Silver to $44

460
129
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.

https://traderdannorcini.blogspot.com/2011/08/s-500-update-us-dollar-sacrificed.html

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

11:50 EDT UPDATE:

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

1:05 EDT UPDATE:

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

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  460 Comments

TheGoodDoctor
Aug 10, 2011 - 1:13am

@Strongsidejedi I don't think

@Strongsidejedi I don't think that would happen (Chase becoming new FRB). I think that BAC is doomed to fail. And I don't know how they fix that without it being another tax burden to the US citizens. Remember Dodd-Frank has about 4 trillion for bailouts written in the law.

Maybe JPM will only take BAC over after the risk is washed off. But let me tell you it looks like BAC has at least 40 billion worth of lawsuits on them right now. And that is minimum. 25 billion for robo signing (that is a minimum) and another 10 billion from AIG. So, I rounded up. But I don't know what other lawsuits are out there.

Well Lewis no doubt was the fall guy for the Countrywide thing. But what would Staley be the fall guy for? That is what I mean. Is there something else going on with the WAMU assets that we don't know about yet?

So, again. What is the question that Wynter Benton and her Leader wants Staley to answer before a fortnight this past Sunday?

PS It looks like Staley is not in the running for the CEO job now from this article here.

https://www.businessinsider.com/jes-staley-matt-zames-daniel-pinto-2011-6

And this is why I was wondering if he would be a whistleblower or burn a bridge. I thought this might be the answer to the question. I don't know. Interesting discussion though.

Mudsharkbytes TheGoodDoctor
Aug 10, 2011 - 1:14am
Jasper Puddlemaker Dr G
Aug 10, 2011 - 1:14am

@ Dr G

"You old guys and your stupid videos. Have the metals driven you mad?"

No, this is the actual cause:

Video unavailable
maravich44 TheGoodDoctor
Aug 10, 2011 - 1:18am

BOFA @ The Good Doctor

BOFA failure. Doc, this would be an earth shift. Would it be allowed?

TheGoodDoctor
Aug 10, 2011 - 1:22am

@maravich44 I don't know. My

@maravich44 I don't know. My point is the stock has sure been acting like the banks in 2008. I'm basing this possible outcome on the Jim Rogers bank short. And then of course rumors that BAC could be split in two. One with the shit WAMU assets and one with the "good" assets.

But then I fear the shit bank will go the way of a Fannie/Freddie and end up a taxpayer burden anyway. That part is probably destined for failure or a taxpayer backstop. Hell look at Fannie/Freddie walking around with their hat out for another 5 billion! It never ends!

wallshot
Aug 10, 2011 - 1:31am

Dummies, Trends and Bullion

Dummies:

Here is a link to some data I started tracking out of curiosity a few months back, albeit not on any given on a specific cadence. It shows the sales rank of books on Amazon that might be attractive to new investors:

Trends:

Here is a link to all data in a database owned by a certain company that doesn't do "evil" things. This is very untraditional, but it is something that I looked at ahead of the comex induced tank a few months ago and searches definitely got close right beforehand. A zoomed in look at the last year trend is in the picture below.

https://www.google.com/trends?q=inflation%2C+buy+gold%2C+price+of+gold%2C+buy+silver%2C+price+of+silver&ctab=0&geo=all&date=all&sort=0

Bullion:

Some good bullion music

Millencolin - Bullion
Strongsidejedi
Aug 10, 2011 - 1:34am

WAMU and Countrywide implication on USD value? (Good Doctor)

Dear Good Doctor,

I've thought alot about this issue over the past 18 months.

Your question raises in my mind the question of the AIG litigation against BAC. I believe that AIG is suing BAC because BAC inherited the Countrywide contractual issues for the RMBS and CMBS notes. It seems that BAC must have been holding the risk associated with the Fannie Mae and Freddie Mac residential notes. So, BAC, logically, also must hold the Residential Mortgage Backed Securities from Countrywide. But, JPMChase does NOT hold crap from WAMU. That crap got spewed on Fannie Mae and Freddie Mac back in September 2008 when WAMU went down.

(For those uninformed, when these mortgage sharks were writing a loan to John Q. Public, the money came from somewhere. So, Citibank would go out to some investment fund and say "Hey fund, give us $10,000,000 and we'll get you back 6% for these bonds backed by AAA rated mortgages". The fund manager gives Citi the money and then Citi gets leverage 30:1 and turn 10 Million in to $300 Million from the Federal Reserve Bank, PLUS they get to turn the deal several more times. This is the bubble that popped in 2006)

Okay, so here's the thought experiment....let's say that Jes Staley's JPM Investment team has to deal with being a party on the RMBS derivative contracts. So, that means, Staley has to evaluate the new AA+ rated versus the AAA rated stuff. Well, Fannie Mae and Freddie Mac just got downgraded by S&P. Therefore, if Staley's team has a "conservative" fund and the contract language requires him to blow out AA in favor of AAA, then they would need to start liquidating the downgraded holdings. If they don't, then there must be some other move that the Wynter Benton people can make to blow more stuff up.

Max Keiser's website has been running the meme of a Suicide Banker for some time. I think this Wynter Benton message is the same thing....its like a threat against the stability of JPMC and BAC.

My guess is that the Wynter_Benton team (and this is purely conjecture because I have really no first hand knowledge who is really on that team) is telling Staley's remaining players that the jig is up and giving them a count down.

So, something has to give.

bbdgoco
Aug 10, 2011 - 1:39am

Great Music Great Vids

And when Silver makes its big move, it'll feel like this:

Led Zeppelin - Rock N' Roll
Strongsidejedi
Aug 10, 2011 - 1:43am

msg to Good Doctor re: WAMU and Countrywide

Doc,

WAMU failed around Sept 26, 2008. In the span of a few hours, FDIC took over the bank and then sold the assets to JPM Chase.

Countrywide was bought by Bank of America directly. Countrywide never failed formally and therefore FDIC did not get involved. I have never understood what happened in this transaction because you would think that Ken Lewis (BAC's CEO at the time) would have wanted to insure that FDIC got between BAC and Countrywide first.

Both WAMU and Countrywide had "no-doc's" loans and also home equity lines of credit. Both of those types of loans, especially when made to parties of dubious credit, had little to no stability and assurance of payment. However, when the contract for repayment was hooked to "AAA" rated corporations like WAMU and Countrywide were, then the AIG or Citi rep could sell the RMBS bond for AAA rating.

One wonders if JPMC "investment" people were selling this stuff to institutional investors. If AIG was buying Credit Default Swaps on those bonds and the counter parties were also the same banks, then the banks were buying hedges against their own loans.

I think this is what they were doing...plus they were hedging by pitting one city against another through the CME futures and options on Case-Shiller. When I figured this whole slimey mess out, it made me really angry for a long time.

maravich44 TheGoodDoctor
Aug 10, 2011 - 1:45am

Banksters @ The Good Doctor

All reward and no risk at our expense. I despised them all even before I knew all this, believe me I am angry as hell too. This is all bodies buried, and people wonder why nobody is prosecuted? Is "cahoots a word"? I'll agree, protection is in progress.

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