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

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turd [at] tfmetalsreport [dot] com ()

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mouser
Aug 24, 2011 - 9:44pm

Well there is no question in

Well there is no question in my mind , that corruption still rules in the US markets. The powerz either knew the gold margin hike was coming, or exerted enuff pressure to have it happen. You can bet some big dollars were made by some bigboys who were in the know well before they were announced. Gold did pullback to under 1800 as i had suggested could happen a few days ago, and could see 1700 on the bottom side , which is still just over 10% from the top. Silver i see holding 40$ and my gut feeling is that silver hits 50$ before gold hits 2000, i think we go back to silver outperforming gold % wise.

As was mentioned by Turd and a few others, this margin slam should be bullish for silver and i see silver already climbed back over 40$ in a flash as asia starts trading. Interesting watching BNN tonnite , alot of bullish comments towards copper. Shafer was on , NAZ commodity guy, and he thinks copper sees a big jump from current levels in the next 3 -5 years as over a billion people in ASIA who live without power will be electrified in the next few years. AND that requires a few million miles of copper lines. Patricia Mohr from Scotia also on and same story there from her. China now uses 38% of the worlds copper, US under 10%, Europe less than 15%, , so we know where the driver for copper ad base metals are coming from.

Still waiting for the miners ( mainly the good oversold ones) to get a real jump back up. THE huge volumes in the inane etfs shows that people want to gamble on direction rather than investing in a good company that actually makes something of value. Sometime this fall the beat down miners will come back into favor, and the leverage to the metals will start to show in the miners, both in the share price, and in the record profits they report.

Nice interview with Rogers there, and a very good job by Turd Ferguson , in that session. Congrats.

Sunnyboy
Aug 24, 2011 - 9:40pm

My 10 cents worth - WE SHOULD HAVE SEEN THIS COMING A MILE OFF

Firstly Turd, thanks for the website, been following you for two years+ on zero hedge and now here, thanks to you and others I got physical at around the 900 level.

2ndly...We should all have seen this coming, a recap of my thoughts for the last 5 days gave this;

1. TPTB always tell you before the shit on you, seems to be a masons rule or something, and they did, Zero hedge published their "we will hike margins" message to the brokers a good 3+ days ago (short term memory sucks)

2. When Turd was explaining why it would shoot just shy of 2k my inner voice said Blythe is reading this and is going to slap T's 5th most read PM site's ass

3. In the last couple of weeks (days?) we have shot passed 1700, shot passed 1800 and shot passed 1900...wtf too much to fast

4. The market does not feel right, I can see the support levels but not the resistance levels, even T took a day to figure an upside target, bad sign that kicks off the hopium in me

5. S&P fired the CEO who downgraded the US...TPTB are fighting back

6. JPM and MS upgraded their GLD targets....these c**ts always spew bullshit to screw their clients, sure sell signal

The first three points and the sixth should have had me running to the shorts, unfortunately I drink too much and smoke to much and most importantly I DO NOT WRITE DOWN MY THOUGHTS, a classical failure in any business if you have short term memory issues

That's it, please donate 10 cents to TF if this is useful (x 500 for leverage of course...)

Woof to u all

Sunnyboy

PS. needless to say I was catching falling broadswords yesterday... and have been in ER all day today (did some real work)

AnonymousTurdle GG
Aug 24, 2011 - 9:37pm

Removed comment

Removed comment.

Prize Fighter
Aug 24, 2011 - 9:35pm

Congrats Turdle on the gold

Congrats Turdle on the gold buys!

An hour ago after reading more Turd, I reassessed my price targets for my mother's buys from earlier. While 1550 is huge support I just don't see us getting that. Patient buyers will be lucky to see 1600. To top it off, Gainesville is out of 1 oz bars now. Hmmmm. Told her the new 1st buy point was now, then 1725, 1675, 1625 if we're lucky.

Thefreeman
Aug 24, 2011 - 9:35pm

Short covering from China Cartel

Ted Buter correctly points out, the last $300 or so of the gold rally was almost entirely all Cartel short-covering, today comes another news from China - https://gold.hexun.com/2011-08-25/132780410.html, it says that at the closing of Aug 23rd, Shanghai Commodities Exchange discovered that 4 large Chinese banks (兴业银行 - https://www.cib.com.cn/netbank/cn/index.html, 民生银行 - https://www.cmbc.com.cn/, 农业银行 - https://www.abchina.com/cn/浦发银行 - https://www.spdb.com.cn/chpage/c1/)are on the list of first 10 gold futures short sellers, for total of 7244 contracts, each contract is 1000 gm(1 Kilo of gold). And none of the Banks are on the list of the first 20 Gold futures long buyers.

金价持续上涨下,上海期货交易所黄金期货(下称“沪金”)的持仓排名中,却惊现多家银行的做空身影。截至8月23日收盘,兴业银行(601166,股吧)、民生银行(600016,股吧)、农业银行(601288,股吧)、浦发银行(600000,股吧) 全部入围沪金1112合约空方持仓量前10名,持仓量合计高达7244手(每手为1千克)。而在前20名多方名单中,却无一银行在列。

Is this joint effort by all International cartel or just coinstence?

Turdle GG
Aug 24, 2011 - 9:32pm

onewileyz

yes, you need to register first.

surfeitndearthJake
Aug 24, 2011 - 9:30pm

@ Jake, 50Jim

Thanks. Very nicely put.

AnonymousTurdle GG
Aug 24, 2011 - 9:30pm

Removed comment

Removed comment.

Turdle GG
Aug 24, 2011 - 9:30pm
TruBlu11
Aug 24, 2011 - 9:30pm

Back at Santa's magic number 1764

It would be nice to see the same acceleration upwards that we had here last time. A launching pad.

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