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 ()


BUDDHA PRINCESS · Mar 23, 2012 - 12:56am

Brother John F - Silver Update-China Bashers

he is calling the bottom?

Silver Update 3/22/12 China Bashers
ClinkinKY · Mar 23, 2012 - 1:10am

Don't you dare criticize Dear Leader

Marine faces boot for anti-Obama Facebook posts

SAN DIEGO - March 22, 2012 (WPVI) -- A Marine sergeant who started a Facebook group that is openly critical of President Barack Obama and posted comments saying he will not follow the unlawful orders of the commander in chief is facing possible dismissal from the Corps.

Read more:

Pegasus · Mar 23, 2012 - 1:28am

Solar Flare Activity

Solar Flares to Continue Pounding Earth Until 2014

NASA says the solar region responsible for recent flares is growing larger and becoming more unstable

By Jason Koebler

March 12, 2012 RSS Feed Print

The wave of solar storms that has pounded Earth over the past several weeks is only likely to get worse over the next year, according to a NASA scientist.

Sunspot 1429, the active region of the sun responsible for the flares, has been getting larger over the past several weeks, making it less stable and more likely for additional flares to erupt, which can cause damage to GPS satellites and electronic systems on our planet. NASA reported that the sunspot is now more than seven times the width of earth.


Keep in mind also that since the earths magnetospehere is at or near its lowest intensity, the protection that it usually provides in deflecting the solar radiation is much lower then normal. High levels of solar activity (CME's) + low magnetosphere protection = much higher than normal risk! What we really have to watch out for is that one of these times, the CME flare will be pointed directly at the earth, rather then out into empty space.

Party on Garth!

wildstylechef · Mar 23, 2012 - 2:27am

Looks like a bottom

By the looks of the chart we have hit bottom, having survived the 9:30 pm onslaught and the12:30 am Fedwire funds transfer onslaughts, the 3 am Euro the rest that's another question

wildstylechef · Mar 23, 2012 - 2:58am

Looks like a bottom

By the looks of the chart we have hit bottom, having survived the 9:30 pm onslaught and the12:30 am Fedwire funds transfer onslaughts, the 3 am Euro the rest that's another question

ivars · Mar 23, 2012 - 4:03am

GSR is moving up

I wonder if this slight upwards trend confirms the prediction of TEMPORARY GSR increase I made on March 2 here:

If it does, it will give additional support to green charts in silver and gold price predictions:

Senseosensei · Mar 23, 2012 - 4:25am

regarding figures

The problem i have with many sorts of analysis, these days, is that it is heavily depending on sound figures. Garbage in is garbage out, or in other words if your starting figures are lies, distortions, or misinterpreted, your analysis could be brilliant but the outcome is still very much garbage.

We don't believe the inflation figures. We don't believe the debt amounts. We don't believe the job reports.
So why would be believe the figures about oil reserves. Or the COT. Or any sort of chart data.

The only thing i am using is common sense these days. And it leads to conclusions i will never be able to "prove" to people who rely on figures. So be it. 

Excalibur Senseosensei · Mar 23, 2012 - 4:40am


I started buying silver, not because of charts or predictions, but when I saw that I kg of silver would only buy a very average sofa (couch). My common sense told me that silver must be way too undervalued. Selling the 'family silver' wouldn't get you very far at current prices. When 1kg will buy a top range sofa and a couple of arm chairs I might consider selling some. Until then I'll sit back on my IKEA sofa and relax.

wildstylechef wildstylechef · Mar 23, 2012 - 4:56am
SRSrocco Patrancus · Mar 23, 2012 - 5:24am



For some reason, there is still a great deal of misunderstanding when it comes to the Liberty Rig. The Liberty Rig is BIG, not because it is going to tap into the so-called 200 YEARS worth of oil at GULL ISLAND as Lindsey Williams would like you to believe, but because it needs to drill 34,000-44,000 feet of horizontal pipe to get the the Liberty Oil field.

This is the LIBERTY RIG:

This is how they get to the Liberty Oil Field:

The Liberty Field, according to RIGZONE who knows what they are talking about when it comes to RESOURCES and RESERVES, states there is about 100 million barrels of oil in the Liberty Reserve. 100 million times $100 a barrel is $10 billion dollars. The Liberty Rig costs $215 million to build and the reason why it is the biggest rig on the planet is because it will be drilling the longest HORIZONTAL WELL on the planet.

It is positioned in such a way that it is close enough to land that it can get to the oil even during the winter when the Beaufort Sea is frozen.

Again... Lindsey Williams does not realize that it is still profitable to spend $215 million to earn over $10 billion in oil revenue. The reason why BP did not attempt this sooner is due to the fact that it is very expensive to drill a world record 44,000 feet of horizontal pipe so the price of crude oil had to be high enough to make the venture commercially viable.

In conclusion, the Liberty Rig has to be large to be able to do this record breaking type of horizontal drilling. The HYPE being put out by Williams and more than likely Alex Jones in the next several days or week (bringing Lindsey on his show) is pure HOT AIR and not based of factual data whatsoever.


FanningTurds · Mar 23, 2012 - 5:25am

Maybe $26 has to be revisited

Maybe $26 has to be revisited first and then hold?

FanningTurds · Mar 23, 2012 - 5:28am
ClinkinKY · Mar 23, 2012 - 5:57am
ClinkinKY · Mar 23, 2012 - 5:58am
ClinkinKY · Mar 23, 2012 - 6:01am
ClinkinKY · Mar 23, 2012 - 6:03am
koan · Mar 23, 2012 - 6:21am

Paper price...

Anyone got ideas of how the end of the comex will play out? Are the comex & globex the sole drivers for paper price?

E.g. Inexplicable plunge in spot price (the EE gettting out of dodge) before it's made public?

Be Prepared · Mar 23, 2012 - 7:07am
Be Prepared · Mar 23, 2012 - 7:20am
· Mar 23, 2012 - 7:25am

Patrancus wrote: If peak oil

Patrancus wrote:

If peak oil is reality, why would BP construct and tow the largest offshore oil platform ever constructed way the heck up too Prudhoe Bay? The Liberty rig appears to be for real and is designed to suck one heck of alot of earl out of the earth.

Patrancus, I'd ask a slightly different question... if oil was just bubbling up out of the ground (a la Beverly Hillbillies), why wouldn't BP focus on that instead? It would be a heck of a lot cheaper and make them a ton of profit. If I'm running a huge company, I want to make as much profit as possible, not build an oil platform to drill down 40,000 feet.

Beverly Hillbillies Theme Song
Wizard · Mar 23, 2012 - 7:35am

@Dr Jerome

Boswell posted the exact site I was going to post. Thank You Boswell

The article in the March 21, 2012 Coin Week by our own Charles Morgan is a very good article about Eisenhower Dollars and Modern Coinage in general and the way it is represented by The Powers That Be in the coin world.


Member of the Ike Group since Feb. 2009

Collecting Eisenhower Dollars since Summer 2007

tpbeta · Mar 23, 2012 - 7:48am

Interesting blog from Trader Dan

"The weekly chart shows that since 2009, either the 50 WEEK or the 100 WEEK moving average have served to provide buying support on this time frame. Now that the 50 week has been violated, the next line of support comes in near the 100 week at the $30.15 - $30.00 level. If this does not hold, it will drop back towards the heavy blue line shown on the chart below $27."

Needless to say a return to $27 would be the cue to back up the proverbial truck. Could it really happen though? I'm not so sure.

boatman · Mar 23, 2012 - 8:11am


beware thinking that any sort of conundrum is going to change human nature or 'society' set in millions of years of 'evolutionary-cement'

humans take care of THEMSELVES first when push comes to is THE basic self preservation.....the prime directive.

and it is as it should be.

any altruism [other than vocal support or 'patting someone on the back'] exhibited by a homo sapien is do to parental reflex or the fact that 'if i didn't help i could not live with myself'........the second reason also being the reason for the first one, to some extent.

thinking "society will change only if we can __________________ " are the missplaced dreams of youth.

go ahead and have them if you must, but do NOT let it guide your wallet.

to deny the basic motivation of people is to land yourself in poverty and emotional distress.

i know some[mostly women] who 'want to take care of everyone' and say 'we can all just help each other all the time'.......'share everything'..........

we are not ants........we are individuals.........who will kill to protect themselves [if u won't u are a fool- but that is your choice]

but yes, we need to get along as best we can w/eachother........and be nice and polite to all that deserve it.

· Mar 23, 2012 - 8:37am

HIndenburg Omen?

Has anybody seen an analyst touting the Hindenburg omen lately? Last news story I saw was from 9/2010. Anybody here know how to calculate it? I was just wondering with all the bearishness on ZH and even infiltrating the MSM.

ClinkinKY · Mar 23, 2012 - 8:39am


Once upon a time the government had a vast scrap yard in the middle of a desert. Congress said, "Someone may steal from it at night." So they created a night watchman position and hired a person for the job.

Then Congress said, "How does the watchman do his job without instruction?" So they created a planning department and hired two people, one person to write the instructions, and one person to do time studies.

Then Congress said, "How will we know the Night Watchman is doing the tasks correctly?" So they created a Quality Control department and hired two people. One was to do the studies and one was to write the reports.

Then Congress said, "How are these people going to get paid?" So they created two positions: a Time Keeper and a Payroll Officer then hired two people.

Then Congress said, "Who will be accountable for all of these people?" So they created an administrative section and hired three people, an Administrative Officer, Assistant Administrative Officer, and a Legal Secretary.

Then Congress said, "We have had this command in operation for one year and we are $918,000 over budget, we must cut back. So they laid-off the Night Watchman.

NOW, slowly, let it sink in. Does anybody remember the reason given for the establishment of the DEPARTMENT OF ENERGY during the Carter administration?

Anybody? Anything? No? Didn't think so! Bottom line is, we've spent several hundred billion dollars in support of an agency the reason for which not one person who reads this can remember!

Ready?? It was very simple and at the time, everybody thought it very appropriate. The Department of Energy was instituted on 8/04/1977, TO LESSEN OUR DEPENDENCE ON FOREIGN OIL. Hey, pretty efficient, huh? AND NOW IT'S 2012 -- 35 YEARS LATER -- AND THE BUDGET FOR THIS "NECESSARY" DEPARTMENT IS AT $24.2 BILLION A YEAR. IT HAS 16,000 FEDERAL EMPLOYEES AND APPROXIMATELY 100,000 CONTRACT EMPLOYEES; AND LOOK AT THE JOB IT HAS DONE!


34 years ago 30% of our oil consumption was foreign imports. Today 70% of our oil consumption is foreign imports. Ah, yes -- good old Federal bureaucracy. NOW, WE HAVE TURNED OVER THE BANKING SYSTEM, HEALTH CARE, AND THE AUTO INDUSTRY TO THE SAME GOVERNMENT?

Hello!! Anybody Home?


The Night Watchman

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11/27 9:00 ET Case-Schiller home prices
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