Having A Tough Week

Wed, Jan 25, 2012 - 10:24am

Yuck. This week is turning out to be one that I'll want to forget. I had thought/hoped it would be a volatile week with new money finally flowing back into the PM pits. Wrong! Just the same old, same old.

For a few, fleeting moments on Monday, things looked pretty good. Gold was pressing up against resistance at 1680 while silver was making another charge at 32.80. The POSX was weak and it looked like we were ready to roll. What happened? Well, we got our clues yesterday in the open interest report from Monday. For those who missed it, I mentioned the report in the comments section of the new "Wicked Witch" video:

"Gold, which was UP $14 yesterday, saw total OI fall by almost 2,000 contracts. Lots of Cartel short-covering drove the rally. Between Friday and Monday, gold rose almost $25 in price yet total OI fell by almost 5,000 contracts. We are clearly seeing a continuation of the pattern where gold is rising primarily due to Cartel covering, not new spec money inflows. Look for the resistance area between 1680 and 1705 to hold price in check for a while longer.
Silver lacked excitement, too. Total OI fell by 1,400 contracts even though silver was UP 60 cents on the day. It would seem that the move yesterday was almost entirely upon the backs of EE short-covering and not follow-through buying related to front-running the additions to PSLV. This does not bode well for the very short-term price of silver. $32.80-33.00 will likely continue to serve as a cap for silver price for the time being."

Today's action confirms these thoughts. Don't forget, too, that tomorrow is option expiration day for the Feb12 contract. Gold will probably swing around 1650 for the next few days like that level is some sort of magnet.

At any rate, we're certainly not seeing the rush to the upside that I was secretly hoping for this week. Instead, this week just looks to be the continuation of the recent trend. Money flows in one day and then The Cartel and The EE suck price back down in the days that follow. Until and unless we get some technical breakouts and/or a strong fundamental change (like QE3), the pattern will likely continue.


You should also review again these two charts from Monday as the time since has only served to validate them.


For now, The Pig isn't helping things, either. We had the big drop from 82 to just below 80 but the commodity sector failed to really respond. Now, as speculated on Monday, Pigatha is bouncing from the lows and appears headed back up toward 81 or so.


And, just for fun, take a look at this chart of the ES (mini S&P 500). With all of the turmoil and uncertainty in the world, the last thing you would expect would be a simple, low volume melt-up in equity prices. However, when the only entities left trading the market are the PPT and Primary Dealers attempting to front-run it, this is what you get:



Finally today, a few odds and ends. First up, this fun video someone found of Glenn Beck. In it, Glenn cites a theory from a Rutgers University professor that "The Wizard of Oz" was actually written as a metaphor for the battle regarding sound money arguments of the late nineteenth century. Hmmm. I don't know about that one but its worth watching if only for what happens at the end.

Video unavailable
Video unavailable

Someone just asked me for an updated weekly chart of gold. Here it is. Note that the "pennant" will be closing soon. Since none of the fundos have changed to disrupt the now three-year old pattern and trendline, I fully expect the pennant to be broken to the UPside.


Lastly, as you know, loyal Turdite "fortinbras" has a job that takes him all over the world. He sent me this picture earlier today. Fortinbras, DuranDuran and a Big Yellow Hat...all in Bratislava. What a combo! He promises more pictures as he travels the globe. I can't wait!


OK, that's all for now. Hang in there! TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Jan 25, 2012 - 10:33am

Can it be?..

First? Be still my beating heart!

Jan 25, 2012 - 10:38am

Infamous "almost last" post


Thanks for the update and thread TF.



I agree with the U.S. wanting/needing higher gold prices in the future.

It's the only way I see them beating China to the goal of doing the same thing within 5-10 years. They'll need to do it just before China does, imo. Not after.

The only other real thought I have about the U.S. allowing the USD to devalue severely without doing anything about it is that we want a cheap dollar to start a manufacturing base again and become the exporter of cheaper goods by virtue of a purposeful USD debasement.

Kind of like the advantage China has had with the cheap Yuan and robust manufacturing and export led growth that's gotten them to where they are at. At some point soon (happening now), China competes with the U.S. as far as selling Govt. bonds and corporate debt etc. They'll mimic what allowed us to grow all these decades. They'll use our blueprint.

At some point in the future, we'll become what they were as far as exporters of cheaper goods/services. There's a standard of living issue/inflation that will happen here at the same time due to inflation/USD devaluation but it seems inevitable that we swing back to a manufacturing base or energy driven base of competing. That's are only hope imo besides overall domestic energy transformation that changes the dynamic of the ME and world economy in a unknown manner. What happens when the U.S. stops spending 100's of billions annually over there and keeps that same money over here (gradually at first)?

In my mind, at some point the U.S. drastically reduces their foreign energy dependence and looks inwards and becomes more self sustaining. Domestic energy is the next big thing and the cheaper dollar will allow us to enjoy and export the surplus. It's already started.

I think LNG, bio-fuel and fuel cell technology is what gives the U.S. "the next big thing' and a productive/competitive edge in the future. Just like heavy manufacturing accomplished post WWII and shaped our economy and how the technology/computer industry that led the economy for the last 20 years and continues to do so will effect domestic energy and energy technologies that are just now coming online shortly.

All of this is dependant (IMO) on a cheap dollar relative to other currencies at that time when the cycle of boom/bust shifts back towards the U.S in a measurable and meaningful way. Not completely, but enough to make a profound difference going forward.

Gold will become "unbarbaric" at some point and some key announcement from the U.S. or China will make us go slack jawed regarding a monumental monetary policy shift that will affect mankind for centuries.

Jan 25, 2012 - 10:39am

Yellow Hats

Hey Turd,

You may want to consider selling those yellow hats. Or giving them away if someone donates a certain amount of money. Like the Guy Fawkes masks that those Anonymous guys wear, we could also symbolize who we are with the yellow hats. Except we'd be more like the good guys than those guys who are more like anarchists.

We could take pictures of ourselves in yellow hats. If we ever decide to do a coordinated protest, even if online, we could all be wearing yellow hats. Just a thought... Needless to say, I'm jealous of something I can't have. ;D

Jan 25, 2012 - 10:40am

best picture

here is hoLLywOOds aTTempt at distraction 

Best Picture

  • "The Artist" Thomas Langmann, Producer
  • "The Descendants" Jim Burke, Alexander Payne and Jim Taylor, Producers
  • "Extremely Loud & Incredibly Close" Scott Rudin, Producer
  • "The Help" Brunson Green, Chris Columbus and Michael Barnathan, Producers
  • "Hugo" Graham King and Martin Scorsese, Producers
  • "Midnight in Paris" Letty Aronson and Stephen Tenenbaum, Producers
  • "Moneyball" Michael De Luca, Rachael Horovitz and Brad Pitt, Producers
  • "The Tree of Life" Nominees to be determined
  • "War HorseSteven Spielberg and Kathleen Kennedy, Producers

money baLL is the only one ive sEEn. and would watch it again....bpiTT is gOOd @ survivingwstyle.

Jan 25, 2012 - 10:41am


Good to see him around and accounted for with hat on head. The global intrigue builds.

What were the natives thinking about the American with the big, yellow foamy hat? Lol!

Where next? Africa?

Take care, Fort.

Jan 25, 2012 - 10:44am

Fort mentioned he's headed to

Fort mentioned he's headed to Vienna later today amd then to Kiev for some chicken tomorrow.

A little TF dedication for him:

Billy Joel - Vienna
Jan 25, 2012 - 10:46am


recovering from the Hopium OD I was dealt last night.

Jan 25, 2012 - 10:46am

wizard of oz

the wizard of oz was, in fact, a metaphor for sound money based on silver (the original color of the slippers in the book) and gold (the road). can you guess who the man behind the curtain in the emerald city (fiat greenbacks) was?


Dr G
Jan 25, 2012 - 10:46am

Good post, although it

Good post, although it dampers my mood a bit. Love the fortinbras picture. Never cared for Bratwurst though.

Jan 25, 2012 - 10:48am
Jan 25, 2012 - 10:50am

wizard of oz lost to gone w/ the wind

in 1939 for best picture....alright enough movie trivia.

option x days are the best day of the month to stack. anyone got a chart showing that?

Dr Durden
Jan 25, 2012 - 10:53am


I think the odds favor and epic bear trap more than they do an up up up and away resolution to the support trendline. say hi to $1500 in a fast move down and then matched with a quick move up. Look at the chart,forget it's gold for second forget about the cartel. What does a chart say? Forget about the manipulation, forget about the fundamentals. What does the chart say? That is all you really need to know.

Jan 25, 2012 - 10:56am

OOps Fats and turds

pardon the double post of the vid.

Hello silver just turned green!

Jan 25, 2012 - 10:57am

not too shabby

another fine-looking FUBM forming on the silver chart

Dr G
Jan 25, 2012 - 11:04am

Turd, what has prompted this

Turd, what has prompted this FUBM? Something leaked?

Jan 25, 2012 - 11:04am

Great & Powerful Oz

While Baum himself denied "Oz" was a political allegory - the coincidences are too numerous & too dead on for it to be anything other than a statement on monetary reform. For those interested, the compelling case can be found here.

Jan 25, 2012 - 11:05am

Jan 25, 2012 - 11:06am

Another prep show - Independence, USA on GBTV

There's also a prepper reality show on GBTV that started last week, Independence USA. I actually thought it was pretty good. The guy who is the head of the family is pretty smart and tries out all sorts of things (like trying to build a bow and arrow out of materials he has lying around). The mom also surprised everyone and bagged a turkey when they went on a camping trip.

It's on GBTV.com, though I've noticed the first episode has been posted on YouTube...however, you might want to support the new network and get a subscription if you really want to watch it, so I won't encourage pirating here. Besides, I think it's good to support alternatives to the MSM. :-)

Video unavailable
Dr G
Jan 25, 2012 - 11:10am


DrG: You must recall why FUBMs are FUBMs in the first place.

The chart formation is a response to the overt selling and manipulation of the EE. When buyers of size step in where they perceive a bargain to have been created, the resulting turnaround in price creates the FUBM.

That we have seen them the past few days in silver bodes well for the future. It shows a real demand for paper silver. Instead of the EE being able to create waterfall declines, the B0S step in and turn things around.

Jan 25, 2012 - 11:11am

What's up with Ag right now ?

What's up with Ag right now ?

Jan 25, 2012 - 11:14am


Silver is WINNING!

My new favorite word- FUGS! Come on everyone shout it out- It FEELS good to shout it out!


Dr G
Jan 25, 2012 - 11:14am

Turd, thanks. What I

Turd, thanks. What I appreciate about you is that you aren't afraid to go back to basics. Sometimes I find myself looking for something more sinister lurking in the shadows, when the easy answer is before me.

And you are correct about this boding well for silver, especially when one considers the insane margin requirements needed to trade the paper. Thanks again.

Dr G
Jan 25, 2012 - 11:15am

I do like FUGS. Has a good

I do like FUGS. Has a good feeling about it.

Desert Fox fats
Jan 25, 2012 - 11:23am

Men Behind The Curtain


Think also of the time frame in which the book was written. Late 1890's. Industrialists, Bankers, Politicians, American workforce, The Silver Wars and on and on. A rich background from which to weave a tale. Hollywood it up {40 years later mind you} and you've got the Classic it is.

To Turd's thoughts on the disappointing chart action, I don't believe Gold and Silver are ever allowed up days when the POTUS speaks or The Fed meets. G20 summits are downers for PMs too. Just my observations.

Can we break that cycle? Please!

Jan 25, 2012 - 11:29am


This crazy upside-down excuse for a market can really piss a person off, after a while. The criminality just marches on in an apparent unhindered fashion. The top players make vast amounts of wealth on the backs of the rest of us. No one is in charge. There is no white knight. Only the laws of Nature will eventually turn the tide - but Nature works slowly (at Glacial speed).

So I dream ..

Imagine if you could control the price of your favorite Top Tier Mining stock.

Imagine that you could put on trades, either short or long and swing the market in which-ever direction you wished.

Imagine that you had a European buddy who could work with you and swing the market during European trading hours.

Imagine the vast piles of fiat you could make while playing your mining stock, day in and day out.

Imagine that you had buddies in Government and heading up the Regulatory Agencies that would look the other way, about your manipulation.

Imagine that the MSM heard about your operation and thought you were brilliant.

Imagine how pissed off all the honest, honourable people, would be with you.

Now, understand that this is the world we live in. - Argh!

Jan 25, 2012 - 11:29am
Jan 25, 2012 - 11:33am

Wizard of Oz documentary

You can find this on my blogspot at https://silverstandards.blogspot.com/

Well worth a couple hours if you're interested in monetary history (as it always repeats)

A few other bits and bobs on there that i have collected on the way - enjoy.

Jan 25, 2012 - 11:34am

snooty Obama pic

Ugh. Seeing that pic of Obama with his nose up in the air yet again, and Biden behind him clapping...all I can say is, I am sooo glad I am going to outlive these jerks! 

I'm betting that George Soros doesn't see the end of 2012 either...he's 80something and looking pretty horrible.

I just wish Ron Paul were much younger! Let's hope Rand can pick up the mantle down the line...

Jan 25, 2012 - 11:46am

Junk Silver vs ASE's & Rounds

People who rage against the Cartel recommend buying silver to ‘starve the beast.’

- - - - - -

So where does buying Junk Silver fit in here? It sounds like those folks who stack 90% are not doing their civic duty to fight the Cartel by taking Physical off the market.

Jan 25, 2012 - 11:54am
Become a gold member and subscribe to Turd's Vault


Donate  Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 1/14

1/15 8:30 am ET Producer Price Index
1/15 8:30 am ET Empire State Mfg. Index
1/16 8:30 am ET Retail Sales
1/16 8:30 am ET Import Price Index
1/17 8:30 am ET Housing Starts
1/17 8:30 am ET Philly Fed
1/18 9:15 am ET Capacity Utilization and Ind. Prod.

Key Economic Events Week of 1/7

1/7 10:00 ET ISM Services Index
1/7 10:00 ET Factory Orders
1/9 2:00 ET December FOMC minutes 
1/10 Speeches from CGP, Goons Bullard and Evans
1/11 8:30 ET CPI

Key Economic Events Week of 12/31

1/2 9:45 am ET Markit Manu PMI
1/3 10:00 am ET ISM Manu Index
1/4 8:30 am ET BLSBS
1/4 9:45 am ET Markit Serv PMI