Bring It On Down To Liquorville

Thu, Aug 11, 2011 - 3:02pm

Man, this has been a long week. Craziness. Madness. Downgrades. FOMC minutes. Bank runs. Margin hikes. I can't take much more and we still have tomorrow to go. I may need to hit Liquorville tonight!

Justin Timberlake Does His Thing again in Liquorville SNL

Before we get started, Santa posted some wisdom a few moments ago. C&P'd for your convenience:

Dear CIGAs,
Now that we have reached $1800 gold, what should you do?
1. Those holding gold to hedge the systemic risks of the Western Financial world simply stay in your position.
2. Traders lighten up your positions as gold approaches the next two Angels.
3. No market fails to have reactions at some point.
4. Reactions in this market will be deep, but brief when they occur.
5. The undervaluation of good gold shares has passed manic.
6. Utilization of some of your gold profits into good gold shares is pure logic.

Yes, I know this was a tough day for everyone, particularly after how rosy everything looked yesterday at this time. Once again, the old adage is proven true: When everything looks great...when everything looks ready to roll...Sell. The EE always stands ready to change the rules and complicate things at the most inopportune times. The key from here will be two things:

1) Will there be more margin hikes coming? If so, I suggest that you seriously consider selling your current trades and moving what you have left to the sideline.

2) How will gold respond when it approaches 1800 again? Notice how I typed "when" because it most assuredly will approach 1800 again, probably by early next week.

The stock market is extremely volatile but it is not making new lows. I take that as a sign that the current selloff is almost complete. A recovering equity market will remove some of the "safe haven" bid from gold. The overall commodity market is rallying for a second day in a row, confirming our suspicions that the 5-day selloff ended back on Tuesday and we are now back into a general "risk on" mode for the next 3-4 weeks. Though "risk on" is generally good for gold, the further removal of the safe have bid will serve to contain price, too. I guess what I'm saying is...Even though I'd gotten pretty excited just 24 short hours ago about the near-term prospects for gold, I think I'll use the rally I expect tomorrow and Monday to lighten some of my trading longs. I'll keep you posted.

For as lousy as today felt in gold, is was still only down about $30 from yesterday's Comex close and, frankly, you'd be foolish not to expect a 3-5% correction after a margin hike. It was possible that gold could shrug off the hike but, when the hike was combined with the 300 point stock market rally...well, that was just too much for gold to withstand. Regardless, just two days ago gold traded as low as 1725 so 1745 isn't really that bad. From here, we could still see 1725-30 overnight. It wouldn't surprise me if we did but we don't necessarily have to. Gold will rebound tomorrow whether or not the selloff continues. Why, you ask? Let me put it this way. Would you like to be long or short gold heading into the weekend? Would you like to be long or short stocks headed into the weekend? If you answered short gold/long stocks, you're crazy. Way, way, way too much real and imagined risk to take that position. Nope, I expect gold to rally tomorrow and stocks to pare gains simply because the smart move is long gold/short stocks. Given all the dramatics around 1765-1775 this week, don't be surprised if gold goes out tomorrow, somewhere right in that range.

By the way, did anyone help out poor ole Turd by compiling all of the gold guesses from back on Monday? The contest ends at 1:30 EDT tomorrow. What did you guess? I hope it wasn't something in the 2000s.

Speaking of silver...It still can't seem to get out of its own way. It's a commodity when commodities are going down. It's a precious metal when gold is going down. Nuts! Driving me freaking crazy and I'm the one who has it dangling in the wind with a pick of $44 by Labor Day. I still think that the next three weeks will prove me right as it's clear that the entire commodity complex has found another short-term bottom. Like gold, it may bottom tonight or early tomorrow. When it does, I'll be trying to buy that dip.

That's it for now. Perhaps I'll see you at Liquorville later. If not, relax and chill for a while. Tomorrow promises to be another crazy day and you're going to need to be ready. Turd out.

About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 11, 2011 - 3:06pm


Since this seems to be the tradition...first!

Aug 11, 2011 - 3:07pm



never mind

Aug 11, 2011 - 3:08pm

demon rum

won't help anything

of course, it couldn't hurt much

Aug 11, 2011 - 3:09pm

Yeah the weekend should be

Yeah the weekend should be interesting again. Seems that the same things are happening to Europe that were happening to the US in 2008. Denials of insolvency. Emergency meetings. The ban of short selling. And soon failures? Their going to need a lot of duct tape!

Aug 11, 2011 - 3:14pm
Dr G
Aug 11, 2011 - 3:16pm

Does anybody else feel like

Does anybody else feel like there is a new crisis happening every day now? And not just little stuff, but medium-to-big stuff; stuff that would have been front page news for weeks if this were 4-5 years ago.

It's all coming down the chute so quickly now that I'm having trouble reading, studying and processing everything that I should be. I'm grateful to all of you who help me parse the massive amounts of information down into bite-sized chunks.

Long live Au/Ag!

Aug 11, 2011 - 3:16pm
Eric Original
Aug 11, 2011 - 3:17pm


or anyone else looking for a nice picture of Mex pesos, check out what 97guns posted on another thread! Nice!

Left to right, those are Mex 20 pesos, Mex 50 pesos, and Austrian 100 Coronas.

Aug 11, 2011 - 3:17pm

@DrG It certainly does feel

@DrG It certainly does feel like the quickening is here!

Aug 11, 2011 - 3:19pm

Silver time is coming!

I feel that! See oil and stock market. Gold down 2 percent and silver down 2 percent not 6 as usual.

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

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Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

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