$34.40 Hard Cap Still Holding in Silver

241
Wed, Feb 22, 2012 - 7:37pm

Wow, what an afternoon for gold! After toiling all day between 1750 and 1760, someone or something finally got sick of Cartel's cap and blew it right off.

Below are two, 3-minute charts that I posted in the comments section of the previous post. Always nice to see surprise spikes to the UPside:

The jump in gold is particularly painful for yours truly. As you probably recall, I was in trying to buy an April $1750 gold call on Friday. I placed the order as a "limit" at 23 and the price of the option only fell to 24. I never got filled. Tonight, that call is probably worth 60+ so, for the sake of $150, I didn't make $4000. Once again, Turd DumDum.

Anyway, the main object of this post is silver. After the CoT report last Friday, I expected gold to rise this week but thought that silver would remain boxed up, particularly with the increasingly negative 1-month lease rate. This seems to be playing out. While gold rocketed higher today, silver lagged and has since been beaten back. In fact, the EE managed to stop it right on schedule. Check out this updated chart:

I going to step out on a limb here and offer a prediction for the next week or so:

I'm with Uncle Ted, Jim Willie and others who think that physical silver in size is in short supply right now. Combine that with the way the "options delivery February expiration" has gone according to Harvey and I think we are set up for a month-end raid. I hope that I'm dead wrong and silver explodes higher for everyone but, please, hear me out.

As you can see on the chart above and as documented here ad nauseam, after quickly rising from $26 to $34 in a matter of weeks, silver has been aggressively capped below $34.40 for nearly four weeks. The question you must ask yourself is: WHY? I think it's all about March expiration and limiting those standing for delivery.

Even though the MFingGlobal disaster has seriously dwindled the amount of Comex participation, the supply squeeze that Uncle Ted mentions is causing the EE some sleepless nights. Silver continuing its January advance through February would only exacerbate the problem. Thus the cap. And how does the cap get put in place? Through a rapidly increasing, EE net short position? Is that the case, too? Yes, it is.

With March (big delivery month) option expiration tomorrow, expect the capping to continue. In all seriousness, why would they quit now? Maybe $34.40 can be overrun in the same fashion that $1765 was overrun in gold today but I doubt it. The EE has come too far and expended too much energy to quit now...not with option expiration tomorrow and first-notice day next Wednesday.

So, here's my prediction. Expect continued volatility tomorrow but maintenance of the hard cap. Then, with expiry behind them, the EE will mount an attack utilizing the exceptionally low silver lease rates. Their goal will be to drive prices lower and coerce March longs to either roll to May or get out completely. The last thing the entire C/C/C needs right now are 5,000-10,000 strong-handed and deep-pocketed longs standing for delivery in March. Once this danger has passed, the pressure will relent and silver will finally be allowed to rise and rally toward The Battle Royale between $35-36.

Lastly, I need a little help. The arrows I took on ZH this afternoon got me thinking. I give you my up-to-date analysis every day, sometimes two or three times per day. It seems that many folks either don't read it every day or simply skim what I write. For whatever reason, they then take my analysis out of context. So, here are my questions:

  • What do you think my PM price objectives are for 2012?
  • Am I currently bearish or bullish on the PMs?
  • Do I make any money off of running/managing this site? If so, how much per month?
  • Does my TA work and is it useful? If not, why not?

Thank you in advance for your feedback. I'm really quite curious to read the responses.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  241 Comments

Jager06
Feb 22, 2012 - 7:47pm

Questions? Answers....

Your PM price objectives? THey are only to have an open and honest market....next question.

"Realistically Bullish" long term due to the fundamentals of the markets.

I doubt you make enough to run the site in the green.

Your TA works and is useful, or else no one would be hanging around here.

Keep up the good work Turd, thanks for keeping it real.

tpbeta
Feb 22, 2012 - 7:50pm

Let's see now...

I dunno what your silver price target is (and I don't think price targets are worth much anyway) - but you're just predicting a very strong year for silver.

So very bullish long term. Short term obviously not so much (again on silver.)

You make a bit from adverts, but not much.

Your TA often works but it is ALWAYS useful. Your main value is in being willing to call it, and give your reasons. Don't need you to be right all the time.

twippers
Feb 22, 2012 - 7:52pm

amazing

turd, i read a lot of silver analysis sites and yours is by far the best. the humour alone keeps me coming back.

know one knows (except the ee) what is going to happen day to day but you at least offer us some expert food for thought and make the murky seas clearer to navigate through. thanks for all you do.

tyberious
Feb 22, 2012 - 7:52pm

What

did I miss? What's going on with the knuckle heads at ZH?

Vypuero
Feb 22, 2012 - 7:53pm

Response

1 - I never read ZH comments, just the articles. Too many crazies

2 - PM targets for 2012 are solid as they can be on such a timeframe

3 - You are bullish - "cautious optimism"

4 - Not sure but probably little if anything, certainly not worth the time unless you WANT to do this

5 - Yes, I tend to use TA that uses more indicators. The old fashioned support, resistance, and other analysis is very useful to have

Keep up the good work, and screw the ZH wack jobs!

Dr G
Feb 22, 2012 - 8:00pm

Some dude was crying on ZH

Some dude was crying on ZH that he missed another buying opportunity by listening to Turd. I don't even think he was referencing trading, which makes it all the worse. As I said above, if you have funds, then buy when you can. Turd may be right that a dip in silver is coming, so I only purchased half the physical I normally do today. If we make it through the week without that dip, then I'm buying the rest on Saturday. Don't wait for dips to stack. DCA. And above all, don't ever look back at prices and think "if only...". That will simply paralyze you and make you unable to react/purchase/trade in the future.

Greggo
Feb 22, 2012 - 8:01pm

Feedback

2012 Price Objectives
About 20% higher than last year

Bearish or Bullish
Definitely Bullish, but with shorter term volatility

Do you make money off the site?
I doubt you could give up your day job!

Does your TA work?
Generally yes, I've been hurt a few times following your recommendations but there have definitely been more wins than losses. Personally I think it's basically impossible to determine the short-term movement of gold and silver, but over the longer term it's pretty obvious.

Your greatest value is in finding and aggregating some of the other writings, podcasts and videos about precious metals and in educating us about why they will continue to rise under the current financial regime. Yours is one of the few sites I visit every day.

Thanks Turd

Fortinbras
Feb 22, 2012 - 8:01pm

Feedback

  • What do you think my PM price objectives are for 2012? You've repeatedly stated that by end of 2012, PMs will be up, probably fairly big.
  • Am I currently bearish or bullish on the PMs? Macro/Strategic = consistently full bull, Micro/Tactical = situationally nimble, as one should be.
  • Do I make any money off of running/managing this site? If so, how much per month? If anything, not much, but more power to if you do, subscription based or not.
  • Does my TA work and is it useful? If not, why not? Useful... especially when combined with all the other factors, both conforming and non-conforming, that I look at before making my own decisions.
Dr G
Feb 22, 2012 - 8:03pm

1st

1st. Silver bitchez. But seriously, Nancy Pelosi is a dumbass. Check out her statement on why we have rising gas prices. This is mainstream media/politics/sheeple all rolled into one. Her statement is infuriating. https://www.zerohedge.com/news/nancy-pelosi-issues-statement-soaring-gas... As for Turd's questions: What do you think my PM price objectives are for 2012? $65 silver and $2200 gold. In other words, very realistic given past trends and the current state of the world. I think your objective it to provide a realistic roadmap for others to follow. Am I currently bearish or bullish on the PMs? Bullish but logical. I'd call it old bull rather than young bull. You've been around the block. Do I make any money off of running/managing this site? If so, how much per month? Do you personally? You make maybe $300 if that. Probably in the hole most months. I can make money following your general guidelines. Does my TA work and is it useful? If not, why not? Yes, you are great at watching trends and patterns. It's valuable. It helps me focus my own thoughts. Turd, you are doing a great job. Just remind the people to stack every day that they can. There are times that trading is foolish. Buy low and sell high and yada, yada. But everybody should be buying anytime they can. I don't care if silver is $50. If you can buy 5 oz that day, then you should. If you can't afford to buy every day, then save every day so you can buy.

¤
Feb 22, 2012 - 8:03pm

Thanks

No explanations or suggestions offered here on your questions. I know your thoughts on the PM's in general and their much higher then what they are right now. That's all that matters.

The PM's go up because there is no solution and austerity and deflation isn't an option in a asset value/collateral based world of credit we live in.

I have no idea what took place at ZH. The seeds of troll discontent have been spread about so it doesn't surprise me to hear your coming across crab grass out there. Try not to dwell on the slings and arrows you come across although I'm sure it's tough to ignore at times. If it bugs you they win or they feel good about it.

Scrape it off your shoes and .... Eff'em!

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