Three Weekly Charts

387
Fri, Aug 5, 2011 - 6:36pm

Whew! I don't know about you but I am glad this week is over! I'm just glad I had all of you to share it with.

I made a couple of changes today within my trading account today. I guessed that a brief selloff would materialize around lunchtime and, luckily, I absolutely nailed it. I made a very quick and tidy little profit on some ES calls. I quickly rolled out of them and now I am in:

1) October gold call spreads 1700 vs 1800

2) December gold call spreads 1700 vs 1800

3) September silver call spreads 40 vs 45

Only the silver makes me nervous (time is short) and has me worried (didn't rally back today like everything else). Actually, it kind of pisses me off a little bit. The ES rallies 40 points. Gold rebounds $15. Crude bounces back $3. Silver...blechk. Oh well, I must be patient. Provided there are no overwhelmingly bad headlines over the weekend, we look to head into Monday with a general "risk ON" mindset. Maybe I'll catch a break.

Speaking of headlines, did you see this a few minutes ago?

https://blogs.abcnews.com/politicalpunch/2011/08/govt-official-us-expecting-sp-downgrade.html

If you were wondering why gold was so strong on the Globex, I guess you just got your answer! Personally, I still cannot believe that a U.S.-based ratings agency will be allowed to downgrade U.S. government debt. The implications for insurance companies, mutual funds and pension funds would be calamitous. I'll guess we'll see.

OK, onto the charts. First, let's take a look at gold. For all the craziness, the Dec gold contract finished UP another $34. Headline risk is everything at this point, however, gold looks certain to test the 1680-85 level again next week. After that, it's anyone's guess. IF it rallies another $40 next week and closes near or above $1700, all bets will come off. Gold will have the appearance of an accelerating uptrend as it would be breaking out and through its nearly three year uptrend. It's going to be a very exciting and consequential week.

Silver isn't nearly as exciting. You know I've been going on and on lately about lack of follow-through due to the meager 120,000 short interest. OI finally perked up this week as we headed toward 42+ and then, of course, came the smashdown. This weekly chart looks sickly and, frankly, gives me a feeling that 36 is in the cards before we ever go back and break through 42. In the very short-term, however, I can see an early-week rally next week that takes silver back up near $40 and maybe even $40.50. You can bet you arse I'll be dumping that spread when it gets there.

Lastly, I've received several requests for an opinion on crude. I had hoped that 88-90 would hold but, once that failed in the massive dump on Thursday, you had to figure that 84 was in the cards. You can see that on the chart below. That should do it. IF 84 fails, it looks like it could trade to 80. At 80, it would sure look to be one heckuva good buy. If anyone out there is trading crude, be sure to buy yourself plenty of time. It looks to go much higher but maybe not as soon as next week. Be patient and you'll be rewarded.

OK, that's all for now. I'm going to take a couple of days off so consider this your open thread for the weekend. I think we all found great value from this site this week. Go forth and convert as many new Turdites as possible.

TF

p.s. It's 10:00 pm EDT Friday night and I felt I had to chime in. I must admit that I am absolutely stunned and flabbergasted that S&P has officially downgraded U.S. debt to AA+ with a negative outlook. This is truly an historic event and one that will have repercussions for weeks and months to come. At first glance, I can't see how the PMs don't experience a huge rally on Monday but, who knows? One thing I do know, however, is that gold and silver will be higher in a month. They'll be higher still in six months and even higher a year from now. The Great Keynesian Experiment is ending. Do not, under any circumstances, sell you precious metal. They are your only financial protection.

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¤
Aug 7, 2011 - 1:10pm

@pailin

I wasn't trying to bang back at you about apmex and money etc. Sorry if it came across that way.

Yeah, each to his own. It's awesome were sitting on here talking about acquiring PM's and the merits of the vendors out there etc. The best part of all of this is that we all believe and know the same thing about the physical aspect. And no matter how we acquire them or by whom and no matter under what circumstance and price, the best part is that we acquire them, period.

So here is what I have to say about all of us acquiring the physical PM's via a movie clip that never gets old...

The Warriors - Can You Dig It
Save_America1st
Aug 7, 2011 - 1:08pm

Screwtape Files and SGS article

It's getting pretty heated over at Screwtape over that SGS article they posted this morning. Check out the comments flying around over there now:

https://screwtapefiles.blogspot.com/2011/08/bear-necessities-of-silver-life.html

Supposedly, the guy they claim is SGS (and SGS claims they're wrong), is now posting on there to try and clear things up. Now there are "fights" going on at both websites.

Turd's site has been mentioned a couple times so far along w/ Zero Hedge. Screwtape says they will be investigating other websites, so I imagine they're already Scooby-Doo'ing an investigation of TFMetalsreport right about now as well. lol

KegfreakRuNuts
Aug 7, 2011 - 1:03pm

RuNuts screwtape files

I just wasted about 30 minutes reading that blog and the only thing I can think about is the motivation. If there was collusion between ZH and SGS, what is the big deal. ZH has guests posts that pay all the time. The author seems to have some sort of hidden motivation. She says in the comments after being challenged that she investigated because silver investors did not do due diligence and got burned in May. People who watch CNBC get burned everyday!

In my opinion, there is an underlying motive this person has.

¤
Aug 7, 2011 - 1:02pm

Move along, don't look here, this didn't happen...

Stuff like this gets lost in the MSM all the time. I have a feeling this had less to do with the incident that precipitated it and more to do with a stressed out and resentful citizenry.

Lots of pics and videos of large objects and structures on fire.

https://www.telegraph.co.uk/news/uknews/crime/8687177/Tottenham-riot-liv...

ewc58
Aug 7, 2011 - 1:00pm

yeah, and I heard Tyler 1st heard about it in Turd Town ;-)

"What Zero Hedge has been saying for well over half a year has finally hit the mainstream, with pundit after pundit "suddenly" coming out of the closet and making the uber-bold proclamation that "QE3 is here." Yawn."

Goldman: The Ball Is Now In The Fed's Court

pailin
Aug 7, 2011 - 12:59pm

@DarkPurpleHaze

Everybody should do what works for them. I was just trying to point out that a few minutes of comparison shopping can save you a few bucks. Going back to Eric Original's pimping of the Mexican 50 Peso Gold on the old TF site, I remember both of us being enamored by it. This was just before silver peaked and crashed. I had one more trade in me that was going to buy me that coin. But I needed silver to hit 49.50 on that May 1 open. Oh well :)

Anyway, when you announced you had gotten yours, I pointed out that you overpaid at Apmex vs. Provident. That's the case now too, if one is thinking of getting one. It probably has been the case all along, but I don't check daily. Here's the comparison today, and remember Provident has cheaper shipping to -

Provident

Apmex - AU/BU

Apmex - damaged (seriously - still more expensive???)

So eff it, I just ordered it anyway. Paid more than you (because gold has gone up several hundred bucks since April) but life goes on and now we've both got the big gold phyzz, baby :)

Fortinbrasewc58
Aug 7, 2011 - 12:59pm

One more comment on ones "price" per ounce

In order to understand your real out of pocket cost for any PM item, you need to take all the cost elements into account. Spot, premium, and shipping. Once you know that number, you'll be in the best position to judge value for money, regardless of the type of item you're considering.

Agreed, and for tracking my physical, add spot, premium and pro-rated cost per ounce of shipping as my actual price for cost basis... not merely the spot on that day.

¤
Aug 7, 2011 - 12:56pm

And then's there's this...

Citi Battens Down The Hatches, Prepares For Global Risk Offness In A Few Short Hours

Submitted by Tyler Durden on 08/07/2011 - 11:43

"The accelerated timing is a surprise and comes at a point at which global market sentiment is extremely weak, so it seems more likely that the reaction in markets will be negative than positive" ..."there may be concern in FX markets that the EUR AAAs are not solid, given the political and economic issues facing the euro zone and how conditions have worsened since the agencies last commented on ratings"..."a downward shock to markets is likely to be USD positive in the near term. This is hardly USD positive once things settle down, but before they settle down, the short term will likely dominate the long-term"..."The odds are that the week will start with FX investors challenging the SNB and MoF to intervene in size"... most importantly, why Europe is sweating bullets after the last bailout attempt announced from Friday has now gone up in flames and the EFSF is seen as being on edge of functionality: "In terms of FX market impact, the biggest would come from a downgrade of one of the AAA eurozone countries who back the EFSF’s AAA rating. This would mean either dropping the EFSF AAA or increasing the contributions of the remaining AAA."and on the topic of everyone's most favorite Federal Reserve: "A Fed response is likely to emerge only if there is turmoil in markets." And here we were warning anyone who cared to listen that the Fed needs a 25% correction before QE3 comes. Well, you may just get it very soon.

¤
Aug 7, 2011 - 12:55pm

For those of you having ZH problems

Apmex Is On Hiatus Until Asia Open, Or Why You Better Already Have All Your Physical By Now...

Submitted by Tyler Durden on 08/07/2011 - 11:23 Precious Metals

As of yesterday, anyone wishing to pad their holdings of precious metals in response to what is about to be a perfect storm in risk, using one of the biggest vendors of gold and silver has to wait until Asia open, as the firm's checkout counter has just decided to enter suspended animation until 8pm today. "*Attention – Due to the uncertainty in the global precious metals markets, we will not be able to accept any additional orders until the global markets re-open in Asia. We expect to be accepting orders around 6:15 pm EST. Sunday August 7th, 2011, following the market open." Implication: the opening print in gold will not be the closing print from Friday. That much we can guarantee you.

ewc58
Aug 7, 2011 - 12:54pm

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Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
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6/11 8:30 ET Initial jobless claims
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Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
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5/13 8:30 ET PPI
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5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
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