So, What's Next?

409
175
Mon, Aug 22, 2011 - 8:22pm

Sorry that I've been MIA most of the day. I've been spending a lot of time in thought, trying to decipher where we are going from here. This evening gold has charged through $1900 and silver has spent some time above $44. I feel I've got a decent handle on where we're headed, so, let's get started.

Let's begin with gold. It's moving almost straight UP and that is the type of momentum that is certain to garner the attention of our friends at the C/C/C. Many thought they were going to raise margins Friday. The specter of a margin hike kept gold in check all day near 1850. When Friday evening came and went without a hike, gold rallied today to make up for lost time. Since this afternoon has also failed to provide any emails from the C/C/C, gold is rolling again at present. However, don't be fooled. A margin hike is coming and the C/C/C will, undoubtedly, attempt to time it in order to get the biggest "bang" for their manipulative "buck". What better time than later this week?

Recall for a moment the pain and suffering from the late April and early May silver fiasco. The Forces of Darkness stood down and let silver run to a speculative "all-in" peak of almost $50...the psychologically significant, I might add, $50 level. Once everyone was sufficiently sucked in, the C/C/C dropped the hammer with 5 margin hikes in 9 days. As we all know, silver fell over 30% in the coming weeks.

Fast forward to present day gold. The C/C/C has already lobbed in one margin hike, just like they did in silver on Monday, April 25. They now appear to be letting gold run in order to, once again, suck in a lot of weak-handed, latecomers. And, just like silver in April, we are approaching an uber-significant psychological level...$2000. So, here's what I think happens next:

1) Gold, which is currently trading at $1912 as I type, is going to be allowed to run a little bit farther. It may slow a bit at Santa's next angel of $1936 but I think it may make it almost all the way to $2000. Maybe as soon as Wednesday or Thursday.

2) Then, the criminal C/C/C drops the hammer with a significant margin hike.

3) Gold sells off after the margin hike but hangs in there with a few speculators hoping and praying that The Fed will rescue them by announcing some new, dramatic quantitative easing program over the weekend.

4) The Fed "disappoints". No new overt QE. Instead, something like what is described in the link below will begin taking place behind the scenes. Still horribly inflationary but obscure enough to confuse the easily confusable.

https://www.financeandeconomics.org/Articles%20archive/2011.08.17%20Bank%20Credit%20Repo.htm

5) Gold sinks like a stone next week, conveniently taking silver with it for a while.

You know that I like empirical data and patterns to buttress my opinions. These two charts do the trick:

So, the next question is, what happens to silver? In the very short term, silver looks great. In fact, now that we've eclipsed 44, I think it could soon trade as high as 46. However, keep in mind that September options expire on Thursday. The EE will likely be forced to retreat from their positions around 44 but they will certainly regroup at a higher level. Look for some resistance near 45. IF silver can get through there, it should have a very hard time dealing with 46. So, I expect a peak there, either at 45 or 46, before the EE caps things once and for all ahead of option expiry. IF I'm right about the coming gold beatdown, silver will be taken along for the ride next week. I would not be surprised to see it pull all the way back to 42 before basing and beginning its final assault on the highs from April near $50. Keep in mind that, by attacking gold, the C/C/C is unwittingly shifting the leverage picture back in favor of silver. Maybe not fully in favor of silver but at least they'd be leveling the playing field. In Q4, this will have the effect of driving more speculative longs back into silver and consequently give silver the juice to finally eclipse $50.

So, there you have it. Jeezo pete, I must be some kind of masochist. I finally put $44 silver to bed and I jump right back into the fire by trying to predict the future again. Oh well. My buddy "Turdle" told me when I started this nonsense back in November that my real value was always going to be in "calling it like I see it" and not "pulling punches". Well, there you go. No punches pulled on that one. Now, keep in mind two things:

1) I could be wrong.

2) If you're ready to get out and sell your trading positions now, then do it. Don't wait around for the final uptick. Remember, "pigs get slaughtered".

That's all for now. Stay nimble and enjoy the fireworks. Thanks for being a part of this growing "community". TF

8:40 am EDT UPDATE:

As I rubbed the sleep from my eyes an hour ago, my first thoughts were of despair. After some coffee and some consciousness, I feel better. Gold is only down about $10 from where it was when I went to bed and silver is only off 30c. Big deal. In fact, the only thing we've seen is a continuation of the pattern we identified yesterday at this time. Gold sells off at 3:00 am EDT and begins to rally back at around 9:00 or 10:00 am. Here's a reprint of the chart from yesterday morning:

And now, here's an updated hourly and a 3-minute chart that shows the raid commencing at exactly 3:00. (Like Mussolini, the Wicked Witch may be ruthless but at least she makes the trains run on time!)

Predictably, silver was dragged along for the ride. However, it has once again held what is now support near 42.50. It has since rebounded back above $43.

Hang in there today but have fun. More after the close. TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  409 Comments

ginger
Aug 22, 2011 - 9:53pm

TF, I always listen very

TF, I always listen very carefully to what you say and I appreciate your wisdom very much. ...You put alot of time in here for us and I am sure hoping to Feed you this Fall when my calls explode and I am rolling in the fiat. ......I hope you don't starve before then.. ..lol. (Until then.. ..you can eat the daisies..?... ..sorry.. it's the only munching smilie I could find on quick notice.. ...and actually the lil smilie didn't munch the daisies..he breathed them in.. oh well. :) :D

Going to play my GDX calls for another day maybe and then ....well, I can't decide if it's a good idea to exit them (cheap otm) and take the profit I have.. ..or whether I should sit with them knowing they will be back with a vengence in the Fall. ...THIS is the part I am worst at with options. .......I just keep reminding myself of that quote that 'noone ever went broke taking profit'. ...I think that's my decision....

Rui
Aug 22, 2011 - 9:57pm

Ben Davies: "Benny went past QE3 and straight to QE4"

B.D. said sth like that in his last KWN audio interview, and I kinda agree. Both QE1 and QE2 were aimed to lower the interest rate on mortgages and treasury for a year, respectively. Now with Benny promising two more years of almost zero interest rate in last FOMC meeting he's essentially promising QE3 to 2012 and QE4 to 2013.

DogStar76
Aug 22, 2011 - 9:59pm

Shanghai Gold Exchange Raises Gold Trading Margin To 12%

SHANGHAI, Aug 23 (Reuters) - The Shanghai Gold Exchange (SGE) will raise trading margins on three of its gold spot deferred contracts to 12 percent from 11 percent starting from Aug. 26 to limit trading risk, it said in a statement on Tuesday.

lilbromarky1
Aug 22, 2011 - 9:59pm

The aggregate reserves that

The aggregate reserves that are mentioned in the article turd linked to can be found here. 1.68 trillion in base money stacked up from 2008 going forward, waiting to get fractionally reserved out 9 times over. Ticking time bomb. I always thought that it would be a government mandate that would force the banks to lend and multiply the base money but it looks like based on Turd's article, there's more sly mechanism in place.

https://www.federalreserve.gov/releases/H3/Current/

Also of note, for the first time since I've been watching the link below, the totals column at the bottom DECREASED in June 2011.

https://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

FogHorn LegHorn
Aug 22, 2011 - 10:07pm

TF well done!

My gut was telling me exactly, right down to the stealth QE4, skipping QE 3 via the reverse repo, with fanny and freddie on the list, as per usual, You Sir, are amazing! Mucho gracias! Ps. Your charting and TA bolster, My comfort level with what was just a gut feeling, based on ee tactics. You da Man, TF!

Hard Rain
Aug 22, 2011 - 10:12pm

Some Observations....

Firstly, a huge thank you to Turd for his brilliant analysis and for providing this forum for (mostly) like minded individuals to share ideas.

Secondly, another big thank you to all individuals and posters for their contributions. Every single post is of value to me, especially since I saw the 'light' about a year ago.

I have been able to make very good fiat form the analysis and contributions from the content on this site. I am grateful.

My Observations:

I just came back from an 11 day trip to the Eastern and Southern Caribbean. It was interesting. Here are my observations in REVERSE.

1) On my arrival back in the US (through Houston), I did not see a SINGLE US resident or citizen with even a smile on their face as they went through Immigration, Customs and then TSA as we all caught connecting flights. I would say there was even fear of these government and non-government (TSA) employees. Because they had the power to mess with your freedom. Immigration and Customs treated you as though you were a criminal with something to hide.

The tourists and visitors had smiles on their faces and their was laughter. NOT so for the citizens.

It's scary that citizens are now becoming fearful of the power of rank and file government employees who now have the right to detain you with little or no fear of reprisal.

SCARY! What has happened to our treasured national documents like the Constitution, Bill of Rights etc. I for one don't like the direction this is headed.

2) Crime is increasing. This is a result of many factors including high unemployment, disillusionment with the politicians and their corruption and the increasing inequality in opportunity and wealth. (SOUNDS FAMILIAR?)

This is something that happened just today where a curfew went into effect.

https://www.trinidadexpress.com/news/State-of-Emergency-update-128197553...

The citizens in their gated communities are becoming scared. (Beginning to SOUND FAMILIAR?)

3) Lots of these island have their currencies pegged to the UDS or in many cases (Bahamas, Bermuda) use the USD. Based on the debasement of the USD, prices are going through the roof. The average person is finding it difficult to survive. (SOUNDS FAMILIAR?)

4) A few people who I spoke with would like to buy gold, but bullion is difficult to get and very expensive. So, DEMAND IS THERE. This bodes well for those accumulating because there is latent demand across the globe, even if it's unaffordable.

5) Spoke to someone who is in banking. He was questioning the fact that Caribbean money center banks are buying US treasuries as is claimed by the US Treasury. He thinks it's the Feds providing the funds for these banks to purchase these treasuries. There simply not enough money there for them to purchase the amount that is claimed.

6) There is a fairly widespread belief that the US government will try to create an Arab Spring like atmosphere in the region. To steal resources for US companies.

Many believe it will start with Venezuela. The US has a huge military capability in Columbia. They will instigate some sort of cross border skirmish between Venezuela and Columbia. The US will then defend it's ally (Columbia) as an excuse to get involved.

Previously I went to the Caribbean for the rum, calypso, beaches, sunshine, women and casinos. Not necessarily in that order. This time around I was still doing the same just being more observant.

I saw a lot of things that had me thinking, " IS THIS WHAT WE, IN THE US, MAY EVOLVE INTO?"

It's a little bit scary. Thanks for providing a listening ear.

This site has now become my daily dose of sanity in a world that's seemingly careening wildly into insanity.

Or, maybe it's just me!!!!

Rain

Kuchek
Aug 22, 2011 - 10:15pm

Hmmm

So your saying there might be a little dip for me to buy?

Turdle GG
Aug 22, 2011 - 10:20pm

Great work, Turd

Keep telling it like you see it.

Well done on $44.

UncleFester
Aug 22, 2011 - 10:21pm

Chavez Gold

Anyone else hoping for a Ragnar Danneskjöld moment on the open seas?

IFester

Waffen
Aug 22, 2011 - 10:21pm

Aren't people expecting this

Aren't people expecting this and aren't most people buying Gold as a safe haven rather then for speculation, which is very different from Silver in April?

This makes me believe that we will simply not see the kind of slaughter that we saw in Silver.

Of course I could be very wrong.

Vernon Wormer
Aug 22, 2011 - 10:25pm

Coin shop

Repost from last thread

@silvermonkey

There are three shops I have done business with. The guy 5 minutes from the house is a dick and I will never go back. The guy 1/2 and hour away is dirty and I can do better at Provident with a credit card and shipping. The guy an hour from the house is fantastic (of course). I can get silver for about spot +1 and gold for about spot +5%. Last weekend there were tons of people selling gold and even more people buying silver. It was crazy.

Just today, Mrs. Wormer had a small gold necklace that was beat to hell and wanted to take it to a "we buy gold" place to see what she could get. We went to the local jeweler. While the Mrs. was taking care of her business, I asked the owner if people were coming in with gold coins. He rolled his eyes and said he had too many. People were coming in all day every day with these one ounce coins. I played dumb and asked what he was talking about. He came from the back with a very large handful of gold coins. He told me that he sends them to a guy in LA who melts them down and then the gold gets used in jewelry. I said that it sounded like a pain and he agreed. Spot at that moment was at $1911(I peeked at my phone). He said that he had a really old coin and showed me a 1908 $20 double eagle. I asked him what he would sell it to me for right then. He kind of shrugged and said $50 over spot. I asked him what spot was and he said very matter of fact that it was $1880 and I could have the coin for $1930. I shit my pants, went home and changed my drawers, stopped at the bank and am now the proud owner of a $20 double eagle.

I think I have a new coin guy.

FogHorn LegHorn
Aug 22, 2011 - 10:25pm

TF feeding time

TF, I hope to feed the Turd real soon. I hope No one thinks, I was being too immodest, with My last post, I just had a feeling that this is the way the setup will play out. I am in no way able to call events like " Our fearless Leader." just average, Foggy :)

Shill
Aug 22, 2011 - 10:27pm

Think I'll call 66.22 in the

Think I'll call 66.22 in the green on the GDX tomorrow. As Turd noted the EE is lurking.

Great post Turd thanks for all you do.

Mr. Hyde
Aug 22, 2011 - 10:29pm

Turd is The Man!!

For whatever it is worth...I'm right on board with Turd. I see some further run up in the next day or two, but watch out for Thursday/Friday. And a shout out to Turd...I made a shitload of fiat this spring, gave a shitload back the first week of May thinking the next day things would bounce back, after days of that kind of thinking, I lost 40g. I was sick, ready to bail on PMs. With patience and Turd's wisdom...is it really possible for a Turd to have wisdom? As of todays close I am all the way back, all 40g, plus a little. Taking caution and wanting to lock in my gains after the harsh lessons learned in early May, I sold half of my positions in AGQ and UGL on today's close. I plan on selling the rest tomorrow or Wednesday on any further advances, sit on the sidelines, smile, thank the Turd, and get back in on the pullback.

FogHorn LegHorn
Aug 22, 2011 - 10:30pm

@ginger fall options

Hi ginger, exiting fall options how far out are they?

lostinspace Waffen
Aug 22, 2011 - 10:31pm

I don't think the EE can

I don't think the EE can manufacture another raid like the May 1 massacre. Most of the weak hands have been shaken out already. Wouldn't mind being wrong, another sale would be greatly appreciated!

llaettner
Aug 22, 2011 - 10:32pm

Monetizing the deficit

Indeed, the Fed will create demand for US Treasurys for as long as they can through direct purchase using newly printed dollars (QE2) and creating swap agreements with other central banks who would effectively purchase US Treasurys and in exchange for this service, the Fed would sell x quantity of the purchaser's currency (aiding exports etc via weakening of the purchaser's currency . . ) all in effect to artificially create perceived demand for US debt.

sk
Aug 22, 2011 - 10:33pm

Holding the line

It feels to me like someone is trying hard to hold 1900 and 43.50. We've bounced off these and been beaten back down to these a lot in the last day or so.

Titus Andronicus
Aug 22, 2011 - 10:40pm

RE: margin hikes

The chart that Save_America1st posted above is very good. It shows a clear correlation between the price action of silver prior to May 1st and today's gold price action.

But there are some obvious and important differences between the May 1st margin hike massacre and gold today:

1) Gold is a much larger market than silver.

2) We did not have a raging bank crisis on May 1st.

3) We were not in the middle of a market crash on May 1st.

4) Gold is GOLD -- the queen of financial uncertainty.

I'm not saying that we won't have a correction. But I'm saying that I don't think we will have anything like the correction we had in early May for silver. The situation is different.

Just a guess.

Having said that, I did lighten up a bit on my gold/silver comex positions.

(I don't mean to detract from the value of the Save_America1st's post. It is very good. Thanks!)

Save_America1st
Aug 22, 2011 - 10:44pm

@Vernon Wormer

Congrats man! I just got a 1924 Double Eagle today...first one! Hope yours is as kick ass as I hope mine is (when it gets delivered!) lol

You def. got yours cheaper than I got mine, but hey, at this point even though we know once gold gets close to 2000 there's gonna be a beat-down, it's still gonna rebound back way up above 2000 and we're in the clear!

Congrats again man!

Shill
Aug 22, 2011 - 10:44pm
ginger
Aug 22, 2011 - 10:45pm

FogHorn ...Love your posts..

FogHorn ...Love your posts.. ..always learn from them. They are certainly not immodest.. ..Please keep posting..

..My options in GDX are Jan12 ....bought just 25 (cause it's all I could afford at the time) ..anyway.. jan12 $95 and that $300 investment is now $937 ....I *do* believe that GDX will go up much more this Fall into Winter ....and so.. this is the part I'm not good at yet with these calls. ...Do you exit and take the profit now and buy back in counting on the dip later... ...or let the calls ride into the next season. (?)

I tend to hold too long and lose. ..That is why I am thinking of learning from my past mistakes and exiting. ...Not sure either way is a clear cut right or wrong here though. ...Any thoughts from you options professionals would be appreciated as I am hanging on here and don't want to lose again... ;)

Blorf lostinspace
Aug 22, 2011 - 10:46pm

Margin requirements for

Margin requirements for silver are like 14%. Gold is like 4%. I guess they could take down gold with some scheme like they did silver, but the margin reqs probably need to go up for gold regardless. Seems too low.

Eric Original
Aug 22, 2011 - 10:49pm

kumanari

My condolences.

I lost my Dad about 6 years ago, and really 2-3 years before that to dementia. He was my best friend. I've never been same since, but I'm still in there swinging everyday trying to do my best for my Mom, my Wife, and my Kids. That's what Dad always did, and that's how I honor his memory. That's all any of us can do.

llaettner
Aug 22, 2011 - 10:49pm

One more time

I will post this again, the chart Save_America1st post above is deceiving, it doesn't indicate correlation, the only reason the top of the first and second graph are on level is because the graphing tool (netdania) is scaling both wave forms to fit on the same page at the same scale, there's no correlation in this way. . . .

ginger
Aug 22, 2011 - 10:53pm

Eric. That says it all.

Eric. That says it all. ;)

...BTW... ...gotta add that I wouldn't have made that gdx move that day without Shill and this blog. ...Thank you Shill. ......... .....Now.. if I wait too long to exit and lose my $300.. .....you have to pay me back.

:D

FogHorn LegHorn
Aug 22, 2011 - 10:56pm

@Mr.Hyde congrats on the rebound

May, taught some hard lessons! I'm glad to see" turds,"talking about taking profits, and/or buying insurance. I had to learn to protect My positions, My previous unhedged balls to the wind, option portfolio suffered big time to, its a long haul back. It's nice to see some green on the screen! Hat tip to You Sir!

Vernon Wormer
Aug 22, 2011 - 10:59pm

SaveAm1st

Thanks man. It really is a cool coin. Eric O always has a way of pointing out the good coins. BTW I have a 100 corona coin coming next week from Provident.

Shill
Aug 22, 2011 - 11:03pm

http://finance.yahoo.com/echa

https://finance.yahoo.com/echarts?s=GDX+Interactive#chart2:symbol=gdx;ra...

Hows this for a triple top. Going to get real interesting Ginger, hold out a little longer. If you need dollars well then grab them while you can, nothing wrong with profits friend.

Whats it going to be Vertical or down she goes? I'll gamble vertical. Ginger a pleasure.

survivalwstyle
Aug 22, 2011 - 11:05pm

graceland

​some of the info from st.

  1. "Gold beat the USD toilet paper bugs down to $1896last night. Some Fudds are starting to ask about gold now, wanting to buy. How pathetic, how disgusting. As I said, the only the thing more exciting than the upmoves in the parabola zone are....the down moves. You need extreme patience to get those down moves and watch your opponent get lit up by the banksters, like ricepaper in a volcano. Fudd will learn a whole new level of fear as he enters gold parabola chase mode. "Me parabola chaser, me should be ok". -Not you, Aug 22, 2011. Enjoy the ride. Buy the slide.How will you know when the slide happens? Answer: When you look in the mirror, the image you see... will be shaking.
  2. Silver tagged $44 last night, which was nice to see. I was a very light seller. Some of you have noticed the large premium on the Sprott silver fund. Eric was asked about filings where he sold shares in his own silver fund and used the proceeds to buy physical silver. Click here now to view the current NAV premium/discount for Eric's fund.
  3. Eric thinks silver should already be $100. He's a pro, so he doesn't just wade in and buy his fantasies willy nilly. Sometimes the Sprott funds, and other physical gold funds like the central gold fund, which Eric co-built....sometimes these funds trade at discounts to the price of the physical metal.
  4. If you want to be a pro like he is, then buy his funds when they have a low premium or even a discount, and sell, as he does, when the premium is high. "
  5. so it sEEms we are breaking records daily. if you take profits here, beware we may not coRRect to here for awhile. be wiLLing to sit in paper as long as it takes to get back here. i am not ready to do that. at 50 we wiLL coRRect. 42.50 wiLL not be hit. 44 is the flOOr. stay LONG. best part is that if i am wrong. i wiLL buy more!

(mod edit for bad url link)

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