Silver to $44

Tue, Aug 9, 2011 - 9:53pm

In the past 24 hours, we can now count four, separate attempts at the 1770 level by the December11 gold contract. We can also count four, immediate Cartel actions to hammer price back down. However, the lows are getting higher and the pressure is mounting. Will the Forces of Evil be able to contain gold through the night and into tomorrow or will they again be forced to retreat to higher ground? I suspect we will know very soon.

Take a look at these three December gold charts. I've tried to draw the same trendline on each. Note the savagery of the beatdowns as gold eclipses 1770. Santa warned us weeks ago that The Cartel also knows that 1764 is a very significant level and will thus defend it vigorously. They have and they are. Will they be successful? You'll know by following the trendline I've drawn and watching the triangle close. If I had to guess, our Asian friends also see this chart pattern and they will make a run at putting the EE into a submission hold later tonight. We'll see. It will be great theater.

Now, what I really wanted to talk about this evening is silver. I've scoured the internet for the most reliable and accurate analysis of today's events. I of course found it at Trader Dan's site. Please take a moment to read it and then come back. Go ahead, I'll wait.

Ahh, glad you're back. OK, where was I? Oh yea...silver. I've lifted the most important chart that Dan posted and re-printed it below. (Thanks, Dan!)

Notice that the CCI has averaged one big drop per month for the past five months. Each drop has lasted from 4-7 trading days and has been followed by a rather significant rally. The current drop just finished its fifth day and, with all of the hubbub from The Fed today, is almost assuredly going to bottom tomorrow if it didn't already bottom today. Anyway, my point is...we're about to see another 2-4 week rally in all of the commodities. Yes, copper, crude and the grains are going to rally. More importantly, I think we can feel very confident that silver is not going much lower, if at all. In fact, I bet we saw the lows today, in the beatdown on the Globex. So, from here, what can we expect? Given that silver rallied almost 25% in July, during the last CCI rally, I think a reasonable target for silver is $44 before Labor Day.

Adding to the ammunition are the utterly amazing OI numbers in silver. The latest numbers are basis Monday and show a total open interest of just over 114,000 contracts. We almost certainly lost a few more today. For perspective, the last time OI was this low was late June...right about the time the CCI bottomed!

So, there you go. I may look like a complete fool by this time tomorrow. Rigged and manipulated markets can do that to you. But, I'm sticking with it. $44 silver by Labor Day.

Have a great evening!! TF

10:05 am EDT UPDATE:

I do not have a new post this morning for two reasons:

1) I want to leave this current post as the "main story" for most of the day.

2) I'm busy watching an epic and breathtaking battle in the Dec11 gold contract.

As I type, our side is winning but just barely. Watch the 1780 level very, very closely. Above there, The Cartel will be forced to give up and retreat to safer ground. It looks almost certain that this is going to happen. As I watch the order flow, the bids are very strong and unrelenting. The chart looks like it's about to squeeze them, too.

I've got a last of 1777. Stay close and keep your fingers crossed! TF


The global stampede of investors rushing into the safety of a 6000-year old currency has completely overrun The Cartel's defensive positions between 1770 and 1780. I have a last of 1789 in the Dec11. If headlines don't change in the next six hours, expect explosive gains in the overnight Asian trade, too. Personally, I'm darn glad I took off my spreads yesterday and went "open-ended". Looks like lots of gains to come!

Speaking of which, isn't it great to see silver participating...FINALLY! The chart below was printed before the recent surge through $39. Keep the faith. Silver looks great!

More as conditions dictate. TF


30 minutes to go on this historic day. Gold is $20 off its highs but I'm not at all concerned. In fact, the chart below might be one of my all-time favorites. All of the smarty-pant shorts who had faith that their evil Cartel buddies could hold the line at 1780 just got smoked! HAHAHA! Rather predictably, the "market" has given back the $20 it added on the back of the short's pain and that's OK. Nothing has fundamentally changed and its looking more and more likely that we'll head into the overnight session with " a lotta mo", just like Mr T!

Clubber Lang - Best Scenes! (From Rocky III, Mr. T)

Full update soon. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Tom L ewc58
Aug 10, 2011 - 12:26pm


Okay, I just looked and realized my Jan 12 $17.50 calls are at $.90, I paid $0.29 for them.

Now, I can be happy.


Aug 10, 2011 - 12:28pm

All good on my end BH

These are wild times, friends are gonna disagree sometimes.

Thanks dude.

Aug 10, 2011 - 12:28pm

what to do with dry

what to do with dry powder?

I just added some more to my CEF which had been restrained so far

After the Storm
Aug 10, 2011 - 12:32pm


I'll take it and use it.........since you are the expert. Thanks.

Nick Elway
Aug 10, 2011 - 12:34pm

Your dry powder is what YOU choose to put in the denominator.


What do you call dry powder? Federal Reserve Notes? Gold ? Silver? Copper?

Holding a FRN is a bet that gold and silver will come down as measured in FRN's. Holding gold is a bet that FRN's will come down as measured in gold. Everything changes.

Your dry powder is what YOU choose to put in the denominator.

I choose a denominator of 1 ea CEF share and 1.55 ea PHYS share.

I believe FOFOA uses 1 ounce of gold as his denominator.

Aug 10, 2011 - 12:34pm
Aug 10, 2011 - 12:36pm
Aug 10, 2011 - 12:36pm

how does the "Miner Call" watchlist look today?

2/3 Green, 1/3 unchanged. Not a single red to be found. Not hard to figure today I guess.

I've got Au 1783.80 on the live ticker I use:

Eric Original
Aug 10, 2011 - 12:37pm

love the pic

Love the pic on the KWN post. Take that, shorts!

FogHorn LegHorn worldend666
Aug 10, 2011 - 12:38pm

worldend Thats such a valid question!

@worldend there a lot of folks thinking the same thing, It is such a good question! I think, You should start a forum thread. I' ll be glad to share my perpective. Again good question.!

Aug 10, 2011 - 12:41pm

Sure wish I'd nailed that GG 1/21/12 62.50 strike earlier

'cause the sucker's up nearly 50% on the day. Not gonna touch it now. I only buy 'em red.

The Vet
Aug 10, 2011 - 12:42pm


make almost as much profit out of gold as they do copper, but the market is treating them as a copper only company right now... As copper starts to recover (and I suspect that won't be long) FCX is going to recover very quickly.....

Aug 10, 2011 - 12:43pm

Ratigan Right On

Any one who is not that angry is NOT PAYING ATTENTION! Cattle, for the most part, are docile - but when they STAMPEDE, take cover! Make no mistake - to TPTB, we are cattle.

Aug 10, 2011 - 12:44pm

Yeah Eric, that shorty dude sure looks shell shocked

and it's only 12:40. Awww, the poor things. My just for them...


Eric Original
Aug 10, 2011 - 12:44pm

Heroes for the day

Kaminak is my hero for the day, up 13%, helped by some drilling news after hours yesterday. Among producers, NewGold, Aurizon, Kirkland Lake, and Richmont up 6% each.

Oh yeah, Argonaut is up 14%. Why did I sell that one again? Can't win 'em all.

Aug 10, 2011 - 12:46pm

Cool !!!

Wow cool After The Storm - I like you moniker BTW!

Aug 10, 2011 - 12:56pm

Glad to oblige Foghorn

Glad to oblige Foghorn Legorn

Here is the forum question. Feel free to discuss:

Thanks for the other replies guys. Stock might be a good option, but I have lots of those already and they have sucked thus far.

Aug 10, 2011 - 1:00pm


2 words mate: miner calls

Aug 10, 2011 - 1:02pm

I respect your sentiments,

I respect your sentiments, stingbee, but your suggestions reflect Statist tyranny, plain and simple. The solutions lie not in MORE government intrusion, but in MUCH LESS. Get government out of our lives, and let us work within a free market construct to make what we will of the talents God gave us. Sure, some will fail, but with freedom comes responsibility, and those who enter this marketplace know the risks going in.

Grigeo ewc58
Aug 10, 2011 - 1:02pm

Not a single red to be found.

You forgot to look at Hecla. If you are looking for a red Miner, that is where you have to look.

Aug 10, 2011 - 1:03pm

Back to lows of the day again.

So much for $1800. The next question is, can we hold $1764? We haven't even seen a vicious turn around in the markets yet. If this happens, another big time smack down is coming. I'm sure the EE would love to see gold close down after what has transpired today. Then, of course, we'll get all the usual chatter that $1800 was a blow off top and so forth. Interesting that the TSX Venture finally popped its head today. Anyway, keep trading, stay nimble. We'll see what tomorrow brings.

Have a good day.

TheGoodDoctor silver foil hat
Aug 10, 2011 - 1:05pm

@silver foil hat Thank you

@silver foil hat Thank you for the "New Nuclear Arms Race" article.

Aug 10, 2011 - 1:06pm


I have some GG calls also otm Jan 12 at $65 & $70 strike. Mine are doing well today also but I'm letting it ride. I'm sitting tight because I know all of us are right!

After my SLW hft experience yesterday a.m. I saw first hand what the future in my options might become due to HFT and panic induced selling buying. I can't wait until the manic part of this where it's going up and there are no attacks by the EE.

I hope the manic part is later then sooner. The longer the ride the better for all of us.

Aug 10, 2011 - 1:06pm

Another update

One more before the bell.

OliverTwist maravich44
Aug 10, 2011 - 1:06pm

@ maravich44

Thank You!

Aug 10, 2011 - 1:07pm
Aug 10, 2011 - 1:09pm


I know all about Rick the prick Perry brother. The guy takes a page right out of Act 11 Richard the III when Richard is posing as pious and refusing calls for him to assume the crown.

Says much,much more however about the deep level of stupidity that has spread like sewage across the vast American political and cultural landscape.

Aug 10, 2011 - 1:11pm


Couldn't agree more about Hecla and the opportunity at this price. If Hecla does indeed crank that much Ag out at that cost basis then it's a screaming buy.

It does trade very strangely for it's supposed reserves and production. It should be priced much higher but I think it's also one of the heaviest shorted miners out there last I knew. When the shorts come flying off I think it will go straight past $15 towards $20 and quickly.

Aug 10, 2011 - 1:11pm

Dream Ticket

President Ron Paul

Sec of Treasury Rick Santelli

Speaker of the House Dylan Ratigan

Aug 10, 2011 - 1:11pm


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