Way back in the day...I'm talking January 2011...things really took off with what was eventually called "Turd's Bottom". This was simply an accurate call of a low, right when the crowd was expecting prices to fall even farther. And this was an important call because you know what happened next from February through April.
So now here we are again. The circumstances aren't the same...but...the stakes are. As you know, we've been writing about a spike, sub-$20 low in Comex silver since late last year. In our 2022 macrocast, we said this move would mark "the lows of the year" before prices rebound in the second half on a Fed reversal of course.
I guess it's time to see if the old man still knows what he's talking about.
Above is the snippet from the macrocast. Below is the current chart.
And while a dip all the way to $19.00 is not out of the question, with the RSI already at 26, you don't have to be Edmund Einstein to figure out that a low is near.
So, we'll see what happens next. Will this be the 2022 version of "Turd's Bottom"? Will prices soar back over the remainder of the year, proving this to have been an extraordinary buying opportunity? Or will Turd be shown to be just as clueless as the Elliott Wave chartreaders?
One thing that would seem to be working in my favor is the collapsing US economy, as evidence by the GDP numbers and data like today's manufacturing PMIs for June. https://www.zerohedge.com/economics/us-manufacturing-slumps-may-new-orde...
And the bond market is certainly aware of how quickly things are changing. The contracting US economy assures a Powell Pivot and the bond market gets it. The stock market seems to be catching on, too. But CDG and CDS are being dragged down by falling inflation expectations and a surging POSX. This will change soon and, once both reverse, the Comex metals are going to rally quite sharply.
The market's tightening cycle is over.— Sven Henrich (@NorthmanTrader) July 1, 2022
The Fed however, again having locked itself into a narrative disassociated from what's going in markets and the economy is now again risking to make another policy mistake.
That's what markets have to negotiate now. pic.twitter.com/8NQS8lYPbb
And this POSX rally is really quite odd. The bond market is telling you that the pivot is coming as the US economy is driven into the ditch. But the euro is such trash that the POSX keeps soaring. All The Machines "see" is the rising Pig and they dump more and more CDG and CDS.
OK, I'm going to stop here and get this posted. Why?
- I need to take a look at things and consider whether or not to buy some calls today or Tuesday.
- I also need to decide whether to buy some more AEM or a few silver explorers or both.
- And I must take a few minutes to mentally prepare for the hour I will spend with The Jackass.
As I close, I see that CDG is back above $1800 and a full 1% off its lows. That's a start. Additionally, BE CERTAIN TO NOTE that spot silver is trading a full 10¢ above the front month Sep22. That's a level of backwardation we've not seen since march of 2020 and indicative of extreme paper selling...the sort of extreme paper selling we see at lows.
Happy Canada Day to all of my Canuck Turdites! More later with you full weekly summary podcast, chart and CoT review.