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 - 11:05am

The silver-bullrun

The silver-bullrun is about to start. We will surely see over 36$ until the end of the year, and 45$ by march next year. The miners will outperform heavily.

Prize Fighter
Aug 21, 2012 - 11:05am

What a great thought about

What a great thought about "the pack" dynamic, Turd. That goes a long way in possibly explaining the confusing COT. I see that same scenario play out on reality tv like Big Brother or Survivor all the time. Again, excellent thought!

Aug 21, 2012 - 11:05am

if I could figure out

how to post a chart I saw at some website, that chart would illustrate a comparison of the Obama and Ryan future debt positions--both grow substantially over the next 8 years.

And both are probably optimistic since based on history budgets and plans do not work out too well from either party.

Consequently, even the best plan from either ticket still calls for more debasement and debt. Therefore, green lite long term on PM.

Here I talk how to make (preserve) money-if the politics is germain to that I'd talk politics.

Both parties are FUBAR. They just switch back in forth between who is in charge of FUBAR.

Aug 21, 2012 - 11:05am

9th! (seems to be real important...)

Here we go again, gold is up a few bucks on the day and out the woodwork come the "bottom callers," soon be followed by the so manyth rant about "Evil Empires" and "Witches" etc when PM's drop.

Gold and Silver WILL significantly go up if a next round of QE will be announced, and not a day sooner.

Up 10 bucks, down 20 bucks, who cares! This has NOTHING to do with preparing for a systemic collapse, but it's pure day trading/gambling and whipping up a frenzy.

Aug 21, 2012 - 11:07am

Cheers Turd!

I salute your solution!

The Raconteurs - Salute your Solution (Live at Montreux 2008)

Another contrarian indicator that the bottom is in:

Aug 21, 2012 - 11:10am

Forgive me for I have sinned

Yesterday I scalped several C-notes when my silver futures buy-stop was triggered during the morning run up (yes, I helped push that line upward in a very small way).

Normally I just stack physical. I promise to never trade paper silver again.

Unless another scrumptious opportunity presents itself.

Roger Godberd
Aug 21, 2012 - 11:11am

Great stuff Turd

Weekly closing price will be key imho. Agree completely re. Dollar Index is helping.

Just one more trend line to smash through on gold. Fingers crossed for a $1660+ close.

Aug 21, 2012 - 11:11am


I have an IQ of 61.

That's practically plankton.

Aug 21, 2012 - 11:12am

Silver to zero?

Hi tmosley. What about the dozens of other commodiIes? Are lumber, pork bellies and corn or platinum going to zero or is it just gold and silver?

Aug 21, 2012 - 11:14am

Hot and Explosive

A short vid of the Cartel trying to keep their short PM positions safe and from doing the inevitable....

Destroyed in Seconds- Oil Tanker Explosion .flv

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Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
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Key Economic Events Week of 11/4

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11/8 10:00 ET Consumer Sentiment
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Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
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1/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
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10/24 9:45 ET Markit flash PMIs
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Key Economic Events Week of 10/14

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10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
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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
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10/4 8:30 ET BLSBS
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Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
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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.

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