I Suck

369
122
Wed, Mar 14, 2012 - 11:51am

There. That feels better.

Seriously, though, since I'm not pimping a newsletter or trying to sell you something, it's pretty easy to publicly discuss my faults. I don't have to try to convince you that I'm some all-knowing guru with a tried and true method for predicting market moves. No on is and no one can. If I was right all the time, why wouldn't I be sitting on a beach somewhere instead of spending my time typing this blog?

That said, I do think I've got a better handle on this stuff than most folks so, even though there will continue to be periods like the one we are currently experiencing, I'm going to keep trudging forward confident in the fundamentals and eagerly awaiting the day when true price discovery is finally allowed in the precious metals.

What gets really frustrating for me is my occasional reluctance to trust my own instincts. I'm sure you feel this way, too. Whether it's interpersonal relationships, your dealings in your career or with your family or your financial decisions, we all suffer from doubt. Though we may instinctively know the correct answer, we doubt ourselves to the point where we search for outside opinions in an attempt to confirm or deny our beliefs. Occasionally, those outside opinions sway us away from our original plan/thought/idea. Sometimes this is a good thing. Sometimes this is a bad thing and, when it's bad and you've been influenced away from your correct, original interpretation, you end up "kicking yourself" for being gullible/insecure/foolish etc.

And, so, here I sit this morning. Correct and wrong at the same time. Instead of sticking with my original ideas, I've now gotten myself so twisted up that you, my dear reader, probably have no idea where I'm coming from these days. I kind of wonder, too. So, in an attempt to bring back some clarity, I must try to lay it all out through my favorite method, the black dot chronology!

  • First and foremost, none of the fundamentals for owning precious metal have changed. In fact, they've only gotten stronger. LTRO, ZIRP, negative real interest rates and a U.S. government debt that continues to grow at $100B+/month confirm this.
  • After being drastically oversold at the end of December, the metals staged a dramatic rally through January and February. This rally was on the back of renewed interest in Comex paper trading as total open interest grew by about 15% in both metals.
  • I began writing about a pending "Battle Royale" in late January. The "Battle Royale" lines were going to be difficult to cross as The Cartels would be forced to defend them. I knew they would be defended fiercely because, if price were to be allowed through those lines, enough new money would be brought into the PMs that price would begin to rapidly accelerate.
  • It was at that time that the idea began to form in my head that gold would be allowed trade to 1800 and silver to 36 before a smashdown would take place that would drive price back toward 1600 and 30.
  • But, then, February happens and I once again begin to fall prey to bullishness. The metals move toward the Battle Royale lines much quicker than I'd anticipated and, because of this, I begin to feel that maybe momentum will surge the metals through Cartel defenses and we will win.
  • And then February 29 comes.
  • On that day, silver surges through 36 and even 37. The new money that The EE feared would flood the pit is, indeed, flooding the pit. Normally, I would have seen this for what it was...an intentional, last-minute suck-in of the longs before the planned beatdown. Instead, once again, I fell prey to bullishness. Why? See the next bullet point.
  • The morning of the 29th was when I first found out about the new silver exchange in China that Ned, Andy et al hope to build and operate by summer. "Perhaps this rally is in anticipation of that", I thought. "Maybe demand is forcing the EE's hand", I hoped. "True price discovery may be right around the corner", I dreamed.
  • So, instead of sticking with my original plan/idea from late January, I got sucked into the dream again.
  • Now it's back to reality. Obviously, The Cartels intended to defend 1800 and 36 all along. Obviously, the sucked in all kinds of new HFT algo money just in time to fleece them through the same old, manipulative process they've used for years. Eventually, the "Mississippi Leg Hounds" will have finished their business and physical spot buying will turn the ship. Just like in September. Just like in December.

So what does this all mean for price? Well, lease rates are not signaling that there are declines ahead so that helps:

Total open interest has fallen back but it is still about 5% above the levels we saw in January. The means that The Cartels still have some WOPR sheep left to skin so we must expect some additional downside.

And the charts confirm this, too. In fact, if I had printed a chart back in early February and drawn "future price action" onto it, I would have likely drawn something that would look remarkably similar to the actual daily charts below. Price did indeed move up to the Battle Royale lines. Then there came a blistering, manipulative Cartel event. And now we are moving down toward a reverse head-and-shoulder bottom that will inspire aggressive physical buying and provide us a bottom if the next 5-10 days.

OK, lets' wrap this up. What do we know?

  1. I must fight the temptation to doubt myself just as much as much as anyone else.
  2. I must stick to my convictions.
  3. If I allow myself to vacillate, I become just as worthless as countless other newsletter Carnacs.
  4. The last two weeks of PM price action is simply another Cartel-manufactured robbery of WOPR and trader wealth.
  5. This "correction" will end at a price where physical buying stems the paper selling flood.
  6. Gold will bottom somewhere between 1650 and 1600. Last week I mentioned "splitting the difference" and calling it 1625. I'll stick with that.
  7. Silver will bottom somewhere between 32 and 31 with an outside shot at a sharp, brief plunge toward 30. For analysis of both, I refer you back to this post from last Tuesday: https://www.tfmetalsreport.com/blog/3488/impending-bottom-gold-and-silver
  8. Prices will then reverse and turn higher. Gold will move back through 1680 and then 1725. Silver will trade back above 33 and 34.50.
  9. At those points, you'll know that Battle Royale II is right around the corner.
  10. Let's look for a bottom in the next 5-10 days for both metals. Let's look for Battle Royale II before the end of April.

That's all for today. The Turd has plenty of springtime yardwork and preparation to do so I'm hitting the "SAVE" button and walking away. Please keep the faith and trust your instincts. Your eyes and your brain do not deceive you, the media and The Cartels do. Don't let them. Be patient. Be strong. Physical precious metal is your only protection against this ongoing financial disaster. Don't let anyone talk you out of it.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  369 Comments

bellyacre
Mar 14, 2012 - 11:53am

FIRST

FIRST

dgstage
Mar 14, 2012 - 11:53am
diegeiro
Mar 14, 2012 - 11:57am

Thurd

Thurd

MetalShawn
Mar 14, 2012 - 11:59am

Second

Probably better I didn't get first on an "I Suck" post... LOL ;-)

Good post, very useful, thanks!

Looner
Mar 14, 2012 - 12:01pm

Don't be too hard on yourself Turd...

You're a tremendous slouch. Just kidding.

I think this thing is rigged, in which case, they are intentionally trying to confuse you. It seems like a hall of mirrors but just keep your point of reference in the physical realm and you'll be fine, I think.

Anyways, you're first two silver charts say a bottom of 30-31 but your final chart suggests we'll see something close to 25 again.

Be Prepared
Mar 14, 2012 - 12:01pm

I go Fifthly

No I really go forth......

No One Sucks!.... it's the knowledge about the reality we live in.... This is absolutely a tough road and it will be full of $hit storms a long the way.... this is a small one of them.

The long view is important..... and being flexible in the short run. The next 4-5 months are going to be about equities whether we like it or not.... and fighting their push won't make us winners. We must take the information being provided by their moves and make our own as it best fits our plans to prepare.

Buy when it makes sense for the stack and, if you're a trader, it might be time to buy some equities and look for the entry back into paper metal. All of this isn't going to make you rich because in a very short time.... the measurement of wealth may change very drastically.

Find your inner juju.... and know what you know.... and trust that with each step you are heading in the right direction. They want to wear you out..... They want you to give up....

The days ahead will be this times 10... times 20.... times 100 until they figure that it's finally in their best interest to let the beast go.... Stand tall and gird up friends... the battle hasn't even begun!

Turd.... it's a crazy world.... this song's for you..

Video unavailable
Mar 14, 2012 - 12:04pm

I should add

the rally in The Pig and the subsequent dumping of gold this week also suggest that something is terribly wrong with the Greece "deal". If a Lehman-like financial market calamity ensues over the next 10 days, we'll be able to look back and see that we were warned well ahead of time by these two markets.

Out to the yard I go. Good luck, everyone.

worldend666
Mar 14, 2012 - 12:05pm

Don't let a couple bad ones mess with your head

>>Though we may instinctivelyknow the correct answer, we doubt ourselves to the point where we search for outside opinions in an attempt to confirm or deny our beliefs. Occasionally, those outside opinions sway us away from our original plan/thought/idea. Sometimes this is a good thing.

I would not sweat it Turd. Jesse Livermore, the greatest trader who ever lived had his biggest flop when he listened to advice from a so-called guru. YOU make good calls most of the time. It's easy to let a few bad ones in a row sow the seeds of doubt.

diegeiro
Mar 14, 2012 - 12:06pm

Lindsay Williams q&a

Did anyone else get to hear Katie Rose ask Lindsay Williams her questions last night? it was pretty great! she asked if Victor the cleaner was right and that we should only be stacking gold. His answer was that both gold and silver are what the elite consider currency, but that they prefer gold, in part because it is less bulky. he also was later asked about Breitbart. he sd he was not allowed to speak about what Breibart was going to reveal, but that he had crossed a line. he also said that the elite are really angry about Obama not allowing the Keystone pipeline. It may very well cost him the election.

pourty
Mar 14, 2012 - 12:06pm

What about price divergence?

I understand that, given the paper-trading paradigm, we expect to see a recovery in the spot and futures prices after these massive sell-off's... but in a post MF-Global world... ?

Every commentator I follow has mentioned at one point or another the growing irrelevance of the paper spot prices. Clearly, the scheme isn't dead yet, but when will it be possible to see it on the horizon? From my personal perspective, as long as Gainesville and Provident continue indexing their prices to spot and a small premium, there's no divergence.

It would be interesting to have some OCD person (or web guru) start tracking premiums on the 3-4 major metals retailers for AGE and ASE's over time with a kitco-style chart.

In any case, BTFD. I bought some yesterday, but now I'm on the sidelines, wondering if I should hold back my remaining fiat for sub-$31 silver...

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Key Economic Events Week of 10/21

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