July Silver Option Expiration

325
Tue, Jun 26, 2012 - 11:00am

It's July silver option expiration day and it's Tuesday. Put those together and you have to expect some volatility.

So far, the activity has been light but, as of 10:20 EDT, it appears to be heating up. Silver just dropped about 20c and gold $5. Let's see if this continues. I haven't looked at the silver option open interest but I would imagine that there is some decent volume around $27, seeing as how that level has acted as support for the past 8 weeks or so. With that in mind, I would expect the activity in silver to center around that level today. I wouldn't look for the same volatility we saw in February and April as the "market" has been flat and rangebound for the past eight weeks or so. Nonetheless, a volatile trade that whipsaws around $27 is likely in order today.

Here are two daily charts. The silver chart is particularly nasty. Though I believe that silver is in a sideways consolidation and basing pattern, you can clearly see that silver remains in the down channel, as I've drawn it. Yuck. Gold, on the other hand, looks like it's trying to break out...if I draw the lines the same way. Not sure what this means, if anything, as I think the horizontal, basing pattern is more important.

And I need a little help with crude. Why on earth is it down 25% in the past 2 months? Is the global economy slowing that much? Is OPEC exporting record amounts? Is the U.S. economy so bad that surplus is stockpiling both on and off shore? Did the O'Bottom Regime scare out all of the evil, nasty speculators? Is there a coordinated effort being made to get U.S. gasoline prices down before the election? I'm open to all theories. I guess we should be happy that gold and silver have hung in there as well as they have in the face of this.

And this is interesting. "Out here in the fields, I farm for my meals. I get my back into my living." Well, lately, it's HOT HOT HOT and grain prices are going UP UP UP. I recognize, of course, that as soon as I post these charts, a new forecast will show up with cool and wet weather over the horizon. Regardless, check these out. If the heat continues and even gets worse, what's the limit for corn? $8? What's the limit for beans? $20?

In the news today, a couple of items merit your attention. First, this little number from Izabella Kaminska at the FT. Seems that gold swaps with the BIS continue. Where, exactly, do you think that gold ends up? Do you think it just sits in "central banks and commercial institutions"? Hmmmm???...

https://ftalphaville.ft.com/blog/2012/06/25/1058101/

And how about this...Uncle Ted referenced this article in his latest newsletter. It should provide some rather interesting discussion points.

https://economix.blogs.nytimes.com/2012/06/21/losing-faith-in-american-institutions/

And I thought I would give you this, too. Over the weekend, I remember seeing a comment here about how "Turd says gold will be $10,000 sooner rather than later". It always amuses me how my comments are often parsed together and taken out of context. So let me be clear on this: Gold could go to $10,000. It could go to $20,000. Heck if I know. What I do know is that it is headed multiples higher when the world finally reverts back to some type of gold-backed, international trade settlement system. Will this happen tomorrow, next month or by 2015? I don't know. It is, however, going to happen.

With that in mind, I give you the latest from our pal, Jeff Nielson, where he does give you a number and a date.

https://www.bullionbullscanada.com/silver-commentary/25569-my-last-forecast-on-silver-and-gold-prices

Jim Quinn has penned part 3 of his latest series:

https://www.theburningplatform.com/?p=36198

Lastly, I simply want to thank everyone that has signed up for TurdTalksMetals. It's going to be a very fun, new service and I'm confident that most everyone will find it well worth the subscription cost. I find it amusing that there are so many folks eager to tell me how stooopid I am and how undeniably worthless the new service will be. Thanks for that. To all of those seemingly excited by the prospect of our failure, I close with a little more Baba O'Riley:

I don't need to fight to prove I'm right. I don't need to be forgiven.

TF

p.s. And just because someone will post it anyway...

The Who-Baba O'Riley@Concert For New York City 2/4

About the Author

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  325 Comments

tpbeta
Jun 26, 2012 - 11:05am

First

Yes I know it's dumb. Token serious minded comment...do we think the current spike down is caused by Dan Norcini's spec short hedge funds following the CCI, or is Blythe just in a bad mood?

¤
Jun 26, 2012 - 11:06am

Thanks amigo

You're right...I would've posted that vid

Thanks for the update and the effort that goes into all of this.

We seem to be in lull right now and I think we're really close to something significant breaking loose in many area's.

Everyone have great day and appreciate all the little things in life as much as possible.

Dr G
Jun 26, 2012 - 11:09am

Fallin' like a rock, just

Fallin' like a rock, just like the big man predicted.

@Turd, remember, it's not volatility because it never occurs to the upside. Ranting Andy would be ashamed of you. :)

Istack
Jun 26, 2012 - 11:10am

oh yea

gonna buy some more today! i'm getting off the titanic

Quixote2
Jun 26, 2012 - 11:13am
tpbeta Quixote2
Jun 26, 2012 - 11:20am

@Quixote2

Just for the record, nothing to do with me

Larry L
Jun 26, 2012 - 11:20am

Option Expiration

Thanks Turd for keeping us up-to-date on the Options Expiration time. We get so busy with many things we tend to forget the opportunities around this time frame.

Many thanks for all you do!!!

Quixote2
Jun 26, 2012 - 11:22am

It's like they're my

It's like they're my stalkers. Not really sure why anyone pays attention to them. I don't.

LOUP-GAROU
Jun 26, 2012 - 11:26am

Thanks

Thanks Turd for the update, dont matter when! it just will. the big question I have is when will our gooberment wake up from their deep sleep and do something right for a change, wishful thinking right.

JohnG
Jun 26, 2012 - 11:30am

Crude

See here for crude price differential explanation:

https://www.zerohedge.com/news/guest-post-oil-price-differentials-caught...

Short summary: Cushing is overflowing.

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