Hot and Explosive?

Tue, Aug 21, 2012 - 10:43am

Yes, the past 24 hours have indeed been hot and explosive. Is it THE hot and explosive? Maybe.

As you know, I've been waiting for a "hot, explosive and historic" rally to begin. I'm sure most everyone is wondering whether or not this is the beginning of that move. In all honesty, I can only say "maybe". Let's talk about another option, first.

As you know, The Fed last met for an OMC meeting three weeks ago. At the conclusion of the meeting, the "Fedlines" were released, giving us all some idea of the things The Goon Squad discussed between steak dinners and trips to Cheetahs. Tomorrow, after a 3-week delay, we get the release of the official minutes of the meeting. As you also know, we have already had five or six occasions in 2012 where prices ran up ahead of a Fed/Bernank announcement, only to be summarily beaten back immediately following said Fedlines/press conference. This could be just another occurrence of the SpecSheep being led to the shearing barn. Could. It also might not be.

As we discussed last Friday and over the weekend, the CoT last week was very, very interesting. At 47,797, the gross commercial long position in silver is the highest I ever recall seeing it. Additionally, Uncle Ted suspected that the 4,752 increase in the gross commercial short position came almost entirely from JPM. From there, I began to wonder if we were about to witness a "civil war" in silver.

I used an analogy with Mister Hyde this morning that I think I'll use again here. Currently, the commercials in silver act collusively to crush the specs. In a way, this is similar to a pack of hyenas on the Serengeti. The pack works together to accomplish the kills but there is usually a leader, a bigger male dog that leads the pack. This is all well and good until and unless the the leader ages, becomes weaker and distracted, and becomes vulnerable. At that point, members of the pack may begin to collude to oust the leader. The remainder of the pack may begin to act collusively against the leader and, when the day comes that their confidence rises to the point where they are ready to attack, the pack turns on the leader for their own selfish, potential gain.

So, the question is: Is the silver "leader" vulnerable? Has "the pack" begun to sense the leader's vulnerability? Does the pack know something that you and I don't about the leader's health and viability and, sensing this weakness, have they turned upon the leader?

Here's that word again: Maybe. Though I am supremely confident that the metals, particularly silver, are about to charge off into uncharted territory, I cannot be certain that this is happening right now. This is coming, however, and it is coming very soon. Perhaps the leader will survive and even play along? Maybe. In the end, it doesn't mater. Prices are going much, much higher whether they like it or not.

The metals are almost certainly getting some support from crude. As we identified last week, once crude broke out of its latest consolidation spot, it was likely to head toward $98-99, perhaps as soon as late this week. Well, we're already there, all the Iran v Israel grumblings giving things another shove higher this morning. The next short-term top and consolidation looks to come in just below par, near $99 or so. Let's see what happens from there but anyone trading might ring the cash register a little if give the opportunity to take some off near $100.

Finally, our pal Ned was on with Max earlier today and he did an outstanding job of discussing unallocated/allocated and a number of other items. I strongly suggest that you take the time to watch this video. Perhaps an admin could embed it below so that you don't have to leave the site to watch.

I also traded emails with Ned this morning and he asked me to alert everyone to the falling gold:silver. Ivars has been doing a great job of keeping us up-to-date on this and I hope he'll post another chart of the ratio soon. A drop below 55 would seem to be something for which you should keep a look out.

And one more thing...I am going to begin to actively remove political and other content that is posted to the main threads that doesn't promote the wider discussion. Everyone already knows that O'bomney is guaranteed to win in November so we don't need a daily barrage of left-wing and right-wing propaganda/marketing. If you want to start your own site and publish all of that stuff, go right ahead. (Be prepared, though, as it is way more expensive than you might think) This is my site and I decide what stays and what goes, what gets published and what does not. This site is not your personal political propagandizing tool. It is a site that I have built for all of us to discuss the precious metals and our personal preparations for the end of The Great Keynesian Experiment. The "Main Street" thread our primary "front door" and I will not allow personal political agendas to slow or otherwise harm the growth of this site. Any registered Turdite has the ability to begin a forum where he/she can discuss anything on their mind. That person can then invite everyone else to stop by and share their views. This is the way we shall conduct business here moving forward. The American election is less than 90 days away and if we don't correct this now, I fear our site will be destroyed by mindless, partisan infighting.

That is all for now. As I go to publish, I see that the metals are hanging in there. This is good. One step at a time. Today's goal should be to close above $29 in silver and above $1635 in gold. Let's worry about tomorrow tomorrow. Have a fun day.


12:35 pm EDT UPDATE:

On the heels of he very impressive action this week, I am ready to declare that Battle Royale I has now finally been won by the good guys. Any attempts to raid price and dip it lower will now find support at the descending line. The next major battle will now be at Battle Royale II, the line connecting the 4/11, 9/11 and 2/12 peaks. This line currently resides near 30.50, which is the area where we also find the 200-day moving average.

I plan to write up a new post later this afternoon or early evening so please be sure to check back.


About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 21, 2012 - 5:19pm


err. I mean, @Bollocks. Nice to see you over here too...

Aug 21, 2012 - 5:19pm

Its dangerous out there

Just heard that my brother in law lost 20K in a Ponzi scheme after selling his AG to get in. "Zeekler." anyone heard of it? I told him it smelled like a ponzi when he called me to sell me his silver. I don't get no respect in the family. He talked my mother in law and some other relatives into investing also. Damn!

Aug 21, 2012 - 5:08pm

re Copper , Nickel etc

I don't know if anyone has followed this story or not, but it appears MN is sitting on one of the largest copper deposits in the world.

3rd largest for copper and nickle, 4th largest for precious metals according to that article. Whether or not they'll get past all the environmental hurdles to mine it or not is another story.

Short Stacktyberious
Aug 21, 2012 - 5:04pm

@Tyberious Re: US Prison Population and D'Amico

The United States incarcerates more people than any other country in the world—more even than China or Russia

I haven't heard much about Russian prison population but there has been plenty of information regarding the execution of a vast majority of Chinese prisoners for the purpose of harvesting human organs to sell on the black market.

According to D’Amico, a free country should not have 1.6 million people in prison,

Correction, a free country (like the U.S.) should not have 1.6 million people committing crimes the likes of murder, rape and armed robbery.

it is time for Americans to recognize that the U.S. criminal justice system is desperately in need of reform.

No, it is passed time that many America's parents wake up to the realization that they are raising a bunch of street-hoodlums who grow up to have no respect for the Rights and lives of others, and no respect for themselves.

D' Amico comes across to me like one of the mis-guided Left-wing Liberal/Socialist Professors who infest our colleges and universities. Such people should be deported in my opinion.

Be Prepared
Aug 21, 2012 - 4:57pm

The Stand.... but will we Remember?

Since the general civilization of mankind, I believe there are more instances of the abridgment of the freedom of the people by gradual and silent encroachments of those in power, than by violent and sudden usurpations; but, on a candid examination of history, we shall find that turbulence, violence, and abuse of power, by the majority trampling on the rights of the minority, have produced factions and commotions, which, in republics, have, more frequently than any other cause, produced despotism. If we go over the whole history of ancient and modern republics, we shall find their destruction to have generally resulted from those causes. – Speech at the Virginia Convention to ratify the Federal Constitution (1788-06-06) - James Madison

A Republic, such as ours, always stands on the edge along a deep cliff.....that will bring us all to an abrupt end. The end of this experiment, imo, is not Mad Max, but will the mixtures of fascism, socialism and totalitarianism. What we are and what we have achieved are always on the line and so easily lost. What we lose is a precious understanding that are rights are granted to us by the mere fact of are being and not granted unto us by any government, but, with it, comes a grave responsibility and a social contract of vigilance. I want to be protected for the great storm of this century and seem PMs as a berth upon which to hold fast to the idea that we, as a nation, will right ourselves again. The realist in me, though, sees too many of my fellow citizens inured in a system where this Republic in nothing but what are government tells us it is.... They have no concept and can't fathom what freedom is because they've never been shown or taught what freedom is and what it requires of us. The government, which means Us, have allowed an education with abhors the ideals of Our Constitution. We are a minority and we are shrinking. Our neighbors will be on the side of the jackboot and to believe otherwise will lead you down a path of misery. I hope, as the evidence and the myth of the nanny government fails to deliver, that my fellow citizens will revive their history and embrace its truth. Freedom isn't free and no one is guaranteed anything other than the opportunity to pursue the happiness defined within one's own heart.... Will we Remember?

Aug 21, 2012 - 4:54pm



Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Aug 21, 2012 - 4:53pm

I was a liberal arts major

I had three courses that actually had value.

1) A survey course on ancient history from Mesopotamia to Rome

2) An introduction to logic course that covered the informal fallacies and a survey of the great philosophical questions and the great philosophers

3) A literature course that introduced me to the likes of Shakespeare, Twain, Dostoyevsky and Joseph Conrad.

That combination taught me how to think. These days you can get all that free on the Internet.

Everything else was a waste of time. I ended up first in manufacturing quality control and eventually information technology. Fortunately 35 or 40 later my formal education hasn't hindered me very much. :)

Colonel Angus
Aug 21, 2012 - 4:49pm


Here's another example of the cult of higher ed: I had this student who wasn't getting it done in the classroom...any classrooms as a matter of fact. You remember Delta Tau Chi? He had the GPAs to go with Otter and Bluto, but I don't think he had the brains to have the fun that they had. Anyway, I asked the kid if we should talk about his classes for the next semester, as I'm somehow the academic advisor for this guy. He says he isn't coming back, as he's enrolling in an auto mechanics tech school down the road. I praise his decisions, offer to help him get a position, write letters, whatever. I talk about how he'll always have a job. And this is much more this guy's speed anyhow. He's the kind of kid I'd trust with my car but not with my daughters, the editing of my papers, or the balancing of my checkbook.

Anyway, someone in one of the softer sciences gets wind of what I've done to help this kid out. She tries to ream me a new one. Being the kind of guy I am, I just ask her, "Are you thinking about the kid or about retaining our positions? Aren't we supposed to think about these kids first?"

More stories later if anyone cares. In our next episode, I would be glad to talk about how pissed off people get when I tell them that the next bubble is student loans. Those are fun stories if they weren't so damned true.

Aug 21, 2012 - 4:38pm


hamster fur weaving!


Ok but seriously, as a science major, BS. Bio, MSHS PH, I have met and continue to meet people taking what I call worthless degrees. It is the easy way, some people do not need nor desire a higher education, though I am huge proponent of technical training, but alas the jobs are all gone.

P.S. My manager was an English major. In her defense she writes excellent reports, though overly long :)

TreeTop Dwellerneedadeel
Aug 21, 2012 - 4:36pm

Cowabunga Dude!

Time to ride that Elliott (Idiot) Wave

A person has to have a lot of faith to to get in front of a national audience and say the things he said. I sure wish these people were held accountable for predictions. Not a word is mentioned on their prior calls!


The news is no better for copper bulls. In fact, it's much worse if you buy into the idea that "Dr. Copper" is a tell for the rest of the economy. Based on his wave work, Kennedy says copper is heading not just lower, but down as much as 55% to $1.50. This would take copper near lows last seen during financial meltdown of 2008, when global growth crumbled.

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Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

Key Economic Events Week of 7/13

7/13 11:30 ET Goon Williams speech
7/13 1:00 ET Goon Kaplan speech
7/14 8:30 ET CPI for June
7/14 2:30 ET Goon Bullard speech
7/15 8:30 ET Empire State and Import Price Idx
7/15 9:15 ET Cap Ute and Ind Prod
7/16 8:30 ET Retail Sales and Philly Fed
7/16 11:00 ET Goon Williams again
7/17 8:30 ET Housing Starts and Permits

Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
6/30 12:30 ET CGP and SSHW to Capitol Hill
7/1 8:15 ET ADP Employment
7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 2:00 ET June FOMC minutes
7/2 8:30 ET BLSBS
7/2 10:00 ET Factory Orders

Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
6/22 10:00 ET Existing home sales
6/23 9:45 ET Markit flash PMIs for June
6/23 10:00 ET New home sales
6/25 8:30 ET Q1 GDP final guess
6/25 8:30 ET Durable Goods
6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
6/16 8:30 ET Cap Ute and Ind Prod
6/16 10:00 ET Chief Goon Powell US Senate
6/16 4:00 pm ET Goon Chlamydia speech
6/17 8:30 ET Housing Starts
6/17 12:00 ET Chief Goon Powell US House
6/18 8:30 ET Initial Jobless Claims
6/18 8:30 ET Philly Fed
6/19 8:30 ET Current Account Deficit
6/19 1:00 pm ET CGP and Mester conference

Key Economic Events Week of 6/8

6/9 10:00 ET Job openings
6/9 10:00 ET Wholesale inventories
6/10 8:30 ET CPI for May
6/10 2:00 ET FOMC Fedlines
6/10 2:30 ET CGP presser
6/11 8:30 ET Initial jobless claims
6/11 8:30 ET PPI for May
6/12 8:30 ET Import price index
6/12 10:00 ET Consumer sentiment

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