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Chart Update

114
Thu, Feb 2, 2012 - 5:40pm

The Tech Team is still working with the server company to blunt and stop the continued DoS attacks. In the meantime, at least we have this backup platform to utilize.

I'll keep this brief. I had tried to buy back my Mar $35 silver call today but I never got filled. Nuts! I thought I might on the pullback late morning but it never happened. I was looking to buy it back because I'm expecting a decent UP day tomorrow, post the BLSBS.

I may still get another chance. If tomorrow plays out like your typical BLSBS day, the metals will surge in the moments right after the numbers are released. They will then get hammered back about 15 minutes later before reversing course and heading higher. Now that 1750 and 34 have fallen, the next targets are The Battle Royale.

Gold is head to the area around 1770-80 where it will encounter the downsloping trendline from the September highs. Silver is headed to 35.50 or so where it will also encounter stiff resistance. With a lousy BLSBS number, both metals may reach these levels by tomorrow.

paper_2-2pmgold.jpgpaper_2-2pmsilv.jpg

Regardless of what happens tomorrow, these two charts are the only ones that matter right now. Both metals are trending higher post the FOMC "announcements" last week. Look for these trends to continue.

I'll let you know via twitter when the site is back up. Until then, enjoy blogspot! TF

[Admin note: Site is running reasonably well at the moment, but we will continue to make more adjustments. We hope any further outages will be temporary.]

About the Author

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turd [at] tfmetalsreport [dot] com ()

  114 Comments

Ircsum · Feb 3, 2012 - 4:47am

Don't let them grind you down - ever!!

edit: a first first :)

Senseosensei · Feb 3, 2012 - 4:50am

Looks like you are considered a threat now Turd. Consider it a compliment, and a big acknowledgement of your wisdom and advice.

TheGoodDoctor · Feb 3, 2012 - 4:58am

Yeah Turd. Fight the power! No worries man. Sometimes is it is difficult not to have access to the site when things are going wrong. You realize how much you take the site for granted as a news source.

Thanks man!

zilverreiger · Feb 3, 2012 - 5:03am

I noticed it gradually getting slower over the past days, are you sure it's not just popularity? the site has always loaded a bit sluggish for me, a few hits per second extra would probably bring it down. Good luck solving it.

I missed discussing ben bernank on chat live yesterday as we broke 1750 haha hope the rise continues so we can get back to last years bullmarket track roughly 10% higher

Chris P. Bacon · Feb 3, 2012 - 5:05am

You know you're over the target when you start taking flak!

polopony · Feb 3, 2012 - 5:13am

Au & Ag had a nice move yesterday. My wish for today is that Jeff Christian would go back on CNBC today and declare that the PMs have reached their peak for this year again! Maybe $1800 and $35.00 can be had before the weekend! I'm glad you're up and running again Turd. I also appreciate the efforts of the administrative staff; good job guys and gals.

-Polopony-

beinki · Feb 3, 2012 - 5:34am
Velocity · Feb 3, 2012 - 5:37am

...wondered where you'd got to!

Now we know, it was hacking by CYBER-FED

..an attack of counterfeit electrons and a bombardment of worthless zeros on TFM

Same strategy as The Feds attack on society in fact

¤ · Feb 3, 2012 - 5:55am

DPH: Not sure what this is about but it sounds like a heads up from the ISDA to the BIS about a potential derivatives melt down and a contingency plan of sorts. H'mmm?

Thanks for the update TF. Bummer about the Chinese cyber attack

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Secretariat

Committee on Payment and Settlement Systems

Bank for International Settlements

Sent by email to: cpss[at]bis[dot]org

Secretariat

Technical Committee

International Organization of Securities Commissions

Sent by email to: fmi[at]iosco[dot]org

The Systemic Risk of Intraday Margin Calls for Cleared Over-the-Counter Derivatives

Dear Secretariats

We wish to alert you to a matter which is, in our view, sufficiently important to reducing risk

and fostering financial stability to raise at this late stage

1. In this letter, we outline our

concern and propose potential solutions that we are exploring to address this matter, while

acknowledging that, as ever, there is no panacea for risk and that each of our proposed

solutions contains its own difficulties and risks. Nevertheless, the industry feels strongly that

CPSS-IOSCO ought to address this issue in its Principles for Financial Market Infrastructures

(“PFMI”). In particular, CPSS-IOSCO PFMI 3.4.8

2 and aspects of PFMI 63 require careful

amendment.

As you know, the G20 seeks to impose mandatory central clearing for standard Over-the-

Counter (“OTC”) derivatives. The widely-used margin system for central clearing contains

three components: initial margin (“IM”), variation margin (“VM”) and intraday margin

(“IDM”). In relation to VM and IDM, Clearing Members (“CMs”) pre-fund their clients’

1

We refer to the work of the Committee on Payment and Settlement Systems and the Technical Committee of

the International Organization of Securities Commissions (collectively, “CPSS-IOSCO”) on Principles for

financial market infrastructures, specifically the CPSS-IOSCO consultative report titled ‘Principles for financial

market infrastructures’ of March 2011 and work following the consultation. As you know, ISDA’s consultation

response of 22 July 2011 focused on the proposals’ application to OTC derivatives markets, and in particular

their suitability as risk management standards for OTC derivatives central counterparties (“CCPs”).

2

CPSS-IOSCO consultative report ‘Principles for financial market infrastructures’ page 34, PFMI 3.4.8: “In

addition, a CCP should have the authority and operational capacity to make

ad hoc intraday variation margin

calls from participants with positions that have lost significant value during the trading day.” [emphasis added]

3

CPSS-IOSCO consultative report ‘Principles for financial market infrastructures’ page 40, PFMI 6 Key

consideration 4 “…A CCP should have the authority and operational capacity to make intraday calls for initial

and variation margin from participants with positions that have lost significant value.”

2

obligations. In relation to IDM, in general CCPs do not provide physical payment for

accounts with net mark-to-market gains

4. This produces a liquidity drain at the CM, which is

significantly exacerbated by the fact that, unlike listed derivatives, clearable OTC derivatives

are fungible products that can be cleared at more than one CCP and the new and envisioned

national regulatory frameworks allow clients of CMs to choose where to clear. This can be

expected to lead to certain preferences, for example:

Customer preferences may lead one client segment to clear their large receive fixed

positions on interest rate swaps (“IRS”) at one CCP, while a second customer segment

may prefer to clear their large pay fixed at a second CCP.

For credit default swaps (“CDS”), the different CCPs offer significantly different

margin methodologies for buyers and receivers of protection. With respect to the size

of margin requirements in isolation, sellers of protection would be likely to prefer one

CCP and buyers another.

This fragmentation of the clearing market is likely to result in unbalanced netting sets in

CMs’ house and client accounts. In this context, the use of IDM calls for OTC derivatives

cleared at multiple CCPs creates systemic risk as CMs must make payment of net mark-tomarket

losses on directional exposures to CCPs without the benefit of payment from CCPs

for accounts with net mark-to-market gains. In the absence of refined standards for IDM

practice, CMs are exposed to a serious liquidity risk as they risk-intermediate CCPs in

distressed market conditions.

One preliminary estimate suggests that such IDM calls may require USD$20B in overnight

funding from each CM or USD$300B - $500B in aggregate

5. This preliminary estimate gives

a sense of the magnitude of the issue. As noted, CMs cannot effectively control this risk,

since it originates from fragmentation of the clearing market and client choice of clearing

venue.

To commence discussion of how to address this systemic risk, we are examining the

following, which are provided in no particular order, as potential solutions. All would

mitigate the risk, to varying degrees......(continued)

https://www2.isda.org/

agrock · Feb 3, 2012 - 6:08am

Turd - you should let everyone know your IP address for the site incase you have a DNS shut off so everyone can still access via the IP address. Might help to get critical info out when needed.

zilverreiger · Feb 3, 2012 - 6:25am

adrock the old blogspot site is still up too https://tfmetalsreport.blogspot.com/

Brotha Bob · Feb 3, 2012 - 6:35am

Thanks Turd! Sorry they have decided to attack you. At least you know that they are preparing for your visit to Cuba. A lifetime vacation in the wonderful Caribbean.

TheGoodDoctor · Feb 3, 2012 - 6:38am

@DPH I am much more concerned what this will bring. Well, let's just say very concerned about both after the warning from Santa this week.

Merkel Snubs France As Europe's "AAA Club" Meets In Berlin Tomorrow ex-Sarko

https://www.zerohedge.com/news/merkel-snubs-france-europes-aaa-club-meet...

silver foil hat · Feb 3, 2012 - 6:41am

I guess we are at the scene where the flying monkeys appear.

OT: I think someone is trying to send a message:

This is exactly as it appeared, no photoshop editing (unlike the birth certificate, eh?)

alphamorph · Feb 3, 2012 - 6:46am

Always with the conspiracy theories!!! Next thing you're going to tell me the FED or a cartel of banks is somehow manipulating the price of silver..... maybe BY SHORTING IT!!! What's next - war in the middle east is always about oil?

ClinkinKY · Feb 3, 2012 - 6:54am

Posted Image

silver foil hat · Feb 3, 2012 - 6:57am

That was the zerohedge term for the software program put out to bid by the FED to 'monitor social networks comments on the Fed and to respond with sock puppets'.

So, following is my 'signature' as seen in the forum posts. (Mods- why don't signature lines appear here? Maybe if we show Fiattack we're all friendly sort of folk, they'll leave the DoS attacks to other sites.)

Hi Fiattack!

The FED is a benevolent non-profit organization with the interests of the American People placed ahead of its own!

Be Prepared · Feb 3, 2012 - 6:59am

...shouting "You shall not Pass!"

Be Prepared · Feb 3, 2012 - 7:12am

LaMachinna · Feb 3, 2012 - 7:29am

Home Sweet Home! Thanks laughTurd.

vivekmert5 · Feb 3, 2012 - 7:37am

It's not often that a financial market tells us its intentions in a clear and obvious way. But occasionally it happens.

And it just happened last Wednesday.

First, to set the stage: gold came into last week off a 17-week correction, with the direction of the next 17 weeks still up in the air. The big correction in 2008 lasted 34 weeks, so gold was at a critical balance point heading into the Fed meeting -- it was either going to move into the next up leg now, or in 17 weeks, in early May.

C1

This was a major balance point that could have gone either way, mostly because there is a big scary bogey still out there, namely another round of deflation and de-leveraging emanating from Europe.

The last recession in 2008, with its accompanying financial crisis, caused a massive bout of deflation, which slaughtered gold and other financial assets, while triggering a major run up in the dollar.

So it's critical to know if a similar bout of deflation is coming now. And gold is a highly sensitive barometer on this. If we pay careful attention, gold will give us the accurate forecast.

I want to take a minute to briefly discuss deflation and de-leveraging, because these are terms that are bandied about a lot, but perhaps not with optimal clarity, as there is a certain glaze-over factor with this type of economic jargon.

The main idea is that when a debt is written down -- or "marked to market" -- it tightens the money supply, which in turn causes deflation. For example, if your neighbor has an $800,000 mortgage, and because of declining real estate values he negotiates to have it lowered to $600,000, that is $200,000 wiped from the money supply.

So if a recession triggers another round of debt write-downs -- because people and companies don't have the cash-flow to cover debt payments -- it can cause a massive contraction in the money supply. This type of deflation makes the value of the dollar sky-rocket, because suddenly there are fewer dollars floating around, and the scarcer something becomes, the more valuable it gets. This is what happened during the financial debacle in 2008.

It's absolutely critical for gold bulls to realize that this type of de-leveraging, with the accompanying deflation, is just terrible for gold. Gold gets creamed in this macro-environment, along with just about everything else.

It's also important to understand how this relates to the Fed, and its efforts to re-flate the economy. The reality is the beleaguered Fed can't create new dollars quickly enough to keep up with the dollars being wiped out by bad debts. This is why the Fed can pump trillions of dollars into the economy and not cause hyper-inflation.

So it's a big deal when the Fed tells us it's going to keep fighting deflation into "late 2014." That's nearly 3 years from now. There are a lot of trillions between now and then.

Essentially the Fed just told that they -- along with every other politician and central banker out there, in the U.S., Europe, Asia, wherever -- will continue to make the easiest, most expedient policy decisions that carry the least amount of potential "blowback" on their own careers and future earnings. The fix-it-as-best-you-can macro-environment will continue, as it always does.

And I get it: there are "Black Swans" and "Derivative Risks" and a bunch of scenarios that could cause another bad crisis. But here's the thing:

The gold market is not sensing any black swans.

And it always gives plenty of warning if it does.

This is a long-winded way of establishing that gold is free to soar right now. In fact, if this latest correction is over, then there is a juicy 17-month window of opportunity for gold to really, really soar.

This is because the interim peaks in gold are spaced 21 months apart.

21 is a very important number for market timing cycles, in every time-frame. I won't go into the details on why right here, but I do discuss the cycles in depth in my daily reports.

It's a simple thing to do the arithmetic on the size of each move up during these 21-month cycles, measuring from the corrective low to the Month 21 peak.

These 21-month cycles took gold up:

97.3%
89.4%
80.2%
84.2%

The low of this last correction came in at $1,524, so that is the starting point for the forward projection on the next 21-month peak.

If we go ahead and make the not-so-difficult assumption that gold is launching into another 21-month cycle to the upside -- thank you Fed, thank you ECB -- the target for this move is $2,750 to $3,000, with the next peak scheduled to arrive in June 2013. That is 17 months from now, as we are 5 months into this latest 21 month stretch. This top could stretch into July 2013, depending on how the local timing cycle lines up at that point.

Fr. Bill · Feb 3, 2012 - 7:42am

Too bad we can't have a pool on the identity/source of the DOS attack. Winner would get a dozen hats, since it would be such a challenging puzzle to solve! Of course, Turd would need a way to track down the malefactor.

My guess is this: someone previously registered here, a malcontent who got bounced and who promptly went online to hire a hacker for as little as $5/hour. For a little over a single C-note, such a malconted malefactor could pay someone to deploy a DOS for about 24 hours.

And the world of blog-commenters is FULL of people with the time, money, and bitterness to do exactly this kind of thing. Sitting where Turd sits (moderating a forum) for over 30 years has convinced me of this.

labestiol · Feb 3, 2012 - 7:43am

What do you guys think about this dip in silver lease rates ?

We don't see anything comparable in gold lease rates.

Thougths ?

Eric Original · Feb 3, 2012 - 7:49am

Still feels kind of glitchy to me. I get locked up when I try to move around the site. Great to be back though!

Good Morning!

boatman · Feb 3, 2012 - 7:49am

if you post WHOLE articles like above without a credit

here it is:

https://www.safehaven.com/article/24223/the-next-17-months-for-gold

uki · Feb 3, 2012 - 7:57am

@labestiol: if you compare the current levels to these from September smackdown, there is still some safety margin.

boatman · Feb 3, 2012 - 8:01am

gold/silver look to trade upppp as liquidity flows til march EU referendum failure.

today it would take a trip to 1745 to get far enough out of channel to freak me to reasess.

WOW DID I MISS THIS PLACE YESTERDAY!!!!!!

vivekmert5 · Feb 3, 2012 - 8:05am

https://brotherjohnf.com/2012/02/02/bill-gross-explains-why-gold-is-beco...

https://brotherjohnf.files.wordpress.com/2012/02/fttungsten.jpg?w=432&h=309

https://brotherjohnf.com/2012/02/02/doug-casey-on-the-coming-war-with-iran/

GOLD Technical Update :- Gold Spot is 1756.46USD, Gold having a daily pivot point at 1743.06usd.

Gold Daily Pivot Point : - 1743.06USD, Weekly Pivot Point :- 1708.49USD, Monthly Pivot Point : - 1685.20USD.All indicators are bullish.

Daily Technical Resistance Level : - 1753.24,1761.51,1771.69 USD.
Daily Technical Support Level :- 1734.79, 1724.62,1716.34 USD.

Weekly Technical Resistance Level : - 1767.80,1797.55,1856.86USD.
Weekly Technical Support Level :- 1678.74,1619.43,1589.68USD.

Today's Gold high is 1760.83usd.Above 1761.51 gold looks bullish upto 1767.80-1771.69-1797.55usd levels.
GOLD Short Term Call : - GOLD Spot is 1659.47USD, Buy Gold above 1654usd With Targets Of 1762.50- 1778usd.

Buy Gold Above 1754usd for a target of 1784by next week. or Buy Gold above 1729usd sl below 1714 price target of 1768-1788usd.
Gold MCX Call : - GOLD April Contract closed at Rs 28504, Buy Gold (April) above 28555 for a target of Rs.28630-28776 level.

Gold having Daily Pivot point at Rs .28454 per 10gram.

Gold needs to break 28627 today for 28837-29056 level.If Gold does not break 28627 then it will fall to 28350-28176.

Sell Gold Below 28434 for 28380 - 28276 - 28155 level.
SILVER Short Term Call: - Silver Spot is 34.31usd, Buy Silver over and above 33.96usd for targets of 34.36 -34.72 -35.46USD levels.

Silver looks very bullish and to trade above 33.50USD With targets of 34.96USD-37.00USD.
SILVER March Update :- Silver closed at Rs. 57023 per kg. Silver having daily pivot point at 57050 level.

Buy Silver above 57220-57600 with targets of 57895-58275-58620 levels.

Sell Silver Below 56800 for a target of 56650-56350-56050 levels.

ALERT : - Silver needs to trade over and above at 57600 today else it will correct more than Rs .1000-2000 per kg from the current level.
margaritatime · Feb 3, 2012 - 8:05am

Hmmm... I was going to post on the old site yesterday, but nah. Going to be working on some ta stuff for the next few days. Happy Friday..right?

Notice: If you do not see your new comment immediately, do not be alarmed. We are currently refreshing new comments approximately every 2 minutes to better manage performance while working on other issues. Thank you for your patience.

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11/14 8:30 ET Consumer Price Index
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Key Economic Events week of 11/5

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