Son of ChartDaddy

Mon, Aug 13, 2012 - 10:50am

Top o'the mornin' to everyone in Turdland. As we get the week started, I thought it best to refresh the charts.

Let's start with the metals. As discussed last week, gold was being actively penned below 1620. We finally moved through that level on Friday but, after tripping only a few stops up toward 1630, have since fallen back. The question now is: Can 1620 act as support and a springboard for our next move? The goal now is to finally break out of this 3.5-month range by getting above 1635-1640. From there, we'll head off to fight the major battle at/near 1670.

Though gold has been able to get above 1620, silver has not been able to break its cap at 28.20. This is curious to me and suggestive of additional new shorting in order to contain price. I've often mentioned how odd it was that total Comex silver OI had ranged between 121,000 and 124,000 for nearly six weeks, from 6/28/12 to 8/3/12. The open interest finally broke out of this range on 8/3, just as silver rallied from near $27 to $27.80 and began pressing up against 28.20. Total OI as of last Thursday is now 125,491. To me this is simply adding fuel for the inevitable short squeeze.

Crude is bubbling up again this morning and I expect that to continue now that the quadrennial utopian love fest has concluded in London. Just a reminder that all is not well:

And just a few words about the grains. The much-anticipated USDA report from Friday has become a "buy the rumor, sell the news" event. This is not surprising as corn had rallied 40c in the 24 hours leading up to the report and beans had gained 80c. They are now down sharply in the hours since. This is fine with me. I spent the weekend driving all over the American Midwest and let me tell you...the drought is horrific. Only well-irrigated crops look anything close to "normal". Non-irrigated or "dry-land" corn is mostly dead. (And not in the Miracle Max sense. I mean simply that most of it is 100% dead.) Much of it is already being chopped down in order to use it as silage for livestock...the only use left for it. IF we can continue to chase some of the hot money back out of corn and beans and IF they can fall a bit further, I will definitely be looking to buy. The damage is done and crops estimates will only go lower as we head to harvest. Again, if you're looking for a simple way to participate in the carnage and hedge your personal food costs, take a look at the "DAG" or any similar, agricultural ETF.

Just two other items from the weekend. First, Sprott Asset Management is out with their July newsletter:

And Alasdair Macleod of GoldMoney has a short piece you should read, too:

That's all for now. I hope to have more later.


About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 13, 2012 - 10:51am


For the upside

Aug 13, 2012 - 10:52am



Aug 13, 2012 - 10:53am


why bother with the charts Turd? if you are certain that there will be an upside explosion sometime before 21st September, why not just sit back and wait for it

Short Stack
Aug 13, 2012 - 10:55am

Thurd again ?

Nah, just a lousy Thorth.

Aug 13, 2012 - 10:56am

I keep forgetting to include this

The Turd and his hero at FreedomFest in Vegas. I'm still trying to track him down for a podcast. Keep your fingers crossed!

Aug 13, 2012 - 10:56am


Keep pulling it back so I can buy more.

Aug 13, 2012 - 10:56am

Because there are still

Because there are still literally thousands of people who visit this site daily, looking for chart updates.

Aug 13, 2012 - 10:59am
Aug 13, 2012 - 11:00am



When I saw rhodium go down $60 while the other metals were positive, I knew it wasn't long before they turned negative. I tell you, its been a while since I have seen such a large move down in just one day in Rhodium.

Looks like the markets get ugly from here (of course short term).

Short Stack
Aug 13, 2012 - 11:01am

Sorry Turd but even as you wrote this thread...

The spots of gold, silver and oil were dropping off the bottom of my chart screen via NetDania.

I think gold and oil touched the resistance point already. Watch it closely all.

Dagney Taggart
Aug 13, 2012 - 11:03am


SLV 27 is still holding.

Be Prepared
Aug 13, 2012 - 11:04am
Dagney Taggart
Aug 13, 2012 - 11:05am

Good picture Turd

You're a better looking man than me.

11: double-down.

Aug 13, 2012 - 11:06am

Not saying your old

but here is to you Turd.

Old Man

Aug 13, 2012 - 11:06am
Be Prepared
Aug 13, 2012 - 11:06am
Wallace Hartley
Aug 13, 2012 - 11:06am

To the Traders...

Although I understand the lack of patience and the seemingly endless PM price purgatory we're currently stuck in, gold/silver are not a "trade". You have to adjust your investment timeline when investing in this space (unless you're very fortunate and take the plunge right before a major spike in prices. In which case, you're more than likely going to sell shortly thereafter and are one of the weak hands often referred to.)

The strong hands are investors that treat the PMs more like insurance. They invest smaller amounts regularly and don't pay much attention to the volatility. The timeline is longer than an average trader (mine is through 2020 right now) and the investment's purpose is to protect from an unexpected catastrophe. When a catastrophe does happen, your PMs will be there to bail you out. Sort of like the Central Bank of the common man. 

If you're growing impatient, you should re-examine your original investment timeline to determine the profit/loss of your PM investments. If your timeline is as short as 1-2 years, than you will more than likely be disappointed and are probably not one of the strong hands. With such a short timeline, the manipulators are much more likely to shake you out of the PM investment space with their daily manipulations. If you truly believe in the story of PMs, stick to your guns and you'll be rewarded for your patience

Aug 13, 2012 - 11:07am
Be Prepared
Aug 13, 2012 - 11:09am
Be Prepared
Aug 13, 2012 - 11:18am

The Sentinel Ruling...

The bottomline:

The Courts have made it abundantly clear that you don't own your money....regardless of where you put it. The Government has made it crystal clear that you work for them without the benefit of receiving anything for your productive labor. Each step, each ruling, each law is pulling the wrapping away from the self-evident truth that we are merely slaves. Your bias can make you believe that it's not true... that it's only everyone else that is in the trap, but the cage was closed long ago before you were born. A corporation can steal $312 million and the Bank is the only one who has any rights... it's been made clear. Can you see it?

Aug 13, 2012 - 11:20am

Thanks Orange

Orange posted this by the end of the last thread, a very very important listen...

Aug 13, 2012 - 11:22am


The cows seem to be getting fed much better than the pigs today.

Aug 13, 2012 - 11:23am

This sure is a exciting week!

Zzzzzzzzz............ At least it's sunny outside! Hopefully the paint dries faster in the sun:)

Aug 13, 2012 - 11:24am

Bill Murphy at Lemetropole

He's been mirroring Turd's expectations for August. Here's a part of his latest:

"I have spoken before about my contact on the Board of Trade who trades mainly the metals and is in touch with New York minute by minute. He has been saying for several weeks that the metals would have one more big drop (1525-1550) before they really took off. Today he changed his mind. They saw heavy covering of shorts in Chicago and New York. This should show in next week’s COT. They see an explosion of huge proportions and are adding four more floor traders as they see August as a record month for them. He closed by saying "We could see a 100% increase in 90 days." Tie this in with other things that we have read and heard. Golden regards

If what Peter sends us pans out anywhere close to what he has been told, this Mini-Midas is more than well worth the read. What fascinates me is that this new input confirms what my other three sources have been saying. Now we wait to see how this plays out in the three weeks of trading left ahead in August.

In addition, as you well know by now, it has come to my attention from all of my original contacts that JP Morgan has a big problem with their silver short position and that this problem will reveal itself in a public way in the near future…"

100% in 90 days? $3200 gold by Thanksgiving? 

Aug 13, 2012 - 11:25am

OT. China and Triffin's Dilemma

I have not posted for a long time here. I only post when I have something new to share. Here's my latest analysis on China's currency war. 

Background: A country whose currency is the reserve currency will necessarily run trade deficit against others (so that other countries can accumulate said currency for trade and foreign exchange reserves). Such trade deficit conflicts with national goal of providing employment because to have a trade deficit, production tends to move overseas to countries that want to accumulate the currency.

Hypothesis: Triffin's dilemma is still applicable, of course, but China will find ways around it. How?

1. RMB will be set up selectively as a bilateral currency rather than world trade currency. By being bilateral trade currency, China can pick and choose which countries it will allow to run trade deficit against. Examples:

  • Countries that export commodities. China prints fiat to exchange with commodities. Sweet deal. Commodities extraction are not labor intensive so it does not conflict with China's domestic employment goal. Examples: African countries, Iran, Brazil, etc.
  • Countries that export high technologies. High tech is capital intensive and not labor intensive. Again, no problem to China's domestic employment goal. Examples: Japan.
  • Countries that have structurally higher employment cost. Examples: Japan. 
  • Countries that have industries China is no longer interested in keeping. Examples: don't know, but theoretically possible.

2. Trade deficits will not lead to higher unemployment if simultaneously China exports labor to countries it is running trade deficits against. Example: infrastructure grants and loans to African countries are conditional upon the money being used for contracts with China's corporations who will then export labor and employ Chinese in Africa.

3. RMB will be set up not as entire-world trade currency. It is not designed to replace USD completely. This allows China to keep having trade surplus against the US in USD terms, exporting high unemployment to the US.

The net results will be China running trade deficits against commodities exporting countries in RMB term, but trade surplus against US and Europe in USD terms. China benefits from acquiring commodities cheaply by just printing RMB, keep high employment at home and increase employment of Chinese labor abroad, and at the same time absorb technology from US/Europe through trade surplus. I believe this is what China is aiming for. In this game of global empire building, China demonstrates that it is extremely skillful.

By the way, ZH's article gives a context for what prompts my analysis:

ancientmoney TF
Aug 13, 2012 - 11:32am

video no longer available . . .

Must be too scary for children.

Be Prepared
Aug 13, 2012 - 11:32am
Aug 13, 2012 - 11:33am

Love the Judge!

Could you imagine what the DOJ would be like if Judge Napolitano was in charge....

Beastly Stack
Aug 13, 2012 - 11:35am

Thank You Wallace!

I agree with you 1000%.I sometimes vent here bc it makes me feel better.I've been trading gold since 2003 and taken some time away on several occasions.I just feel I started back at the right time back in May.I live with my wife and 3 kids and I can't talk about the markets with them.This venue is great and especially when you receive input from people like you.

Thank You!

Aug 13, 2012 - 11:37am

Wow, that guy was nervous. 

Wow, that guy was nervous. Wonder if he was thinking he might get capped for this?

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