Back to Business

Tanned, rested and ready. Reporting for duty.

I'll likely have a lot to say over the next few days so I'll try to keep this brief.

First of all, the notion that The Fed will somehow discontinue or slow QE∞ is downright silly, yet it's lapped up by the MSM and repeated here by folks either unwilling or unable to grasp the rationale for QE in the first place. And besides, this selloff isn't about QE, anyway. That's just your current cover story.

This is about squaring the CoT. Plain and simple. As you know, I've been trying to make sense of the silver CoT for weeks. At nearly 100,000 gross shorts, something had to change. The result is the action since the cutoff last week. The question remains, however: What is happening with the Commercial Long position? Is it growing or shrinking. Total open interest continues to grow so we may simply be seeing a continuation of CommLong growth. We might also be seeing a significant jump in new meat SpecShort positions. Either way, it's impossible to know for sure and that alone makes using the CoT as a trading/investing tool very difficult.

I've said that if silver trades to $22, I'll eat my hat. Yes, I will post a video of me doing exactly that if it occurs. I still have a very hard time believing that it will happen, though. Of course, anything is possible but, for now, silver should find VERY STRONG SUPPORT in the same $26-28 region that has supported it for the past year and a half. Why wouldn't it? What has changed fundamentally that would draw you to conclude that this time it's different?

In gold, though, we have likely reached the point where the CoT would indicate a bottom. Combine that with chart support at the bottom of the 18-month range AND all of the other oversold, technical indicators and I'm very confident in saying that The End Is Near. I know I gave you $1580 over the weekend and, so far, I've been off by $30 or so. In the end, though, that hardly matters. All that matters is that gold is once again at the bottom of its 18-month range. Now, IF THE BOTTOM FAILS and gold trades down through $1525, then we've potentially got a problem on our hands. Until then, though, relax and try to see it for what it is...namely, we're back to where we were last summer and at year-end of 2011.

I'm going to stop there for now but I promise you a full, complete post later today. I know this sucks but hang in there and, for God's sake, DON'T SELL YOUR PHYSICAL.

TF

p.s. All sorts of trolls and disinfo agents were allowed in here yesterday while I was traveling. That will not be the case today. Either state something productive or state nothing at all. This is my site and I will run in at I see fit. Folks that show up here simply to ridicule you or me will not be tolerated. I get sick of reading about how stoo-stoo-stoopid we all are and how I'm just in it for the money. We need helpful feedback on days like this, not bullshit.

157 Comments

murphy's picture

miners

The last time the ratio of mining stocks to gold was this low was 2008.  Also probably the most undervalued they have been in the 12 year bull run. The lowest RSI in the last 3.5 years. On two other occasions when it has been so low the HUI bounced 26% and 20% very quickly.

Lastly the last time HUI:GOLD was this low the HUI went up 167%  over the next 7 or 8 months.

Remember to

TJeffson's picture

@Silver66

HT to you sir.  Well said.  Everyone knows where this is going to go... just look at a chart of the money supply... even a 6 year old can tell you where it's going.   Given that chart, it's common sense to know that the US Dollar is constantly being devalued.  These short term changes in price are just buying opportunities.  We don't know when... but we all know that eventually the US Dollar (like every fiat before it and every fiat to come) will go to zero value. 

As you said,  watch what they do, not what they say.   Keep stacking, enjoy life and don't sweat the small stuff.   Anyone trading the paper, well you've been warned for years here at TFMR and other places that it's a risky game at best.  If you can't hold it in your hand, it's not real.. (that includes bitcoin btw). 

Enjoy the game.  I'm not a hockey fan but I do wish the Wild would get competitive again. 

pourty's picture

Re: Murphy @Secret Bans on users

That's freaking awesome.  I vote we institute the hellbans immediately! 

Katie Rose's picture

Dr J - Feeling philosophical as well

Yesterday I headed down to the "big city" to do some shopping. I had one thing on my mind - greenhouses.

I went from place to place looking for someone who sold 1 3/8 inch top rail for chain link fences, pricing 17 gallon plastic storage containers, looking for good potting soil (not Walmart crap), and anything else greenhouse related.  Experience has taught me that 17 gal. bins stuffed on the bottom with straw cleaned out of my goat stalls and then potting soil on top makes an awesome medium for growing plants. All that's required of me is drilling holes in the bottom of the bins.

I did this because I recently lost a 12' x 24 '  during a blizzard, and I love greenhouses. They make me smile. smiley

When I came here last night lots of spats with folks calling each other trolls. It seemed so irrelevant.

I, like so  many others here, am trying to balance out all the information that keeps coming my way. Is it better to put my money into a greenhouse or silver? Do I buy a chipper or silver? The choices go on and on.

Yesterday I made a decision. Having a new greenhouse will bring me much more joy than having more silver. There is something so thrilling about walking into a warm greenhouse bursting with life! Especially if the day is cold and dark. I love greenhouses!!!!!!!

I am dealing with "prepper burnout." Everywhere I look the news is bad. The EE will continue to manipulate the price of PM's and just about anything else. They can not, however, take away my joy when I watch the seeds I plant pop through the soil in my greenhouse. Every plant is a miracle! Think about it - a shriveled up seed gets planted and a plant emerges, with flowers, then fruit!!! smiley

I've decided I need more balance. I need less bad news and more time doing the things that really bring me joy and that I really love doing.

Baby goats bring me joy and make me laugh. Gardening makes me smile. This Spring I will be spending more time with both, and less time on the computer getting depressed.

And as I write this I have a little puff ball puppy sitting on my lap trying to eat the keyboard. She also makes me smile. wink

sengfarmer's picture

Stock Canines

Since you asked your questions in a civil manner I will give you an answer, turd doesn't respond to trolls.

1.No the Fed never suspended QE while implementing Operation Twist, it was in addition to 40 billion/month in outright QE. Further more QE can't be ended because the Fed must keep interest rates at 0 so their banking buddies ponzi scheme known as the Interest Rate Swap derivative market doesn't crash taking the whole financial system down.

2. The Cartel is not going to get, or the better word would be LET  gold go below $1525 because they would be swamped with demand for their remaining physical and that would end their lucrative game of rinse and repeat from ever higher price levels. They know at what levels they must let price rise so they don't ruin their own game.

robov's picture

As Long As...

The banksters stand ready to be the sellers of last resort off every bottom and every rally we will never have free market forces at play. Today is another fine example. We finally get a rally and it get's cut off at the knees and....ohhhhh...what a coincidence, I see gold is now holding steady up just below the allowable daily 1%.

SteveW's picture

Vacation and silver notes

TF, I hope you really had a good vacation, even though you cut it short to try to hold the hands of the whiners and gripers. You need to take enough time away so that you don't get yourself worn out and despondent.

We knew there would be fireworks this week as Monday is the last day for Mar13 options, next Thursday is FND and the silver OI is huge. The volume of trading in COMEX silver has expanded tremendously. Typically a total of 50,000 or so contracts would be traded daily yet this Tuesday and Wednesday saw 75,821 and 97,989 contracts traded in the front Mar13 month alone. OI for Mar13 silver is still over 47,000. Frankly with that amount of hammering I'm surprised that silver still has a 28 handle. We can expect this to continue through next week and it won't be until we get the COT report next week (Mar 1) that we'll have much idea of what happened. Of course we have front row seats on whether there will be a default next month.

Stock_Canines's picture

I am Curious

As to Turd's comment, "IF THE BOTTOM FAILS and gold trades down through $1525, then we've potentially got a problem on our hands". Would people hold off buying until we move upwards and there is more confidence that this is or close to the bottom? Also, what is the implication if 1525 fails? Would people look to sell metal holding if that occurs?

Turd Ferguson's picture

Rrrright...

MODERATOR

And, of course, it doesn't matter what this Goon says...The Bernank says not to expect change until 2015 and he's The Boss. And, by my count, $85B/month for the next 15 months is $1,275,000,000,000. Sell, Mortimer. SELL!!!

News Headline Summary

Fed's Bullard says asset purchases could be 'reduced somewhat' as labor markets 'improve somewhat'

Says: 
- Reiterates monetary policy 'considerably easier' now than in 2012. 
- Fed will consider employment, hours worked, job openings and turnover. 
- Forecasts 6.5% unemployment by June 2014. 
- Predicts rate rise from zero possible by June 2014.

Loud Noises's picture

Kilo bars

I'm very tempted to stack more metal for the first time since August and noticed these Ohio Precious Metals Kilo Silver bars over at Provident.  They're on special at 49 cents over spot.  Anyone have thoughts on the OPM brand or going with the Kilo size?  I have lots of 90%, 1 oz and 10 oz but nothing bigger.  I try to stay conscious of resale in the (distant) future.

Here's what I'm looking at http://www.providentmetals.com/1-kilo-opm-999-fine-silver-bar.html

I'm trying to hold off, since most seem to think this sell off will continue... but getting silver delivered to my door for under $30 is very tempting.

tobydaniel's picture

I LOVE PHYSICAL SILVER!!!!! And this is why:))

Check out my last silver sale that ends in an hour. The key is to have a ton of these with different accounts always selling. Love the Slave Queens. Who cares about paper price? I don't!

http://www.ebay.com/itm/111014872929?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649

BUY PHYSICAL and EFF THE PAPER MARKET!

RationalMind's picture

First drop of Veritaserum

"Three drops of this and even You-Know-Who himself would spill out his darkest secrets. The use of it on a student is--regrettably--forbidden."
Severus Snape threatening Harry Potter with Veritaserum

Congress Asks Bernanke For Full Risk Analysis On Fed's Soaring Balance Sheet

 
Tyler Durden's picture

Several days ago we wrote about what we defined as the Fed's "D-Rate" - the interest rate at which the cash outflows from payments by the Fed on its Excess Reserves will surpass that cash inflows from its asset holdings, a very troubling day because as we further explained, from that point on the Fed would be "printing money just to print money." In other words, with every passing day, the Fed is getting ever closer to the point where the inflation it so very much wishes to unleash will force it to essentially request a technical bailout from Congress (and certainly will halt all future interest remittances to the Treasury), and the longer this takes, the lower the breakeven interest rate becomes, until one day it is so low the tiniest rise in rates will immediately put the Fed into the red. It now appears that Congress itself, the ultimate beneficiary of the Fed's free money policy as nearly half of all US spending is funded by the Fed's monetization of the deficit at ultra low rates, is finally catching on to what is the ultimate rock and hard place for Ben Bernanke. In a letter penned by the Chairman of the House Oversight & Government Reform Committee, Jim Jordan, says that he is "troubled by the corresponding effect that the Federal Reserve's expanding portfolio could have on current and future economic growth" and has asked the Fed what its "future plans to unwind the [$3 trillion and rising at $885 billion per month] portfolio" are.

 
SV's picture

BTC SLV

Some thoughts on SLV and BTC...1:1

http://www.goldsilverbitcoin.com/bitcoin-silver-ratio/

dropout's picture

Congratulations!

To those who had the 'dry powder' to hand and the 'gumption' to back up the truck yesterday.

I did. Sad tale to tell.

My local LCS  told me that late Friday afternoon, a guy came in who's business was suffering an immediate cash flow problem. And would they be interested in buying some silver. He came back from his car with 24 tubes of 2009 silver maples!

I immediately asked if he had any left. He had just 6 remaining. Needless to say that when I left he had none. Too bad on the way back over to the island, the boat got swamped over the stern by a rogue wave and down went everything, including the anchor!  Gonna have to learn how to scuba now.  

Turd Ferguson's picture

Stock, let me see if I can

MODERATOR

Stock, let me see if I can answer this while sticking to my "daily, right-wing talking points".

  1. Operation Twist was supposedly "sterile" because The Fed sold 0-3 years treasuries and used the proceeds to keep 10-30 year rates low by buying those issues. Operation Twist ended in December when The Fed ran out of short term securities to sell.
  2. IF 1525 were to fail, we undoubtedly would seem a very rapid drop in price as there are bound to be a boatload of sell stops from long-term longs. Though technically damaging, this wouldn't be all bad in that it would surely create a washout, capitulation low. Just guessing here but, if that were to happen, we'd probably see a bottom somewhere down near 1400-1450.
  3. Again, though, I simply don't see that happening. We are currently experiencing another contrived decline, similar to May 2011 and September 2011. Buyers will return and shorts will cover and we'll begin the ascent again very soon. Just be patient.
Response to: I am Curious
pourty's picture

@Stock Canines RE: Bottom Falls Out

My only problem if the bottom falls out is that I don't have any more fiat left to spend on real money.   But I'm slowly changing that, as there are several items that are evidently in high demand on auction sites these days that I bought before panic struck.

Strangely, SBSS D&D medallions happen to be one of them...  though the spot price is depressed, people are still paying insane prices for these 1-oz silver rounds.  I paid $38 for each of them, and they're selling for $80 and up.  Even after shipping and fees, that's a decent profit (which I can use to stack more silver, of course...).

I will, of course, not be selling them all, or even most of them.  But I can't sit here and NOT sell something at a 50%+ profit, that would be crazy.

Eventually, I suppose one of two things will happen - 1) people will realize these are simply private mint rounds and price them accordingly or 2) people will become even more interested in the message of the rounds while the spot price rises and pay even more insane prices.

I can't wait for #2, I have bills to pay. 

In the end, these are not my "stack", they are medallions I bought because they were "cool looking", but I'll be glad to let someone else have them if they want to pay me insane prices for them.  I can always buy more silver elsewhere (for now, anyway).

Stock_Canines's picture

Sengfarmer

I am a troll because I question whether gold and silver are starting to transition from being in a correction to being in a downtrend? Or is it because I suggested that Turd's launching of this site just might be an event that we look back on as marking the run up to the high in the metals? I imagine you could call me a troll because I wonder what the catalyst could be for prices of metals dramatically higher ('multiples' to use Turd's verbiage) after QE 3 and 4, Chinese buying, record debt, German repatriation, failing recovery have all failed to produce anything but lower prices for the past 18 months. Perhaps it is because I wonder if numerous market commentators who apparently have been far more accurate than Turd on calling the direction and moves in the metals claim that metals are heading lower. I do not know what is going to happen, and I thought for the past 5 years exposure to metals is smart, but I now wonder what the correct move is to make. The past 18 months have been tough as market indices have rallied and miners have gotten decimated. Gold and silver have stagnated or dropped. I also wonder if most here think that the whole system is going to collapse and that is why they hold metals. If that is true, I wonder if someone who doesn't think the whole system is going to collapse is best served by holding metals when the Fed wants everything to go higher, but the metals.

I can admit that sometimes my posts are more emotionally driven than need be, and perhaps that is your definition of a troll, but I can assure you I come to this site for no other reason to learn and test my assumptions.

Bungly's picture

Will you eat your entire hat?

Will you eat your entire hat?

pourty's picture

@tobydaniel

Please check your IM's...

Turd Ferguson's picture

No, that's probably not a

MODERATOR

No, that's probably not a good idea but I'll try to choke down some of it.

sengfarmer's picture

Stock Canines

My apologies. Having a really good memory is not always a good thing :>).

Stock_Canines's picture

Turd - Thanks

Thank you for the response - I appreciate it. I am trying to get better at not letting the 'right'-ness of this board get to me.

AlexCojones's picture

Vacation Destination for Turdites

Here in the Southwest (Arizona, Nevada, California) there are many cool old ghost towns to visit. Yep, You can drive right up into them, get out and walk around. Notice what still stands here at the Bodie bank? A Vault, with PMs still in there - or not. But I trust PMs are still in YOUR vault and you are making deposits frequently. Onward to the LCS!

AC

450bodievault.jpg

Bodie Ghost Town | Strike-The-Root: A Journal Of Liberty

Fr. Bill's picture

@Katie Rose, that crafty gal

Katie,

I immediately thought of you when I saw the following.  I don't suggest you are as profane in your speech as this limey bloke, but his (yes, slap-stickish) delight in farming made me think of you.

tobydaniel's picture

@pourtry

Just wrote you as well.

proton777's picture

stock canines

just say 'btfd' and post an occasional music video. you'll be fine.

¤'s picture

UST /OIL

I can't help but notice the 10 UST steadily creeping below 2.00 since yesterdays market flush. Was that what this is all about...and gold also? One hand washes the other in that respect.

That same flush is still going on with crude. Looks like it'll test $90 for sure at this rate. It's kind of incredible to watch the dynamics in play and the sheer size of the market moves it would take by whomever (Fed/POMO/banks) to submarine any sector at any given time.

You don't suppose the appearance of inflation in runaway gas prices had anything to do with this do you and the rise in the 10 UST lately? Can anyone imagine the size of the huge shadow accounts in the FX / bond, commodities, equities etc. that the Govt./Fed must have at their disposal to effect their pricing through the select banking entities they have that carry these trades out for them?

The machine is an immense one.

SilverLeaf's picture

Significance of Au at these levels

$1626 was a critical level to watch.  It was the max extent of Alf Field's corrective wave, when he called the bottom of the correction last summer. Much lower than that brings the wave count into question and risks much lower prices. 

$1534 is the 20% correction mark from gold's peak in 2011. As Jim Rogers says, a 20% correction in a bull market is healthy and normal. He went on further to say that like other commodities, the gold market could experience a correction of 30% or 40% and it wouldn't mean the gold bull is over.

~$1534 is also where we bottomed last May (the market turned right at the 20% correction mark) before the big move back up that followed. If we test this level again in the coming weeks, it's either going to form a double bottom, or result in a failure that risks a lower extension (as crazy as that seems right now).

As Santa says, stare the bastards in the eyes and don't give up your positions. If we go down much lower, buy as much as you can to dollar cost average your holdings and to reduce your cost basis.  The manipulation will end when we show them that we can't be maipulated any longer.  In the bigger picture, we all know where price is going.

billhilly's picture

@ Katie Rose

Katie Rose,

Best comment EVER !!!!!

The simple joys, those that bring smiles and a warm feeling in the heart, can overcome and wash away ALL sufferings.  The gift of life, and the enjoyment thereof, should be our primary focus, not the day to day comings and goings of greed and deception perpetrated by those who have no awakening to the REAL value(s) which make for a better existence for ALL. 

Your ability to recognize the need for "balance" is indeed a blessing (for us also) which brings great and immediate benefit.  To look into the eyes of a young life (plant or animal) and see the possibilities and potentials, both within them AND ourselves, offers comfort, joy and hope.

I thank you for the wisdom and kindness you offer in all your posts.  I hope wherever it is you are, that you have a warm and early spring.

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