Turd Tips His Hat

313
135
Wed, Aug 24, 2011 - 2:10pm

As you know, we moved from blogspot to this dedicated site for many reasons. The primary reason, however, was to capitalize on the collective knowledge and wisdom of Turdtown. I, The Turd, can only take you so far. I knew we needed a platform through which we could more efficiently share information. To see the effectiveness, all you have to do is look below.

Let me just state this clearly and for the record. If you are coming this site only to read what The Great and Powerful Turd has to say, you are doing yourself a tremendous disservice. The information copied and pasted below proves the point. These three comments were all posted to the "So, What's Next?" column from Monday night, when gold was still between $1890 and $1910. If you'd taken the time to read through the comments, you'd have found this. Perhaps you would have taken action. Note the time stamp:

Shanghai Gold Exchange Raises Gold Trading Margin To 12%

Submitted by DogStar76 on August 22, 2011 - 8:59pm.

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.

The next morning, another Turdite even provided a translation of the text:

Yes, here is the link - https://gold.hexun.com/2011-08-23/1327314

Submitted by Thefreeman on August 23, 2011 - 7:48am.

从8月25日(星期四)日终清算时起,上海黄金交易所将调整黄金Au(T+D)、Au(T+N1)和Au(T+N2)合约的保证金比例至12%;

下一交易日起黄金Au(T+D)、Au(T+N1)和Au(T+N2)合约涨跌停幅度调整为9%。

It syas that Sahnghai Exchange will increase the margin for 3 type of paper gold contract (Au(T+D)、Au(T+N1)和Au(T+N2)to 12%. and will stop the gain and loss to 9% during the same day trading.

The Exchange also warns the investors to be prepared for the vulnerability of international Gold and silver market. Some investors had huge loss last time when silver price dropped 25% within a week.

This event is now being heralded by some as the seminal cause of this latest $150 correction in gold. The links and translation were posted here well before ZH or any other PM site.

Another warning of the impending disaster was provided by a different Turdite:

re: Gold smackdown coming...

Submitted by silver foil hat on August 23, 2011 - 5:43am.

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)

Again, my point is not to rub salt in the wound. My point is simple and clear:IF YOU'RE NOT TAKING THE TIME TO UTILIZE THIS ENTIRE SITE, YOU ARE SERIOUSLY MISSING OUT AND IT IS COSTING YOU MONEY. The Turd tips his hat to "Dogstar76", "The Freeman" and "silver foil hat". Very nice job. Thank you for your help.

OK, back to the disaster at hand. Everyone wants to blame today's collapse on the Chinese margins. OK. The volatility makes C/C/C margin hikes a fait accompli so everyone and their brother is rushing for the exits. In the end, I suspect that the actual margin hikes can be used as a "sell the rumor, buy the news" event. We'll see. Lets' just hope the volatility settles down next week, thereby denying the criminals the justification to raise 3 more times like they did in silver. Again, we'll see.

I suspect that the story below didn't help matters, either. Anyone with a brain and chimpanzee-level logic can deduce that the report is absolute nonsense. However, that matters little when the WOPRs are busy trying to front-run each other out the door.

https://www.zerohedge.com/news/cbo-cuts-forecast-cumulative-2012-2021-deficit-50-admits-it-probably-dead-wrong

I could print some new charts for you but they wouldn't look much different from the ones I posted this morning so I'm giving you some re-prints. Gold now looks certain to test the 1725-1740 area. This would represent a nearly exact 10% correction so, anyone such as I that is interested in" catching the knife" might take a stab there. No pun intended. Silver is the same. I just betcha you get a look at 38.50-75 pretty soon. If you're going to nibble, that'd be the place to do it.

That's all for now. I hope you're hanging in there OK. If not, step away from your computer for a while and take a few deep breaths. Maybe go for a relaxing walk. None of this changes the fact the fiat money is headed down the drain and that the end of the Great Keynesian Experiment is upon us. Gold and silver will be higher again soon. You are doing the right thing by protecting yourself and your family. TF

5:45 EDT UPDATE:

​In a stunning development that has caught everyone by surprise, the criminal C/C/C (CME/Comex/Cartel) just raised margins on gold by about 27%. In case you missed it, it's a development that was predicted here two days ago:

https://www.tfmetalsreport.com/blog/2155/so-whats-next

My mistake was that I thought that gold was going to be allowed higher in order to create the disorder that the C/C/C needed to justify their actions. I thought that they would want to suck in a few more latecomers before they put the hammer down. (But, as Ted Buter correctly points out, the last $300 or so of the gold rally was almost entirely all Cartel short-covering, so, there were no latecoming specs to add to the fold. If I'd remembered this on Monday night, the crash on Tuesday would have been more predictable.) In the end, it didn't really matter as the PMs were crushed on Tuesday before any of you could try to attempt to cash in on the last remaining upticks.

We need to dissect this, though, because there is a lot to be learned...and remembered...for next time. The primary rationale for raising margins (containing price) is volatility. However, by Monday night, gold was just $90 above the level where the C/C/C had raised margins on 8/11. Yes, it had rallied from a hike-induced bottom of 1725 but it had done so in an orderly manner and not in a way that made another margin hike necessary. But the CME desperately wanted to raise margins in an attempt to rescue their evil Cartel buddies who were trapped short in a market that looked to be headed to $2000 very soon. Hmmmm. What to do?

You start by letting word out to some select friends that margin hikes are on the horizon. You then catch a break as the Shanghai exchange raises margins, too. At about noon yesterday, just when it looked like the metals were recovering, you confirm to some EE and hedgie friends that a margin hike is coming. By the end of the day, gold is already down almost 5% and you're building a case for "volatility-managing" hikes. Uh-oh. Gold recovers overnight. It actually makes it back up to 1860 or so. Therefore, before the Comex open today, you sprinkle word around that margins are definitely being raised after the close. The selling begins at 8:30 and is relentless all the way through the session. Gold falls another 6% and...prestowhammo...you've got yourself all the volatility and justification needed to hike margins.

Next up, The Bernank will "disappoint" over the weekend which may further add to the selling pressure in the PMs. I'm not sure how much worse it can get as gold is already down almost 10% since Monday and 10% or so is the typical decline post a margin hike. As stated in the comments of this thread, I'm looking for a bottom in gold somewhere between 1700 and 1725. At this rate, though, I wouldn't be surprised if gold traded all the way down to fill the gap on the chart from two weeks ago when the U.S. downgrade announcement was made. A move that low would take gold all the way back to 1650 or so. The globex session finished at 1754 and we'll likely see some carryover selling in Asia and in Europe. Tomorrow will be interesting.

Lastly, don't forget that gold margin hikes are an indirect positive for silver. The C/C/C is unwittingly "leveling the leverage playing field" in the PMs. Much of the disparity in the relative performance of gold vs silver these past few weeks has been due to silver's much higher margin requirements. Higher gold margins flatten out this difference and make silver look more attractive than it did earlier this week. Combine this with the extraordinarily strong OI and CoT numbers for silver and you can clearly see where $50 silver is still a target before the end of the year.

Have a fun evening. TF

About the Author

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

  313 Comments

Tesla
Aug 24, 2011 - 3:03pm
Marblesonac
Aug 24, 2011 - 3:16pm

Keep pslv, or sell some and buy GDXJ?

I am half in real estate (farm, BOL) and house, both paid off and PM's.

PM's are half in physical and half in PSLV.

Should I sell some PSLV and buy some GDXJ? What do you guys think?

Thanks

artaud23
Aug 24, 2011 - 3:19pm

Panic?

Two down days with no real news to speak of (Shanghai? Really?) and everybody is ready to bail? Maybe I am naive but I am buying this dip... GLTA...

snoochieboochies
Aug 24, 2011 - 3:22pm

@ Dark Matter.Silver has a

@ Dark Matter.

Silver has a tendency to follow gold, so if gold gets a knock down, silver usually does also. It's been way overbought and in danger of a correction for a while now. The first hike did nothing to slow it down, unfortunately the Chinese one did. I haven't been a follower of silver for long, but my experience has been that it always goes down a hell of a lot faster than it goes back up and these kind of price swings are only going to get larger the higher the price of silver goes so long as the Banking cartels are still running the show.

Marblesonac
Aug 24, 2011 - 3:22pm

Regarding my previous

Regarding my previous question on PSLV or junior miners, what do you think will go up faster in the long run?

That's the real question.

Don't want to trade in and out.

Thanks again.

lostinspace LongGoldLongSilver
Aug 24, 2011 - 3:24pm

This was a pretty good call

This was a pretty good call as well.

Pull back to $42?

Submitted by Silver is money on August 22, 2011 - 9:39pm. Hat Tip! 3

I think that is really very optimistic considering that silver likes to overshoot constantly. I'd expect a re-test of that $38-$39 zone that showed so much support recently in the case that gold gets hit hard enough.

I hope that you are right about $45, since I would like to turn some silver into cash and that's a great price for the silver that I bought around the $34-$35 area.

Blight Master
Aug 24, 2011 - 3:26pm

Just got back from a long

Just got back from a long walk, got a panicked phone call from one of the people I buy silver from while on the walk, my pockets were very heavy on the walk home. You can't beat buying a couple hundred 40% halves at 4 bucks a piece. Bring on more raids, I've got too much dry powder still, been patting myself on the back for not freaking out and wasting it all at 1900.

BagOfGold
Aug 24, 2011 - 3:28pm

Xtierra Inc...

My favourite silver penny miner...I was able to pick up some more shares at only 29 cents!...Nice!!!...

Take a peek...& you will see...I "stole" these shares...at this price!!!...

https://www.xtierra.ca/

Bag Of Gold

tpbeta
Aug 24, 2011 - 3:33pm

call me a dumbass..

..but I don't see how a small margin hike in China two days ago causedall this. Isn't it more likely to be an EE raid, given boosters by a sudden loss of faith in Bernanke doing the QE3 thing. In other words the rapid rises of the last two weeks were the market pricing in QE3, and this is the market pricing it out again.

Bay of Pigs
Aug 24, 2011 - 3:33pm

@Dark Matter

FWIW, you need to buy and hold a core position in metal and the miners. Never touch that and then trade accordingly on the dips and rips to your level of risk/reward. When you are in the green in the trading position, take some profits and plow them back into that core position.

It's not really confusing if you read all the comments and visit the forums. Discouraging sometimes? Sure. Goes with the territory.

Reminder: In 2008 gold got pounded from $1000 to $690 (30%). ALL the talking heads said it was over for gold. We might see that again here. Is $1500 probable? No, but anything is possible.

Good luck and best wishes...

pbreed
Aug 24, 2011 - 3:34pm

A Note from stubby the knife catcher.

My paper trading account is now 100% dry powder

I see cash sitting in an account, it looks like its not doing any work, I tell it to get off its lazy ass and go do some work.... The problems is that when I order it to go do that it usually gets slaughtered.

Over and over again I make the error of getting out with a nice profit only to get back in too soon and loose a few digits when catching the falling knife.

Are there any jugglers that still have all their digits that can offer advice on when its safe to go back out and play in the traffic?

Mikeyk23 speconomist
Aug 24, 2011 - 3:34pm

sti back

its nearly impossible to try to pick bottoms or tops, be a BUYER here - scale in on every tick lower!

My call on Friday to cash in profits seems to be a pretty good one and hopefully my call on the 39-39.50 holds, but I fear we may drift a little bit lower. Although I'm starting to scale back in at the close today and will be a buyer on further weakness tomorrow.

Mikeyk23 speconomist
Aug 24, 2011 - 3:34pm

sit back

its nearly impossible to try to pick bottoms or tops, be a BUYER here - scale in on every tick lower!

My call on Friday to cash in profits seems to be a pretty good one and hopefully my call on the 39-39.50 holds, but I fear we may drift a little bit lower. Although I'm starting to scale back in at the close today and will be a buyer on further weakness tomorrow.

Mikeyk23 speconomist
Aug 24, 2011 - 3:34pm

sit back

its nearly impossible to try to pick bottoms or tops, be a BUYER here - scale in on every tick lower!

My call on Friday to cash in profits seems to be a pretty good one and hopefully my call on the 39-39.50 holds, but I fear we may drift a little bit lower. Although I'm starting to scale back in at the close today and will be a buyer on further weakness tomorrow.

lostinspace
Aug 24, 2011 - 3:34pm

Watching the charts today was

Watching the charts today was hurting my eyes, this helped...

Rebecca Romijn- Bar Dance
FunCity
Aug 24, 2011 - 3:40pm

Don't sweat the small stuff

Turd, your support here from fellow turdettes is indicative of your legitimacy regarding PM's. anyone here who isn't aware of the fact that you cannot be right all the time should not be here.

IMO you DO NOT HAVE TO JUSTIFY YOURSELF at all TURD

Keep up the fantastic work, and let's all be patient........

terri5125
Aug 24, 2011 - 3:41pm

Ginger and others coming to our DIMWIT club

Yes, lets form the DIMWIT's club!!!.... it will be for all us noobs who are learning step by step. We can maybe on the main thread do some step by steps of something we can try as a group once in awhile so it's there for posterity or a step by step of those taking their first shots! All I know is when that step by step was written, my little head woke up and said I can do this! Maybe not like the BIG guys and gals but I can do this for my little world! All I have to be is a scalper... I don't have to be a big player. I can be the hyena after the lion gets the kill, taking the bite here and there... taking enough to feed me and my own. Ummm don't normally compare myself to a hyena though my sarcastic children have occasionally said something about my laugh... irritating little people

I would love to see some of the more seasoned people come over once in awhile to give a little input. If it gives you people incentive to stop by and help, just remember you may be the help someone truly needed to get their lives back in order, something you mention or teach along the way will be remembered by us and you will have done something great in the lives of those who are learning.

thanks y'all... man I love this community!!

Tom L
Aug 24, 2011 - 3:46pm

SVM

Looking at today's action, this is the first time in 6 sessions that SVM has not closed at the low of the day. With possibly 3 up ticks on the 1 hour chart coming into the close. Again, still looking for signs of technical life. The OI for this month is seriously against this stock moving, but if you want to start accumulating for a hold through winter, I can't believe you have much down-side risk at this point.

Ta,

edit: 6 sessions not 65. fat finger there.

PJH10
Aug 24, 2011 - 3:46pm

Levels

Gold just tested that 1st fib line and was rejected again. Positive sign.

Shill
Aug 24, 2011 - 3:49pm
Economical Disaster
Aug 24, 2011 - 3:52pm

Harry Shultz QUOTE:

There has never been a time in history when debt problems globally have been this monstrous. At the beginning of the year, I quoted 87 year old Harry Schultz. He is now retired but is widely respected for his economic and market calls. In his last newsletter, Schultz summed up the calamity we face by saying, “Roughly speaking, the mess we are in is the worst since 17th century financial collapse. Comparisons with the 1930’s are ludicrous. We’ve gone far beyond that. And, alas, the courage & political will to recognize the mess & act wisely to reverse gears, is absent in U.S. leadership, where the problems were hatched & where the rot is by far the deepest...

https://usawatchdog.com/martin-armstrong-jim-willie-and-harry-schultz-on...

Jive Dadson
Aug 24, 2011 - 3:56pm

Now what?

I bought puts yesterday. They are up about 100%. Was not expecting that. Probably too late to close them out today. (Market closes in 5 minutes.) Turd, what is my exit plan? Hold the puts until Monday?

Vin
Aug 24, 2011 - 3:56pm

Jackson Hole meeting and gold/silver

This is my first post, so please wait until next week to judge my following assessment:

Jackson Hole speech by BB on Friday most likely will not provide any hint of QE3 whatsoever (i.e. increasing Fed's balance sheet again) but other likely actions by the Fed would be mentioned, such as Operation Twist 2 (i.e. raising the short rates and lowering the long rates via treasury bond sales/purchases without increasing the overall Fed balance sheet). BB could also mention that FOMC would announce similar monetary easing actions at its next meeting "based on the on-going analysis of the upcoming economic data" (!).

This would be taken by the general PM investing public as a highly disappointing event since much of PM's rapid rise since July 1 has been based on an unwavering premise that the global economy is slowing down, eurozone crisis is worsening, the US debt/deficit problem can not be solved until there is a catastrophic crisis, and China is slowing down along with the emerging markets losing their luster.

This perceived disappointing event on Friday will pull PM further down early next week to probably Trader Dan's first support level of 1680 (see his previous blog posts at https://www.traderdannorcini.blogspot.com/

Thank you Turd for providing your highly instructive, well-balanced and insightful posts, and offering a platform for other excellent posts from the intelligent PM community.

Shill
Aug 24, 2011 - 4:02pm

GDX

GDX close 59.92 I'll take it

Dr G tpbeta
Aug 24, 2011 - 4:03pm

@tpeta, agree about the

@tpeta, agree about the margin hikes in HK not causing this. The volume on that market is so small compared to London and NY. Volume on HKMEx yesterday was 4,000. Crimex is literally over 100x greater than that.

treefrog
Aug 24, 2011 - 4:05pm

dubya!

netdania 5 min charts showing what look like "w" bottoms forming on both silver and gold.

Shill
Aug 24, 2011 - 4:07pm

B. of A. paces blue-chip

B. of A. paces blue-chip gains, up 11%

Biggest joke of the day right here.

treefrog
Aug 24, 2011 - 4:08pm

holding out

I'm still holding out for 38.50-75 and 1725-40.

Slick
Aug 24, 2011 - 4:13pm

Jim Willie - Panic & Anxiety Swirl a Storm

Public release..

Panic & Anxiety Swirl a Storm

24 August 2011

https://news.goldseek.com/GoldenJackass/1314216000.php

vonburpenstein Shill
Aug 24, 2011 - 4:13pm

wwtd...

if he had 1500 frns burning a hole in his account and wanted to get jiggy...wait til friday or jump on what now?

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