Feeling Good, Louis!

Wed, Aug 22, 2012 - 4:19pm

OK, now that we've got that FOMC nonsense out of the way, the rallies can continue. How much farther and how fast? Those are the questions.

In case you missed it, the FOMC minutes were QE-bullish. Essentially, The Fed stands ready for more "accommodation" if the economy fails to improve "substantially". You and I know that this is all bullshit, anyway, as The Fed is nearly out of ammo for additional Operation Twist measures and rates must be kept low permanently in order to sustain/protect The Great Ponzi. Again, review this if necessary: https://www.tfmetalsreport.com/blog/4112/murmurs-10-year-note. However, nearly everyone should review that post because the CoT comments contained therein are also important for this current thread.

Anyway, from RanSquawk at ZH, here are three of the main headlines:

  • FOMC says many FOMC members supported extending the Fed late 2014 interest rate guidance, but agreed to defer decision to September meeting

  • FOMC says many FOMC members favored easing soon if no sustained growth pickup

  • FOMC says many FOMC participants saw new QE as bolstering US recovery

  • As you can see, these headlines speak for themselves. More QE is on the way, it's simply a matter of time. The only exception would be renewed, vigorous "growth". Does anyone rally see that happening anytime soon??

    So where do we go from here? After bottoming in May and June, the metals are currently completing a 100-day consolidation and base. From here, we will rally back to the old all-time highs and beyond. Not that there won't be speedbumps and corrections along the way, there will be. However, prices are now headed higher.

    Particularly silver. As mentioned in my CoT comments last week, it appears that the smaller "hyenas" are preparing to battle The Big Dog for silver supremacy. The hyenas correctly sense weakness and smell blood. The fat and lazy Big Dog continues on with business as usual, not knowing yet that it has been mortally wounded. As hyena confidence grows, they will up the pressure by forcing price higher and higher.

    So here are your updated charts. At 1654, gold has clearly broken through the top end of its range and now looks to head toward its next battle, near 1675.

    Silver is still battling to crawl above $30 but it is getting very close. With the FOMC behind us, I expect the hyenas to rage forward tomorrow and press their advantage. This should take silver to and through $30 and serve to draw in some momentum-chasing spec money to aid in the fight.

    And here are two, additional charts for perspective:

    I've mentioned how interesting last week's CoT was, well this week's should be a doozy, too. For the reporting week, gold rose every day, for a total of just over $40, and, prior to yesterday, total OI was down for the week. Again, prior to yesterday. I emphasize this because yesterday, while gold rose $20, total OI shot up by 12,000 contracts (over 3%!). This makes gold CoT data interesting because, clearly, some HOT money returned to gold yesterday in anticipation of today's breakout. But just who are these buyers? Cartel banks or specs? We'll get some answers on Friday.

    The silver CoT will be even more interesting. After the big runup in the "hyena" long position last week, I've been looking forward all week to Friday's report. But now, consider this: For the reporting week, silver was UP $1.68 (6%!) but total OI fell by 1200 contracts. Clearly, to get a 6% move on declining OI, you've got quite a bit of short-covering going on. But, by whom? The SpecShortSheep? The Big Dog? Both? And how many contracts did the hyenas add at the same time? The CoT will shed some light on these questions and I can't wait to see it on Friday.

    In random order, here's some stuff for you to read. First, this from Mark Grant via ZH: https://www.zerohedge.com/news/gathering-storm

    Next, this little ditty that some have posted already into the comments of the previous thread: https://www.mineweb.co.za/mineweb/view/mineweb/en/page32?oid=157430&sn=Detail&pid=102055

    Here are your impending war and destruction updates for today: https://www.zerohedge.com/news/israels-iran-strike-routes & https://www.debka.com/article/22293/Iranian-leaders-in-Israel’s-sights-after-calling-for-its-destruction & https://www.telegraph.co.uk/news/worldnews/middleeast/iran/9490878/Irans-supreme-leader-orders-fresh-terror-attacks-on-West.html & https://www.timesofisrael.com/iran-begins-construction-of-300-million-anti-aircraft-missile-base/

    And here's a fun new piece from Mike Krieger where he discusses the greatness of Bitcoin: https://libertyblitzkrieg.com/2012/08/22/bitcoin-a-way-to-fight-back-against-the-financial-terrorists/

    Lastly, I need your help with something. I spoke with Andrew Maguire earlier today. He and his business partner Paul seem to really like the idea of an "OptionsTrades" service. Her are some random thoughts on the matter:

    1. I'm quite uneasy at recommending options trading to anyone given the inherent risks involved and my oft-stated concerns for the viability of the current "system". After the MFG and PFG debacles, everyone should be wary of holding cash, or anything else for that matter, within the confines of a customer account. That said, I could be wrong. That Ann Barnhart gal could be wrong, too. Maybe MFG and PFG are simply one-offs and everything is fine. I recognize, too, that there are still literally thousands of people worldwide who are still actively trading. Therefore, I'm content to go forward but under the banner of "proceed at your own considerable risk".
    2. I've been trading options for over 25 years now. In my "career", I've always been forced to enter The Den of Thieves armed with nothing but my own experience, wisdom and charts. To think that I could enter again but, this time, have the experience of Andrew Maguire to guide me?...well that is pretty compelling.
    3. After 25 years, I do at least have some idea of what I'm doing. All trades established by Andy and I will only be placed if we are in agreement that the trade makes sense. This clearly doesn't guarantee success but I'd like to think it increases our chances a bit.
    4. It's not going to be cheap but it shouldn't be. First of all, we don't want totally inexperienced traders taking a stab at it simply because the subscription is just $20/month. Additionally, at $250/month, the service would be a bargain. Subscribers would need to maintain an account balance of $15,000-25,000 so we're only talking about a 1-2% monthly vig.
    5. For those that don't trade futures options but do trade equity options, we'll try to offer an alternative ETF option play whenever possible. For example, a Dec12 gold call trade might be matched with a DecGLD call.

    So here's what I need you to do. If you think this sounds interesting and you think you'd be willing to give it a go, please hat tip the first comment below. Since currently only TFMR members can hat tip, any lurker who would like to indicate interest can send me a quick email at tfmetalsreport at gmail dot com. If enough folks show an interest, we'll likely go ahead and set up the system. Thanks in advance for your help.

    As I head out, I see we're still looking good at $1655 and $29.90. Can't wait to see what tomorrow brings!


    About the Author

    turd [at] tfmetalsreport [dot] com ()


    Aug 23, 2012 - 9:11am

    Old faces & avatars

    Just catching up from last night and couldn't help but notice some old and familiar faces that are starting to rejoin the group here. You know who you are

    It's nice to see the community start to re-emerge and drop their occasional $.02 on here little bit by little bit. Most of you lurker/strong, silent types have more to offer then you realize and I look forward to your varied quips and comments more often as we move forward.

    Positive moves in both metals overnight or what? Yes!!!

    Aug 23, 2012 - 9:11am

    I just had a great idea!

    An elderly relative just asked me to buy some gold bars on her behalf and hold them.

    <sarc on>

    But as I considered the possibilities that this situation opens up, I came up eith a great business model.

    So here is my plan:

    I'll ask her to sign a contract allowing me to charge a storage fee and the ability to rehypothecate the gold. Next I'll find 10 other buyers for that gold, sell it to them, but only if I store it and can charge ten more storage fees. Then I shall use the money to invest in gold futures--long and short. If any of the buyers stop by to see their gold, I'll put a black cloth sack over their head, drive them around the block, take back in the house and down to my basement, get the gold out and show it to them. If someone wants their gold back, I'll try to talk them out of it. if that doesn't work I can pledge some GLD shares or as a last resort, use their money to buy gold elsewhere and deliver it up with a "you-must-be-an-idiot" expression. Then I'll search for another buyer of the rehypothecated gold.

    What could go wrong?

    <sarc off>

    Aug 23, 2012 - 9:10am

    @ ag1969

    Your last lines...

    "It scares me. Gold and silver surging scares me. Syria and Iran scares me. But what scares me more than anything is republicans and democrats and their 7th grade social BS.

    I am very happy to see silver surging as I have been stacking for five years, but all it really signifies is that something wicked this way comes."

    Are my thoughts as well. Remember what Gold and Silver are? Remember that the world is going to look much different at $500 oz silver too...

    Get ready, cause I think we might be seeing the light at the end of the tunnel while the train full of worthless cash is charging up behind us.

    Big L
    Aug 23, 2012 - 9:04am

    Nasty comment

    "at this point in time, if you are reaching for videos to try and wake someone up who still doesn't sense something is really wrong, you might want try smacking them with a brick. Heavy sleepers can be a bitch to awaken."

    I'm not going to name the author of this post, but this is an ugly comment. While the point, that most people who don't know by now probably aren't going to 'get it' in time is valid. Your superior and aggressive tone wasn't appreciated.

    This was in response to someone asking for help to enlighten others. This response was awful, and nasty on an unacceptable level.

    I want Turd to know that after reading this comment (and typing this response) I'm done for the day with this site. Life is tough enough without having to be assaulted by this kind of imagery and needless aggression first thing in the morning.

    This is exactly the kind of comment that should get people bounced off the site.

    This point could have easily been made without resorting to such a nasty tone. I want you to know my Mother doesn't 'get it' she's over 80 years old and has seen multiple potential disasters threatened over the years which never came to fruition. She isn't dense or stupid, her experience tells her this is just another tempest in a teapot. Just another reason to get people stirred up over nothing. My mother isn't a heavy sleeper and doesn't need a brick to the head.

    If this post is an expression of what's truly in the heart of the author, I suggest you make a genuine effort to change your heart.

    I'm done for today. I'll be back to tomorrow, which I hope brings us all one day closer to showing the respect all of us and this site deserves.

    Aug 23, 2012 - 9:03am

    at this point

    PSLV is better than a tax hit.

    but thats my opinion.

    Aug 23, 2012 - 8:57am

    looking for input re: PSLV premium vs physical premium

    Currently PSLV premium a little over 3%. I seem to recall that at one point it was over 20%. Seems logical to think it could repeat that, right?

    So here's the deal- my brain is screaming to get out of paper, but cashing out the wife's IRA with Fidelity would have some large tax implications for us. My IRA had been with etrade. Didn't trust 'em, especially with JPM as money market custodian. Phyzzed out some last year and the rest this year and took the hit. Taxes taking most of our fun money and now on a tight budget.

    But- mine was only 20% the size of hers. That tax hit would be one hell of an insurance premium to pay if we did likewise with hers.

    But I was thinking- already own PSLV in her account and could buy more. Then if it's premium advanced as before, say to 20% again, we could cash out, find some phyzz for low premium (even if we had to open a cash for silver storefront) and have the difference for taxes. Relatively painless.

    And- before your fingers even start to twitch, I realize the PSLV premium could disappear as before with a new offering. It would be a gamble, but so is sitting tight.

    Thoughts anyone?

    Aug 23, 2012 - 8:55am

    @Nancy Drew

    "I would like to see these things discussed by Romney/Ryan. Guess it's not going to be, though. Makes ya' wonder?"

    I turned on my local news last night to catch the weather. The first thing I saw was Ryan discussing rape and abortion. I switched the channel in about 5 seconds and logged onto the internet to get the weather. Today's American News is such a joke, that it only took 5 seconds to realize absolutely nothing has changed on the political landscape, and that landscape is nothing short of ridiculous and embarrassing.

    Wars and rumors of wars

    epic fraud

    Big money into gold

    lawsuits coming to JPM from every direction

    gold and silver surging

    And the lead story on the evening news is about a decades old battle on abortion which very simply, is none of the governments business.

    "Hey America, pay no attention to the imminent destruction of your once great republic, there is a disagreement brewing over the definition of rape!"

    It scares me. Gold and silver surging scares me. Syria and Iran scares me. But what scares me more than anything is republicans and democrats and their 7th grade social BS.

    I am very happy to see silver surging as I have been stacking for five years, but all it really signifies is that something wicked this way comes.

    Aug 23, 2012 - 8:54am


    is worse at international chess than bush.

    Aug 23, 2012 - 8:45am

    What the West faces...

    Chess was invented in Persia: we call that place Iran today.

    Russians are master chess players.

    In China there is a game called Go. It is a game of deception where a position that appears very weak can suddenly become dominant with a single move.

    Football thinking does not stand a chance in that environment.

    A little dated, but since Obama is Bush III.

    Aug 23, 2012 - 8:37am

    @worldend666: I've been buying steadily, regardless of price.

    Same dollar amount once a month. I have loaded up on a couple of recent dips--double my normal buy if it looked right--but otherwise, steady and regular. I don't see that changing. I'll be buying until I have no more cash to spend; I won't be selling until my metal is all I have left or the paradigm shifts for good.

    Subscribe or login to read all comments.


    Donate Shop

    Get Your Subscriber Benefits

    Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

    Key Economic Events Week of 5/25

    5/26 8:30 ET Chicago Fed
    5/26 10:00 ET Consumer Confidence
    5/27 2:00 ET Fed Beige Book
    5/28 8:30 ET Q2 GDP 2nd guess
    5/28 8:30 ET Durable Goods
    5/29 8:30 ET Pers Inc and Cons Spend
    5/29 8:30 ET Core Inflation
    5/29 9:45 ET Chicago PMI

    Key Economic Events Week of 5/18

    5/18 2:00 ET Goon Bostic speech
    5/19 8:30 ET Housing starts
    5/19 10:00 ET CGP and Mnuchin US Senate
    5/20 10:00 ET Goon Bullard speech
    5/20 2:00 ET April FOMC minutes
    5/21 8:30 ET Philly Fed
    5/21 9:45 ET Markit flash PMIs for May
    5/21 10:00 ET Goon Williams speech
    5/21 1:00 ET Goon Chlamydia speech
    5/21 2:30 ET Chief Goon Powell speech

    Key Economic Events Week of 5/11

    5/11 12:00 ET Goon Bostic speech
    5/11 12:30 ET Goon Evans speech
    5/12 8:30 ET CPI
    5/12 9:00 ET Goon Kashnkari speech
    5/12 10:00 ET Goon Quarles speech
    5/12 10:00 ET Goon Harker speech
    5/12 5:00 ET Goon Mester speech
    5/13 8:30 ET PPI
    5/13 9:00 ET Chief Goon Powell speech
    5/14 8:30 ET Initial jobless claims and import prices
    5/14 1:00 ET Another Goon Kashnkari speech
    5/14 6:00 ET Goon Kaplan speech
    5/15 8:30 ET Retail Sales and Empire State index
    5/15 9:15 ET Cap Ute and Ind Prod
    5/15 10:00 ET Business Inventories

    Key Economic Events Week of 5/4

    5/4 10:00 ET Factory Orders
    5/5 8:30 ET US Trade Deficit
    5/5 9:45 ET Markit Service PMI
    5/5 10:00 ET ISM Sevrice PMI
    5/6 8:15 ET ADP jobs report
    5/7 8:30 ET Productivity
    5/8 8:30 ET BLSBS
    5/8 10:00 ET Wholesale Inventories

    Key Economic Events Week of 4/27

    4/28 8:30 ET Advance trade in goods
    4/28 9:00 ET Case-Shiller home prices
    4/29 8:30 ET Q1 GDP first guess
    4/29 2:00 ET FOMC Fedlines
    4/29 2:30 ET CGP presser
    4/30 8:30 ET Pers Inc and Cons Spend
    4/30 9:45 ET Chicago PMI
    5/1 9:45 ET Markit Manu PMI
    5/1 10:00 ET ISM Manu PMI

    Key Economic Events Week of 4/20

    4/20 8:30 ET Chicago Fed
    4/21 10:00 ET Existing home sales
    4/23 8:30 ET Weekly jobless claims
    4/23 9:45 ET Markit flash PMIs
    4/24 8:30 ET Durable Goods

    Key Economic Events Week of 4/6

    4/8 2:00 ET March FOMC minutes
    4/9 8:30 ET Producer Price Index
    4/10 8:30 ET Consumer Price Index

    Key Economic Events Week of 3/30

    3/31 9:45 ET Chicago PMI
    4/1 8:15 ET ADP Employment
    4/1 9:45 ET Markit manu PMI
    4/1 10:00 ET ISM manu PMI
    4/2 10:00 ET Factory Orders
    4/3 8:30 ET BLSBS
    4/3 9:45 ET Market service PMI
    4/3 10:00 ET ISM service PMI

    Key Economic Events Week of 3/23

    3/24 9:45 ET Markit flash PMIs
    3/25 8:30 ET Durable Goods
    3/26 8:30 ET Weekly jobless claims
    3/27 8:30 ET Personal Inc and Spending

    Key Economic Events Week of 3/9

    (as if these actually matter)
    3/11 8:30 ET CPI
    3/12 8:30 ET weekly jobless claims
    3/12 8:30 ET PPI
    3/13 8:30 ET Import Price Index

    Recent Comments

    by billhilly, 3 min 2 sec ago
    by scoremore, 24 min 44 sec ago
    by scoremore, 43 min 39 sec ago
    by lakedweller2, 46 min 13 sec ago
    by robobrewer, 49 min 3 sec ago