Calvin? Anyone Seen Calvin?

Thursday, May 10, 2012 at 9:55 am

Meow! Looks like Calvin decided to show up this morning, right on time. Though this was predictable and somewhat of a relief to see, I wouldn't get too carried away just yet.

I once again attempted to draw the charts below as accurately as possible. The main takeaway here is that the lower end of the current down channel is the old down trendline from the highs of last August and November. Here, take a look:

In the grand scheme, really big picture, you must remember that this is exactly how this is supposed to work. When price moves through a down trendline, it typically springs higher and then retraces and "rides" the line lower, on the other side. We've talked about this phenomenon here at length on several occasion. As you can see on the weekly chart, gold is doing just that. Up until this week, the pattern was perfectly fine and gold looked ready to finally skip away from the line. Instead, here we are. It is faith in this pattern, however, that leads me to conclude that it is highly unlikely that gold will trade much lower than 1575, maybe 1550. The horizontal support there should be sufficient to allow gold to base between 1575 and 1625 and then, finally, break through and out of the channel.

Here's another look at the channel, this time on a daily basis:

Here's the best, longer-term silver chart I can give you. Note that The Battle Royale line continues to press silver lower, all the while anything from $30 down to $26 will see buying. This pattern will, eventually, be resolved but...as you can see...it could still be a while. Patience. Wait for the breakout or you risk getting whipsawed to death in the interim.

Just one, quick thing and then I've got to go. If you haven't read this yet, please do so now. David Stockman was Budget Director for Reagan back in the early 80s. Given that, this interview is rather remarkable:

http://www.testosteronepit.com/home/2012/5/9/the-emperor-is-naked-david-stockman.html

Sorry for the brief note this morning but other duties call. More later. TF

Comments

Turd Ferguson's picture

Another interesting link

Submitted by Turd Ferguson on May 10, 2012 - 12:23pm.
MODERATOR

http://jessescrossroadscafe.blogspot.com/2012/05/michael-hudson-firing-alan-greenspan.html

El Dubya's picture

Bream and crappie are the

Submitted by El Dubya on May 10, 2012 - 12:26pm.

Bream and crappie are the best eating freshwater fish there are in the south. Scale, gut and cut the head off and deep fry whole. Meat falls right off the bones when you eat them. Not much work when you get used to it. Gonna need some hush puppies to go with it. Yum. 

Gold Five's picture

Fish

Submitted by Gold Five on May 10, 2012 - 12:28pm.

They're not my favorite, but they're less gamey tasting than something like catfish, IMO.

Some probably don't care for them because they're smallish fish and they'd rather spend the time cleaning something with more meat on it.

Dr G's picture

@bam, thanks for the article

Submitted by Dr G on May 10, 2012 - 12:30pm.

@bam, thanks for the article link. I agree that, when taken in appropriate context and used along with other sources, KWN has a wealth of info. I just think it's a terrible place for young stackers/trades to jump right into. It gives a very one-sided argument.

Turd Ferguson's picture

I highly recommend this

Submitted by Turd Ferguson on May 10, 2012 - 12:30pm.
MODERATOR

Gotta remember this next April (if there is a next April surprise).

http://www.zerohedge.com/news/crudes-crash-conundrum-explained

Turd Ferguson's picture

leaving now for Sam's Club

Submitted by Turd Ferguson on May 10, 2012 - 12:31pm.
MODERATOR

Be careful.

Dr G's picture

Nice video for everybody: a

Submitted by Dr G on May 10, 2012 - 12:45pm.

Nice video for everybody: a six-year old boy with cerebral palsy walks to his dad (a Marine returning home) for the first time

The boy learned to walk while his father was deployed. Made me cry.

UPDATE: I'm still teary-eyed. What a wuss.

The Green Manalishi's picture

The Japanese are dumping their Gold?

Submitted by The Green Manalishi on May 10, 2012 - 12:46pm.

http://www.businessinsider.com/the-japanese-are-dumping-their-gold-2012-5

bbacq's picture

Turdisms, acronyms... YACK!

Submitted by bbacq on May 10, 2012 - 12:51pm.

Along with ABCD: Anything Bernanke Can't Destroy (I love it!)

I would humbly submit "YACK": Yet Another Can-Kick which I coined over in the gold/money slingfest linked earlier.

Every time they do it again, I want to puke.

Do mods actually pick these up and dump them in the welcome wagon somewhere so the site is intelligible to newcomers?

For fun, but I am bound to be out-done, a usage example in context:

"The FUBM in PMs was POSX-related.  TPTB can't hurt you if you are in ABCD, even if the EE tries YACKing."

smiley

DaysGoneBuy's picture

@BigBuffalo

Submitted by DaysGoneBuy on May 10, 2012 - 12:55pm.

I don't know about the rest of it, but bluegill is good. I can speak to that personally. Bluegill are small fish, so they don't have much meat on them, but they taste pretty good and if you catch two or three of them you'll get more than full. 

Punk-Assets's picture

I stopped contributing to my

Submitted by Punk-Assets on May 10, 2012 - 12:58pm.

I stopped contributing to my 401-K and wifes IRA in 2005. Started heavy with gold and silver shortly thereafter. 1000 oz gold and 50,000 oz silver is our retirement plan. No shit. My friends and family members mostly think I went full retard long ago. Even while my pile and its worth in fiat continues to rise. And its value even with all the smash - downs. I have 18 more years to stack. That's my plan and I'm stacking to it.

boatman's picture

i do not think gold/silver outperforms forever

Submitted by boatman on May 10, 2012 - 1:12pm.

there will be a decades top and a 30-50% retrace.....in this debt/credit supercycle BIGBADABUST

yamada says 2018.

sounds good to me.

do not leave it to your kids, u can leave them the house.

bam's picture

I actually cashed out two IRAs and an inherited IRA

Submitted by bam on May 10, 2012 - 1:16pm.

I'm taking a big tax hit, but I do not care for the following reasons:

1.  over the next 10-20 years, are taxes going up or down (including hidden taxes - ie printing money)?    My guess is up, so I'll take the tax rates as they are now and get control of my money.

2.  I believe withdrawal penalties will only increase with time.  

3.  I believe 'the rules' of retirement accounts will be monkeyed with, once the govt figures out a way it can take advantage of all those 'surplus' funds out there....without inciting a revolution.   Fiscal emergency perhaps?   There are a whole host of possibilities here, from forced buying of govt bonds to ludicrously high taxation levels for metals held within IRA/401ks to whatever crappy deal your mind can devise.

4. Lastly, if you are not in control of your money (due to withdrawal penalties and regulations etc), it is NOT YOUR MONEY.   With the coming changes in the world wide economy, I need to be able to deploy my capital as i see fit, unencumbered by a jail cell of regulations. 

Note in the context:  I'm not someone who is taking delivery of my physical at my house (I don't own a home), as I am moving all my money and gold overseas.

I've got two passports and am working on a third.  Any crisis in the US will be observed from afar (overseas).

Helps to be a bit younger, single and unencumbered by a huge liability like a mortgage. 

Dr G's picture

boatman, I agree. Gold/silver

Submitted by Dr G on May 10, 2012 - 1:20pm.

boatman, I agree. Gold/silver will not always be the asset class of choice. The goal is to use the metals to help us achieve other things.

Sinclair, Mr. Gold, got out of his positions at the top of the last bull market. We should all look to do the same.

@Punk, nice stacking goals, but what do you do if we reach an effective monetary system in the next 5-10 years? Will you still keep stacking or will you purchase something that will produce income for you?

JY896's picture

Preparing accordingly

Submitted by JY896 on May 10, 2012 - 1:26pm.

A slightly amusing, but potentially useful little summary on ZH:

A Guide for Those with Much Money and Very Little Patience Whom Want to Prepare for Zombie Apocalypse But Are Afraid to Google It For Fear of DHS Labeling Them A Terrorist

Just a gentle reminder that while essential, PMs are only PART of the necessary preparation.

I was impressed by the continued emphasis on the first rule of Zombieland: Cardio, as well as on the first rule of Fight Club:

"Item 1

Learn that the first rule of preparing for TEOTWAWKI is you do not talk about preparing for TEOTWAWKI.  Tell nobody.  Do, however, make up some lame excuses in advance for when some friend questions you about your actions and purchases.  Say that you are getting ready to visit your rich and crazy uncle whom is a gun nut living in Alaskan bear country, or your friend in Detroit wants you to house sit.  Just do not tell anyone what your plans or preparations are, or even that you have plans or preparations.

[...]

Item 4

Get yourself in shape so you can run for your life.  Go running, no matter how slowly, five times per week.  Work yourself up to 30-minutes during the week, and then a longer run on the weekends.  After each run, do three sets of as many push-ups as you can do.  When you go see your doctor to ask for permission to get healthy, ask her to find some way to get you off any drugs you currently require to survive, and to please write you a post-apocalyptic "ditch medicine" prescription for a broad spectrum open wound MRSA antibiotic like Bactrim DS (or something else if you have a sulfa allergy)."

Duke's picture

First!!!!!!!!!!Dang, I'll get

Submitted by Duke on May 10, 2012 - 1:37pm.

First!!!!!!!!!!Dang, I'll get it one of these times.

Lumpy's picture

No problem

Submitted by Lumpy on May 10, 2012 - 1:38pm.

Sept. 2012 ........We hit the debt ceiling.    

Oct. 2012........Spooky October crash memories.   

Nov. 2012.......... Election.....We're saved.

December 2012 ..........  End of the World

May - Sept.   2012....... Drink beer, grill out, watch baseball, cut grass, pay bills, drink more beer, cut more grass, grill out, not worry about silver, and drink more beer.

ReachWest's picture

Sam's Club Smash Down?

Submitted by ReachWest on May 10, 2012 - 1:39pm.

Turd at Sam's Club .. Silver still holding .. so far .. so good.

hsofiak's picture

Shanghai Futures Exchange

Submitted by hsofiak on May 10, 2012 - 1:40pm.

Trading of China's first silver futures exchange started today..

For the first trading day, the benchmark listing price was 6,166 yuan (about 979.77 USD) per kg, according to  the SFE.

That's $30.47 USD based on 32.1507 troy oz per kilo.  Spot silver is at $29.22.  What does this mean?

Eric Original's picture

fish

Submitted by Eric Original on May 10, 2012 - 1:41pm.

Those panfish species mentioned are all fine eating.  Nothing wrong with them at all. yes

Start Here:

5690992_f260.jpg

End Here:

pan-fried-sunfish-fillets.jpg

Ragnar's picture

Shanghai Futures Exchange

Submitted by Ragnar on May 10, 2012 - 1:44pm.

My limited mental horsepower says to buy comex and sell SHFE for the arbitrage but there has to be major money arbitraging that or so you would think.  So it is very interesting.  Thanks for pointing that out.

SRSrocco's picture

INTERESTING CHARTS...

Submitted by SRSrocco on May 10, 2012 - 1:46pm.

INTERESTING SILVER BEV CHART

This chart came from Mark Lundeen's article.  Here we can see the overall trend.  When the price hits ZERO percent line, then it was a new high.  The drops show how silver declines between new highs.  According to the trend, it looks like this last sell-off that hit a high of 45% in JAN is over.

For sake of comparison, here is his GOLD BEV CHART:

and this is Lundeen's description:

Below (above) is gold's daily closing price BEV chart, where each new all-time high price is recorded as a Zero%. Other prices that are not a new all-time high are converted into negative percentage declines from their previous all-time high price. I call this charting technique the Bear's Eye View as this is exactly how Mr Bear sees the price of gold, or anything else. Each new all-time high is a big fat Zero to Mr Bear; he is only interested in how large a percentage he can claw back from the bulls' gains.

But just because each new all-time high in gold is a Zero percentage in a BEV chart, that doesn't mean gold hasn't moved up in price. It's just that a BEV chart converts price movements into percentages, displayed in a range between Zero% for a new all-time high, and -100% for a total wipeout of the investment. Mathematically, a BEV chart is incapable of showing price gains from one new high to another. So, for your information, the first BEV Zero in the chart below occurred on 19 July 1999 with gold at $253.70; the last BEV Zero occurred on 22 August 2012, with gold at $1888.70, a price increase of 644%. But remember, with the Bear's Eye View, all new highs are equal to Zero%, and never more. But that's okay since we are mainly interested in seeing how large a percentage Mr Bear has clawed back from the bulls' gains from one all-time high to the next.

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

I believe with the huge DIVERGENCE in the ACCUM-DIST line trend compared to the price of gold and silver, we are getting ready to experience a significant move.  How high and to what degree... we will have to see.

Groaner's picture

Well I have to say that was a very disappointing

Submitted by Groaner on May 10, 2012 - 1:48pm.

showing in the metals today with the usd not doing much and more positive metals news.

All I can say is,, THEY WILL NEVER STOP!   

Wheres my buddy Georgy boy to blast the status quoi again?

bbacq's picture

Channel changing and @boatman

Submitted by bbacq on May 10, 2012 - 1:55pm.

For a lark the other day I drew some channels on the linear-scale long-term netdania silver chart:

Then I zoomed in to 1-minute today to have a look:

That is the upper of the two lower channel-markers I drew that we are riding.  I want to make sure that everyone understands the difference between linear and log charts.  Long term, something that is experiencing constant growth will not be linear on a linear chart, it will curve upwards.  It will be linear on a log chart (but ND don't allow lines on log charts...) In the typical lurching market, the upward-curve is usually seen as a series of piecewise-linear price channels of increasing slope. 

We have been running up that long-term linear channel for an awfully long time as fiat has been constantly depreciating.  We know that the market pressure is for the price to move into a new price-channel, with slope even greater than shown on the monthly, above, if the fiat printing continues, and the market continues to accept them at ever-increasing discount rates.

It is not impossible that the EE creates the biggest FUBM of all time, yet to come, but we can know that the right-hand side of that formation, should it come to pass (the "FU" part) will yield a fiat/silver ratio that is above linear extensions of the current monthly-linear-channel,  and from there will rise even more quickly than this channel from there on, because markets compute truth in value over the long term.

It is the reality of that analysis that is currently scaring the sh!t out of the bankers, and causing it to fly from manure-spreaders and fill blog-diapers.  Just wait until it hits the fan.

boatman:

there will be a decades top and a 30-50% retrace.....in this debt/credit supercycle BIGBADABUST

yamada says 2018.

sounds good to me.

Could you put a few more words around that to help me understand your meaning?

Good luck to all in your trades.

Groaner's picture

OK this is worth a watch..Carlin on reality

Submitted by Groaner on May 10, 2012 - 1:59pm.

pbfurn's picture

My Former Girl Friend, Rosy Scenario

Submitted by pbfurn on May 10, 2012 - 2:10pm.

http://www.zerohedge.com/news/marc-faber-sees-1987-crash-approaching

She was a nice Italian girl.

Groaner's picture

I hate to say it, but all these Gurus are like the Weather Men.

Submitted by Groaner on May 10, 2012 - 2:15pm.

It doesn't matter if the forecast is correct, in fact they are usually wrong, but they still get paid.. What a great job..

Just like all the cheerleading that goes on KWN, most of it has not happened..  

So the best thing is not to go over board on these guys, no one has a crystal ball.

How about Pretchert with his Idiot waves charting program.. He was calling to short gold at $360, I got out on his advice.. and lost big money, he was a short and still is all the way up like Nadler.. Schills

boatman's picture

bbacq

Submitted by boatman on May 10, 2012 - 2:16pm.

i just do not think anything goes on forever.....there is always and ebb n flow.

either they are forced to do a gold backed money system, which i doubt, or they do a basket of world currencies, after a big debt reset......as in wiped off the books.

i just don't think any asset class is the final one.

stacking til you die is a fools errand, my opinion.

there will be a big debt blowout, gold/silver will be the asset class that appreciates best.......... to a point

at some point i will sell all, i hope.

if i gotta stay up all night guarding my stash til i die......f that i'm not living in a bunker for 20 years....forgodsake i'll be 83!!!! ..............i'll end it all the first day the cops don't go to work if thats gonna be the case.

PMs are the asset to ride out this debt/credit supercycle crash with.......they will be the last ones standing.

god, i hope to be buying rare earth miners after gold reaches a zenith, and things shakeout.

like G said....sinclair sold at the top last time before volcker crushed it[something they cannot do this time due to exponential sovereign debt].

and leaving money to children--------another fools errand........they need to make their own way thru this world.

i am making sure my mom SPENDS all her money BEFORE she dies.

recaptureamerica's picture

Keep stacking!

Submitted by recaptureamerica on May 10, 2012 - 2:17pm.

S&P Opens The Pandora's Box: The Wall Of Refi Worry Is $46,000,000,000,000 Tall
http://www.zerohedge.com/news/sp-opens-pandoras-box-wall-refi-worry-4600...

Jdawg's picture

Better Wake Your Dumb Ass Up

Submitted by Jdawg on May 10, 2012 - 2:18pm.

George Carlin is 100% correct.  Overall, we dumb ass Americans are stuck on stupid.  Wake your ass up America.   Let us get rid of all those assholes this November and get a complete new set of assholes.  If they can follow instructions, well get rid of them too. 

It time for a change America.  We can do it.  Get off your ass and do something

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