Party Likes It's 2009

Thu, Mar 22, 2012 - 10:53am

I don't know if anyone else feels this way, but I've been having a strange feeling of deja vu and I couldn't seem to place it. I was standing there this morning, making some coffee, when it hit me. This is late 2009 all over again. If you were trading and stacking back then, I'm sure you'll recall that painful period. If not, let me give you a little refresher.

Where were you in late 2009? Were you listening to this:

The Black Eyed Peas - Boom Boom Pow
Avatar Movie Trailer [HD]

I know where I was...I was making some serious cash. In July of 2009, gold was trading in the low $900s. By Thanksgiving of that year it was near $1200 and Turd was flush (no pun intended). And I will never, ever forget where I was when gold peaked. I was reading ZH and watching Fox Business when I saw gold trade at 1225 and read a headline on ZH that the Bundesbank was going to be announcing a huge gold purchase in the morning. My personal sentiment indicator went to 10+. Unfortunately, that didn't work out so well. Beginning the next day, gold began to roll over, instead, and by the first Friday of December, I was doomed. The BLSBS report came out and was spun into good news. Dreams of "green shoots" and a "recovery summer" soon took over. The POSX shot higher and, over the next 3 months, rallied nearly 10% from 74 to 81.

The resulting decline in gold was brutal. First, it had peaked at $1226 and Santa had promised an "angel" at $1225 for years. The fact that I'd let greed overcome me and consequently didn't sell at $1225 was crushing and when gold rolled back down through $1100 in January, I was seriously depressed. All of the same old AGAs were claiming that $1225 was a blow-off top and that gold was soon going to be trading back below $1000 and was probably headed back toward $800. I was sick, Mister Hyde was furious and it seemed like all was lost.

But we didn't quit, we didn't give up. I knew that the whole "recovery summer" thing was a joke. The U.S. economy wasn't going to recover, the best it could do was stagnate and limp. The MOPE and the SPIN were so thick, I could barely breathe and when gold bottomed at $1052 in February of 2010, there was hardly anyone around who noticed or even cared. And that's the funny thing about bottoms, you rarely, if ever, notice them in the present as they are only visible in hindsight. With hindsight, we now know that the "green shoots" of 2009 became the dead weeds of 2010. All of the breathless proclamations by LIESman et al not withstanding, the facts, the math and reality took hold again by mid-2010 and gold finally surged back to the $1225 level in May and through $1225 in September.


My point is simple: We are currently in an identical situation. Gold surged to $1925 last September and, on 9/6/11, gold was ready to rocket higher on news that the SNB was going to devalue the Swissie by 10%. Again, sentiment was at the 10+ level and, again, we were within a few dollars of a Santa "angel" at $1936. Well, we all know what happened next and now, after six months of this brutal "correction" where gold has again fallen 15% while the POSX has rallied 10%, we are once again staring into the Pit of Despair. LIESman et all are screaming from the rooftops that the economy is improving and The Bernank is desperately implying that QE is over. Well, I call "bullshit" and I'm standing tall against them. Will you join me?

As I type, gold is at $1632 and silver is at $31.43. I've been maintaining all month that gold would likely bottom between 1600 and 1650 and that silver was headed to 31, maybe even 30. Why would anyone panic now when we are so close to the bottom. Always remember and never forget: THE ONLY WAY YOU WILL CONSISTENTLY MAKE MONEY TRADING GOLD AND SILVER IS TO BUY WHEN EVERYONE ELSE IS SELLING AND SELL WHEN EVERYONE ELSE IS BUYING. Period. Why is this true? Because this strategy essentially puts you on the same side of the trade as The Cartels, which as you know post-MFG, are exerting an increasing level of influence on the paper metal markets. It is clear to me that now --right now-- The Cartels are buying and covering not selling and adding. I discussed this yesterday in two, separate comments to the previous thread and they are reprinted below:

Submitted by Turd Ferguson on March 21, 2012 - 11:59am.

Back at the last highs of 2/28, total gold OI was 479,044. As of Monday's close, it had fallen to 434,226 for a drop of 9.35%. The last time gold total OI was at this level was 2/14/12 when price closed at $1718. Additionally, even back in January, we find higher total OI numbers. The week of 1/16 averaged total OI of about 439,000. Gold began 2012 with a price near $1600 and a total OI of 420,000.

Back at the price highs of 2/28, total silver OI was 115,866. Total OI was actually higher on 2/24 at 118,204. As of Monday's close, it had fallen back to 108,268 but actually bottomed back on 3/15 at 106,723 or a drop of 9.71%. The last time total silver OI was below 107,000 was 2/17/12 when price was $33.28. Total silver OI averaged about 103,000 in January after beginning the year at almost exactly this level, near 106,000.

Clearly, any "excess" open interest brought about by the early year rallies from 1600 to 1800 and 28 to 37 has now been wrung out. Again, this is just another signal that we are very near a bottom.

Submitted by Turd Ferguson on March 21, 2012 - 3:48pm.

Crazy silver OI report basis yesterday.

Yesterday, gold was down $20.20 and total OI was down 3,200 contracts. Perfectly normal.

Silver, however, was down $1.12 yet total OI expanded by 3,154 contracts. ​ The July12 alone went from 12,404 to 14,018. The only deduction that can be made is that a significant amount of new shorts entered the silver pit yesterday. What we don't know is whether it was Cartel or spec shorts. The CoT on Friday will provide some clues but it is highly likely that these are spec shorts. Why? Because The Cartel typically only adds shorts to:

  1. Cap price OR
  2. Attempt to start a waterfall/cascade selling event.

If only now we are seeing a huge run-up in spec shorts then we truly are very close to a bottom as the late-coming spec shorts will soon be fleeced just like the late-coming spec longs were fleeced on 2/29.

Total silver OI is now back to where it was two weeks ago, when silver was almost exactly $1 higher.

Ahead of the CoT on Friday, here is what we know:

Gold for the week 3/13--3/20 saw the total OI fall from 442,319 to 431,039 while price fell by $47 (2.77%).

Silver for the week 3/13--3/20 saw the total OI only fall from 111,730 to 111,422 while price fell $1.75 (5.2%).

Likely Conclusion: This week's CoT will be slightly bullish for gold but will show a significant improvement in the CoT picture for silver.

Anyway, the point is that is is always darkest before dawn and we are very deep into the wee hours. The global economies have not and will not improve to the point where we can "grow our way out from under the debt". No way, no how. In 2010, it took 6-8 months before logic, math and facts finally prevailed over hope, MOPE and SPIN. The truth will win again in 2012, you just have to be patient.

One more thing, I received some communication from "Winston" this morning and he provided some very helpful information. He is of the belief that the down move that began Tuesday evening and continues this morning is almost entirely related to April gold option expiration. Again, the Comex is now almost completely controlled by The Cartel as the only participants left are Cartel monkeys and HFT-WOPR momentum chasers. This allows The Cartel, which has full knowledge of the order books for both futures and options, the ability to swing price at their leisure and position price in such a way as to maximize pain for option holders upon expiration. Winston believes that the current target of their malice are not only the call buyers but also the out-of-the-money put sellers for April. Remember, gold was near $1800 just 4 weeks before expiration of the April options. A lot of traders believed that there was easy money to be made by selling out-of-the-money puts, the April 1650s and the April 1600s. Those that did are getting seriously squeezed right now and they are being forced to short actual gold contracts to hedge themselves. Winston thinks that the 22,000+ contracts between 1600 and 1650 are the true target of The Cartel here and that their ultimate intent may be to drop gold as close to 1600 as possible before expiration at the close of business next Tuesday.

What's interesting about this is how it fits right in line with all of the other "bottom signals" we've been discussing here as of late. A low near $1600 tomorrow or early next week would:

  1. Complete the drop to stout support at 1600
  2. Complete the right shoulder of a massive reverse head-and-shoulder bottom
  3. Bring silver down to 30-31, just like we'd envisioned
  4. Drop gold open interest levels all the back to early January levels
  5. Put the RSI and MACD indicators into deeply oversold territory
  6. Drive sentiment and our new TITS indicator to record low levels. Even Mister Hyde is once again suicidal and ready to simply cash out his IRA before it goes to zero. He'd like to take it in cash and go to Vegas where he can blow the rest on blackjack, Jack Daniel's and hookers.

And don't forget that lease rates have clearly bottomed and have significantly reversed. In September and December of last year, lease rates reversed about two weeks before price.

So, in the end, hang in there. I know it's tough and painful to watch everything go down when you know you are on the right side long-term. But let me assure you: This, too, shall pass. Soon...very soon...the metals will bottom and resume their inexorible march higher. Of this, you can be certain.


About the Author

turd [at] tfmetalsreport [dot] com ()


Mar 22, 2012 - 10:56am



Dr G
Mar 22, 2012 - 11:02am


Silver bitchez. I still think 29 would be in the cards, as it would make a level shoulder for the reverse head and shoulders. 30 would work just as well.

Of course, the pattern is a reverse head and shoulders until it isn't...

I'll add that I am especially comforted by Turd's gold chart he posted, where the high of 2009 and then the 14% loss into 2010 are nothing more than a slight blip on the multi-year chart.

Mar 22, 2012 - 11:04am

How to control COMEX bots 101.....................

The funny part about this screen cap, is that the volume on the sell side isn't even real. I wonder who would make that sort of trade? That large order isn't a bot, its a MM.

Air Garcia
Mar 22, 2012 - 11:04am
Mar 22, 2012 - 11:10am

I trust everybody did a little buying this morning

add a little here and there when the price is right, could get righter but who knows? But how much "righter"? Is Turds 1600 a good number? With all the BS happening and coming out of DC and NY should we expect PM to sell off further? Where are the big boys buy points and how do we ride their coattails.

Did anybody hear John Williams on Puplava saying that interest on 5 trillion of debt is not in budget because its inter "agency" including social security "lock box"?

Thats why debt increases more than budget deficit.

And as a beneficiary of Social Security shouldn't we have input to what its invested in besides 1-2% treasuries so that perhaps the trust fund does not run out sooner than it has to?

Do we see that the path we are on cannot be turned around unless we cut 2 Tril out of spending for openers (how do you spell depression) and then more to actually reduce debt.

And thats at the Fed level--not even state and local.

Mar 22, 2012 - 11:13am

Jesse Crossroads Cafe

Jesse charts how very often each month metals are pushed down into their OE.

OE is Tuesday the 27th. I will be buying for a bounce on Monday.

If you go over to his site he shows this on a daily basis. Makes perfect sense. The hoods,thugs and SweatHogs flush out all option players then buy up the bottom.

Note the bounces that come immediately following OE each month quite often.

Also we are in a time window for last week of the month. Thats buying time for metals imo. Worst time to buy is after first 3 days of the new month.

And the New moon begins today. Cycle up soon!

Regarding support and resistance. IMO there is no support, there are only waves. What does water do when it flows into a wall? If its strong enough it flows right over. The tsunami wave down that hit from the Silver and Gold top back in late February is still running inland, drowning natives and apprehending the naive and those that thought they would be safe with higher ground. But soon it will flow back out to sea, very soon. 29.50 could do the trick.

Mar 22, 2012 - 11:13am



can't be said any better. Stackers- keep on stacking. Traders- Good luck! Heading to the LCS for the sale!

Mar 22, 2012 - 11:20am

Bought more

I learned a long time ago that I cannot pick a bottom. Now I am buying in stages. I bought some on Monday and I just bought some now. I bought 1/4 the money each time. I have 1/2 my money left still. It keeps some dry powder in case it goes down more. If it happens to break to the upside, I can buy again. I may have missed a few cents but in the grand scheme of things, who cares?

Helps me feel much better about it instead of trying to emotionally trade.

Mar 22, 2012 - 11:20am


Just wake me up when this is over. I'm rolling over and going back into hibernation. When it gets exciting- give me a nudge, I'll roll out of bed check my stack then go back to sleep. Better yet , today's nudge is good enough, bc I need to be rid of some fiat because I do have enough TP in the compound so might as well have something of value.

Mar 22, 2012 - 11:24am

Printing is the only option

"The global economies have not and will not improve to the point where we can 'grow our way out from under the debt'. No way, no how."

That's the key. Look, from the start of the federal government's current fiscal year on 10/1/11 through 2/20/12 (Tuesday of this week) the federal debt increased by nearly $800 billion! And we aren't even halfway through the fiscal year, which ends on 9/30/12. We still have over six months to go. We passed the point of no return long ago. The federal government's debts are unpayable.

Yes, it's discouraging that gold and silver prices are in the doldrums. But it can't continue.

Mar 22, 2012 - 11:24am

Big Picture

We can't forget the US Government has tacked on $360B in fresh debt since Jan 1st 2012. That is a rate of $120B per month or $1,440B per year! These are bonds "investors" are losing money on after the inflation tax. How long can Ben keep the music playing?

Mar 22, 2012 - 11:26am

I must be going nuts or something

Yesterday I believe I watched a video trailer on zero hedge called "end of the road". Now I could swear that it went into the matrix and the freedom speech from Braveheart. Yet today it shows nothing of the sort. Only Turk Schiff Maloney Griffin Sprott Rickards. Not the other bit.

I wonder if I am losing the plot. Did I make this bit up or did I see it elsewhere or was it there and has been changed?

Need coffee - rock back and forward in chair - drool a bit. That sort of thing. Decided to sell house - now I am wondering if my mind may have gone down the path on this one too. Very disturbing.


Mar 22, 2012 - 11:31am

Turd the Comedian...

Turd says, "And that's the funny thing about bottoms, you rarely, if ever, notice them in the present as they are only visible in hindsight."

Indeed, you can only see a bottom if you look behind you. Just like TITs, you can only see them if you're looking forward!

Have a great day!


Loud Noises
Mar 22, 2012 - 11:35am


Two months ago we were calling bottoms at numbers like 26. Now we talk about bottoms at 30. Its not like we're never going to see any bottoms ever again during this roller coaster ride. But as long as the general trend is up, I'm comfy staring at these bottoms as they come and go.

On second thought, I think I should've put this in the TITS thread.surprise

Mar 22, 2012 - 11:44am

EXK Proves that Sprott's Call to Action Can Work!

Silver prices were quite volatile in 2011. After opening the year at $30.63 per ounce, silver climbed to nearly $50 on April 28. However, prices were beaten down to $26 by December and ultimately closed the year at $28.18. This year, silver prices rebounded to $37 per ounce in February and provided Endeavour an opportune time to sell its silver holdings. The miner explained, “Metal prices did rebound in Q1, 2012 and management subsequently sold most of the metal held in inventory at prices significantly higher than the December prices.” Since gold and silver are considered to be real money in many nations worldwide, they can be liquidated easily when the need or opportunity arises.

Mar 22, 2012 - 11:47am


Turn off TV. Unsubscribe any newspaper.(unless you like the entertainment) Maintain data feeds. You know what you need to watch. 10-4 to the"Bullshit"!!!!!! We are exactly where we need to be. Continue stacking even if only an ounce or two a month!!! Strip Silver from the market, as many more are joining us. I seriously see an increase around me. I continually encourage fellow workers and friends/strangers to buy. People are catching on to something being wrong.

Mar 22, 2012 - 11:49am

1600 also coincides with

1600 also coincides with the bottom end of the channel that began in 2009. This is by far the most painful correction in gold for some reason though.

Mar 22, 2012 - 11:54am
Pax Argentum
Mar 22, 2012 - 11:55am

Standing Watch on the Wall...

..with the Turd, calling bullshit on the 'Bama, the Bankers and the Bernank and buying all the way down.

Famous Speeches: A Few Good Men


Feed the Turd.

Mar 22, 2012 - 11:57am


We have lost our views of history and what this nation has been built upon:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not".

"To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical".

"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them". Thomas Jefferson

There were many great men and women who paid the full price to stand against the EE of their days. The EE governments of Europe had an iron fist upon the people and freedom of any kind was challenged with prison and death. Men such as George Fox and William Penn spent their time behind bars for their faith and it was the EE governments that placed them there.

We hear the views of "the separation of Church and state" and what that means to the government. However, in my view, I see the continual invasion of the government into the basic beliefs of the Church and the laws being passed to muzzle the flock. This is all wrapped around the word "discrimination" but is really muzzling.

The great men that we often quote, the fathers of the nation, sailed to America to flee what we are now re-establishing. How will we raise up men like George Fox, William Penn, Oliver Cromwell and Thomas Jefferson in this era?

Mar 22, 2012 - 11:58am

And Now For Something Completely Different .....

... to hopefully lighten the mood.


Breaking "New Terrorist Group" story from the Not The Nine O'Clock News team :-

Nevertheless, opposition groups are drumming up a great deal of sympathy in the liberal media. Core democracy group Behead All Clients is now holed up in the derivatives group, and surrounded by goons loyal to Al-Blankfein .

“They have us cornered in here,” said a message smuggled out to liberal daily El Gardianista yesterday, “but our guys are working hard to leverage one of the stapling machines into a bazooka. When we launch our secret Obligations Missile system, the despicable Al-Blankfein regime won’t know what’s hit it.”

Mar 22, 2012 - 12:01pm


Think you might have mentally spliced a video put out by David Morgan - though doesn't mean you haven't lost the plot - after all, you're on this site.

Dr G
Mar 22, 2012 - 12:05pm

@apex101, it's the most

@apex101, it's the most painful correction in gold thus far because the environment around us (financially, politically, etc.) is the worst it's ever been. Intuitively we know that gold should be going crazy to the upside right now.

Mar 22, 2012 - 12:11pm
Mar 22, 2012 - 12:14pm


Check the pit of your stomach.

Is this what capitulation feels like?

The need to barf up everything and walk away?

Been there!

You will feel better for the moment, but be kicking yourself in a month or two.

Along with Turd, staying long and strong... and nibbling with what little dry powder's left.


Mar 22, 2012 - 12:17pm

be right and sit tight


Go enjoy the spring, come back later on.

Fundamentals changed? No, getting worse by the day.

P.s. this is easier if you don't trade and just stack.

Mar 22, 2012 - 12:17pm

Gold Correction

There hasn't been a real deep correction in gold in many years in comparison to silver,

Gold was due to correct!!!! So the way I see it, it is a gift and great opportunity to buy.

Number 47
Mar 22, 2012 - 12:18pm

Militant islam calling for gold standard

From ft alphaville

London, UK, March 19th 2012 – Hizb ut-Tahrir Britain, will hold a report launch [11am Thursday, 22nd March] of Gold Standard – The Future For a Stable Global Currency – a significantly relevant report in the current economic crisis.

(Just to make clear – that’s Hizb ut-Tahrir, the radical Islamic group)

A taste, from report author Jamal Harwood:

The world financial markets remain in crisis. Growth is declining, there are questions about whether the Eurozone will continue in its current guise, and the US deficit and budget shortfall is at record levels. Markets have failed to recover from the 2008 crisis. In this environment, western governments are resorting to the printing of fiat (paper) money as the only solution to keep the system afloat. This debauchery of their currencies is theft against the people via inflation of the currency. Solutions need to be presented and debated. We show how the Islamic economic system provides practical solutions which economists and thinkers (from both the Muslim and secular worlds) can understand. The report sets out 10 common arguments against the gold/silver standard which are often presented and we refute these.

Mar 22, 2012 - 12:26pm

Take it from Gabby Johnson.

Ain't no way, nobody, is going to leave this town!

Mar 22, 2012 - 12:28pm

Both Metals

not going anywhere till October. Enjoy the consolidation.

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 2/11

2/12 12:45 ET GCP speaks
2/13 8:30 ET CPI and three Goon speeches
2/14 8:30 ET Retail Sales (December)
2/14 8:30 ET PPI
2/15 8:30 ET Import Price Index
2/15 9:15 ET Cap. Util. & Ind. Prod.

Key Economic Events Week of 2/4

2/5 8:30 ET Trade Balance
2/5 9:45 ET Service PMIs
2/5 9:00 pm ET Trump SOTU
2/6 8:30 ET Productivity and Unit Labor Costs
2/6 7:00 pm ET CGP speech
2/7 9:30 ET Goon Clarida speech
2/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 1/28

1/29 10:00 ET Consumer Confidence
1/30 8:30 ET Q4 GDP first guess
1/30 2:00 ET FOMC fedlines
1/30 2:30 ET CGP presser
1/31 8:30 ET Personal Inc, Cons. Spending and Core Inflation
1/31 9:45 ET Chicago PMI
2/1 8:30 ET BLSBS
2/1 9:45 ET Markit Manu PMI
2/1 10:00 ET ISM Manu Index
2/1 10:00 ET Construction Spending