This Ain't Horseshoes

Thu, Aug 25, 2011 - 9:04am

They say close only counts in horseshoes and hand grenades. That certainly applies here. Monday evening, I projected that a margin hike was coming this week in gold. I thought (hoped?) that gold would be allowed to run a little bit farther before the smashdown began. I was looking for the margin hike to be tonight, not last night. If it had been, we'd have had Tuesday as a peak, not Monday, and many of us would have been able to lock in gains before the fireworks began. Alas, I was off by a day. Nuts. Close. But close doesn't count.

The pain for The Cartel had become too great by Monday evening. Their paper shorts were getting slaughtered and, with the technical picture so rosy in both metals, they were looking to really take it up the bahooty on Tuesday. When the Forces of Darkness saw the OI in gold rise by an incredible 10,000+ contracts on Monday, they knew it was time to strike. First, coincidence or no, the C/C/C sees their friends(?) in Shanghai raise their gold margins by 9%. This is enough to stop the runaway train at 1918 and bring it back below 1900. Then, before the Comex opens and momentum starts anew, the criminal C/C/C gets the ball rolling on their diabolical plan. They let word out to a few of their friends (traders, hedgies and algos) that "there might be some headlines that will interest you after the close on Wednesday". Down goes gold. Gold begins to recover mid-morning and it looks like there might be hope. At about noon, you drop the hammer by telling a few more "friends". Gold seriously drops and, when it's all said and done, it finishes the day down about 5% from the overnight highs of the previous day.

I wrote Tuesday afternoon that I would be "flabbergasted" if a margin hike wasn't announced that evening. I felt this way because the C/C/C had already created the necessary volatility to justify one. Ahh...but they weren't done. Why hike margins Tuesday when you can use the fear of the hike to scalp another $100 from gold on Wednesday? And that's exactly what they did.

So, where do we go from here? I may end up looking foolish but I think they're done. I don't expect 3 more hikes over the next 5 days like we saw in silver in May. Why, you ask? Purpose and mission.

In late April, speculators were the primary drivers of price and had squeezed The Evil Empire into a corner. The specs had to be driven out and taught a lesson. The EE also needed time to regroup. This led to the 5 hikes in 9 days and a 35% drop in silver from which it is still recovering. This last run in gold was entirely different. As pointed out here and by others much smarter than I, the OI and CoT numbers for gold over the past three weeks have shown that the primary driver of the last $250+ in gold has been short-covering by The Cartel, not specs. As stated last week, this is why all of the "bubble" talk in gold is nonsense and those spouting it should be permanently ignored. Bubbles form in excess speculation, not short covering, and the data clearly showed that this was a short-covering rally. Given that gold rallied $250+ on the backs of Cartel short-covering and given that The Cartel is a primary member of the C/C/C and given that this entire episode was designed and implemented to relieve the short-covering pressure on The Cartel, it is logical to assume that the target of this attack is to get gold back down to where all the pain began.

Where is that? Well, you can clearly see it on the charts. Three weeks ago tomorrow, S&P announced they were downgrading U.S. debt to AA+. Recall that this even caught The Turd by surprise. On Sunday night, the 7th, gold gapped open higher and never looked back. (Except for the period around the first, damage-control margin hike on the 11th.) The banks know the true significance of the ratings downgrade and they began to furiously cover their long-held short positions in gold. However, it got away from them and, by late last week, the technical picture in both gold and silver had begun to look so swell that hedgie and WOPR money was beginning to rapidly stream into the pits. It had all the markings of a serious short squeeze and the C/C/C was forced to act. Unfortunately, they acted one day too soon.

So, where do we go from here? After reaching down to 1705 a few hours ago, gold has since recovered to about 1730. That could be it. This could easily be a "sell the rumor, buy the news" type of event. Seriously, which fundamentals have changed? The debt? The deficit? Europe? The key number to watch looks to be 1750. A move above there would give me some measure of confidence that the storm has passed. Do not be surprised, however, if gold makes a run down to fill that gap on the chart from Sunday, the 7th.

In silver, I do think the worst is over. It reached down last night and touched the bottom end of the channel we drew for you yesterday. That overnight drop to 38.76 ought to do it. IF gold drops again and tries to fill that gap, I do not expect silver to make new lows. Again, I am very excited about silver here. The C/C/C have evened to great degree the "leverage balance" between silver and gold. This will serve to drive some interest back into silver in the coming days and weeks. I expect we'll see silver eclipse again sometime soon. Not ready to go into full prediction mode yet, though. Let's be 100% certain that this "event" is over before we go there.

That's all for now. More later this afternoon. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 26, 2011 - 7:15pm



I used to use Kitco or Finviz, but, ever since my son found NETDANIA I don't go anywhere else.

It's nice to see it live. LOL

FogHorn LegHornTF
Aug 26, 2011 - 1:04am

TF its easy to find your ass

Its on the other side of the annaconda :) It goes with the territory, that the paid AGA's are goin to show up to spread their hot air, try and cause confusion, stomp moral, generally make fools of themselves. I had to increase My ignore list four or five antiturds, in the last few days. Please try to remember these tools are paid to give you grief and possess no morals or scrupples. They don't realize the harm, they are trying to cause to their brothers, sisters, mothers and grand parents. If they knew what they were doing they wouldn't be able look at themselves in the the mirror for shame. TF for every critic, there are literally dozens of grateful people, who know the truth of your motives and character. Your a fine human being TF! Your good Friends in Turdville thank you! :D

Number 47
Aug 25, 2011 - 10:54pm


R.E. The vulgarity debate.

It is said in Scotland that the use of swear words is nothing more than a sign of someone who has a limited vocabulary. I agree wholeheartedly.

When I try to explain the situation in the world around me, the corporate monopolies, the governmental hypocrisies, the denigration of our social fabric, the destruction of our liberties, the malfeasance of public offices, the degradation of culture, the dilution of art for reward, the ridicule of sensibilities, the pollution of sentient souls through propaganda, the psychological walls erected through cognitive exploitation, the rise of the power base that was last put in place in 1945, the culture of dominance and power, the exploitation of the many for the few, the power vacuum of the common man, the complete exploitation of the concept of leadership and the complete annihilation of any semblance of decency and moralistic behavior.



When I can see no future for the children I deigned to spawn in a message to the world that I wanted my genes to survive, when their future path is shrouded in clouds of hate pregnant with the scent of war.


I lack vocabulary.

There just isn't any other word than fuck that I can daintily prescribe to those listening.

Fuck it, we're fucked.

Vocabulary is definitely lacking, there are not words abounding to fill my need for expression. Not now. Not forthcoming.

Maybe I need to learn a new language. I can swear in Polish, Irish, Scottish (technically English but we state shite instead of shit) English, French and German and it would take me a work of novel size to explain what I feel.

Please understand this. Words aggregate, they gather and collect into explanations. Some are just too long. Expressions of Fuck are a decade of decency split away from reality and condensed into a cry for help, a discourse of pain.

I reserve my right to evolve language, my kids have taken it a step further. Try keeping up with a 15 year old on msngr and you'll know what I mean.

I'm going to leave this, a credit to the use of the one word that can convey meaning in any situation, the verb, the noun, the adjective, the glory that is fuck.

It's getting to the point that we only have choices which revolve around varying degrees of fucked. Do you want to be fucked in Fukushima, less fucked in Canada.......but still fucked, or fucked somewhere else. Perhaps you would prefer to be politically fucked. Maybe financially fucked. Agriculturally fucked? How about religiously fucked? Ethnically? Physically? Unlawfully? It's a long list, but with time and effort, I'm sure you'll find the fucking that's right for you.

This was a comment on zerohedge that I saved. I don't remember who wrote it and I'm too busy to go back and check. I hope this attribute is enough.

Kind regards all.

Aug 25, 2011 - 7:23pm

Why 9/7 date could be so important for PMs

As Eric O posted this morning (see below), a new scenario could indeed be unfolding in Europe.

I ask myself: Could it be in anticipation of what is likely to be the verdict of the German Constitutional Court?

Please read Evans-Pritchard's article (see the link below). I believe we should be prepared for a massive meltup in the PMs.

In the first week of September we should start to get hints as the PMs would start to behave contrary to what should be the negative effect of BB's speech tomorrow.


Something is happening in Europe

Submitted by Eric Original on August 25, 2011 - 10:30am. Hat Tip! 11

German stocks taking a hit, Greek bonds taking a hit. Could mark the floor for our precious?


As Ambrose Evans-Pritchard wrote in an article at this link:

"........the German constitutional court rules on the legality of the various bailout policies. The verdict is expected on September 7."

Aug 25, 2011 - 5:55pm

Margin hikes and Market

Margin hikes and Market makers has to police the market because volatility is bad, what a bunch of bull! They don't like free market moves, it might bury their business. But when they need to support the latest criminal financial innovations of the day they say its good for the flow of liquidity, and smooth the workings of the market. The big players run the markets and there is no end to their innovations of bullshit to promote their view and MOPE the masses!

BTW Thanks, i am doing fine riding the bull and stacking my PM's

Aug 25, 2011 - 3:41pm
argent rampant
Aug 25, 2011 - 3:34pm

@ thedukes

"Intersting post" above was in reply to your DTCC post. Thanks.

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

Aug 25, 2011 - 3:30pm


If you believe the markets are scripted- banking sector often leads major stock move.

Aug 25, 2011 - 3:27pm

Your Web Site


I find your chart analysis clear and concise. Your guesses on future prices are based on good technical analysis.

Keep up the good work. We need honest people more than hype.

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