Fri, Aug 5, 2011 - 9:17am

Weren't the looks on the faces of The Shill and The Coug absolutely priceless? "What? An upside surprise?" Look, we don't refer to it as the BLS"BS" report around here for nothing. The BLS has the ability, through their goofy and worthless statistics like the "birth/death adjustment" to make their monthly reports sing in whichever manner they choose. Sometimes the data is so bad that it's impossible to touch up. Sometimes, like July, when the markets need a boost and a shot of stability, the BLS is able to goose the numbers just enough to take some pressure off. I haven't seen the internals of the report yet but I am highly confident that, once released, it will be plain for all who care to see.

Tucked away in the comments section of the blog from yesterday afternoon was this:

"BTW, upon further review, any BLSBS number tomorrow should be positive for gold.

Bad BLS: Ensures QE3. Positive for gold.

Good BLS: Provides "stability" for stock market. PMs recover, too."

And I suspect that this is true. Though there will be volatility today, there should not be any of the abject panic that prevailed yesterday. As I type, the S&P is up 9 points or so and gold is off $2 at $1657.

There are still plenty of reasons for the equities markets to be spooked, however. All of the funky stuff coming out of Europe should keep you checking the headlines this weekend. Expect more of the same into next week. Gold, having found a floor twice right near 1645, looks poised for a rebound next week. The question is the shape of the rebound. I suspect that, sometime today, we'll get one more push down toward 1645. Whether or not that level holds again will determine the shape of the short-term bottom. If I had to guess, I'd say it's 75/25 that 1645-50 holds for the third time and we rally higher from there. On the off chance it doesn't, I'll get my momentary drop to 1635. From there, I'd look for a rally and then a dip back toward 1645, giving us a cozy, little reverse H&S. The question for me is: Do I move my "stink bid" up to the 1645ish level or do I hope for the 25% chance of getting gold down to 1635. I'll keep you posted.


Silver is a similar deal, though the chart is flatter. I strongly suspect we'll get another look at 38.60 or so later this morning. Whether or not that hold is anyone's guess. I suspect it will but I would not rule out a quick dip that approaches 38. IF that were to happen, I'd be all over it. Unfortunately, yesterday's smash occurred just as traders were beginning to return to the silver pit. OI had finally broken through 120,000 but I'm sure we'll see it back under 120,000 when we get the numbers later today. Because of this, it will likely lollygag around between 38 and 40 for a while. You can bet your arse that The EE would be very happy to see silver contained in a little 38-40 box all the way through the Spetember "first notice day" later this month. For now, I'm just sitting on my puny, out-of-the-money silver spreads and waiting.


As I publish this, we've got a rally! S&P is up 14, gold is 1662 and silver is 39.30. Let's see what the morning brings. TF


For those of you who don't regularly check the comments, I apologize if you missed this:

Let's see if they goose the

Submitted by Turd Ferguson on August 5, 2011 - 10:44am.

Let's see if they goose the market a little bit before/around lunchtime. Maybe take the S&P down toward 1170-75. Perhaps create a momentary pukejob in the PMs. I'll try to buy that dip.

And this:

OK. That worked.

Submitted by Turd Ferguson on August 5, 2011 - 11:10am.

I got my pukejob. S&P held just below 1170.

I put on a 1700 vs 1800 spread in Oct gold and a 40 vs 45 spread in Sept silver.

I strongly suspect that the worst is over for least for today. Don't be surprised if the S&P even moves back into the green this afternoon as dip buyers move in. The same should be true for the PMs. They will likely follow stocks back up.

More later this afternoon. TF

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LaMachinna · Aug 5, 2011 - 9:22am

Good Morning, Turd and

Turdites. Here's to a good day! Coffee cup *clinks* to all. 

Violent Rhetoric · Aug 5, 2011 - 9:29am

The jobs situation looks

The jobs situation looks great!


​The BLS

paulindoon · Aug 5, 2011 - 9:30am

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blackshirtuk · Aug 5, 2011 - 9:31am

Looked in the "turdism's"

Looked in the "turdism's" glossary but no ref to The Shill and The Coug !

can anyone give a Brit a clue?


¤ · Aug 5, 2011 - 9:33am

G'mrng TF

I'm just going to carry this over from the last thread.....FUEE!!!

Maybe a FUBM is underway today after all. We can only hope to see that trend emerge soon.

bullwhip29 · Aug 5, 2011 - 9:42am

Ok, everything is fine now...yeah, whatever.

Better than expected jobs number gives rise to another silly ramp job in stocks. What changed in the last 24 hrs? Is everything all better now? Don't think so. What happens over the weekend? What happens if these gains don't hold and everyone that took a swing at this market on the open gets burnt for the umpteenth time? This is pure silliness...

Harald · Aug 5, 2011 - 9:44am

Is it just me

I have a feeling that there is a "Lehman moment" close at hand. Dow shouldn't have gone down 500 points yesterday considering the reason given for the pullback. Wonder how much it will go down when something seriously serious happens. Fer god's sake, the PM of Spain postponed his vacation to deal with debt matters. Can't get more grim than that. If I owned equities, I'd be selling any rally.

Urban Roman blackshirtuk · Aug 5, 2011 - 9:49am

Re: Looked in the "turdism's"

I think these are Turd's pet names for a couple of the CNBC morning hosts.

I don't really know myself, as I haven't watched it since Mark Haines (RIP) was hosting it.

Monedas · Aug 5, 2011 - 9:53am

Tulsa ?

Dare we say, "DEAD CAT BOUNCE" ? Back me up with some graphics ! Monedas 2011 Compassion and humour do mix....just not on my posts !

SilverWealth · Aug 5, 2011 - 9:58am


Good stuff Turd, thanks a bunch. SW

Frontal Labottleme · Aug 5, 2011 - 9:58am

Miner's signal?

Small caps down - miners up (marginally). Given the "miner's lead the PM's" hypothesis might this bode well for today?

Eric Original · Aug 5, 2011 - 9:59am

"The Coug"  I think refers to

"The Coug" I think refers to Diane Swonk. "The Shill", ummm...I think that's Mark Zandi. Same rogues gallery they always have on BLS days. Steve Liesman always there too. Generally referred to as "LIESman".

Or not.

¤ · Aug 5, 2011 - 9:59am

Wow! Quick market turnaround

Pretty amazing stuff, these markets. WTF!

Expecting something else pretty dramatic to occur with the PM's at some point today at this rate.

No idea what may happen here going forward, especially towards the London close.

But something is going to happen. Today could be the day that TF was referring to yesterday in his comments about gold's status morphing into something a bit more elevated in status.

Were definitely in the moment. I'm highly encouraged that gold is relatively stable given all of the other markets wild gyrations.

alexdgn · Aug 5, 2011 - 9:59am

Were it not for margin calls...

Were it not for margin calls and forced liquidations, Gold should have ended the day at or near all time highs. From a fundamentals point of view it would make sense since the ECB acknowledged in buying Portuguese and Irish bonds and left open the possibility of buying Spanish and Italian bonds for sometime in the future (the uncertainty really screwed the market thou). The SNB and BoJ intervened to devalue their currencies which means that Gold is the last currency standing that can't be tampered with by central banks/planning.

I'm leaving out EE maneuvers and obviously not talking about Silver since that market is tighter and because it still has industrial use which means if it weren't for the speculative interest it should move half way between Gold and Copper. 

So at this point, besides the technicals after this sell-off. I think Tuesdays FOMC meeting is really going to set the short-term trend. If Bernanke can send us all to the cleaners if he says QE3 is off the table.

Pax Argentum · Aug 5, 2011 - 10:00am

@blackshirtuk TF is referring

@blackshirtuk TF is referring to the vapid, synchophantic, admnistration apologists on CNBC, a financial news network here in the States. Utterly useless for our investment purposes here, they do occasionally provide some amusement as well as a regular diet of jaw-droppingly blatant propaganda. Cheers mate! Pax

alexdgn · Aug 5, 2011 - 10:01am

Miners are totally over sold

But falling further... Gold miners are oblivious of what the metal does, it just keeps falling, again!

RockinJohnnyT Frontal Labottleme · Aug 5, 2011 - 10:02am

@Frontal Labottleme

I watch GPL and SLW - even though SLW was up at open GPL was even to losing, so I think we are headed lower.

· Aug 5, 2011 - 10:03am
¤ · Aug 5, 2011 - 10:06am

ZH's 3,000 pt. Circuit Breaker story...

...yesterday seems like that could happen today at this rate. (I certainly hope not)

I don't know if I've ever seen the markets so topsy turvey in very short spans where the swings are this wide. Maybe it's just algo's in a turmoil due to volume and some type of HFT influence.

I'm sure ZH will have a story on this a.m.'s trading irregularities at some point today.

Frontal Labottleme · Aug 5, 2011 - 10:10am


I hear you... i get the feeling that the only thing protecting silver from a big ass smackdown right now is big bro gold which is playing tough. Scary tho - everybody/everything has the jitters...

LongGoldLongSilver · Aug 5, 2011 - 10:14am

Funds Committing Suicide

See how strong gold and silver once again were in Asia, just to get slashed as soon as COMEX opened. The markets are so heavily leveraged nowadays that we will get unprecedented volatility as a natural side-effect. Over-leveraged participants have no choice but to liquidate gold and silver contracts to meet margin calls or to avoid getting totally destroyed.

Don't use leverage! If you don't, then you can just relax, sit back and let the over-leveraged guys commit financial suicide. All the while you know you're in the right place. Who cares if share prices of gold and silver shares fall a bit in the short run when the underlying fundamentals improve? Trust me, the gold and silver shares will have their days in the spotlight. Until then, be happy they are on sale.

RockinJohnnyT · Aug 5, 2011 - 10:16am

@Frontal Labottleme

This thing is going just like they want it to. They have been planning this from the beginning, they want QEIII, they will smack it down more. I am just buying all along the drop. Just keep adding, I know at some point it will go back up, pretty fast when the "Cartel" get what they want -QEIII- so they can enslave us more - get all of our "ASSets", just wish they would take the ASSES in DC with them......

SilverTree · Aug 5, 2011 - 10:16am
CauseChange · Aug 5, 2011 - 10:18am

No problems with the weekly chart. Key support Def at 38

Prices looking good today If week can finish neutral or positive for the week, it will set us up next week to rocket to $42 especially upon any word from the fed on QE3. This is friendly and healthy consolidation even if the price drops by 5% in 40 minutes this is the name of the game. That's why we are here. Biggest upside potential gains risking the sharp cutting corrections From the Reptoids fangs.... Name of the game is fear folks.. It is how they control our minds and manipulate us and the markets....... We must love, just like the love of Real money and freedom.......... from the matrix.......

· Aug 5, 2011 - 10:19am


Mini Flash Crash Following CDU Statement Eurozone Leaders Have Excluded Boosting Volume Of EFSF Sends ES Down 30 Points

I was watching gold futures through this entire "event". They didn't budge. In fact, they even ticked higher toward the end as the S&P stabilized. Beddy, beddy intudesting.

averagejoe · Aug 5, 2011 - 10:20am

In a SHTF scenario, I

In a SHTF scenario, I couldn't see how miners would keep value. Production and trade could come to a halt. Countries that have any order still would nationalize their mines, hoarding PM's.

That's why physical price will rise and miners can drop IMO. This has been a concern of mine for awhile and mentioned here before. I'm totally out of miners and hold physical. For paper trading I play forex XAG, XAU and options on AGQ ZSL

¤ · Aug 5, 2011 - 10:22am

Thanks for that TF

My ability to get ZH is down or acting funny for some reason again today.

I knew something was wrong somewhere. One look at the action so far today indicates that.

· Aug 5, 2011 - 10:23am

Can you say volatility?

I've not seen the markets this volatile since 2008. Looking for a buying opportunity in phyzz later today. $39 isn't bad, but I'd rather have 38.50 or less if I can get it. I suppose by next year it simply won't matter if I saved a dollar today...

Strongsidejedi · Aug 5, 2011 - 10:25am

AG/AU ratio back at 42+

Kitco Shows

AU spot at 1657.60

AG spot at 39.020

That ratio is back at 42+

Either the gold corrects down or the silver corrects up.

With all the buying of gold internationally, I just can't believe that the gold is going to move down during this next week.

Will silver retest $42.50 in the next 10 days?

· Aug 5, 2011 - 10:30am

This from Trader Dan

"Silver was mauled without mercy as it met with the fate of copper. This is to be expected during times of risk aversion. For all the silver bulls out there, please understand this basic principle - Silver will not outperform gold during a period of risk aversion. Period - Comex silver stocks do not matter. All that matters is that risk trades get yanked off and silver gets hit harder than gold because even though it has an historic role as a safe haven metal, it cannot shed its industrial metal role completely during such times. The Gold/Silver ratio will therefore move in the favor of gold during periods of risk aversion when fear trades are the rule. When the risk trades go back on and traders feel very comfortable taking risk, then silver will outperform gold to the upside."

​I'm still working on a hunch that we're going to see silver dip toward 38.25, maybe even 38.00, later this morning. IF it does, I may gamble a bit on some Sept calls. We'll see.

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