Revise and Extend

Fri, Dec 30, 2011 - 9:50am

Just wanted to take a moment and add a few thoughts to the previous post.

I wrote that post late Wednesday with the intention of keeping it up all day yesterday. I had a hunch that The Cartel would try to gun the PMs yesterday and they did. Is it a concern that they were able to smash gold through 1550? Of course. However, it's not the end of the world by any means.

Remember, I'm just working with a ruler and a sharpie here. I've been saying 1550 for a couple of months now based upon where I eyeballed the trendline from the 2008 lows. The key here is that 1550 was/is an approximation. Thankfully, several posters to the comments of the previous thread were able to define the trendline more exactly.

First up, "goldfinch" pointed out that Louise Yamada had been on KWN back on 12/6, basically giving the same numbers that we have been discussing here. As you know, Ms. Yamada is the only technical analyst for whom I have great respect. Her history and track record speak for itself. To discover yesterday that she is looking at the same charts as little ole me made me smile a bit. Maybe I have learned something over the years.

Just a few minutes later, "kazooclown" posted a more accurate representation of the weekly chart. I've reprinted it below so that you can see where he has drawn the trendline. As you can see, it's considerably below 1550.

Anyway, there are three important points I want you to take away from this thread:

  1. 1550 was not a hard and fast number. It was a projection and a guess. Therefore, failure at that exact level is not cause for extreme alarm and concern. That said, failure at 1500-1515 would, quite obviously, be a cause for extreme alarm and concern as both Yamada and "kazooclown" have shown us.
  2. Yesterday was not likely the bottom. It could have been but it probably wasn't. If 1500-1515 is, in fact, a better representation of the trendline, then we should all be prepared for gold to trade down close to there sometime early in 2012. This final move down in gold will likely also cause silver to move down close to its long-term trendline near 25.
  3. And this may be the most important point so I'll reprint it from the previous post: "So, here we are, caught in this strange new paradigm of extreme physical demand in the face of plummeting paper prices. In this environment, why on earth would we expect the gold price to suddenly stop and reverse exactly at some trendline on the chart? That makes no sense. The trendline is a reflection of market price history that simply has no bearing on today. Simply put, the trendline held in the past because investors still had some measure of faith and confidence in the current system. But this is the dawn of a new day. The Comex is dying. Soon, the spread between the price of paper and physical metal will diverge to such a point as to make the Comex an obsolete joke. But that day isn't here yet. It may still be weeks or months away. Until then, the imbalance between buyers and sellers will only increase so I expect the price of paper metal to decline even farther. All of this likely makes my little trendline as obsolete as a sliderule."

So far this week, open interest has held in there. In fact, its even expanded a little in silver. As long as total OI stabilizes above 400,000 in gold and above 100,000 in silver, we can consider the Comex to still be "alive". So, under those conditions, I have a high degree of confidence that the long-term trendlines will hold and will function as support as gold and silver finally find their bottoms from the manufactured declines of the final 4 months of 2011. The bottoms may have occurred yesterday but I think it's likely that we will see a final, capitulation event early in 2012 where gold drops into the 1500-1515 area and silver touches 25.

Lastly, as a pick-me-up, here's a fun little nugget I found while searching KWN for the Louise Yamada clip. It's an interview of the genuinely smart Egon von Greyerz of Matterhorn Asset Management in Switzerland. I think it will put a smile on your face and let me just say, I don't disagree with him...$3,000_-_$5,000_in_2012.html

OK, that's all for now. I plan to type up a kind of month-end and year-end summary later today or tomorrow so keep checking back. Have a great day. Smile and be happy. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 30, 2011 - 9:51am



Dec 30, 2011 - 9:56am

The yield on Mayan

The yield on Mayan 1-year-bonds remains steady @ 20.12%.

Dec 30, 2011 - 9:56am


Who bought at 26 and change? I know I did! Sweet!

Dec 30, 2011 - 9:57am



edit: guess not


Dec 30, 2011 - 10:03am
Dec 30, 2011 - 10:03am
Dec 30, 2011 - 10:04am


Wow.....Seventh......can you just imagine. Seventh!

Dec 30, 2011 - 10:05am


I's times like this I really miss band- camp.

No more charts, no more pumping or dumping, you just cant explain or predict this movement anymore.........the only chart that matters is the price of the phzz at the end of the day.

I was able to Crack out some dry powder on $30 bones of 90% yesterday @ 19 on the dollar...I love me some pawn shopping.

Dec 30, 2011 - 10:09am



This is a repost from the end of the last thread which will probably now not be read by many, but I thought the miner discussion was worth carrying over into the new thread.

Miners depend on a well functioning economy as much or more than anybody else. For one thing, they are very heavy users of electricity, and if electricity becomes unavailable or in short supply due to fuel interruptions, the miners will get shut down or rationed as to electricity, just as happened to the miners in S. Africa. They are also heavy users of labor, and if labor can't find food to eat or can't get to the mine to work, there won't be any mining. This has happened in the past in Argentina and other places where unrest has shut down the mines. They need stability to operate, and stability is one thing 2012 is likely to be short of. If a miner can't produce, it's will not retain value. The elites intend to buy up all these miners anyway, and they will not operate them for the benefit of the stockholders. They might even take them private. Do not assume operations as normal for 2012. It is scheduled to be the most eventful year in 2000 years. As a result of instability, the miners will not be profitable. The elites will naked short the miner stocks until they take them down, and investors will not realize a profit.

Yes, holding physical is a risk, as physical is subject to looters, elitist jackboots, or government confiscation efforts. However, it will likely be one of the three asset classes (guns, grub, gold) that "all the little people" have that will endure the crash. Miners will not.


Dec 30, 2011 - 10:09am

Thanks, Turd! and

good morning comrades! Have been reflecting on the metals this morning and concluded that they definitely suffer from bipolar disease Isn't there a medication for that readily available??

Happy New Year comrades. with love and respect, LaMachinna

Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

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Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Key Economic Events Week of 11/4

11/4 10:00 ET Factory Orders
11/5 9:45 ET Markit Services PMI
11/5 10:00 ET ISM Services PMI
11/6 8:30 ET Productivity & Labor Costs
11/6 Speeches by Goons Williams, Harker and Evans
11/8 10:00 ET Consumer Sentiment
11/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
11/1 9:45 ET Markit Manu PMI
1/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

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