Expecting A Bounce

238
Thu, Aug 2, 2012 - 3:55pm

Well this week has certainly played out as expected, hasn't it? The question now is: Will tomorrow be the final piece of the puzzle? Will price rally off of a lousy BLSBS report? I'm quite sure that it will. Come on in and I'll explain why.

At the risk of seeming to beat a dead horse, regular readers of TFMR (and subscribers to TTM) know that this week is playing out almost entirely as expected. Last Friday, I had hoped that his week would be an UP week but I put the chances at just 25%. The more likely outcome was an early-week rally, followed by a mid-week beatdown, followed by a Friday rally that leaves the week virtually unchanged. If you haven't yet, you can read all about it here (complete with the obligatory images of the spec sheep being sheared).

https://www.tfmetalsreport.com/blog/4053/get-ready-next-week

So what do we have so far? The early week gold rally never quite materialized as prices mainly attempted to consolidate last week's gains. Silver rallied though, rising by 54c back on Monday. But the rally toward the top of the ranges never happened because the HFTs decided to front-run the Fed and they began to sell in earnest Tuesday afternoon. From there, the gold price fell over $30 from Tuesday high to Wednesday trough and the selling has continued today. After a brief, Draghi-induced rise toward $1615 this morning, The Gold Cartel was able to smash price and even succeeded, by around noon or so, to drop price back through the 50-day MA, which is currently near $1593. Further HFT/algo selling ensued and, before you know it, price dropped all the way to $1583. With the HFTs and assorted other specs sufficiently short, price has reversed and stabilized just below $1590.

So, why do I expect a rally tomorrow?

  • Well, first of all, why not?? So far, the week has played out almost exactly as forecast so why wouldn't it continue? Seriously. The BLSBS will likely drive price back UP through the 50-day MA...which will inspire short-covering...which will push price back above $1600...which will inspire even more short-covering...and so on and so on.
  • Physical demand in London remains robust sub-$1600 in gold and near $27 in silver. This demand continues to put a floor under the paper price and will soon cause another rebound, as well.
  • And look at these charts. The correlation is undeniable. Note that, over the past month, every single time the RSI drops below 40 on these 6-hour charts, price almost instantly rebounds. The average short-term bounce in silver is around 85c and the average bounce in gold is around $30.

The final part of the "prediction" from last Friday was that, in the end, price would finish roughly unchanged for the week. (Upon further review, I'd expect The Cartels to step in late in the day with the intention of assuring a slightly down week and a red candle on the weekly chart.) Last Friday, the Oct12 gold closed at $1618. An "average" rally tomorrow would push it back to...drum roll, please... $1618. Last Friday, the Sep12 silver closed at $27.50. An "average" rally would push it back toward $27.75, up on the week but still below the early week highs near $28.30.

Of course, how would I have any idea what the NFP number will be tomorrow? I'm not a Fed governor or sleazeball, WallSt banker with inside info. I'm simply stating that, because the metals markets are so grossly manipulated on a daily basis, sometimes it's rather easy to predict what will happen next. We'll see.

Of course, if tomorrow does, in fact, play out almost exactly as forecast above, I will graciously accept all platitudes and honoraria. If it doesn't...well, I'll simply delete this post and pretend that I never typed it.

Have a great evening! TF

5:00 pm EDT UPDATE:

​I can't confirm it yet but it appears that silver margins are being reduced on Monday. Keep checking the comments of this thread for updates and/or confirmation.

Also, I just came across this GoldMoney podcast. Alasdair Macleod interviews John Butler. I haven't had a chance to listen to it yet but I'm supremely confident that is is well worth your time.

Death of the dollar: John Butler talks to Alasdair Macleod

About the Author

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  238 Comments

Lanikai
Aug 2, 2012 - 5:03pm

Parallels the corporate state manipulation of everything

Collusion Between Pharmaceutical Industry and Government Deepens:

https://articles.mercola.com/sites/articles/archive/2012/08/02/merck-flu...

Conflicts of Interest Affect Your Life and Well-Being...

Thanks to the crony capitalist system where money rules.

Dyna mo hum proformatrillionaire
Aug 2, 2012 - 5:06pm

@pforma

Whats a few million among friends? Face down buns up wheeling and dealing.

RaRaRasputin TF
Aug 2, 2012 - 5:10pm

Turd

Is this what you are looking for?

Effective Sunday, August 5, 2012, for trade date Monday, August 6, 2012, and pending all relevant CFTC regulatory review periods, on behalf of the Commodity Exchange, Inc. (COMEX), the New York Mercantile Exchange, Inc. (NYMEX or Exchange) will list a Cleared OTC London Silver Forward (cash margin) contract for submission for clearing through CME ClearPort. The contract is listed with NYMEX, and subject to, the rules and regulations of NYMEX and COMEX.

https://www.cmegroup.com/rulebook/files/ser-6225_x12-06-27x_london_silve...

RaRa

Kerbouchard
Aug 2, 2012 - 5:12pm

Santa and Bill H.

Remove Third Parties From Holding Your Assets

August 2, 2012, at 2:23 pm by Jim Sinclair in the category General Editorial | Print This Post | Email This Post

Dear Jim,

Think back, do you remember Lehman Bros.? How about MF Global and more recently PFG Best? What do they all have in common? Yes, they all went bankrupt you are correct but…what they ALL had in common was "how", or more to the point HOW FAST they went bankrupt. All of these entities literally went belly up within a week’s time.

How does a firm "just go bankrupt" overnight? Easy, other firms begin to pull money out at the same time that no one will lend to them in the overnight markets. With 20 or 30 to 1 leverage, the milk spoils pretty quickly!

Now, we have Knight Capital in the exact same situation and it has been reported that they are looking for a buyer. They lost $440 million (chump change in today’s world) when their "algo" trading system "malfunctioned" 2 days ago. There is speculation as to the how’s and why’s. I don’t really care. There is speculation on the conspiratorial level that this is just another "rehypothecated vacuum cleaner" being used to force people out of their commodity contracts or to steal client money, (I hope not and feel for the customers) but this I believe is losing sight of the much MUCH bigger picture.

If these firms (along with Merrill Lynch, Countrywide Mortgage, AIG and many more back in 2008) can become insolvent within 5 trading days and close their doors, what does that say? While reading this piece, please keep in mind that financial institutions now mark their assets to whatever they please, no matter how farcical the price. I would venture to say with few exceptions, none of the firms that have gone under were considered at risk a month or two before their doors were closed.

Looking at the situation from a systemic standpoint you must ask yourself what is to stop this type of scenario from happening to the whole system overnight and not just firm by firm.

The answer is very simple – the printing presses. Central banks will create as much money as necessary, whenever necessary to prevent a systemic default. Yes I know, I sound like a broken record but this is what will happen because there are no other alternatives. Please think long and hard about this topic because your financial lives depend on it. We know that the system is over leveraged, we know that ALL the monies (currencies) are based on and backed by all of this debt, we know that governments have always responded (including the last 4 years) by debasing their currency. We know all of this yes, yet people are still depressed because their Gold and Silver is down. You can see the falsehoods everywhere and you know what the government responses have been. You also know what those responses will do to the currency and that in a collapsing currency, what it does to the precious metal’s values. Don’t let boredom, frustration or fear separate you from your insurance!

Regards, CIGA Bill H.

Dear Bill,

I cannot understand why any reader is failing to take delivery of their certificates, their metals and there monies as getting anything back from a clearinghouse is a pure gamble on the unknown. The only reason I can see is dumbed downed laziness.

You are all involved in third parties holding your assets. This is madness and self destructive.

Audits are no good. Insurance is not funded to cover all the risk out there.

Why do you hold securities with a clearing firm? Why do you own any public gold company that will not direct register or deliver certificates for you? Why are you long paper gold and think you really own gold? How do you hold ETFs and really believe you own gold? You do not! How do you buy gold anywhere you never will see or touch.

It is raving madness that affects 9.9 out of 10 people reading this. The system is BROKEN and all the King’s men cannot put it back together again.

Your tax accounts are traps set for you. You are sitting targets that already know that your fiduciary, like all so called fiduciaries, is not worth a lead nickel because that is what your assets will be – worthless.

What can I do for you if the most simple act you need to do you continue to fail to do? Wake up, damn it!

Jim

RaRaRasputin
Aug 2, 2012 - 5:15pm

Nope

That's not it. Note the date is 7/17.

Still looking...

Istack
Aug 2, 2012 - 5:15pm

And this from Bix

I am resurrecting this article because we are so close to that MOMENT when silver is freed from the multi-decade manipulation that there is little time to do anything about it. $8,000/oz Silver and ONE BANK! https://www.roadtoroota.com/public/94.cfm The following FRONT PAGE headlines will soon be in every financial newspaper around the world... "JP MORGAN FOUND GUILTY OF SUPPRESSING SILVER PRICES!" "INVESTORS AROUND THE WORLD SCRAMBLE TO FIND PHYSICAL SILVER" "NOBODY IS SELLING THEIR PHYSICAL SILVER AT ANY PRICE AS COMMODITY MARKETS SHUT DOWN" "JP MORGAN CLAIMS SOVEREIGN IMMUNITY FROM SILVER PROSECUTIONS" "COUNTRIES AROUND THE WORLD NATIONALIZE SILVER MINES UNTIL THE MESS IS SORTED OUT" "THOSE CRAZY CONSPIRACY NUTS WERE RIGHT ALL ALONG ABOUT SILVER!" All those headlines will hit THIS YEAR. Are you properly positioned in physical silver to ride out the coming storm? If not yet...then when? May the Road you choose be the Right Road. Bix Weir www.RoadtoRoota.com


Aug 2, 2012 - 5:19pm

Bringing in the sheep

Dyna,

You may be right. Isn't hat what happened last time the margins were decreased in AG? And why not fleece them again, and again, right up till the day that the explosion begins. Sounds like a JPM modus operandi to me.

If JP has to cover her remaining shorts quickly, they may well be the ones that drive if from 27-ish up through 40, and it would likely happen overnight while we sleep. I bet the online dealers will all be shut down once the short covering starts.

Here's to hoping! And buy more of these everyone!

Short Stack
Aug 2, 2012 - 5:26pm

Bee-you-tee-ful Picture, Dr. J

Almost enough there to give me a chubby !

Bollocks
Aug 2, 2012 - 5:32pm

"JP MORGAN FOUND GUILTY OF SUPPRESSING SILVER PRICES!"

No chance of that ever happening unless all those in the government and courts are removed first and honest people take their places. Suppressing the price of silver and gold is of PARAMOUNT importance in keeping the ponzi alive and the currencies from collapsing. I don't believe we'll ever see that headline. At least not until AFTER the entire system has collapsed and we're picking up the pieces. Most certainly not before. The CFTC are a criminal organisation, like all "independent" regulators they are there to give the impression of regulation. How Bix Weir believes they will find JP Morgan guilty just doesn't compute. I like a lot of what he has to say, but he's got that wrong.

RaRaRasputin
Aug 2, 2012 - 5:35pm

Turd

How 'bout this?

Large Trader Requirement and Expiration Accountability Level for the New Cleared OTC London Silver Forwards (cash margin) Contract In connection with the launch of the new Cleared OTC London Silver Forwards (cash margin) contract on trade date August 6, 2012 (see SER-6225 dated July 17, 2012), please note below the corresponding expiration accountability level (NYMEX Rule 559), reportable level (NYMEX Rule 561), and aggregation allocation for the new contract. https://www.cmegroup.com/rulebook/files/ser_6340_new_london_silver_forwa... RaRa
Mr.Grey
Aug 2, 2012 - 5:44pm

In retrospect

Had I known that I would be required to count silver eagles stacked on a mirrored surface I would have forgone or at least postponed that last bowl!

Short Stack
Aug 2, 2012 - 5:48pm

@Nana and @Mr. Grey

Nana - Ok thanks, thought it sounded familiar.

Mr. Grey - Hah! you too, huh. (business is dead here and nothing else to do.)

Short Stack
Aug 2, 2012 - 5:52pm
Maximillion
Aug 2, 2012 - 5:54pm

Bounce hope

IMO the NFP / unemployment numbers can be fudged, so are irrelevant. Based on todays volatility in PM prices during Dragi's promise nothing speech, the substantially increased volumes today compared to of late, and this weeks Dark knight (and others) flash crash in prices, TPTB could still knock out the $26 in order to trigger the stop loss orders.

We all know a bounce is coming, it's just from how low that's the question!

Istack
Aug 2, 2012 - 5:55pm

I confess

lol . I counted the coins as well.. i counted 40 coins.. please help me

these should come in handy

Grigeo TF
Aug 2, 2012 - 6:01pm
tpbeta
Aug 2, 2012 - 6:03pm

Penson Internatonal

Now partly owned by Knight Capital, whose WOPR went full retard yesterday and bankrupted everyone within a thousand kilometres of ground zero. Many thanks to Ann Barnhardt for the early warnings. She may be a Koran burning crazy, but she got that one right.

My guess is that the imminent implosion of Knight is why the margins are being cut.

SE Istack
Aug 2, 2012 - 6:03pm

Bix Weir

And I'm holding Bix' ass on the line. I have received his emails for I don't know how long, and I'm just watching very closely how much of what he says is coming true. So far, he's way out there. But I'm willing to see if this will happen. At this point anything goes within reason.

Dyna mo hum
Aug 2, 2012 - 6:17pm

Someone was asking about buying phizz on ebay

a few days ago so here. I use an outfit called Scottsdale silver on ebay. I live in a pretty small town with no LCS so ebay works for me. All my purchases where in the auction format and no "buy it now" for me. I bid on silver eagles early in auctions ending in late hours of the day. I bid one time and one time only. I bid on 5 or 10 coins at a time. If I hit thats fine or if I don't thats fine too. I move on. In the last week or so I have won 20 ASE at the price of my choosing. My average cost per 20 is $32.70 and thats a little high but they ship for free and no tax so that takes a little of the pain out of the purchase. I use the completed auctions feature of that day to give me a average bid point. I dont plan to sell next week or next year for that matter so whats a buck or two in that respect and oh yes they ship fast.

Fixedgear
Aug 2, 2012 - 6:17pm

JPM Short - Outside the Box

Why couldn't JPM buy PSLV, take delivery and settle some significant number of their remaining shorts?

Wouldn't this action keep the futures price low and still allow them to settle some of their contracts without causing a run-up?

Mr.Grey
Aug 2, 2012 - 6:31pm
urout
Aug 2, 2012 - 6:31pm

What say you(all)?

Would really be interested in hearing this group's thoughts on what JS said about removing third parties from your holdings.......

"I cannot understand why any reader is failing to take delivery of their certificates, their metals and there monies as getting anything back from a clearinghouse is a pure gamble on the unknown. The only reason I can see is dumbed downed laziness.

You are all involved in third parties holding your assets. This is madness and self destructive."

Short Stack
Aug 2, 2012 - 6:39pm

@ UROUT

Never used them. I take delivery and lock 'em in my home safe. ( so heavy one of the movers hurt his back - it was empty at the time !) Got it cheap at auction.

Dyna mo hum
Aug 2, 2012 - 6:42pm

Dr. Jerome shame on you

That pic on your post is is just straight out porn for the ASE stacker. However I do finger a good old Walking Liberty half once and a while. My finger smells like a magnolia blossom when I finish.

treefrog
Aug 2, 2012 - 6:53pm

chart patterns?

tired of all the more common patterns like head and shoulders? check out the netdania one minute silver spot chart right now.

it's the rare "lingering dog fart pattern. "

somebody who knows how to post a screen capture from netadnia to here, please post it!

this pattern has a high probability of predicting a move either up, down, or sideways!

Pellet
Aug 2, 2012 - 7:01pm

Editing posts

Can someone tell me how to edit posts? I am not sure if my office firewall is hiding an edit button or if there is a secret way to do it. I would like to join the club.

Pellet

Edit: Never mind, the edit button is showing up now but was not appearing earlier.

Money By Trading
Aug 2, 2012 - 7:02pm

Today was "glass half full"

Turd,

Nice post. I expressed similar sentiments as well.

https://wp.me/p2CT0a-1s

balz
Aug 2, 2012 - 7:04pm

Bix Weir is crazy

I just don't understand why anyone follow this "Road to Roota" theory which has no basis whatsoever.

Better to stick with Turd, Jim Sinclair, The Doc, Jim Willie.

Bollocks
Aug 2, 2012 - 7:06pm

"Can someone tell me how to edit posts? "

What, you mean other people's posts? Wow, the CIA are getting desperate. Stack boys and girls, stack!

Short Stack Bollocks
Aug 2, 2012 - 7:16pm

And here I was accused of being a smartass.

Pellet:

Once you have posted and wish to edit look at the bottom right side of your post for the EDIT button. Click it, make your changes then scroll down to the save button.

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