew Maguire's business partners and he operates his own trading service. He publishes these updates daily for his subscribers and offered this one to all Turdites as an introduction to his services. Pretty good stuff!

http://www.coghlancapital.com/node/3039

I owe you some charts, too, so here they are. First up, let's look at gold. We are still being pressed lower by the downtrend line but we are getting close to what should be very strong support between 1600 and 1620. We might have bottomed yesterday but I don't think so. My gut tells me that there is at least one more thrust lower to test and confirm a double bottom. From there, a move higher that takes gold back UP through 1660 and then 1680 will confirm that this nasty episode is behind us.

paper_4-24pmgold8.jpg

In regards to silver, I thought we should start with a chart of crude. HUH? That's right, crude. Do you recall last week when I mentioned that the silver chart looked a lot like the crude chart from late March and that silver was subject to "getting its stops gunned"? Well, guess what happened? And now what? Note that immediately after the crude stops were gunned a few weeks ago, crude bounced back but failed at the old support line, which had now become resistance. It then sold off further to a deeper low before consolidating and turning higher.

paper_4-24pmcrude.jpg

Note that silver may be following this same, classic pattern. The stops got gunned yesterday and down she went. A rally today failed right near where the old support had been and now it has since turned back lower. Will we next see a lower low, perhaps near the $30 level that we've all been waiting for? Probably.

paper_4-24pmsilv8.jpg

Lastly, silver open interest rose again yesterday to a new 2012 high of 122,727. Again, for reference, back on 2/24 with price $5 higher, total OI peaked at 118,204 before falling along with price to 106,723 on 3/15. Since that date, price has fallen another $1.50 yet OI has risen by over 15%. The spring is obviously being coiled for a dramatic move. Which direction will it be? I imagine you can guess what I think.

Have a great evening and overnight. Get ready for a volatile rest of the week.   TF

168 Comments

¤'s picture

TexasStacker

Just catching up out here, welcome aboard Matey!

Here ya' go...

Kcap's picture

Hmmmmmmmmmm.

Its tempting to say a few things but my brain is fried for the night.

I will lay out one concept.

Bear market in stocks needed for QE III, metals will have factored equity deflation in long before stock market bottoms and therefore the "turn" will preempt any stock turnaround.  When QE III is announced, it will be like nitro-glycerine has been added to the spontaneous combustion under gold/silvers explosion higher.

Just the truth here.  Sinclair is right on, except he is way early with his announcement of the gap up.  I understand why, but equity market has to start tanking first.

I don't claim to "know" HOW this will unfold wrt specifics, but when she goes, she goes... and by the time QE III rolls around, you'll be worried about many other things more than your G/S.

Kcap

johnnydow's picture

AAPL

AAPL on fire.  Close out the call options and slam GLL before Bens talk.

Gold's Next Big Move, Which Direction?   -  Clive Maund

You might want to scratch him off your list.

http://www.marketoracle.co.uk/Article34277.html

Is Apple Inc about to become a faller??

http://www.clivemaund.com/article.php?art_id=2717

Dr Jerome's picture

Anybody recognize that Turdite

I think one of us may be from Russia.

I wish our own politicians understood the role of gold as the Russians do.

notmessenger's picture

@opticsguy: In the DFW area yourself?

In the DFW area yourself?

EDIT: Had I just looked at your profile I would have answered my own question :-)

slacker's picture

Turd, I'd like to see your TITS

chart analysis...  Will they be perking up now or sag? 

DavidSilverSwe's picture

tits

so tits lowest ever = very oversold?

i forgot how tits work.

silverstax's picture

TITS Indicator

Turd said it's at it's lowest point ever, meaning sentiment is low. When sentiment is low, it's a good time to BUY BUY BUY!!

Juan Moment's picture

Congrats Good Doc. A job is

Congrats Good Doc. A job is like a stack of silver, its better to have one and not needing it than needing one and not having it. Here some Seasick Steve, I am sure you can relate.

As one comment over on yt says: Top-notch recession-proof post-apocalyptic blues.

_______

Also, thanx Turd for the interview with Jim the Heat Miser .... his commentary on the metals always worth watching.

________

And just to throw my 1.5 cents worth in the opinion hat, looking at the weekly chart, Gold is about to touch its strong 3 year trend line. Going by past performance one would have to expect a hefty bounce in the coming weeks, or, and I think I am leaning that way, the price is gonna drop significantly through the trend line, taking out countless stops, and revisit the lower bollinger band somewhere near the $1560.

By doing so Gold would establish a triple bottom in the mid $1500 range, a bullish sign to those with the nerves to buy although the 3 year up trend line has been broken, and once the price recovers and shoots back up into the $1700 area, confirming the triple bottom, other traders will come back in to join the love fest.

The picture in Silver is similar, difference being the trend line is weaker and only 2 years old. 

Either the price ricochets off the trend line near the $30 mark in the coming weeks, or it breaks down and falls by another 10% into the 26/27 range, hopefully creating a massive triple bottom, off which the price will launch back into the mid 30's, confirming the pattern and drawing investors back in.

But then again, thats the optimist in me talking, based on charts, which for the ones with motive and means are as easy to manipulate as it is to shoot fish in a barrel.  

So having said all that, the pessimist in me sees a world economy seemingly going into recession, consumption reduced and the money being used to instead pay down excessive debt. Conclusion: asset prices will continue to deflate. US and European stock markets are no way a reflection of economic reality and sooner or later will in all likelihood drop significantly. The domino effect will lead to liquidity problems, which in turn means commodities futures will be sold to generate cash, amplifying an already established downward trend.

So my overall feeling is that precious metals prices, Silver more so than Gold, will gravitate south, until such time when prices reach levels interesting enough for big players with the means to make a difference to make their move.

Anyhow, we shall find out what destiny has in store for stackers. But however gut wrenching that short term pain may be for people like us hoping precious metals prices will rise, the important part to remember is that 60% of the world population don't earn enough money to save up for a couple of ounces of silver, and 20% have barely enough to not starve. Contrasting ones perceived misfortune with the fact that most other people on this planet have it much, much harder, puts matters such as a $2 drop in silver in perspective.

On this note, roll the dice.

FriendOfTheDevil's picture

Not on topic but needed to say thanks...

Just wanted to say thanks for the response's and direction that Xty and Eric O provided in a previous thread (Friday Link Dump). Took your advice (Xty) and checked out the forums over there a bit more and was blown away! Amazing amount of info buried and I took the weekend to get accustomed to the 'system' of stocks and investing in miners. Not gonna dive in just yet but I'll slowly get my feet wet as I see the situation start turning in a positive light and after my knowledge base grows a fair amount ; ) . Take care!

- Friend

C F's picture

Speaking of bogus bills

This one is still my favorite.

SRSrocco's picture

OH WHERE ARE THE SILVER BULLS??

THE NEGATIVE NEWS FLOODGATES ON SILVER ARE NOW WIDE OPEN

As I sit here and read comments on this blog as well as articles on silver, I see a trend taking place.  Silver investor sentiment is hitting rock bottom (maybe will fall even more) and the psychology is now in the HANDS OF THE FED & MEMBER BANKS.  They have done a very neat trick this past year using all methods of manipulation and negative hit pieces on silver in the MSM.  You don't need alot because you get BRAIN DEAD ANALYSTS who come in behind to fill in the rest.

I am simply amazed at what I see.  I have been in silver since 2002, and have never looked back.  In the past 10 years I have seen silver bug extremes.   As I see the reports coming out about higher comex inventories, low premiums, low silver eagle sales, and etc, the sentiment falls even further.  It is a NEGATIVE FEEDBACK LOOP and it is working HOOK LINE and SINKER.... just as the FED designed.

Here is a typical part of an article about silver:

Demand for silver fell in 2011 for the first year in four as Europe’s debt crisis sapped industrial use of the metal found in solar panels and photography, Thomson Reuters GFMS said in a report on April 19. The decline in ETP assets yesterday drove holdings to the lowest level since August.

“The price drop drives fund selling and that in turn drives prices even lower,” said Sun Yonggang, an analyst at Everbright Futures Co., a unit of China’s largest state-owned investment group. “Silver isn’t holding up as well as gold because it is still primarily an industrial metal.”

---------------------------------------------

Demand for silver fell in 2011.... that's the big line there.    Let's take a look at GFMS newest 2011 chart on silver demand:

World Silver Supply and Demand (million ounces)
(totals may not add due to rounding)


Supply

  2010 2011
Mine Production 751.4 761.6
Net Government Sales 44.2 11.5
Old Silver Scrap 228.7 256.7
Producer Hedging 50.4 10.7
Implied Net Disinvestment - -
Total Supply 1074.7 1040.6

Demand

  2010 2011
Fabrication    
Industrial Applications 500.0 486.5
Photography 72.1 66.1
Jewelry 167.4 159.8
Silverware 51.2 46.0
Coins & Medals 99.4 118.2
Total Fabrication 890.1 876.6
Producer De-hedging - -
Implied Net Investment 184.6 164.0
Total Demand 1074.7 1040.6

In 2010 silver demand as 890 million ounces.  What's funny is if you go to their website, you will notice that their total 2010 demand figures were 878 million oz.  Somehow they adjusted their 2010 figures higher by 12 million ounces.  If they revise figures each year, will 2011 turn out higher??  Who knows.  Furthermore, the Fabrication demand in their old 2010 figures was 487 million.  They revised it up to a cool round figure of 500 million.

The interesting thing to note is the IMPLIED NET INVESTMENT (this just means total investment).  They state that there was actually less investment buying of silver in 2011 than 2010.  How can that be if Coin & Medals (most official coins such as Eagles & Maples) were up from 99.4 million to 118.2 million? 

The answer to that question is this.... GFMS has to make sure that the TOP SUPPLY FIGURES match up with the BOTTOM DEMAND figures.  They don't want any surpluses or deficits in this accounting category.  However, they will show a so-called surplus of 260 million oz this year due to their CREATIVE ACCOUNTING.  That is for another post coming later.

Lastly, the real news is in the SUPPLY CATEGORY at the top.  Here we can see that Government sales from China and Russia fell off a cliff from 2010... 44 million down to 11 million in 2011.  Also, Producer Hedging declined a substantial amount of nearly 40 million oz.  Together that accounted for nearly 70 million oz less than 2010. 

The total supply was down 34 million oz from last year so the folks at GFMS had to do some creative accounting to make it look like INVESTMENT DEMAND was lower along with Fabrication demand.

FOLKS.... THE JOKE IS ON US. 

El Gordo's picture

My "Buy" chart

I've been plunking a few stackers down throughout 2011 and present, riding that train down since silver dropped below $40 (some of you may remember that far back).  As fiat is available, and as the prices dipped, I have added a few more pieces to the stack.  With the premiums over spot, plus S & H, my average price is well above spot, but who cares.  As the price remains suppressed, I'm able to add at a lower price thus reducing my overall average cost.  When it starts back up, unless it skyrockets, I'll probably continue to make a few more purchases as I trudge the road of happy destiny.  My theory is that unless you are selling, why worry about the price.  If you are buying, a low price is good.  If you are just holding, leave it alone and forget about it.

azzatack's picture

The Telegraph: UK in recession

Number 47's picture

UK enters double dip recession.

http://www.bbc.co.uk/news/business-17836624

The UK economy has returned to recession, official figures have shown.

The economy shrank by 0.2% in the first three months of 2012, the Office for National Statistics (ONS) said. This followed contraction of 0.3% in the last three months of 2011.

These figures are probably skewed by the farce of the government stoking fears of a fuel shortage that resulted in panic buying. Fuel sales rocketed, call me a cynic.......

http://www.bbc.co.uk/news/uk-17533151

There is something quite sickening watching these boys from public school telling the nation to 'pop a few jerry cans full of fuel in the garage, just in case.' They don't seem to even realise that most of the population don't actually own a garage. Luckily only one woman blew herself up while storing petrol in her kitchen, decanting it from a milk jug while the gas burner was lit on her cooking hob. no

Not too much harm done eh?  Only a 0.2% contraction. I wonder where that would have been without the 45% increase in fuel sales?

S Roche's picture

The silver forward curve is almost entirely flat...

ClinkinKY's picture

Morning Toons

ClinkinKY's picture

Lame Stream Media

toon120420.jpg

ClinkinKY's picture

First Church Of Gaia

ClinkinKY's picture

And finally...

Number 47's picture

UK economy compared to great depression

Bobbejaan's picture

@zilverreiger

Quote:

Now THAT was (A) Satirically funny, & (B) makes a STRONG Anti-Thuggery point, & (C) Targets a SPECIFIC Thuggish & Terroristic group/organisation (rather than a rant against an Entire Country) that IS a menace to Society. enlightened

.

Well done, & Thank You Kindly. yes

ClinkinKY's picture

I predict that...

...the AAPL "Bears" here will be hibernating today.

Be Prepared's picture

The Ground really is coming up..... faster!

Be Prepared's picture

12 million illegal immigrants... it's not news when a few leave.

Be Prepared's picture

He lives to generate and push....... hate......

Bobbejaan's picture

Speaking of bogus bills (UK Version)

Be Prepared's picture

OBummer's next term.... it's what they're counting on....

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