Friday Fun

Fri, Aug 19, 2011 - 10:25am

Looks like closing above $1818 was as significant as I suggested it would be but I doubt you're here for a history lesson. You're likely looking for insight as to where we go from here. As you might expect, I have a few thoughts. Let's get started.

I was telling Mr Hyde late last night that I didn't think Santa's next "angel" was going to offer much resistance. Anymore, the levels aren't that far apart on a percentage basis and there seems to be some history that shows every other level to be challenging. With $1849 behind us (Dec gold hit 1881 earlier today), let's wait for the next one, instead. Given that I'm expecting a short-term peak next week, probably somewhere between 1936 and 2000, the 1936 angel seems to be worthy of watching. Here's why:

Take a look at this first chart. It's a 4-hour gold. Note that the angles of ascent are steepening. This can only continue for a little while longer as, eventually, the trendline goes straight up and that's as far as it can go. It's not parabolic yet, however, and I don't expect a significant peak today...not ahead of what will be a very interesting weekend. Early next week, though, we could get our peak. It is critical to understand this, though: I'm only talking about a short-term peak, similar to nine days ago. If a dip develops, it will simply offer you an opportunity to buy. Just like last week's pullback stopped right on schedule at 1725, the next dip will do the same. IF I'm right, you'll have a choice to make:

1) Enforce some sell discipline on yourself to lock in some profits and look to buy the pullback.

2) Look the other way and wait for the market to rebound.

Reinforcing this opinion is the whole "orderly vs disorderly" idea I postulated last evening. The move from the lows of last week had been orderly and calm. This type of advance is sustainable. Last night into this morning has been disorderly, like early last week. Volatility extends markets into short-term overbought or oversold territory and this is where we are headed by early next week. You can see the onset of the disorderly action on this 15-minute chart.

In short, absent a margin hike or The Second Coming, I expect gold to be firm all day. There will be dips but dips will be bought. Ask yourself: Would you like to be long gold or out of gold over the weekend? Exactly. Using charts to predict headlines is challenging to say the least but these charts suggest to me that early next week will see another $50-100 advance in the price of gold. From there, maybe another 3-5% dip? We'll see. The key is to assess these eventualities so that, when they occur, you can act with discipline and not emotion.

Silver looks great, doesn't it? As background, I suggest you pause for a moment and read this from Trader Dan:

As Dan says, the first key closing level today is about 41.50. A close above there will draw the 10-day moving average through the 20-day. This is a bullish crossover and would portend higher prices next week. The next number to watch is 42.30, which is the intra-day high from earlier this month. A close above there today would be bring a response Monday that is similar to today's reaction to yesterday's close. All in all, my $44 by Labor Day pick is looking pretty solid right about now. It may even be a tad conservative. Watch today's close very closely. It will be your clue for next week.

Lastly, both silver and gold have moved into significant backwardation this morning. This is an extremely significant development and, if it continues, is indicative of very tight, short-term supplies. A few loyal Turdites questioned the significance of the "Venezuelan Decision" when I posted the news Wednesday evening. Let me set this straight. It is extremely significant. Why?

1) The Venezuelan gold is on deposit at the Bank of England.

2) The Bank of England supplies the gold for the GLD.

3) I believe the GLD to be an empty, fraudulent shell game of fractional bullion banking.

4) It has been speculated that there might be only 1 ounce of gold for every 100 ounces of paper gold.

5) The withdrawal of 8% of GLD's gold from the BoE would cause a massive supply squeeze.

6) This massive supply squeeze would reveal itself by backwardation in the gold market.

7) See the paragraph above.

8) IF I'm right and GLD is exposed as the scam I believe it to be....well, let's just say that gold is going a little bit higher from here.

9) Money flows out of GLD and back into the rightful place...the miners.

That's it for now. Equities are rallying and the PMs are falling as I type. This is not a surprise nor is it unexpected. The prices as of 10:20 a.m. are of no consequence. Let's see where we are at 1:30 and 4:00.


About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 19, 2011 - 10:50am

Buying Physical Advice

Do I buy a new 1oz gold coin on a dip this morning or do I wait for a dip next week that will be lower than today?

Aug 19, 2011 - 10:53am

Stu Thompson

  1. Gold is up 26% from the 1478 low. Silver is up 28%. Sadly, silverbugs think this is some kind of nightmare. Live the dream. Live the reality. You're beating gold. Enjoy that victory.
  2. Pretending that silver rules gold, however, gives the silver bugs a 100% chance of ending up like the bond bugs. Financially obliterated. The gold bull ends with gold shaking hands with the dollar and the bond. The silver bull ends with the banksters dropping a firecracker into the silverbug jar. There won't be any survivors. Only those who transition to gold or operate real pgens to zero on silver will exit the final stage silver bull... financially alive. The rest: No.
Aug 19, 2011 - 10:54am

A Positive post for the day

There has been a lot of glom and doom if nobody complains I'm going to try and do a positive (OT) post daily.

There are cool alternatives for oil being worked on:

The NASA Dawn mission is no in orbit around the asteroid vests, some really cool pictures:

Cool picture:

Web Site:

And completely random Happy Happy Lobster...

Aug 19, 2011 - 11:02am



Aug 19, 2011 - 11:04am
Aug 19, 2011 - 11:04am

"Lastly, both silver and gold

"Lastly, both silver and gold have moved into significant backwardation this morning."

I don't see any backwardation in gold. Looks more like the perfect contango structure to me with almost every further out contract getting more expensive. Also it's normal for the futures contracts to lag a little behind the spot price on sharp price movements. Where do you get your data Turd?

Aug 19, 2011 - 11:05am

Suggestion and comment...

@s1lentslayer--As many of the greats, Champan, Turk, Sinclair, etc. have stated on many occasions, it is best to buy when you have the opportunity, should the opportunity disappear.

Turd, Thanks for all the efforts. I have stated several times that I am not a trader, however, what all you traders do impacts to value of my physical holdings. I love to read what you and Trader Dan have to offer in regards to your insight. I have a great deal of respect for both of you and look forward to reading your commentary on a daily basis. Once gold hits $2k I am going to take a small profit and make a donation and---"Feed the Turd, because Turd knows his shit!" That has become my knew favorite saying, much to wives dismay. Turd knows his shit!!

All you trader types out there keep up the great work and thank you to each of you for sharing your knowledge. It is a pleasure being able to visit and read how the Big Boys do it!!

Aug 19, 2011 - 11:06am

Nice Job Turd!

Turd, you are the man!! Your timing on these calls is uncanny! My only regret is not following you sooner when I had more fiat to play with... Thanks for showing us all the light!

Monedas s1lentslayer
Aug 19, 2011 - 11:07am

Today you know you can buy it !

That's a certainty ! You would risk that certainty hoping to save $40 USD.........and risk paying $100 more ? The time for these cute parlor games has ended ! If you can buy it ! Monedas 2011 Evo Morales preparing to nationalize Bolivian miners or is he having a libertarian epiphany ? Hee hee hee !

Aug 19, 2011 - 11:07am

Sad day for me.  I found out

Sad day for me. I found out that I have a large windfall coming to me in November. I have no idea what it will buy me when it gets here. If I had it today, I would buy PMs 100%. I fear that by the time it gets here, silver may have doubled or more, and same with gold, especially if the fraudulent GLD and SLV are caught with their pants down.

Oh well, What I have is probably enough for most anyone. But damn if I wouldn't like more :)

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

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

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

Key Economic Events Week of 8/5

8/5 9:45 ET Markit services PMI
8/5 10:00 ET ISM services PMI
8/6 10:00 ET Job Openings
8/8 10:00 ET Wholesale Inventories
8/9 8:30 ET Producer Price Index

Key Economic Events Week of 7/29

7/30 8:30 ET Personal Inc/Spending & Core Inflation
7/30 10:00 ET Consumer Confidence
7/31 8:15 ET ADP employment
7/31 2:00 pm ET FOMC Fedlines
7/31 2:30 pm ET CGP presser
8/1 9:45 ET Markit Manu PMI
8/1 10:00 ET ISM Manu PMI
8/2 8:30 ET BLSBS
8/2 10:00 ET Factory Orders

Key Economic Events Week of 7/22

7/23 10:00 ET Existing home sales
7/23 10:00 ET Richmond Fed Manu Idx
7/24 9:45 ET flash Markit PMIs
7/25 8:00 ET Count Draghi/ECB policy meeting
7/25 8:30 ET Durable Goods
7/25 8:30 ET Wholesale Inventories
7/26 8:30 ET Q2 GDP first guess

Key Economic Events Week of 7/15

7/15 8:30 ET Empire State Fed Index
7/16 8:30 ET Retail Sales and Import Price Index
7/16 9:15 ET Cap Ute and Ind Prod
7/16 10:00 ET Business Inventories
7/17 8:30 ET Housing Starts and Building Permits
7/18 8:30 ET Philly Fed
7/19 10:00 ET Consumer Sentiment

Forum Discussion

by SteveW, 6 hours 20 min ago
by sierra skier, 7 hours 23 min ago
by atarangi, 14 hours 8 min ago
by atarangi, 15 hours 45 min ago
by atarangi, 15 hours 52 min ago