In The Woods

312
Thu, Sep 8, 2011 - 9:25am

The overnight action is the PMs is certainly encouraging and it would seem as though the half-life of central bank gold intervention is now about as long as central bank currency intervention. We all know, however, that it is still too soon to let our guards down. The quick recovery in price may only serve to embolden our increasingly desperate adversary, so, much caution is still warranted.

That said, I do not want to minimize the importance of the overnight reaction in price. The SNB attack of early yesterday sent the metals markets reeling. The attacks were timed to have a spillover effect onto the Comex and December gold traded as low as $1794 by mid-morning. In the old days, this would have sent gold into a tailspin as weak-handed longs began to race each other for the exits. They knew they were no match for the central banks and The Cartel.

Note, though, how yesterday was different. Once the Comex was closed, things began to improve almost immediately. Baby steps at first but then a full-blown rally overnight in Asia. Our longs are no longer weak-handed. They are resolute. They are buyers of size and they seem to pounce on discounted prices. This must be very discouraging to The Cartel. They are trapped in an untenable short position and they are being forced to cover at increasingly higher prices. HAHAHA!

To that end, I feel I must state this again. Please be sure you are making note of which "analysts" and "traders" are calling a "bubble". One only needs a cursory understanding of the Commitment of Traders data to deduce that there is no such thing as the CoT data since early August has clearly shown that the primary driver of price to this level has been Cartel short-covering. A bubble presumes retail buying. Average, everyday investors rushing in to buy something. The greater fool theory in action. Think dot com. Think Las Vegas real estate. Cartel short-covering does not create a bubble. As stated ad nauseam, the weekly CoT report is a very important, fundamental statistic. Any serious metals analyst knows this. Accordingly, any serious metals analyst knows that gold is not a bubble. The boneheads calling gold a bubble are, therefore, not serious analysts and should be ignored. Do not forget them, though, as they will most assuredly resurface in the future to once again proclaim an end to the gold bull. Remember who they are so that you can ignore them in the future, too.

The next question we need to ask is: Why are the banks so desperate to cover? Ponder that one for a while. I've got my thoughts on the subject. I'd be curious to hear yours.

Here are your charts for this morning. I see they are already becoming outdated as the metals have continued to rally while I type.

Remember today that my warning of yesterday was not to sell, it was not to buy. I stand by that. With the active central bank intervention of earlier this week, it is still too dangerous to be boldly buying with confidence. For now, I am simply holding my positions. The only trades I made yesterday were to re-cover my October gold calls. You may recall, I have been long October calls but, from time to time, I've been selling some calls against them (creating a spread) whenever I felt that risk was high. I've been taking the "short" side off and "opening up" my calls when I feel that risk is minimal. My current trading portfolio is as follows:

Long Oct 1900 gold calls vs short Oct 2000 gold calls

Long Dec 1900 gold calls vs short Dec 2200 gold calls

Long Dec 50 silver calls vs short Dec 60 silver calls

About 25% cash. Patiently waiting.

Lastly, I would be remiss if I didn't print the chart below. Several Turdites have sent it to me looking for my opinion and I feel it deserves your full consideration.

About the quickest way to go broke trading futures is to go around declaring that "this time is different". However, in this case, I feel this time truly is different.

This chart covers the previous 32 years of Keynesian central banker-dominated thinking. We are at the end of the Great Keynesian Experiment. The current system will not be continuing much longer. A new paradigm will soon be emerging. Therefore, while price will still correct from time to time, historical correlations such as this one are of minimal significance.

I've got lasts of 1862 and 42.42. It will be a very interesting day so try to keep an eye on things. More later. TF

About the Author

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  312 Comments

Orange
Sep 8, 2011 - 4:22pm

@darkpurplehaze

you typed incorrectly. please replace "cranked" with "cracked"

Thanks.

The Vet FFF
Sep 8, 2011 - 4:22pm

FFF - You did everything right

but your broker is screwing with you... Margin on that position is about $5,100 maximum. Some brokers would be less. For some reason many brokerages have a thing about selling naked puts and do everything in their power to prevent you from doing it. Some will allow it with special permission.

Of course by selling naked puts you are competing directly with the option market makers. This is their bread and butter and they really don't want to encourage the great unwashed to take some of the cream off their cake...

Aram
Sep 8, 2011 - 4:27pm

@Cali Lawyer: the Swiss "encouraged" to devalue the CHF

The devaluation of the Euro will also efficiently mask the crumbling state of the Euro. The Daily Bell has an interesting article on this: there are two Switzerlands, one is the home of the PE and the other one is the one we know with chocolate and cuckoo clocks. Since the EU is a creation of the PE, as we know in order to create a Euro-block to be later joined in 2013 with the NAU, the SNB has acted on behalf of the first Switzerland solely to serve the PE European interests.

Daily Bell article: https://thedailybell.com/2888/Swiss-Government-Ruins-Franc

FriedEggs
Sep 8, 2011 - 4:33pm

Who is in Power?

From a different angle - Those that are of the same bloodline.

I don't believe that small town nobody's can grow up to become in a great position of power... those are only available for the select motley crue.

I believe they are all somehow connected.

They own both sides. Why? - To control the outcome of course.

"Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they better not speak above their breath when they speak in condemnation of it." Woodrow Wilson, The New Freedom (1913)

Fried(e)...and 4:20 btw...

grt_trading
Sep 8, 2011 - 4:37pm

Technicals....

...I'm not sure what they're worth in a manipulated market but just noticed that Gold topped out at $1872 a little while ago - the exact 61.8% Fib retracement of the takedown (from $1921 to $1792).

CreditCrumbs
Sep 8, 2011 - 4:40pm

FBI Raids Solyndra Headquarter

"SAN FRANCISCO—The U.S. Federal Bureau of Investigation (FBI) executed a search warrant Thursday (Sept. 8) at the Fremont, Calif., headquarters of Solyndra Inc., the solar cell manufacturer that announced last week it wasshutting

down operations and filing for bankruptcy, according to reports.
FBI agents, joined by officials from the U.S. Dept. of Energy's Office of the Inspector General, began executing the search warrant at 7:30 a.m. Thursday, according to a report by the San Jose Mercury News.
An FBI spokesperson declined to divulge the reason for the search, according to the report."

https://www.eetimes.com/electronics-news/4219744/FBI-raids-Solyndra-head...

cpnscarlet margaritatime
Sep 8, 2011 - 4:44pm

@marg...Platinum

I have bought JM 1 oz bars in the past, but I've decided to pull the trigger on PPLT this time as a foray into Platinum. There are not many ways to buy physical, but if I were going to, I'd buy from Gainesville as usual.

Rear Flank Downdraft ScottJ
Sep 8, 2011 - 4:45pm

@ ScottJ re: Ron Paul....

Thanks for the vid link......

That image is a perfect, pictorial analogue to how the Cryptocracy deals with us: heavy-handed, finger-wagging, condescending presumptuousness.

Would be nice if the Paul camp had anything to say about this exchange.

This pic could use a good TF community "caption-this" (with a thought balloon for Paul, of course).

Jive Dadson
Sep 8, 2011 - 4:46pm
cpnscarlet CreditCrumbs
Sep 8, 2011 - 4:46pm

@CreditCrumbs - At this

@CreditCrumbs - At this point, I'm cynical enough to say that the whole operation was such a piece of political payola crap, the FBI was sent in to destroy the evidence.

RaRaRasputin margaritatime
Sep 8, 2011 - 4:46pm

@Margaritatime

Picked up a couple of 1oz Isle of Man Nobles a few months back.

https://www.bullionbypost.co.uk/platinum-coins/one-noble/1oz-platinum-isle-man-one-noble/

It was at that point more expensive than gold but not right now - there is only £1.10 between them spot right now in the UK with gold being the more expensive.

Bought them for my kids as my husband and I have platinum wedding bands so will hand them on and not sell.

RaRa

Mikey
Sep 8, 2011 - 4:48pm

@Ca Lawyer,That AUD/USD

@Ca Lawyer,

That AUD/USD trade, on 8/22, hit an upsloping lower trend line that started back on Dec. 1, 2010.

The Vet grt_trading
Sep 8, 2011 - 4:49pm

Technicals.... grt_trading

...I'm not sure what they're worth in a manipulated market but just noticed that Gold topped out at $1872 a little while ago - the exact 61.8% Fib retracement of the takedown (from $1921 to $1792).

It just proves that the EE can read charts and calculate Fib retracements just like we can...

cpnscarlet
Sep 8, 2011 - 4:49pm

Ag Penant

Looks like a nice penant in Ag Globex. Bets on a nice pop when Asia opens?

NW VIEW California Lawyer
Sep 8, 2011 - 4:51pm

@California Lawyer - Who is really in power??????

You have a great post. The things that worry those sitting around the secret table and doing their evil plans is "what about those things that we cannot easily control" ? The economy of the nations - no problem. Wars and rumors of wars - got it covered. How to control the China expansion, their politics, the spread of terror and control of radical Islam, and those nations which have nukes and crazy leaders. If one is sitting at the table and planning evil plots and a nuke lands in their wine glass, they are still DEAD. The evil plan will always include the elimination of the mass population. They want to control everything and own everything without others to occupy. The mind set behind it has always been to "kill, rob and destroy". If a bankster is sitting on his island with stacks of gold and food and even has the control, he has only one problem: People who will take it from him. When Noah got off the boat after the flood, he owned it all and there were only eight of them left. So, part of the future plans must include the downsizing of mankind and they will program it in . Yes C.L., I know this is way out on a limb but it is j.m.o.

KC
Sep 8, 2011 - 4:51pm

NZD and AUD

@Cal Lawyer - Just my 2 cents, but I'm currently long NZD on a trading position. I think these currencies will benefit from the move the swiss have made. Fiscally, NZ and Australia are pretty sound, they have very low debt to GDP and actually sport healthy interest rates. Sound places to stash money with decent interest rates are few and far between. Yes, the dollar index will rise in the short term, but against a basket of world currencies, I expect the dollar to resume it's decline. I think the AUD is at a swing point right now. There might be some trading profits to be made on the short side but expecting par might be a little risky. Yes, I do acknowledge that they are heavily dependent on China. If China sneezes, Australia and New Zealand catch a cold. I like the trade of buying these on weakness and selling on strength - of course with the goal of more metal in hand! Not trying to shake you from your trade, If you have the conviction I wish you the best. Regards, KC

Jake
Sep 8, 2011 - 4:53pm
TheGoodDoctor CreditCrumbs
Sep 8, 2011 - 5:01pm

@CreditCrumbs They are loaded

@CreditCrumbs They are loaded questions to Ron Paul while the other douchebags get softball questions. Last night because it was televised on CNBC you actually had more loaded questions for the candidates but wait until it is on Fox. It's joke really. They are just trying to frame the question to make Ron Paul look bad. Note the question about no government intervention like FEMA, the FDA etc.

But to that point, he needs to be more prepared.

Rear Flank Downdraft margaritatime
Sep 8, 2011 - 5:02pm

@margaritatime, and others...

I have thought about Pt from time to time, but haven't been sure about something and curious to hear from you.....

For those of you thinking about or already have taken the platinum plunge, is there any concern that it hasn't been (to my knowledge) used as a means of currency-- given this is by and large a currency dilemma that plagues us? Does this impact your exit strategy? Does your intent to hold Pt differ much from gold/silver?

Thanks!

CreditCrumbs Mikey
Sep 8, 2011 - 5:04pm

@Mikey, Re: China debt forgiveness

"Best of both worlds for China. Metals go higher, dollar goes higher. Next thing we'll hear is China forgiving some debt for a million acres of gov't land here in the USSA."

Yup, we'd better believe that China wants good collateral for lending money or for debt forgiveness. Ecuador president recently complained that China was more demanding than the IMF, in what collateral must be pledged for providing loans. And I bet it is not a million acres, it would be much more than that.

Bay of Pigs
Sep 8, 2011 - 5:04pm

Correction

That sure didn't last very long, did it? A whole two days...

$1900 tomorrow? Triple Top?

Lol...that will shake up the PM buffoons over at the BlowHorn [CNBC].

The Vet KC
Sep 8, 2011 - 5:08pm

Playing the Aussie dollar...

While I don't have any at the present time, I have been quite successful using the currency ETF for the AUD, FXA as a vehicle to capture the moves in the AUD USD rates and the higher Australian interest rates. What many don't realize is that because the official Australian interest rates are 4.75% the FXA pays out a monthly distribution of 30 to 35 cents a share which is not taxable for most in the US. (Already taxed off shore under some odd rule). It's not a lot of return, but it's more than any of the other currency ETFs (most pay nothing) and you can trade both the stock and options (calls and puts both trade quite well) if you want more leverage.

KC
Sep 8, 2011 - 5:09pm

Appreciate the Counterpoint, KC

Re the AUD/USD cross: I firmly believe that there will be a massive credit event later this fall, likely a EUR collapse triggered by a sovereign/bank default. When that happens, it will be massively risk-off and the USD will greatly benefit. I look for the commodity currencies to tumble for a bit.

Since I would rather have leverage in the currency market, and nowhere else, I play with house money on the FOREX with an FXCM account. I love how interrelated and instant the Forex markets are. Yes, I do believe there is manipulation, but I think the manipulation is less powerful, and I do believe the trends are far easier to spot and play. Plus, the excitement entertains me a lot.

I am sort of embarrassed to say that I am trading micro lots, because I do not have the stomach for anything else. But it sure is a lot of fun!

So, I hope I am right, who knows?

I wish you all the best on your trades, too!

Jake
Sep 8, 2011 - 5:09pm

I Miss Dubya

George Bush on Voting - Spoof by Will Ferrell
Dubya on Global Warming (Will Farrell)
TheGoodDoctor Stephanie C
Sep 8, 2011 - 5:11pm

Ha ha. stephanie. No one has

Ha ha. stephanie. No one has posted there yet at the Frivolity Forum. They must like it out here where the sun is shining!

Larry
Sep 8, 2011 - 5:13pm

Who is really in power?

California, Esquire - "I am confident that it sums up the answer to Turd's question nicely."

I'll agree with you on your comment about your own post earlier today. Kudos for digging around and ahead of the "why banks are desperate" question. Although I fear we are all beating around the bush a bit in the grander scheme of things. Even if we succeed in drawing a hierarchy for the "powers that be" along with a blow by blow of their "top down bottom up" strategies being played out in their complex Marxist, Elitist, Keynesian totality, we would have to change our thesis many times in the coming months and years. I say this just because some truths are not self evident and no matter how long we are ruled by whomever, the curtain comes down eventually.

While we can all point blame in the right general direction for the evil that small, powerful elite groups cause, you seem to assign them more power than I do. They are not infallible and they certainly are not perfect. They are showing cracks in their fortress. In their greed and lust for power and control of a one world government, they may have overreached and actually caused their own ruin. Unfortunately, they will not go down without a desperate fight, continuing and exacerbating the ruin or devastation of billions of people around the world.

We can easily point to the obvious corruption of the large international banking cartel, drug cartels, world governments, wicked crony capitalists as well as false prophets and other 'support systems' on this earth, but none of us can explain it all as simply and succinctly as what we find in Revelation 12:12.

As we and others have said many times, we know what we need to do to prepare. One of those things is staying away from the dragons fighting the dinosaurs. Wrong place, wrong time, one flip of the tail and...

Rear Flank Downdraft
Sep 8, 2011 - 5:16pm
2turdledoves
Sep 8, 2011 - 5:17pm
Nick Elway
Sep 8, 2011 - 5:19pm

Platinum forum

https://www.tfmetalsreport.com/forum/platinum/554

My coin club contacts confirmed trading platinum coins is pretty rare. I look forward to the platinum forum becoming more lively.

CreditCrumbs TheGoodDoctor
Sep 8, 2011 - 5:23pm

@TheGoodDoctor

"They are loaded questions to Ron Paul while the other douchebags get softball questions. "

Just another confirmation that MSM is fully captured (or should I say, fully owned?) by the big capital owners.

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