The Greased Pig

Thu, Apr 26, 2012 - 10:44am

Isn't it funny how the brain works? I start out this morning by looking at a few charts of the POSX. Next, I'm looking at a chart of crude. I begin thinking about writing a post regarding a "greasy pig" and, before I know it, I'm watching this video. Out here in the sticks, nestled between Nowhere and Bumfuk, the locals find amusement at such simple things. Maybe you will, too.

Greased pig contest

So, anyway, back to the charts that started all of this earlier. As I said, I'm apparently one of the few "analysts" who is still watching the POSX. Seems there's hardly much discussion about it these days. A false sense of complacency perhaps? Perhaps, and with so many folks concerned now with Spain, France and the EU in general, maybe The Pig is set for another leg higher. However, with the metals making what appear to be such obvious bottoms, perhaps ole Pigatha can provide some impetus for a price recovery.

Take a look at these charts. Note first that on the hourly chart, The Pig is firmly entrenched in a down channel and has been for the last two weeks. This is such a prominent and obvious trend that it may take something dramatic for it to break out in the short term. Why is a short term breakout important/vital? Well, take a look at the daily chart beside it. The index now sits right atop the trendline from the lows last August that were made prior to the announcement of Operation Twist. A breakdown through the trendline would indicate a minimum drop to 78 and, if 78 fails, a drop back toward 75 or even the all-important 73. Also note that a case could be made that The Pig has already broken down through the line. (This is the lighter pink line on the chart.)


Another major indicator that has reached a critical point is crude. Take a close look at the daily chart below. IF crude can break higher here and move back through $105, it will signal the beginning of a new UPtrend and set a target of at least $110, if not $115. However, if it fails at this level, it will drop back to at least $101 and, failing there, will have a go at $98. Watch this closely the next few days.


As you might imagine, I am very relieved by the action the metals since late yesterday. It was so clearly obvious that they had to be bought at $30 and $1630 but, with things the way they are post-MFG, it's increasingly nerve-wracking to stick my neck out and urge a trade. At $1655 and $31, I'm very excited about our prospects from here but I would strongly urge anyone who bought yesterday to apply some stops at yesterday's lows. Today, we saw selling into the London PM fix at 10:00 am EDT but have since seen a further rally. The next critical level in gold is 1660 and for silver it is the old support level of 31.00-31.35. Moving back through and closing above those levels would be very encouraging and would likely cause an extension of the rally as more nervous, weak-handed shorts continue to cover.

If you have some time today, you should read the items linked below. First, our pal Jim Quinn has released part 2 of his current series. And your other assignment is to read the text of this speech to the NY Fed by Robert Wenzel. Like Jim Grant last month,, Wenzel blasts away at our fuzzy-headed monetary masters. Why the Fed pretends to be interested in all of this is beyond me. I imagine they are just attempting to patronize their critics and, once they leave the building, they simply laugh off the criticism, if they even listened at all.

Finally, I'll be recording this week's podcast later today. Given the increasingly blatant manipulation of the PMs, I thought I'd ring up Ranting Andy again in order to have him explain, in greater detail, how The Cartels coordinate and implement their attacks. If any of you have specific questions you'd like me to pose to Andy, please include them in the comments section of this post. I likely won't be able to ask all of them but I'll certainly pick a few. Thanks in advance for your input.

I hope everyone has a fun day. Keep your fingers crossed for a move back above 1660 and 31. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Apr 26, 2012 - 10:45am


Numero Uno

silver bullett
Apr 26, 2012 - 10:49am



Haole Guy
Apr 26, 2012 - 10:50am


I mean third

Apr 26, 2012 - 10:54am

"All Of The Above" energy policy. or...

... stack, stack, stack.


EPA official apologizes for call to 'crucify' oil companies, senator investigating

A top EPA official has apologized for comparing his agency's enforcement strategy to Roman crucifixion -- as Republican Sen. James Inhofe launched an investigation and told Fox News the comments are part of a campaign of "threats" and "intimidation." 

Al Armendariz, the EPA administrator in the Region 6 Dallas office, made the remarks at a local Texas government meeting in 2010. He relayed to the audience what he described as a "crude" analogy he once told his staff about his "philosophy of enforcement."

Read more:

Apr 26, 2012 - 10:56am



Apr 26, 2012 - 10:59am

Lets focus on Oil Manipulation, says Obama Regime bastard

In the meantime Obama and the mainstream are hinting of manipulation in the oil prices and that they will stop this cartel who is manipulating the oil prices on behalf of the American people whilst in the shadows the banking oligarchy manipulates the money of the people - silver - so that the people never even begin to ask themselves what is this cotton in my leather wallet and why must I reach for my pocket everytime I am after a nibble after a long underpaid day at work in this slave ship known as the USSA? This banker designed control grid civilization must be ended, lights out.

Apr 26, 2012 - 11:01am

Off topic but...I thought I

Off topic but...I thought I would share the name of a company where I have gotten some good deals on bullion. The company is I have dealt with them for many years and they have very good pricing. Be sure to check out their daily deals. I am in no way associated with them but I found Colorado gold from some ones recommendation here and thought I would share.

Apr 26, 2012 - 11:05am


Is NUGT another one of those etfs which slowly soaks your money away? Its a triple etf but every time gold or miners go today, it doesn't even catch up to 100% of the move.. what kind of miners does it track? any ideas?

Apr 26, 2012 - 11:05am

Really beginning to squeeze here

Quite a battle in both metals here. 1660 and 31 being ardently defended. IF we can get through, buy stops will send us to our primary short term target of 1680 and 32.

Apr 26, 2012 - 11:12am


From Ireland, David Mcwilliams tells it like it is with no holds bared!

"When it comes to the fiscal compact, the EU is pissing down our backs and telling us it is raining. And the fact that the government is also going with this line implies that it is party to this falsehood. In these weeks of April showers as we go into the campaign season, remember that sensation of dampness you are feeling down your back is a bit too pungent to be water." 

Greece, Ireland, Italy, Portugal and now Holland, soon to be followed by France after Sarkozy is ousted from office, are all coming to the end of the line of disillusionment with the EU experiment.

Gold and silver positive.

Apr 26, 2012 - 11:30am

Just another temporary beatdown...

While keeping interest rates at record low levels sounds bullish for precious metals to most rational investors, as it prolongs a negative real interest rate environment, gold and silver immediately spiked lower after the FOMC statement. Some may attribute the stable inflation outlook as a bearish signal for precious metals, but this could actually provide the Federal Reserve with more room to provide further easing, despite the option being labeled as “off the table” by some observers.

Although the FOMC minutes did not announce any QE3, Ben Bernanke has clearly not taken the option off the table. In a press conference after the FOMC statement, the Fed Chairman explained, “If appropriate and depending also on assessment of the costs and risks of additional policy actions, we remain entirely prepared to take additional balance sheet actions if necessary to achieve our objectives. So those tools remain very much on the table and we will not hesitate to use them, should the economy require that additional support.” The knee-jerk reaction seen in precious metals to the downside after the FOMC statement was overshadowed by Bernanke’s comments, as gold and silver both rebounded from intra-day lows.

Apr 26, 2012 - 11:33am


As I sit here in a faculty meeting catching up on the posts, I think my conclusion is that a college degree is valuable IF...

affordable and NO DEBT after graduation

A field where one could actually find doors that would open 

Doors are certainly closed to you without a degree. And developing the vocabulary and ability to write coherently is definitely worth the education, so that one can participate in worthwhile forums like this one.

MIT has been putting their lectures online free for a while--an excellent move

Five other major universities are offering online courses free (U of Mich, Stanford, Princeton, U of Penn, UC Berkely), but you get a certificate of completion, not college credit. But knowledge is out there for one who wants it, and everyone needs to get an education.

I have learned much by participating in this website. My thanks to all!

Apr 26, 2012 - 11:40am

No "pumping" here

Just some very astute observations on the U.S. labor market.

Since unemployment is a obviously such a key metric for The Bernank and his goons, infer from this what you will:

Apr 26, 2012 - 11:44am

A poll = who believes there are 8000t of gold in FK

bbacq said :-

We should take a poll: who actually believes there are 8000 tons of gold (or whatever) - physical bars sitting there, without any other paper claim to them - in Fort Knox, or wherever, but with clear title held by either the Fed or the US Treasury? Not me. (for One)

Not me for Two, too. ..... +2


TPTB are CONSTANTLY using the phrase "If you have nothing to HIDE, then you have nothing to FEAR" in order to justify their ever-expanding State-Terrorism ...

... So any reasonable & logical person has to wonder WHY they FEAR a True Audit of the USA Gold-Reserves to such an extent that they have BLOCKED all attempts to do so for something like 50 years or more.

If something "smells" like a rat, AND "sounds" like a rat, BUT nobody is ever allowed to "look inside" the rat-cage .... It is quite probable that The Rat has died and/or been disposed of, and I strongly suspect they are "Hiding a huge amount of nothing" in their vaults, and the much vaunted 8000 tons "just resting" in the vaults is nothing more nowadays than a 'looped tape recording' of a dead Ex-Rat that has ceased to be & is no more.

Apr 26, 2012 - 11:44am

Silver $31.20

Looking good, Billy Ray!

Apr 26, 2012 - 11:48am

Victor and silver

I'll reply here cause there's a new thread, but I'm continuing the discussion started elsewhere:

Hi Victor

You're a clever guy, I'm trying to get through some of your articles and I think I am understanding them.

As far as I can tell you make a lot of sense about why gold will be currency and not silver.

I like silver as an investment, but I'm not committed to the idea of it being currency, and I hear your argument about silver failing the stocks-to-flows test. I started investing in silver after I started reading about peak oil. Only subsequently did I start trying to understand the the monetary systems of the world. As far as I can tell, we will still need silver for a such a wide variety of applications, small and energy efficient phones and electronics to water purification to all kinds of things. I do agree that silver won't go to ridiculous levels; if the price of silver rose to $300 an ounce in a year, well, demand would drop dramatically, we'd find alternatives for many applications and then the price would probably collapse again.

I agree that the historical GSR is meaningless. When I look at the charts of the historical relationship going back a few hundred years, I see it going all over the place. I don't see it holding consistently at 1:16.

However, I have to second S Roche's view that silver is "an emotional trade with a historical perspective"...even if it logically cannot function as a currency as gold can, I submit to you that you are dismissing some entrenched human psychology here. I too don't believe silver will ever be accumulated by central banks and it won't return as a monetary metal. However, many people still perceive a monetary association with silver and some kind of linkage between silver and gold. I think your suggestion that gold could rise to $30 000/ounce while silver stays at $60 is totally impossible. If that came close to happening, I'd sell every ounce of gold I have and transfer it all into silver. So would many millions of other people, and that's why this will never happen. With all due respect I think you are analyzing the numbers but ignoring psychology.

So, in summary, I like silver as an industrial metal that will fare well in a peak oil scenario and while I don't believe it is a monetary metal, I do think it will also be dragged up by gold due to a a perceived link to gold (whether that perception is technically valid or invalid).

And on a completely irrelevant note, while on the topic of industrial metals, I don't know how to fit platinum and palladium into my outlook. On the one hand, mining it in South Africa and Zimbabwe (85% of world supply) is a disaster, with costs rising at ridiculous rates every year and political uncertainty keeping investment constrained. Supply is actually decreasing in South Africa because production is not being expanded at a fast enough rate to keep pace. This is good for the price of platinum. On the other hand, half or more of the platinum we mine is used in auto-catalytic converters. In a world of slowly declining oil production, what will happen to auto sales? Also, someone might develop technologies that allow us to produce auto-catalytic converters that use cheaper materials. Platinum and Palladium are one-trick ponies. I just don't know what will happen with platinum and palladium, so I avoid them...silver, on the other hand, is the second most widely used commodity (in terms of variety of applications) after petroleum. If you believe in peak oil, silver should do well. If you believe the Saudis and others have more reserves than we have been led to believe, and peak oil is not on the horizon, I'd be staying away from silver. But I don't believe that.

I've read books such as this by Robert Hirsh (a plain book with lots of pictures and graphs for stupid people like me to appreciate) and then I read stuff that tries to refute it I just don't see satisfactory, in-depth responses that allay my fears about peak oil. The standard responses seem to be "fifty years ago some people said we would run out of oil in twenty years and look at us now", "people are smart, we'll figure something out without hardly feeling a bump in the road" or "they have lots more oil they aren't telling us about, when prices rise, we'll explore and find more oil when prices gives us an incentive" or variants of those. I just don't see the in-depth, line-by-line response to the very serious and detailed challenges put forth by those who hold that the decline in the rate of production will soon be upon us.

Some suggest the Saudis have a lot more reserves of oil than we have been led to believe. I'll concede that politics, and using oil revenues to subsidize social programs and government spending has no doubt caused less capital investment in oil infrastructure than is optimal, and greatly limited the production potential of countries like Russia, Venezuela, and probably most of the middle eastern oil producers. However, if the Saudis have the oil they say they have, why are they pumping billions of liters of seawater into their fields? At some fields they pump in as much seawater as oil comes out. These are not the actions of a country idly sitting on infinite oil reserves. Some suggest the Saudis actually can up production to 12 million barrels a day or more; I'll believe it when I see it.

Apr 26, 2012 - 11:55am

Pigs off to the races

Pigs off to the races, these markets seem to be analogous to the 3rd race

Eric Original
Apr 26, 2012 - 12:03pm


The HUI is the best known miner index. It's heavy on the big miners, weighted toward the giants like Barrick, Goldcorp, and Newmont.

GDX is an ETF that is supposed to track the HUI.

NUGT should do triple the GDX on any given day, while it's sister fund DUST should do triple inverse GDX, on any given day.

You'll notice, today GDX is pretty flat, and therefore so are NUGT and DUST. All the miner strength today is in GDXJ, which is an ETF of much smaller miners.

Apr 26, 2012 - 12:07pm

Last post again

I don't mind one bit. I just kept the Victor/silver conversation alive over in the last thread and knew I would probably get LP'd / last posted.

Thanks for the new thread TF. Appreciate it!

Greased pig you say? H'mmm....

Porky Pig

Dr G
Apr 26, 2012 - 12:08pm

Sometimes I look at these

Sometimes I look at these numbers and after pondering them for a bit, realize what a clusterf these spot prices are. Silver is seriously/no joking at $31/oz right now. Ponder that for a moment. And having it go above $33 would for some reason give me an emotional woody.

What a joke. I'm bullish as ever but obviously mentally exhausted from silver being rangebound for the better part of 9 months. Yippee!

Big Buffalo
Apr 26, 2012 - 12:08pm

Monarch Precious Metals (Bad, very bad)

Do not order the 90% coins. I just received an order and the coins are crap. Out of 20 Walking Liberties, there was 1 nice one and one decent one. Others are crap. Standing Liberties, out of 11, there is one (maybe one) okay. Out of 10 Barber Quarters, maybe one is decent. All the others...I would be shameful to saw them to family and friends.

Eric Original
Apr 26, 2012 - 12:09pm

I'm liking the metals today

Liking my miners again today too. That's a change.

Beer drinking girl
Apr 26, 2012 - 12:18pm

Feeling Good Louis!

"The Wizards of Oz" - Obama and Bernanke Commercial: Part 2 (by Swiss America)
Apr 26, 2012 - 12:22pm

Losing steam

I am new to the community. I wanted to share my trading ideas. Let me know if not useful or appreciated.

I do not recommend following my trades, unless your own ideas match mine.

Anyway, I am in a short position now, expecting SLV to close under $30 tomorrow.

Apr 26, 2012 - 12:22pm

These just crack me up.

"The Inflatocracy" - Obama and Bernanke Commercial: Part 1 (by Swiss America)

Apr 26, 2012 - 12:22pm

I found that video quite disturbing

What are we teaching our kids these days? It is sad, really. That was bacon running around there. BACON! And those kids just lolligagged around, half-heartedly going near but never working up the guts to actually tackle the thing. Pathetic. Those parents should be ashamed at not teaching their children the pork-based values of their ancestors. I fear for the Republic.

Apr 26, 2012 - 12:26pm
Colonel Angus
Apr 26, 2012 - 12:32pm

College again

Teaching at a smaller, tuition-driven university, I have to say that it is all about fleecing kids and parents for their tuition dollars, with a few exceptions. 

I teach math and finance here, and we have many students who have delusions of mediocrity. There are a few who are good, and my two best students are headed for PhD math programs at some better ranked schools. The piece on ZeroHedge the other day keeps resounding in my head, as I can pick out the status quo faculty and the 5% that are like us. I always tell my students never to believe anything I say and to always question. Most of my "colleagues" tell the same students that I am Professor X, the authority on all things in this domain and on truth in general. Don't question me. Yes, they come bitching to me when our common students say that Dr. Colonel Angus encourages them to be troublemakers in other classes too....that little Mr. Frat Boy or Ms. Coed are paying tuition dollars and ought to learn something along the way. (Here's that spot-on piece: )

One last note- one of my "advisees" wasn't cutting it in the classrooms. He decided to go out to automotive tech school. I applauded the decision and offered to help him in any way I could. You would have thought I'd called one of my colleagues up on Earth Day and asked, "If the outdoors is so swell, how come the homeless aren't more fond of it?" (Thanks, PJ O'Rourke) I heard about the business model, how we need tuition dollars. And then I reminded them who has degrees in just those areas and how the student was going to be helped by his decision. When I said, "Stop being selfish only thinking of what is good for you. Do something noble for a kid," well that was the end of that. I sincerely hope they'll throw me off of all committees. I've got real stuff to do.

Apr 26, 2012 - 12:32pm



Apr 26, 2012 - 12:34pm

71185208 - silver as currency

I still do not understand why now one would think that silver would never again be used as a currency, when it demonstrably was until about 1970, here in North America.

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