Objectives Met

195
Wed, Aug 3, 2011 - 2:41pm

As you know, I've been looking for a short-term peak in Dec gold, somewhere around 1680. I've also been looking for Sep silver to trade to a peak between 42 and 42.50. You may have noticed that this morning I simply split the difference and called for 42.25. I have intraday highs of $1675.90 in the December gold and $42.06 in the September silver. That's definitely close enough!

It looks to me like The Cartel has had enough for now. Combine that with an overall desire to lock in some gains and you've got a recipe for a small selloff. The Cartel my have tipped their hand a bit by whacking gold for $6 in one minute, just three minutes after the Comex close. It's hard to say for sure but history suggests that they will come back for more later this afternoon and overnight. The key now is to find points where we can buy back in for a short-term trade. The charts below should help.

If you're interested, here's my strategy:

Earlier today, I sold my spreads of Dec 1600 vs Dec 1700 calls. I rolled into new spreads of Dec 1700 vs Dec 1800. I'm still "long" but this freed up quite a bit of cash. I also changed around my silver spreads. You may recall that I was long the Dec 45s and short the Dec 50s against them. Again, to raise some trading cash, I sold my 45s and bought some 48s. So, my new spread is Dec 48 vs Dec 50.

Now, with my liquidity "issue" solved, I'm going to be looking to buy the dip I expect to see between now and this time tomorrow. Even though I expect a "modest positive surprise" in the BLSBS report Friday, I'd still like to do some buying before the report comes out, just in case I'm wrong and the report shows something like -50,000 payrolls! If I get the opportunity, I'd like to buy some October gold calls as well as some September silver. Keep an eye on the numbers I've given you and I'll let you know if I make any moves.

Have a great evening! TF

4:10 EDT UPDATE:

Just wanted to go ahead and get "on the record" here. I do not at all like the unusual action on the Globex this afternoon. The entire thing stinks of an upcoming raid, probably overnight and into tomorrow. Additionally, we know that The Cartel likes to raid the metals on the day before the BLSBS report, too. Combine that with this ugly, 5-minute chart and I think its safe to predict the raid I suspected earlier.

Let's watch and see. I've got a last on Dec gold at 1663. As mentioned above, a preliminary target for a selloff tonight and tomorrow would be 1635-45. Be prepared. TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  195 Comments

SilverTree
Aug 3, 2011 - 4:25pm

Silver hanging in there!

Silver hanging in there!

Awesomeness
Aug 3, 2011 - 4:26pm

I look for a whack job here

I look for a whack job here on the metals, and rebuy tomorrow. They've got juice the dow here.

Double Bogey
Aug 3, 2011 - 4:29pm

Jamie Dimon the next Treasury Sec?

Please tell me I was hearing things when CNBS was talking about Dimon being a good candidate to replace Geithner as Treas. Sec.? Isn't the henhouse already empty?

Titus Andronicus
Aug 3, 2011 - 4:31pm

I guess dip-waiting traders will be lucky to see $1645

My guess is that gold demand is going to buy up any dip before we reach $1645 (Tuesday's pit-close price). I don't think it will drop lower.

How many are waiting for a pull back to get into the market? I think there are too many people around the world with very good reasons to buy gold. A lot of people would love to get in at Tuesday's price and I expect the demand to get stronger as we approach $1645. I'm thinking an dip will be bought strongly before we reach $1645.

Just my guess.

If we are fortunate enough to get $1646, I'm thinking maybe I'll add to my paper gold position.

Random_Robert
Aug 3, 2011 - 4:33pm

RE: POSSIBLE GLOBEX GOLD RAID

Turd-

Look at tonight's Globex chart pattern in AU and compare to yesterday's AG pattern...

identical initial high, then the subsequent selloffs to lower lows.

It has to be an algo sniffing for stops, but yesterday the Silver pattern broke when Asia came online.

TexAsh
Aug 3, 2011 - 4:35pm

Awesome, possum!

Do you feel the enveloping waves of admiration? Thanks, Turd.

Eric Original
Aug 3, 2011 - 4:35pm

I did the deal--was there ever any doubt?

Two Sovereigns (both Young Victoria's, my favorites) and an 1879-S $20 Gold Piece just found a new home! Here's an internet of pic of that variety of Double Eagle, though I must say mine is just a tad nicer.

pbreed
Aug 3, 2011 - 4:36pm

Gold

I've sold my oct gold options for a nice 100% gain.

Since I'm now completely out of the (paper) gold market.... on Thursday we will get the following news:

1)OPEC is now using gold to price oil and that all oil purchases will have to settle in physical bullion.

2)All the metal in fort knox is actually spray painted cardboard.

3)Buffet has gone all in and is converting 100% of his holdings to physical gold.

You've been warned.

Eric Original
Aug 3, 2011 - 4:38pm

ewc58

ewc, you'll appreciate this:

After the coin shop I went next door to the co-op and knocked back a double shot of wheatgrass juice.

Between the gold and the wheatgrass, talk about feeling ten feet tall!

Nigel Black
Aug 3, 2011 - 4:45pm

@pbreed

You forgot #4... Ben Bernanke admits on CNBS that he has been lying to the American people since he took office.

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