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

latcho
Aug 23, 2011 - 4:03am

@tesla

The charts are from the Turd Reich... Restricted access sorry ;)

Tesla
Aug 23, 2011 - 4:04am

Chart

https://www.netdania.com/Products/live-streaming-currency-exchange-rates/real-time-forex-charts/ChartStation.aspx

this links to 4 panel chart station

https://www.netdania.com/Products/live-streaming-currency-exchange-rates/real-time-forex-charts/FinanceChart.aspx?m=c

this links to one chart

___

If you want to set audible and email price alerts create a free account, draw a line (or two) on your chart and drag it where you want and then right click and select 'set price alert'. (nice if your multitasking or busy away from screens / home etc..)

silverstool
Aug 23, 2011 - 4:28am

Plus ca change, plus c'est la meme chose

DE GAULLE predicted the US monetary crisis in 1965
Dakini flaunt
Aug 23, 2011 - 4:32am

Ditto. Nice post

Ditto. Nice post Turd!

Sincerity and being real never fails...

We are here to be one thing only - who we are. All else is missing the mark. No matter what happens.

silverbleve
Aug 23, 2011 - 4:33am

sweet

thanks! I gotta try the audible notifications. I was using forexpros which dosent show volume. hat tipped!

Silverman
Aug 23, 2011 - 4:39am

I'm still holding my 1500

I'm still holding my 1500 position on gold. I will close at 2000.

stoneeh
Aug 23, 2011 - 4:58am

Re: That is one EXTREME volume spike at this hour - Wow!!!

Yeah, this and prices going down it is surely because of the Asians selling a lot of physical, right? The GLOBEX is open for futures trading 100% of the market hours, except for the COMEX which is basically just the same paper/electronic market. These markets set the price and nothing else. This is fact. Yet it is not an acknowledged fact.

Today is another proof, just as Mayday has been. Since the May silver massacre the idea that this is actually possible has set in in a lot of people in the PM community, although it is rarely mentioned and talked about. It is actually pretty easy to see/realize that the paper markets control the prize, seeing that hundreds or thousands times the volume of the physical market is traded, but obviously conditioning and normalcy bias again did its job thoroughly, because I have never seen the notion even discussed prior to May. The notion that most of the price discovery happens during the COMEX hours, yes, but not the notion that during the rest of the time the GLOBEX dominates price discovery and makes other markets essentially irrelevant.

Well, I've been stating the exact same thing a few months ago already. Let's see if more people are willing to entertain the idea this time around ^^

speconomist
Aug 23, 2011 - 5:16am

Tesla Your huge volume spike

Tesla

Your huge volume spike happens precisely when Europe opens.

BagOfGold
Aug 23, 2011 - 5:33am

Turd & Bill Downey (Gold Trends.Net)...

Turd...I have been a subscriber with Bill Downey for a number of years...& in my opinion...he is the best technical analyist out there...because he is rarely wrong!...One of our members here...whoever RobertI is...submitted from your blog...which Bill Downey concurs with...the possible potential where you describe...the short term weaker cycles that are due to kick in for a few weeks!...Here is what is quoted from you...

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.

Bill Downey recognizes the wonderful work you do...& it is truly great to see both of "my heroes"...on the same page!!!...

Thanks For Everything you do Turd...You Are The Best!!!...

Bag Of Gold

GoldMania3000
Aug 23, 2011 - 6:44am

david morgan

why is it whenever he's on kitco he's always talking about a correction. i know he's into the PMs, but it's almost always talking about the downs vs. the ups. Even earlier this year he was constantly talking about a correction..it never happened but eventually it did. I guess when you call something so often it eventually occurs.

I could do this too..i can call corrections. if something keeps going up eventually it must go down too....hmmm

pheeseas GoldMania3000
Aug 23, 2011 - 6:53am
GoldMania3000 pheeseas
Aug 23, 2011 - 6:57am

PEESEAS

Interesting... when i was at the New York hard money assett show and Eric sprott spoke he mentioned that there was a specific silver newsletter writer that we shouldn't listen to because of incorrect analaysis. I wonder who that was.

silver foil hat
Aug 23, 2011 - 7:00am

re: Gold smackdown coming...

look at the options activity on GLD...

$4,040,919 puts at 175 bought yesterday

$1,019,046 puts at 170 bought yesterday

$1,221,472 puts at 165 bought yesterday

Even a trend down to any of these numbers, for those unfamiliar, will likely make these options double, triple, or more. GLD doesn't have to get to 165 to make the trade at 165 worth the purchase.

Can the EE make money shorting "Gold" on the crimex? Don't forget, in bringing down Gold, Silver will follow, along with its options, as well as miners (and, of course, their options). So once you knock over the first domino, the rest will fall.

They may take a loss on shorting Gold this time, as the physical demand will be overwhelming on the way down AND back up (they won't cover all their Gold contracts at a gain... it will likely be a net loss) BUT they will more than make up any possible losses with covering the miner stocks sold short while they are down, closing the put positions, etc.

There is still a gap in the 1500 - 1600 range, isn't there? (Seems like last week... but LOOOOOONNNNNGGGGG ago price wise). I don't know if that gap will be filled.... (It may be a 'flash crash' that only WOPR can fill orders for the EE in that range.. taking out trader stops only).

Here's the relevant data (https://finance.yahoo.com/q/op?s=GLD&m=2011-09)

edit: very interesting.... while editing, yahoo changed the 165 Put OI to 102,615.... within the five minutes from when I first copied the data below. I was going to point out that the link was dynamic, and it would change after market open +:15, but it already DID change the data... interesting.

165.00 GLD110917P00165000 0.82 0.00 N/A N/A 14,896 93,365
165.00 GLD110930P00165000 1.12 0.00 N/A N/A 990 1,925
166.00 GLD110917P00166000 0.89 0.00 N/A N/A 794 5,584
166.00 GLD110930P00166000 1.11 0.00 N/A N/A 105 668
167.00 GLD110917P00167000 0.95 0.00 N/A N/A 1,667 19,390
167.00 GLD110930P00167000 1.36 0.00 N/A N/A 126 2,857
168.00 GLD110917P00168000 1.04 0.00 N/A N/A 1,619 21,372
168.00 GLD110930P00168000 1.59 0.00 N/A N/A 173 590
169.00 GLD110917P00169000 1.18 0.00 N/A N/A 924 6,689
169.00 GLD110930P00169000 1.77 0.00 N/A N/A 17 796
170.00 GLD110917P00170000 1.33 0.00 N/A N/A 7,662 28,120
170.00 GLD110930P00170000 1.87 0.00 N/A N/A 755 572
171.00 GLD110917P00171000 1.48 0.00 N/A N/A 1,754 4,894
171.00 GLD110930P00171000 2.11 0.00 N/A N/A 474 416
172.00 GLD110917P00172000 1.67 0.00 N/A N/A 8,245 3,972
172.00 GLD110930P00172000 2.37 0.00 N/A N/A 377 429
173.00 GLD110917P00173000 1.86 0.00 N/A N/A 7,943 5,500
173.00 GLD110930P00173000 2.60 0.00 N/A N/A 206 147
174.00 GLD110917P00174000 2.09 0.00 N/A N/A 3,016 5,813
174.00 GLD110930P00174000 2.78 0.00 N/A N/A 263 139
175.00 GLD110917P00175000 2.33 0.00 N/A N/A 17,343

19,917

GoldMania3000
Aug 23, 2011 - 7:07am

TURD...Where do we end the year?

I may have missed it..but where does silver and gold end up this year. This will be one of the most emotional years that I can recall in being in these markets. I can belive the upss and downns that have occured. I assume that we can only expect more of this volatility and who knows what right around the corner. I hope someones keeping track of all this because at the end of this bull market we should all be able to write a book...o i just gave an idea away...:)

BagOfGold
Aug 23, 2011 - 7:11am
OC15
Aug 23, 2011 - 7:32am

Hmmm

I think many people were planning on profit taking at $2,000, just like they were planning on profit taking at $50 on silver. Appears that they have decided to front run the psychology again at around 95-96%.

pheeseas GoldMania3000
Aug 23, 2011 - 7:35am

Peace Silver, I don't  know

Peace Silver, I don't know if you're familiar with Jeff Nielson of Bullion Bulls Canada, but he doesn't have much good to say about Morgan and has called him out on occasion.

speconomist
Aug 23, 2011 - 7:36am

@  silver foil hatIMHO

@ silver foil hat

IMHO you've hit the nail right on the head, it is coming, you only have to see how the price was contained in Asian and European trading so far, after the new record high and of course, right after the "small takedown", small in comparison to what's ahead. Hold tight on to your physical and enjoy the upcoming takedown.

Also, could you explain the difference of those puts? There are two different lines for each strike with different data of volume, don't understand it. Thanks in advance.

Edit: Nevermind, it's the expiry date, right?

Shill
Aug 23, 2011 - 7:40am

Yep

Yep profit taking day. nothing wrong with that at all. Been a very VERY! nice run up time for a little consolidation going into the Autumn months and then its off to the races.

UBS to shed 3,500 jobs, eyes $2.5 billion in cuts

hotsaucze
Aug 23, 2011 - 7:44am

Gold is unstoppable

I seen and have read many blogs and believe gold is hard to manipulate, with very strong demand in developing contries. China alone wants over 1000 tonnes of it. I haven't seen a chart where gold lost much value in a short span of time. Many suspected a margin call on friday and monday, no call. I don't think a call will make a difference with unrelentless demand gold has built up some momintum and looks like it will easily pass 2k. What other countries might want there gold back? I think QE3 will be annonced, because the banks stocks can't take much more of a beating, this will only break the system and real price discovery will occur. Doesn't JP morgan need capital in there stock to short silver and keep it in check? QE3 has been priced in and bernake has his hands tied and only knows one thing to do, print. More lip stammering to come, and more jitters in the market on friday :) I'm buying regardless of the price at this time, to unpredictable, but this dip is nice! BTFD.

Bullish indicators - Euro crisis, tarp 2, QE3, inflation, unemployment, money supply is contracting. Almost forgot, NATIONAL DEBT.

Everything is only compounding, and accelerating. It's going to take a whole lot of manipulation to keep the price from rising, but I read there having trouble recalling the gold for Hugo and Backwardation is forming. What's next?! WWIII. They wont let B of A to fail, remember to big to fail, will take the system or ponzi scheme down. More bail outs? Any pullbacks will be very short lived.

survivalwstyle
Aug 23, 2011 - 7:50am

it is 420 on the west coast and geTTing up is easier everyday

my initial thoughts on the overnight action.

the euro poPPed up a fuLL point @ the london open, reading the financial news at ZH looks like PMI on german manufacturing coming in above expectations. USD down. 2 year auction later today....the risk on trade lOOks like a go today so you know what that means, PM's hit. it tOOk 2 minutes to knock Ag .40 and that is where we stiLL sit right about 42.80. lOOks like we may get another retest of 42.50. Au is bouncing oFF 1875. wiLL we get 1850?

lots of talk of a significant coRRection in the near term here tonight. stiLL fEEl that the EE has two buLLets in their mag before having to reload. one is another margin hike, which i agrEE should come right around 2k. 2nd we do have Ag options expiration on thursday. if they can smash the paper price below 42.50, we could be headed in for a short term coRRection. it would be nice to sEE 40 hold. but we aLL know that this dip COULD ​be much dEEper.

lastly this AM, taking profits is NEVER​ a bad idea. IMVFHO being aLL-in or aLL out right now is crazy. take a liTTle oFF for an extra bag or two of dry powder, but i am haPPy here, ready to buy any significant weakneSS. Whether it coRREcts here on not. $50 Ag by 9/11.

remember this is stiLL suPPosed to be the dog days of suMMer, that 1st wEEk back after labor day is when the rEEl action should start.

have fun out there in turdviLLe.

remember to fEEd the 20 gaLLon yeLLow, this is the best site on the internet. PERIOD.

i did yesterday when we hit the big turds 44, 2 wEEks early i might aDD. now turn that paper into an oz of AG dOOd, a hat tip fuLL of thanks again mr.F 4 kEEping us on the upNup and aLL the other gOOd stuFF

Tom L
Aug 23, 2011 - 7:51am

@Kumniari

I'm very sorry for your loss. My dad died suddenly 18 years ago, I still see the effects everyday in my Mom's face when she comes up to drop of the day's mail.

Be well.

Ta,

Shill
Aug 23, 2011 - 7:54am

Interesting to see the pull

Interesting to see the pull back bought right back up...hmm

silver foil hat speconomist
Aug 23, 2011 - 7:59am

@speconomist...

you got it... those are expiry dates. I don't trade GLD options or GLD, but I look at them to see what the manipulator money is doing since that amazingly accurate SLV July Put was bought back in early April.

(If you don't know what that was, someone bought a HUGE amount of SLV puts at 25 strike for July when Silver was just starting to go 'parabolic' in the 30's the first to second week of April. Rather dumb move, unless you were either LUCKY or "IN THE KNOW".)

I looked at SLV and SIVR... guess what? The same 'pattern' emerges with 35 SLV and 36 SIVR being interesting. This is the same number as SLV is usually $1 less than SIVR for 'fees'.

Watcher
Aug 23, 2011 - 8:02am

Most Excellent Chart from Dan

Most Excellent Chart from Dan the Man

Monday, August 22, 2011
Monthly Gold Chart with some Price Projection levels




Gold has shown continued strength going into the Asian session this evening. In the process of so doing, it has reached the upper limits of the pitchfork extensions shown on the chart. I have chosen the monthly upon which to do some analysis so as to get the long term picture and point out several things which merit mentioning.

Notice that the dark green center line has acted as the upper boundary for the entire move since the reaction that occured in the gold price in late 2009, early 2010. All subsequent rallies met this line and held below it until this month when price exploded through the center line alerting that the trend higher in gold was now accelerating.
The three red outer lines and the single blue outer lines are projected levels where we can expect to see some resistance form. Thus far the two red lines nearest to the center have failed to cap the price rise. We are currently trading right on the outer 3rd red line of the upper set which this month passes through the $1925 - $1935 level. Beyond that is a blue line which this month comes in near the $1950 - $1960 level.

What we are attempting to do is to project levels at which we might expect some selling to occur and a potential reaction in price to take place. There is nothing set in stone which states that these levels must produce selling. They are merely given as POTENTIAL areas of selling resistance. Should the market blow through these levels, then we will have to resort to other methods to anticipate some potential inflection points.

For now, traders can monitor price action near these levels and trade accordingly.

Should we actually get a turn lower in price, any subsequent retracement should find buying support at each of the upsloping colored lines on the way down. The dark green center line should hold any retracement if the market is going to continue with a strong and sharp advance. Thus gold could move lower to the tune of $150 - $170 from current levels and still be very strong on the chart. If such an event were to occur, the bulls would like to see the price then hug that same green center line as it forms its low and bounce upward off of that level as the overall trend continues to the upside with a bit less steep of a price advance.


Posted by Trader Dan at 7:24 PM 2 comments
Tom L
Aug 23, 2011 - 8:06am

Silver

It looks like the $42.50 area has held for now. There's still a Power Down Trend in place on the 1 hour chart. We'll know more in an hour or so... shocking! just as we come into the CRIMEX open.

Nice call on the correction in Silver Turd. My worry for the day is the HUI. Will it or won't it break through 609. I'm looking to lighten up my miner positions today and if possible tomorrow. I think everything dated less than November is on the chopping block. I'm at 17% cash, I want to be at around 35-40% Good luck today all.

Ta,

winemaker Watcher
Aug 23, 2011 - 8:08am

BWT

I know there are a lot of important things going on in the world this morning, but in an effort to focus on the basics, I leave you with this... Today the Big White Truck will deliver 12 canned hams to me! Woohoo! That is all.

HiHo_Silver
Aug 23, 2011 - 8:14am
survivalwstyle
Aug 23, 2011 - 8:17am

Ron Paul w/ Mike Maloney

not sure if anyone miSSed this one. it was posted on MM youtubes chaNNel on 8/16/11 but it was done before the 'o8 election i think. it is more true today than any day to date. have your coFFEE brewed and give it a listen.

a gOOd 1 from RP "i think we are going to sEE a coLLapse before they come around to reaLLy thinking seriously about monitary policy."

in this 40 minute video RP gives you aLL the reason you nEEd to get out the vote in 2012.

Ron Paul's Greatest Interview: Gold, Silver, Freedom, Free Markets, & Sound Money - Mike Maloney
speconomist
Aug 23, 2011 - 8:26am

@silver foil hat I remember

@silver foil hat

I remember reading something about that in ZH, making an astonishing return, this is the link commenting it before the takewdown:
https://www.zerohedge.com/article/drop-silver-attributed-1-million-37-downside-bet-slv

If anyone could find the link to the post where they mention the return, I'd be grateful.

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