Well, THAT Was Interesting

Wed, Apr 25, 2012 - 4:45pm

What a day, huh? First we saw some May silver call-sellers get squeezed. Then, the FOMC statement caused a sharp selloff. Unfortunately for The Cartel, no waterfall ensued as price quickly rebounded. We now look to be on the verge of a rally. Let's get started!

I know that many folks come here only to read my blogs or to visit Pailin's Corner. In doing so, many miss out on the terrific information that is shared in the comments. Rather than re-type my thoughts from earlier, here are some C&Ps of my comments from the previous thread:

Submitted by Turd Ferguson on April 25, 2012 - 10:46am.
If anyone is willing to gamble in the casino, now would be the time. This reeks of a screwing of put sellers ahead of option expiry. The final beatdown before the reversal.

Submitted by Turd Ferguson on April 25, 2012 - 11:17am.
The summer is going to be hot and explosive, though, so anyone gambling should be sure to buy time, too.
Maybe (buy) the Oct or Dec (silver) $40s?
All I know is that today's action is bullshit. May call sellers have been forced to hedge by shorting futures. Just like the action we saw in late March prior to April gold option expiry. Recall that after dropping to 1630, price rallied sharply back toward 1700. Same shit here.
I expect silver back to 32 or even 33 relatively quickly, The Bernank notwithstanding.

Submitted by Turd Ferguson on April 25, 2012 - 11:21am.
A drop to 30 or just below is possible but I firmly believe that that is it.
Physical demand is very strong and there are literally tonnes waiting and hoping to be filled at $30.
EVERYTHING points to a bottom here. Longterm holders WILL NOT be disappointed.

Submitted by Turd Ferguson on April 25, 2012 - 11:48am.
And most should NOT (be trading).
However, this action reminds me of the day in early November 2010 when QE2 was announced. A beatdown headfake occurred that day prior to the announcement.
Again, if you are willing to risk a loss in the casino, this looks like an excellent opportunity to give it a whirl.

Obviously, I believe today's low was the bottom. Maybe there will be a retest but $30 silver is going to be a very difficult barrier for the permabears to break. I would still be looking to put on a speculative position here with money you are fully content to lose if you are wrong or if it is stolen from you. That said, if you absolutely feel compelled to trade in the casino, this would be a good time to give it a try.

Gold is basing above what appears to be solid support between 1625 and 1635. As our pal, Winston, pointed out earlier today, physical demand is so strong and consistent here that further, sustained drops in paper price are highly unlikely. Gold will show signs of life when it trades back above 1650 and then 1660. Let's go into more detail and begin to get excited then. For now, let's just be happy to be building such a strong base from which we can, eventually, catapult forward.

Clearly, I'm excited about silver here, too. $30 silver completes the right shoulder of our massive, reverse H&S formation and Winston has informed us about incredible demand for physical silver at that level. I am nearly 100% certain that silver won't fall again much below today's lows. As it bases here, it is preparing for Battle Royale II. Of course you remember Battle Royale I at $36 in late February and the ensuing crush. Well, Battle Royale II now lies near our old nemesis of $33. What will happen next time? I can't say for sure but I'm quite certain we won't have to wait too long to find out.

Just a quick word about open interest and the next CoT. Today's OI (basis yesterday) came in at a new low of 395,389 in gold and 122,325 in silver. Recall that yesterday, price rose by about $10 so what we clearly saw was short-covering ahead of The Bernank. No doubt many of those same shorts were put back on this morning and are now, once again, waiting to be covered. While silver rose 22c yesterday, OI fell by about 400. Clearly this was a short-covering bump, too. Please allow me to emphasize this again:

Since March 15, paper silver has fallen in price by over almost $2 yet total Comex open interest has expanded by almost 15%. There is no question in my mind that this is the result of short contracts being added. Just as the EE fleeced the over-excited longs in February, they will soon fleece the over-indulgent shorts. Just be patient.

For the CoT reporting week, gold fell about $9 while shedding 3200 in OI. Silver fell $1.22 while adding about 1000 contracts. Here's why both are ultimately positive: Gold liquidity has been wrung out and now sits patiently in the sideline, waiting to return as the charts improve. The much smaller silver market has swung from speculative long excess in late Feb to speculative short excess in late April. The EE, playing both sides of the specs for profit, will soon close the trap on the foolish spec shorts.

Finally, this short video about government debt. Not much new here for the average Turdite but, since it's presented in such a brief and simple manner, perhaps you can C&P the url and email it to your friends.

Does Government Have a Revenue or Spending Problem?

About the Author

turd [at] tfmetalsreport [dot] com ()


Apr 25, 2012 - 4:50pm

2nd maybe

2nd maybe

Apr 25, 2012 - 4:51pm

First ?

First time first.(silly boy)

Apr 25, 2012 - 4:53pm

Thurd & Jim

Video unavailable
Apr 25, 2012 - 4:56pm

Thanks turd

Thanks turd

Ferd Torgerson
Apr 25, 2012 - 5:06pm


Not buying or selling right now. Just waiting to see if my miners can make a steady recovery.

Thanks for the update, Turd.

Apr 25, 2012 - 5:11pm

This amazes me every time I see it

Did you know this?

From Uncle Ted:

The entire world’s gold bullion inventory (bars held for investment or monetary purposes) is now worth 150 times more than all the world’s silver bullion. The numbers are pretty straight-forward; the 3 billion ounces of gold bullion in the world is worth roughly $5 trillion at current prices ($1650) versus the $31 billion value of the world’s 1 billion ounces of silver bullion (at the current $31 price).
Apr 25, 2012 - 5:13pm

a small comment

the term is reeks - since you are speaking of how it "smells" metaphorically, or feels

the work "wreaks" means, for example, a storm that "wreaks havoc" - to bring about or cause misfortune

Hard Rain
Apr 25, 2012 - 5:14pm

Holy Batman

I actually made a top ten. I need to buy a lottery ticket!


Apr 25, 2012 - 5:16pm

Thank you

Noted and corrected.

Apr 25, 2012 - 5:17pm

It was this posted

It was this posted before?

United States Budget Dilemma.wmv
Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

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Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

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