Get Ready For Next Week

169
Fri, Jul 27, 2012 - 11:42am

Today's action, though disappointing, is meaningless when next week brings another FOMC meeting and the BLSBS. I hope you're ready.

Frankly, my biggest concern is that we've seen this all before. The Cartel allows the metals to rise in the days before some kind of Fed "news", only to rip the spec's guts out when the Fed, inevitably, disappoints. So, the most likely outcome next week is a rally on Monday and Tuesday as the Spec Sheep are led into the shearing barn.

The hammer falls on Wednesday and Thursday as the politically-handcuffed Fed "disappoints".

Then, a sharp rally on Friday when the BLSBS comes in lousy.

The Spec Sheep get sheared twice by being long on Wednesday and short on Friday. The Gold Cartel wins twice and laughs all the way to the bank.

{Now, let's get one thing straight. I am NOT trying to have it both ways. What I have described above is the most likely outcome for next week. Likely but not 100% certain. Regardless of what happens next week, I am still expecting a hot, explosive and historic summer and fall.}

OK, let's just wrap up some charts before we get to the weekend. First, The Pig. Where all looked strong earlier this week, the bluster regarding QEIII has buckled its knees, somewhat. It is still well within the channel that has driven it higher since late last year but, with all this talk of easing, it must be watched closely.

And a small note of caution in crude, too. In the short term, it looks fine as the more time it spends above 88-90, the more likely it looks to go tackle 93 and head toward 100. All crude traders most be cognizant, though, of this long term "dome" pattern. IF crude can continue to rally, it will eventually have to trade through 105-110 or it risks perpetuating this pattern and falling back.

And here are your daily charts for both gold and silver. Both look pretty good, actually. As you can plainly see, gold has broken free of the pennant formed by the Feb 29 highs and the May 16 lows. This is great but it is only step 1. For the remainder of the "steps to recovery", please read the text on the chart. In silver, we are still penned under the "Battle Royale" line. Do you recall that, back in late February, the line was near $36? Now, with the passage of time, it has fallen all the way to $29. This pattern must resolve itself in the next 6 weeks or so but I have a strong hunch that silver will break out and through well before then.

This week's CoT will be somewhat interesting. For the reporting week, gold was down $13 and total OI was also down by 11,000 contracts as August contracts were not immediately rolled into Oct or Dec. Silver was down 52c while total OI rose by 1800. Someone was busy creating new silver shorts at these levels. Was it the SSS (SpecShortSheep) or was it JPM? The CoT will provide some answers so please check back later this afternoon and search the comments section of this thread for my analysis.

Have a great weekend. Try to relax and have some fun. Next week promises to be exciting!

TF

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  169 Comments

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Burticus
Aug 1, 2012 - 5:47pm

It's a trap

"So, the most likely outcome next week is a rally on Monday and Tuesday as the Spec Sheep are led into the shearing barn. The hammer falls on Wednesday and Thursday as the politically-handcuffed Fed 'disappoints'."

Sure enough, as predicted, prices rallied on Monday then the sheeple longs got sheared on Wednesday, as papersilver is whackulated by 60 CentiFeRNs. Tip of the hat to Turd!

Bum in the library...Mr. Smith
Jul 29, 2012 - 1:22pm

Futures

I've never traded futures so I guess I need to learn how first. I'm pretty comfortable with options though. I've heard for a long time that SLV and GLD don't have the metals that they claim to. I'm not holding on to them very long so it doesn't really matter to me. I just want to make some spending cash. One thing I like about SLV is that there are small spreads on the price compared to options on the miners.

Bum in the library...Admiral Ag Bar
Jul 29, 2012 - 1:14pm

thank you!

thanks for the reply! I will definitely look over there.

Mr. SmithBum in the library...
Jul 28, 2012 - 5:20pm

Futures and Options

Others have cautioned if Slv and Gld are adequately backed with their respective metals. The cautions on the fidelity of brokerage houses and clearing firms are relevant. Lastly is options require you to pick time and price! Why not buy a futures contract and just roll forward. I have been doing that since the 1970's having seen another do that in silver. You must have the trend correct, adequate capital and muchoPatience

Urban Romanexiledbear
Jul 28, 2012 - 1:22pm

BTC as currency

@exiledbear,

Yes, exactly. Like I was saying, it's an interesting technology.

Thanks for the advice on exchanges -- I don't currently have any BTC, but thinking about getting a few, just for shits and giggles. Bitcoin was designed as an anonymous, distributed, digital money system and it does that function very well. It's hard to counterfeit. There's a finite supply. Etc.

And interestingly, it has caught the attention of scam artists ... a sign of importance, perhaps?

Response to: Bitcoins

[edit]
To tell the truth, I've been posting without thinking this morning. My first thought about the Brazilian story was that the financial regulator was attacking those guys for using Bitcoin. Then I read the other article, and some of the comments, and realized that the Brazilian thing is an old fashioned Ponzi, and the regulator is actually doing his job!

I think the biggest threat to BTC from the "financial industry" will happen when they want to virtualize it and create derivatives and a fractional reserve system and crap like that. I'm sure the architects of the BTC system are against that kind of stuff, but never underestimate the scam artistry of the banksters.

Louie
Jul 28, 2012 - 1:20pm

LAST!

New thread!

GoldMania3000
Jul 28, 2012 - 1:18pm

@95%of people dont' know about gold

Yes...in USA, etc. But if you start looking at emerging markets, etc. we are seeing more of an uptake in gold buyers. The markets' these days' are not just the USA. The floor in Gold has been set buy CHina central bank buying...and as they start to see more debasement of the USAD these folks and individuals in their countries will be buyers They are already buyers. The people of china, india, middle east, etc. Gold in other parts of the world is seen as a store of wealth but here in the USA it isn't. When youtravel you see this so much.

No one in the USA will be buying gold until it's too late. The people in the US are the last to know about what is actually going on. The empire is falling and many will go broke.

I don't think FACEbook etc will do well in the next round of QE. there will be some stocks that do well that will drive the dow, but gold and silver will continue to do well. We don't need the 95% to come into gold and silver to have a good move. even a .03-0.05% move into gold will be a hearty move. Also the hedge funds will start, are starting to go long....so that's big money that will come into it. Even if we hit a mania in gold, it won't take the 95% of the people to go into gold, there are some very good analysis out there that just says a 3-5% allocation by funds, individuals into gold will move the market.. But again, we must look at it from the perspective of "this is not a USA/North American" phenomenon. It's global, I speak to a lot of folks -non-USA-and they are so hip to what is going on...but when you talk to the average USA citizen they don't have a clue.

Regardless, of what happens with Silver manipulation or Libor, if we look at history all the way back into the early part of the last century..manipulation ends as markets do take over. It's the law of the universe. Many case studies for us to review on this...

Over the past couple of weeks, there have been some major gold discoveries. The shorts couldn't stop those stocks from going up. The fundamentals drove them up, just like the fundamentals will win. I'm of the feeling that markets will also go up in an inflationary cycle..but will have to wait and see.

The trade over the past 10 years gold @500%. And we are just getting started with the money printing. See nominal GDP targeting is "QE to infinity"--that will be a trigger. Everyone in the US may not see it, but those outside of the US will..nominal GPD targeting...nominal GPD targeting...nominal GDP targeting....debasement of the USD. Gold will go up regardless of the 95% of the shucks.

LouieGoldMania3000
Jul 28, 2012 - 1:15pm

@ GoldMania3000- Alternate thoughts

ZIRP extended until 2015 will drive people to bonds, Facebook, and whatever Kramer recommends this week. They will be looking for some kind of "return" on their assets. 95% of "normal" people still have no clue about PMs.

The JPM silver investigation is coming to a close. I'd suspect that this will end in some form of guilty verdict. If it doesn't then Bart C is a fucking lier.

- ​OK, so Bart is a lier (one who does nothing but lie around), or a liar (as in pants on fire). How is that Swap definition coming? Bart & JPM are working with the Fed to try and keep the globally economy from crashing. If they have to manipulate the G&S markets to do it, they will. There won't be any prosecutions. If anyone gets prosecuted, it will be some lowlife who ends up as the scapegoat.

Libor- I personally guarantee that every bank who settles and pays the fine will receive protection from prosecution and protection from civil liabilities. They will pay fines, but it will not be the end of the world. Everyone has known this was going on for years. Tiny Tim, who can't even figure out how to pay his own taxes, knew about it 4 years ago.

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LouieBum in the library...
Jul 28, 2012 - 1:07pm

@Bum- Answering the question

Two problems with trading SLV & GLD

First, your clearing house may disappear without prior notice and steal your money. MF Global ring any bells? 500% return is great until you can't get your money back.

Second, there are legitimate questions as to whether SLV & GLD actually hold the physical metal that they say they do. If/when the markets collapse the small time investors are going to end up holding empty paper bags.

Short Stack
Jul 28, 2012 - 1:04pm

Anyone remember the Aesops Fable ...

Anyone remember the Aesops Fable: THE ANT AND THE GRASSHOPPER ?

A refresher - The grasshopper played and danced the summer away while the ant and his friends worked hard to put up provisions for the coming winter.

Grasshopper joked and teased the little ant for "wasting" all the beautiful days away. But come Autumn the ant was ready for the coming hardship while the grasshopper slowly realized his mistake and froze with the first frost.

We are the "ants" my friends and the sheeple are the "grasshoppers." The ants must realize a cruel truth here. Yes, it is moral to help those who did not help themselves but, is it really morally right ?

Provision just one - just one of the "grasshoppers" and here's what's likely to happen.

Grasshopper leaves and goes his way. Other grasshoppers ask "where did you get all that food ?" Grasshopper points back to you. Next thing you know tens to hundreds of these human grasshoppers are at your door demanding you feed them too. Some will pull at your heart-strings, "my children are starving!"

Next thing you know, they're breaking in to take by force that which you put aside to feed your family and yourself. And no doubt beating the crap out of you in the process.

Your home (shelter) is burned down, you and yours are as poor and suffering and hungry as those who broke in and now your in the same "Titanic" as the human vermin you were stupid enough to try to help.

Moral of this story: Jesus said in Matt. 5:42 "Give to him who keeps on begging from you, do not turn away from he who would borrow from you." But, He also said, in Chaper 7, Do not give that which is Holy (blessed food) to the dogs, do not throw your pearls (precious metals) to the swine, lest they trample it under their hooves (waste it) and turn on you (for more) and tear you to pieces.

Seems like a contradiction until you consider that the former is referring to the here and now, the latter refers to "the coming storm of chaos."

Let your motto be: GIVE TO THOSE IN NEED, NOT TO THOSE IN GREED.

But the SHTF time is a game-changer. No amount of assistance will help or change those in greed.

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