Tame, Tedious and Tiresome Tuesday

142
Tue, Aug 7, 2012 - 12:10pm

At least it's not "Terrible"...at least not yet. The only thing of interest, so far, was when gold had the audacity to approach 1620. The banks quickly beat it back and have seemingly decided to take the rest of the day off. Let's see if we can find something else to talk about.

First of all, the metals. We've had a couple of good days in a row and a nice little pop this morning. Apparently, that was all that would be allowed for now as gold was suddenly pressing up against 1620. There would appear to be quite a few stops between 1620 and the top of the range so The Cartel appears intent upon keeping a lid on things here. Silver is facing a similar issue. Having rallied over $1 from the Friday lows, it is now back into the very center of its 3-month range. It needs a propellant to shove it through 28.40 and on towards 29 and 30. Let's hope we see some propellant soon.

By far, the most interesting market right now is crude. The chart is compelling and the fundamentals are certainly heating up. For now, The Olympics have distracted the global press so everyone seems to be ignoring the major battles in Syria. For example, bubbling just below the surface is this: https://www.sltrib.com/sltrib/world/54635926-68/syrian-rebels-government-syria.html.csp. Of course, the Iranians aren't too excited about this development and have supposedly issued a warning to the U.S.: https://www.debka.com/article/22250/Iran-threatens-US-Turkey-after-Israel-with-spreading-Syrian-conflict.

You may be wondering why this is so important. Mainly, it's the geo-politics. We have the U.S., NATO, many Arab states and Israel on one side. The Assad Regime, Russia, Iran and even China on the other. First of all, the chances of a miscalculation or accidental escalation are high. All of those ships and aircraft in the same area can be very dangerous.

We'll Be Lucky to Live Through It
Russians don't take a dump, son...

Why is Russia so actively engaged in opposing NATO and supporting not only Syria but Iran? Can they be "talked into" standing down? Not likely. Why? Do you realize that crude oil and natural gas now account for 75% of the value of all Russian exports? Because of this, Russian industry and government (and political stability) is supported almost entirely by the revenue generated by energy exports. To mollify the masses, Putin has recently promised a new Keynesian-style stimulus program that increases government pensions and puts a freeze on domestic gas prices. The estimated "cost" of this is about $200B over the next 5 years. From where will this money come? Oil and gas exports! And it's estimated that the Russians need a crude oil price of at least $150/bbl to be able to meet these obligations. Clearly, the Russians have an interest in not only maintaining the current level of prices for oil and gas, they need to see higher prices, as well. Uh-oh.

So, here's your current daily chart. What was once resistance at $88 has now become stout support. A move through and close above $93.25 will set the stage for a run toward $98 and $100.

And here's a grain update for you. Things are sideways so far this week as the markets anticipate a major crop report on Friday. Soybeans, which still have time to be partially-rescued if decent rains can develop in the next 10 days, have been under significant pressure now for over two weeks and are close to completing a 50% retracement of the move from June 1 to July 20. This retracement will be complete near $15.50/bushel and that level would close the final gap on the chart, too. Let's see if we can get there. Corn, where most of the drought damage has already been done, is consolidating in a pennant ahead of the Friday report. It's poised to go either direction. Which direction will it be?

Finally, just a few random items. First, our pal Jim Quinn has typed out another, excellent two-parter. Both segments are well worth your time:

https://www.theburningplatform.com/?p=37087

https://www.theburningplatform.com/?p=38476

And because you likely have this stuck in your head now, I present this as a public service:

Billy Joel - A Matter of Trust (Official Video)

(Boyohboy, that takes me back. Maybe 1986 or 1987. A young Turd wooing a future girlfriend. Wow, where does the time go? Anyway, the Great Liberty Devito was on drums for Billy back then. He sure is fun to watch. Timeless music and timeless memories.)

OK, back to work. This story from ZH is well-written and, though it's a rehash of much of the same stuff we talk about daily here in Turdistan, I present it to you nonetheless:

https://www.zerohedge.com/news/guest-post-has-perfect-moment-kill-dollar-arrived

And lastly, my pal Big Red in Richmond sent along this chart yesterday. For me, it's a visual illustration of The End of The Great Keynesian Experiment. The accumulated debt is now so great that additional dollars of deficit spending are having a decreasing level of "effectiveness". If I were Romney (and I thank The Good Lord that I'm not), I'd publish this chart every day. I'd hand out pocket-sized versions at all my rallies and I'd make it the "poster child" for all of O'bottom's keynesian failures.

Alright, that's it. As I go to publish, I see that the metals are stable at 1612 and 28.15. That's OK. We'll live to play another day. Crude, though, is rolling and breaking out at $93.60. Again, IF it can close above $93.25 and not fall back below tomorrow, I would expect the next move to take it toward $98 and maybe even $100. Watch closely. Have a great day!

TF

p.s. Here's a little more Billy Joel for you. As a bonus, this video comes from the 100%-outstanding, 1980s television series "Moonlighting". Any Turdites too young to recall Moonlighting should check it out on Youtube or Hulu today!

Moonlighting - Billy Joel - Big man on Mulberry Street

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  142 Comments

G00dfella
Aug 7, 2012 - 12:13pm

haha

First!

philly
Aug 7, 2012 - 12:17pm

Still stacking...

Loving the site, loving the advice, loving the daily commentary from so many knowledgeable folks!

Short Stack
Aug 7, 2012 - 12:18pm

SECOND ?

Nope, just another Thurd.

El Gordo
Aug 7, 2012 - 12:22pm

Read it first

At least I read the post before commenting.

Fat Willie
Aug 7, 2012 - 12:23pm

Thanks Turd

And a top 10. Whoopeee. Almost as good as seeing silver up, and breaking a year long weekly downtrend. Rock n roll FW

tobydaniel
Aug 7, 2012 - 12:25pm

Yep

The paint is drying just fine in the silver market. Up to the low 28's soon to be followed by the infamous 27.50. Don't let these small hamster moves get you excited. They are just exciting enough to keep you running in circles. Ahhh, cant wait till after the elections....then and mostly likely only then will we hit the 30's. Until then, save your energy on getting excited on every 20 cent move. lol. We have been there over 100 times now.

opticsguy
Aug 7, 2012 - 12:26pm
philly
Aug 7, 2012 - 12:27pm

Thank you

And I lovingly accept donations in order to keep the site going

boatman
Aug 7, 2012 - 12:29pm

2008-09

of course, US treasuries went UP as a safe haven play in o8-09.....

at some point soon........they will not be perceived as that........

wait til moody's n fitch joins SnP on their US downgrade last aug to AA+.

ALL pension funds must then exit, as they are mandated for AAA debt.

thats when the REAL fun starts.

Galearis
Aug 7, 2012 - 12:31pm

fourth

Best yet pour moi!

G.

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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