OK, Here Are Some Charts

Fri, Sep 23, 2011 - 9:43am

I hope you're sitting down because these charts are not pretty.

First of all, I'm not going to waste your time with 15-minute and 2-hour charts because, frankly, those charts aren't worth the paper they'd be printed on. In a global liquidation event, you can throw TA and the fundos out the window. Eventually, however, buyers will emerge to take advantage of the discounted prices. The question is, where? Maybe we can find some answers on the longer-term charts.

First up, gold. Of course, none of the fundos have changed. More on that in a minute. Technically, however, gold looks like it could drop another $100 or so. We've been following the 8/7 gap on the charts since it happened. Though there have certainly been moments when it looked like gold would not go down and fill that gap, it appears almost certain now. And don't expect it to stop there. The charts below certainly seem to indicate that gold could fall below 1600 before finding some substantial bids. Therefore, for now, I'm not buying anything. Not even any physical. I'm waiting, confident that I can save $100/ounce if I'm patient.

Silver is an absolute disaster but it is only doing what silver does. As I mentioned last night, if you elect to trade in an unregulated market that is dominated by an uber-short which has virtually unlimited financial and political backing to defend its position, you're going to get your ass kicked every once in a while. And I don't think that the current beating is over yet. Furthermore, if you're a believer in the whole "wynter benton" thing, then how can seriously expect JPM to go down without a fight? In fact, this kind of 24-hour destruction almost validates the entire WB "story". If JPM really is threatened by "60 days of silver over " or whatever it is, then wouldn't you expect them to hammer silver before the deadline? I mean, they're not going to go all Dylan Thomas on you and simply "go gentle into that good night". That said, if silver doesn't stop right here, at the lows of May, then it's going considerably lower, as the charts below show. Though I'd love to buy some more Maples here, I'm waiting on this one, too. At , I can buy 4 sleeves for the same amount of fiat that would get me 3 sleeves at .

One last thing, I may not know much but one thing I do know is that this whole "deflation is coming" stuff is bullshit. Yes, by failing to add additional QE this week, The Fed had set off a chain of events that will finish off any hope of economic recovery and, yes, the value of your house and your 401(k) is headed lower. However, deflation will not solve the current global debt crisis. That's not how it works. You cannot deflate your way out of debt. Period. End of story. Not open for discussion. The only way out is devaluation of the currency. Period. End of story. Not open for discussion.

What we are entering is the worst possible outcome and the worst of all worlds for the average, everyday person. Your fiat-based wealth is going to decline. Your wages will stagnate if not decline. But, the cost you pay for everything from milk to bread to gasoline is going to skyrocket. Eventually, this will lead to civil unrest, political instability and even revolutions. So let me state this again very clearly: THE ONLY FINANCIAL PROTECTION YOU HAVE AGAINST THIS COMING MADNESS IS PHYSICAL GOLD AND SILVER. Period. End of story. Not open for discussion.

OK, that's all for now. Hang in there and be patient. Help each other. Do not be small and/or petty. Use your brain. Do not panic like the sheep. Stay alert. Survive and prosper. TF

11:15 am EDT UPDATE:

​The metals are catching some bids but don't allow yourself to get sucked in just yet. Dec11 gold bottomed at 1668 but that is still about $16 above the level it needs to fall to if it's going to close that gap on the daily chart. I can't imagine gold falling all this way and not closing the gap so look for at least a double-bottom soon, if not a dip toward 1650 and slightly below. Be patient. Contrary to previous Friday's, I doubt there will be much buying on the afternoon Globex. Probably more selling, instead, as weak hands head for the exits rather than stay long over the weekend.

About the Author

turd [at] tfmetalsreport [dot] com ()


JP McManus
Sep 23, 2011 - 10:07am

0% Gain 0% Loss

I keep 100 ASEs in my desk drawer. When the POS was higher, I opened the drawer and counted them. Sure enough, still 100 of them. Yesterday, I opened the drawer and counted out... 100. I keep stacking in my safe, but I'll keep the 100 ASEs in the drawer to remind myself that 100 ounces of silver a year ago is still 100 ounces of silver today.

Sep 23, 2011 - 10:08am



"As the resident GSR physical swap expert, was 51 the right number this morning?"

Yes, anything above 49 is significant. I am just waiting for my broker to open to make the exchange now – I am swapping all Au in my possession today.

I will throw caution to the wind here. 49 was a VERY significant number to cross. It has more to do with other indexes such as the movement in DJI, and even other markets such as FTSE and DAX. This GSR is pointing to turning points in equities. Particularly liquidation. The most notable thing is that the 50mda of the GSR has crossed the 200dma GSR. This indicates VERY extended territory.

This is not the same as the 2008 liquidation. Some aspects are similar, but this is not the same. I am not saying this is bottom. This is simply the point that I decided would be a GSR exchange point, and quite honestly, I did not think the fundos supported anything over 49. I realize the GSR has been as high as 100 – but other indexes were not where they are now at that time. This is more of a perfect storm as far as liquidity goes. It wont stay here long.

Sep 23, 2011 - 10:11am

Stumbled across this

Stumbled across this article, which I think fits in with Turd's very big picture. It's about poverty in the suburbs, and seemed pretty well done for CNN.


Sep 23, 2011 - 10:12am

Every wife loves a sale!

My wife is a very clever lady and is ploddingly conservative from an investment perspective ...but constantly wins that way.

Anyway she just called me and suggested gold is on sale and that we NEED to BUY some more physical.

After I picked myself up I quite cleverly told her that she is correct as usual but the "community" feels that we might get a bit more of a sale so we will buy... but perhaps later today or early next week once we see that the prices have stopped falling.

Turd...thanks for the reminder and calm....and thanks to the rest for a balanced discussion of reality.

Remember... this is about protecting what you have FIRST... getting wealthy SECOND.

Now I have to go buy her some flowers for being right again :)

Dr GScottJ
Sep 23, 2011 - 10:12am

@ScottJ, woke my dealer up

@ScottJ, woke my dealer up this morning. Still selling ASEs for $3.50 over spot and Maples/Phils for $3.00 over spot. His usual. That may change tomorrow, but that's what it is today.

Sep 23, 2011 - 10:13am


I'm DCA-ing into the BTFD event, that's all I know. It'll either come back and it won't matter, the world will implode and it won't matter, or lollipops will sprout and the unicorns will come back and it won't matter.

Dr G
Sep 23, 2011 - 10:14am

My thoughts

I posted yesterday that silver won't bottom out until the high 20s. I still believe it. All signs point to it.

I also posted that gold would go to $1100 and got laughed at. We shall see. And for the record, I'm as long as you can be with the metals. Super bull. But I'm also realistic about manipulation that MUST take place for QE3 to happen.

And like said yesterday, the Dow:gold ratio could be 2:1 with 12,000:6,000, but who is to say that 3,000:1,500 isn't more likely? It's not about the actual number in fiat that gold equates to, but about the preservation and purchasing power.​ So, with everything continuing to fall today, you can rest assured that gold, although falling, is still preserving wealth in relationship to everything else.

Sep 23, 2011 - 10:15am

Truck is backed up and idling . . .

I may cut off the engine to save some dead dinosaurs and see if we get down to 1600.

Of course, by then, with my luck, there won't be much physical left to buy . . .

I'm not even opening my paper account trading application any more. Don't want to know.

Ferd Torgersonmargaritatime
Sep 23, 2011 - 10:16am

@ margaritatime

See where you're swapping AU for more AG.

Will hold onto my AU since I don't have that much.

Given your position of trading AU for AG, if you were standing there strictly with cash, would you be buying AG at these prices or waiting? That's what I'm considering - adding to my AG.


Sep 23, 2011 - 10:17am

Stay strong TF/others

This is exactly what we've been expecting to some degree, except we didn't know to what extent.

As much as it sucks to watch or think about it is necessary for it to happen. It was inevitable and we will emerge at some point sooner then we can imagine.

Good day for a walk or hike probably for some of you. Myself also..

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