The Dipman Cometh

Mon, Jun 27, 2011 - 6:15pm

Wow, what a brutal day today was, particularly in silver. The short-term charts of silver and gold both look awful and both look to head even lower. However, a trading opportunity may be about to arise so pay attention this week.

First up, the POSX is trying to rally but it has having a devil of a time getting by the 76.60 area on the chart. Note how quickly buying enthusiasm dries up each time it reaches near that level. One more failed attempt at that level may inspire the dollar bears and, as we all know, a weakening dollar adds buying support to the PMs.

So, what does this mean for the PM trade? Both have been savagely beaten over the past three trading days. Silver is down about 9% and gold is off about 4.5%. Yikes! Hold on, though, a brief interruption is necessary:

[ Why was gold taken down? It looked so good last Wednesday. That's the point. In hindsight, do you really think The Fed was going to allow gold to make new all-time highs at a time when they are supposedly showing their "hawkishness" regarding additional QE? How could that be spun by their friends at CNBS? I can just hear LIESman: "Fed chairman The Bernank said today that all is well, inflation is under control and that the economy is just in a 'soft patch'. In other news, gold closed tonight at an all-time high of $1565". Not happening. Solution: Lower margins on gold to suck in some additional longs then have The Empire put the hammer down by creating extraordinary amounts of new paper. Did you see the CoT report from Friday?? Through last Tuesday, The Empire added an additional 9,805 new short contracts. That's almost ten fucking thousand! In a week! Then, add some more on Wednesday and Thursday to get the ball rolling downward but cover some on Friday and today while spec longs are liquidating because of margin calls. (Just watch, the CoT this coming Friday will show about a net neutral to the Empire cumulative short position.) Oh, and don't forget the secondary benefit: Trashing gold provides cover for JPM to hammer silver. Taking 10% or so out of silver this close to first notice day has the effect of "persuading" those considering standing for delivery to instead roll out of July contracts and try again some other time. In the end, when you own the arena and you make the rules, it's pretty tough to lose and The Fed, through The Empire, just won again.]

OK, back to the possible dip buying opportunity. As mentioned above, the short-term charts look lousy so expect further weakness in the PMs tonight and tomorrow. Maybe the POSX will take another stab at 76.40, too. However, big moves in short periods of time invariably create overbought or oversold conditions and we are very close to oversold in the PMs. Both are also closing in on pretty stout support levels, too. Therefore, IF you are inclined to gamble a bit, a trade opportunity may be about to present itself. IF you get a chance tomorrow or Wednesday to buy some gold below 1480 and/or silver below 33, you stand a pretty good chance of catching a tradable bounce. Gold could easily spring back toward 1515 and silver looks like 34.50-35.00. It's not much, I know, but when you're in the doldrums, you've got to take what you can get.

Have a great evening!! TF

p.s. Due to popular demand, we've opened two new forums. First, there's now a forum for foreign currency trading. Not my specialty but, if it's yours, go there and check it out. The other is a forum specifically designed for members to add their own charts on anything/everything they follow. Have at it!

About the Author

turd [at] tfmetalsreport [dot] com ()


Jun 27, 2011 - 6:21pm



Jun 27, 2011 - 6:21pm


Encouraging news on an otherwise typical summer doldrums day.

Thanks Turd!

Blue Sky
Jun 27, 2011 - 6:21pm

Keep up the great work Turd

Hard to remain positive but let me be the FIRST tocongratulate you on the half full glass.

Jun 27, 2011 - 6:35pm

Launch Time

As great as Turd is in reading the micro charts no one knows what tomorrow brings. This game is rigged! May 1st threw everyone a Ag curve ball. IMHO July 1st or better yet Monday July 4th (Tuesday July 5th for USA) will throw everyone another Ag & Au curve ball. This time in the opposite direction. If you own physical and quality miners and are not leveraged ...... Relax, the end feels near.

Jun 27, 2011 - 6:55pm


If any of you on this board have any doubt now about the Power behind these levers still then you probably still think there is a tooth fairy. Of course there are many out there believing we are in a market that trades "fairly" and according to "market forces". Ultimately there is some truth to that but real control of these markets will never be changed and they will ultimately have a lot to do dictating how this PM trade unravels. Don't shake out of your trade. That's all part of the game. I still think we see silver trade below 30 but that is certainly NOT a guarantee. I also think they want to see the $HUI at 426 area..... NONE of this is certain and I maintain a healthy core of miners. I won't add unless I see the 426 or higher highs and higher lows.......This is where the trade reaches the maximum fear level..........thats their game. Couple dire predictions of gold and silver dumping by their MSM shills and many of you will puke. Keep that store of fiat in case they REALLY crush the prices but hold tight here. gl

Jun 27, 2011 - 6:57pm

June 30th

Can't wait for June 30th (or is it July 1st ?) to see who's gonna buy those pieces of sh*t US treasuries

Eric Original
Jun 27, 2011 - 6:59pm

Bad Timing on this article

Here's an article about how the silver miners are oversold, dated 6/26. Rather unfortunate timing, given today's action.

Eric Original
Jun 27, 2011 - 7:01pm

Dividend paying Miners

Here's a good source of info on miners that pay dividends.

Jun 27, 2011 - 7:05pm

Turd and all. OPEC is very

Turd and all. OPEC is very pissed about the strategic oil release. I read of a rumor that they could reduce production further or even stop selling to the US to cause pain for said strategic oil release. I'll see if I can find the link.

Duh! Of course. Zero Hedge! LOL!

So, my point is, what happens if the spigot gets turned to a trickle or even off? There are many things happening right now. And a lot of them could spike gold and silver at any moment.

Even earnings could suck this quarter. That could be a catalyst as well. What do you all think?

TheGoodDoctor Eric Original
Jun 27, 2011 - 7:08pm

Eric Original thanks for that

Eric Original thanks for that link but it is not complete. Two noticeable exclusions that have been left off are El Dorado Gold and Silvercorp Metals. There are probably others that I can't think of. Is there a way to submit dividend payers to that web site?

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