Gold and Silver Fun and Games

Wed, May 23, 2012 - 4:00pm

This is just getting to be far too predictable.

Let's see, first it was the April12 gold. Then it was the May12 silver. Today it was the June12 gold. What do I mean? Today was, once again, one day prior to option expiration and today, once again, we get a round trip in the metal as the poor losers who are left trading and hedging get their arses handed to them by the controlling powers of The Cartel.

As a refresher, what we saw in March and April, we saw again today. Namely, the handful of poor saps who had sold put options on the front month, thinking they had free money (Wouldn't you have thought that selling the June 1550 put looked like a safe bet back in February? Heck, maybe even late last week?) Lo and behold late yesterday, with just two days left before expiration, gold gets smoked on the Globex and is driven below its 10-day MA. WOPR selling ensues and before you know it, gold is near 1550 and headed lower. YOU, the poor sap that is short 100 June puts, have no other option but to sell short 100 June12 contracts, just to hedge yourself. Your selling (and everyone else caught in the same vise) sends gold even lower, toward 1535. All of this selling is gladly soaked up by The Cartel until...snap, boom, bang...they spring the latch on the trap and begin rallying gold back higher. Your new short hedge is suddenly squeezed and you eventually cover. This is particularly likely once price rallies back through and above that personally dangerous 1550 level. With gold back at 1560, you are now left with your original 100 naked puts that will expire worthless at 1:30 tomorrow as scheduled, however, you were just lightened of some considerable funds by the coercive, manipulative power of The Gold Cartel. Wash, rinse and repeat next month in July silver if prices continue down at these levels.

The selling of yesterday and today has established the basing/trading ranges that we began to discuss here yesterday. See this for a refresher: Of that post, this line in particular is the most relevant:

"Now, please don't misunderstand what I'm telling you here. I'm still extremely excited about where the metals are headed, particularly silver. The ranges I've described above are for the short term, maybe the next week or two and into early June."

Here are your charts that show these new ranges:

Here are some other nuggets that I've picked up as I've gone through the day. First, Jesse had this little ditty about KosherDakota who, as you know, is one my favorite Fed douchebags. This guy is a complete clown. Anyway, the speech Jesse references is not the first time KD has muttered this current bit of nonsense. I actually saw a headline on ZH about a week ago where this buffoon said the same thing that he said today. I was going to write about it at the time but by the time I doubled back to C&P it, the ticker had moved on. At any rate, enjoy the nonsense.

Trader Dan has a good comment today on commodities, in general. He also made an appearance on KWN. I highly recommend both: &

If you haven't yet, you should speed through this. I often listen to Coast-to-Coast as I'm shuttling LT#1 back and forth to ballet class. I caught part of this episode the other night. The stuff with Peter Schiff is definitely pertinent and well worth your time.

Video unavailable

And this is interesting. With the FB/silver spread now at just $4 or so, can the closure of the latest Hat Contest be very far away?

Have a great evening! TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Dr G
May 23, 2012 - 11:22pm

ZH working well for me. 

ZH working well for me.

bam Big Buffalo
May 23, 2012 - 11:27pm

@Big B

Just to clarify in case it was not clear, the intention is to pay back everything in full (at hopefully a gain to myself).

Another default thing you can add: identity theft/fraud. Had that happen to me a number of years ago, and I defaulted on the other person's 'loans' in my name.

May 23, 2012 - 11:33pm

Gold Five


I've never been there, but the scene is sure lovely.

May 23, 2012 - 11:36pm

welcome Sherman

As the judge said In My Cousin Vinny. That was a very intelligent and lucid statement Mr. Gambini.

May 23, 2012 - 11:43pm

Another smackdown coming?

Based on the V-shaped charts the last two trading days in G&S, does anyone figure going into the holiday weekend TPTB will be smacking them down (again!) on light volume? (Or is that an ignorant question because WE are the ones buying when that happens, keeping a watchful eye for buying opportunities?)

El Gordo
May 23, 2012 - 11:44pm

Stay away from leverage

I use "disposable" or "investable" income for PM acquisitions. It is not a house where I can plan to live 30 years and pay as I go. The income stream that I have is not fully dedicated, so I am afforded the luxury to play around a little, and I've found stacking to be an interesting hobby. My advice to anyone who might ask would be to invest that income stream after it is deposited into your bank account, not before. You can ride the price up and ride the price down - we're talking long term here - and after a while you might be surprised how tall your stack is. If you think the price is too high for a while, just wait it out, and then when the price goes down, BTFD. Always, always, always keep a little dry powder around - after all, the government likes it and most of my bill collectors will still accept it in return for good and services. If you ever get in a bind and have to sell something, you can bet your ass that it will be at the most inopportune time and at the absolute lowest price, so try to stay out of a bind.

Big Buffalo
May 24, 2012 - 12:04am


That was no shot at you.

Default and filing BK is thrown around like nothing nowadays. I could go off on a rant but I won't.

I read your initial post, as "damn, this investment idea sure is juicy, lets jump on this". I, like many people in 2005 thru 2008 thought the same with houses. . . .and now look. I have a condo in Florida that's way upside down, that lucky for me, rent and make most of my money back. I still go in the hole a little bit every year. But I still keep on b/c with an 800 plus credit score, if and when I need the next big business loan, I can get it. And I'm a man of my word.

Now, play out the worst case scenario for yourself. Work this out on a sheet of paper. You take out $50,000 of silver. Silver drops 10%, 20%, 30%, will you be able to sleep? will you be pissed off? will Vinny be calling and stopping by the house? Again, it's a gamble and I agree whole heartedly, the gamble is on your (our, the stackers) side. It may not be a bad thing, so long as you can live with the potential downside.

Fred Hayek
May 24, 2012 - 12:12am

@big buffalo

I never once tried to figure out the average cost of what I have. Why should I bother, is my attitude. When silver goes to $500 an ounce will it much matter whether my average cost was $17 an ounce or $22 an ounce or $24? And this is from an obsessively analytical person. It just never seemed worth the few minutes time to figure it out.

May 24, 2012 - 12:14am

All TA is the same, right?


Added to my stack at the MLH via PHYS. This is a classic Andrews chart pattern.

We may get more challenges to the MLH, but the 5/16 low in gold is looking stronger after today. A daily close under today's low would be bearish and open the door for the 5/16 low to be taken out.

[IMG][/IMG] ---This is the daily picture.

[IMG][/IMG] ---This is the 60m picture with additional technical observations.

What is important now is that the 5/20 high be equaled or exceeded on a daily swing up.

Fred Hayek Big Buffalo
May 24, 2012 - 12:19am

@Big Buffalo re default

You're ignoring another aspect of this. Banks and credit card companies *deserve* to lose money for being too free with credit. I'm not saying that Bam should consciously make himself into an instrument of financial vengeance but if they casually give $20,000 of unsecured credit to someone who perhaps they should see will have trouble dealing with it, then what does that say about them?! This is a BIG part of the problem, the addiction to the credit and debt game not just on the part of consumers but also bank and card companies.

May 24, 2012 - 12:20am

C2CAM, Nice!

I remember listening to Art Bell Back prior to the Y2K Hype... He was wound for sound about it... then as with the hype, he faded away.

I will admit, I was a bit concerned, and felt the fool when the non event passed w/o a ripple. Got that similar feeling last year watching Silver run, Pumpers all pumping away.. only to watch prices Make dramatic declines. There in lied my mistake, Watching. I was in a great position to have made some nice gains, but i ignored that little voice, (well it was hard to hear over all the Exuberance) myself included.

May 24, 2012 - 12:21am

Norcini and Willie

First off I could never figure out how anyone can detect who the parties are that are doing the buying and selling and how does a trader know that buyers of bullion are Eastern Central Banks? Pardon my ignorance, I just don't get it.

Norcini is right about the relative strength of miners today, no question. I just thought it was because they had led the way down far ahead of everyone else and now they are possibly leading the way back up. Pardon my ignorance.

Now Willie will have to excuse me. Telling us that 'his source' is seeing an imminent blow up in Treasuries and the dollar and a rocket blast in Gold is something more or less right out of Ian Fleming. Is his source Sean Connery? Or Daniel Craig? Or just Roger fucking Moore, ole man that he is? Maybe on the low side for less fee Timothy Dalton? And what are Willie's updates on JFK in Mykonnos? Rumor has it that he is the only human ever to survive and live on with the entire back of his head blown off. What surgeons did at Bethesda is just cement the giant hole with some paper mache and then thread a hair weave over it and he was good as new absent some short term recall and the permanent erection he sustained, this is in fact why they shipped him to Mykonnos,lots of willing Swedish girls on tour,etc.

Sorry Turd, I couldn't resist. Miners suddenly looking bullish, get out the little caps and switch on the brow lights, time to go digging.

Big Buffalo
May 24, 2012 - 12:49am

@ Fred Hayek

No business (large or small) deserves to be defaulted against. We need to be accountable for everything we do and say. We need to stop blaming others for our own actions. I'm tired of the drug user blaming the drug dealer for their habit. Tired of the student blaming the teachers, and the teachers blaming the the parents and the parents blaming the government. How about the student picking up the book and reading and studying? With that said... I wrote the following a few years back....

- - - - - - - -

I hear people complain about how the big Credit Card (CC) companies charge too much and make too much money. i.e. Pay scale and bonuses.

Then WHY, i ask, do you still continue to use CC's for everything! Including your pack of gum purchase.

"But I pay off the card every month and I get free points." they say. Really? SO the CC companies lose money on you? You're single handily beating the system? Have you looked at the transaction fees the merchants pay?

Cash is not king! (That's another conversation.) However, start thinking about using cash. Maybe you wouldn't get points or get a discount. (Bring back the cash vs credit prices at the gas pumps please.) But at least, the profits and fees will go to your server, small business owner, entrepreneur, and those who could and will use the money.

This will help our economy much more then supporting the Goldman Sachs, Chase bank, and the like.

Finally, lots of my friends and families work for "banking" companies and the pay provides their families. I understand the value of a CC company. Such as making online purchases, rent cars, and buy flights.

Fine. But let's take some time and truly research and understand the word credit, and in most recent history how it has destroyed people. Don't count on the either the donkeys or the elephants to govern you. Govern yourself, educate yourself, educate others.

Please consider EVERY transaction, monetary or personal, has an effect on our person, economy, and well being. Take the blindfold off. Money does not make the world go round, people and production do.

May 24, 2012 - 1:14am



Once every year gold and stocks form a major yearly cycle low. Commodities form a major cycle bottom every 2 1/2 to 3 years. Every once in a while all three of those major cycles hit at the same time. I'm pretty sure that's what is happening right now.

Bongo Jim
May 24, 2012 - 1:19am

Re: Turdopalooza

Turd you need to enjoy the event, you'll be running around like a mad man anyway trying to keep all then plates spinning. Get Norm McDonald to be the MoC, his schedule is probably very open.

May 24, 2012 - 1:23am

Dell, hpq, Cisco

As investments, look at the charts of the above three. Surprises to downside. Stock price craters. Why.

Low growth.

The govt response is "investment",formerly stimulation. Kosherladoda says today (my interpretation) we are at full employment. With 8percent reported unemployment which we know is much higher. So kosherlakoda is saying we will permanently have a chunk of population that's unemployed. Get used to it.

Give me my PM,

May 24, 2012 - 1:26am

Perfect Huge Volume Scare on

Perfect Huge Volume Scare on the second fall --- little boy traders peeing their pants , oh my it's happening again my precious silver is going down, whilst evil speculators at Hawaii Trading have the secret channel from 2007 (blue) and a classic high volume embryo pop to guide them. That be silver long by the way, shoulda bought some of those out month calls the wrong way boyz were selling today to hedge their smoking puts.

I love the cartel, they are so predictable. LOL, thanks Turd, also for pointing out what we would likely miss.

May 24, 2012 - 1:44am

GSR yesterday

Went up a bit, but below previous high still. I think this indicates that we will have relatively flat top, i.e. longer bottom phase then during December bottom. We already have it. As silver has to fight increasing USDx, and that takes time, but its winning, I have no doubt. Frustrated, could not find EVEN USDx (DXY) excel data without charge anywhere. If I had it, I would make AG/AU vs. USDx plot myself- it would show what is the general trend of appreaciation of silver vs. USD and might show some other new interesting points.

May 24, 2012 - 2:00am

Hotel GDX

Rumor has it she is about to roll over and collapse.

Video unavailable
fnord Mickey
May 24, 2012 - 3:23am


we will permanently have a chunk of population that's unemployed. Get used to it.

Yes, that's not an original idea either. WSJ has run several articles regarding that as well. Europe has been dealing with the same problem for years. We have exported all our simple manufacturing needs. Most remaining domestic manufacturing is highly automated and efficient; needs fewer people. At the same time, population continues to grow. In other words, there's less work to do, and more people standing in line to do it. We may need to change our ideas about what employment means. We could have a working class that does all the work, and a loafer class. (The default if we do nothing) Or, we could decide to give up on our 40+ hr workweek. Let everyone work, but fewer hours.

There may also be some work to be had soon wiping drool for convalescent baby boomers.

May 24, 2012 - 3:48am

And USDx is trying hard-

And USDx is trying hard- 82,27 right now.

May 24, 2012 - 4:06am

All the stars are aligning

Methinks QE may be sooner than the consensus believes. And maybe from both sides of the pond simultaneously (now that, surely, would be PM positive!)?

May 24, 2012 - 4:32am

missing the bigger picture?

Hi Turd,

Can I firstly just say what a great site and community you have built here; it is excellent.

I would though like to put forward my view on gold going forward.

Let me firstly say that I am a very bullish gold in the longer-term.

However, gold has been going up for 11 straight years! This is unusual in any asset class. It would in fact be healthy for it to have a really decent correction, before heading higher. Most asset classes will correct up to say c.40% in their bull market at some stage and that is especially the case in commodities and gold. If my memory serves me correctly, gold corrected 50% in the 70/80's bull market before heading considerably higher.

Everyone reading/following your site will be, for the most part, will be very bullish on gold. I think it is important to not let a cheerleader mentality take hold of the discussions where a blind faith develops that every small dip should be bought. Of course, no one knows the future and anything can happen at any time.

As I mentioned at the start, I AM a believer - but one who is content stepping back from the noise to try to see the bigger picture. I personally think there is a good chance of gold breaking 1525 and heading lower this year, and we should all not talk in a tone of absolute's

best wishes,

keep up the good work


May 24, 2012 - 4:34am

USDx 82,36!

USDx 82,36! Silver steady.

May 24, 2012 - 5:02am

descending to an altitude of zero credibility

Another comment from the Telegraph worthy of sharing:

This is your pilot speaking. Should we encounter turbulence in the single currency zone, please assume the face-saving position. Lean forward with your fingers in your ears looking vague and evasive while stamping your feet in a display of resentful aggrievement. With any luck this collective suspension of reality will keep us airborne for long enough to descend to an altitude of zero credibility.

Unfortunately, we are unable to actually land due to the jettisoning of our undercarriage at take-off, which was a design feature of this magnificent machine.

During our descent, in the event of a sudden loss of cabin pressure a community singing hymn sheet will automatically drop from your overhead locker in time for passengers to render a few choruses of Kumbaya before we plunge into the ground.

There are no emergency exits on this aircraft.

Thank you for flying Eurobrick.

The Green Manalishi
May 24, 2012 - 5:16am

Printing money is the only thing keeping the UK and US afloat

It’s a fantastic run-through of the “catastrophic failure” of the Darien scheme – the creation of the Company of Scotland to establish a Central American colony. This failure (a result of horrible financial mismanagement and shockingly bad strategy) and the huge financial losses that came with it, made Darien what Watt calls a “central ingredient” in the eventual marriage of convenience between the two countries. “The Price of Scotland” refers to the huge sum of money transferred from England to Scotland on union, the majority of which went to pay back the losses of the original investors in the Company of Scotland. I suspect we’ll be returning to this one here another day.

May 24, 2012 - 5:20am


i'd call since oct a decent correction.................more than consolidation.


you got it 99monkeyman......

we are going to get a QE hint one saturday soon from the helicopter man.

then you will not believe the green/blue candle on sunday afternoon late.

we will all[or most] kick ourself for not buying MORE now.


japan--- a self financed country, due to demographics, pension funds there are now netsellers of more % up on yield and it takes 100% of gov income to fund debt.

May 24, 2012 - 5:22am

Explosive and historic Q4

Well, I hope so. The only other thing I've got going on that's explosive and historic is...well...

let's not go there.

May 24, 2012 - 5:47am

Morning Kids!

Here is an update from Clive M. He is hit or miss just like most of fortune tellers. Let's face it, charts cant predict everything but he thinks we have a really good shot for this to be the bottom at these levels.

But it all hinges on the moon shot from QE out of Europe and here. He thinks the metal stocks will be really good place to be, higher percentage return. They should!

Torpedo Fish
May 24, 2012 - 5:49am


I too think that QE4(QE3 - official) is coming much sooner than July.


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