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 ()


    Loud Noises
    Aug 23, 2012 - 10:34am


    I'm really hoping to get some hints at whether this move is tied to the cause of the "hot, explosive" one or not. Is this caused by the fundamental game changers that you have referenced or is this only the short covering that we all knew would happen? Maybe you can elaborate just a bit more in your next thread?

    Aug 23, 2012 - 10:36am


    Sorry to hear that

    Aug 23, 2012 - 10:39am


    JPM are currently at 37.55, so a fair way to go yet.

    Loud Noises
    Aug 23, 2012 - 10:43am

    On Tuesday, I began to think

    On Tuesday, I began to think that it is.

    The action since has only served to drive me closer to this conclusion.

    The hyenas sense weakness and are attacking.

    Aug 23, 2012 - 10:44am
    Short Stack
    Aug 23, 2012 - 10:47am

    Never thought I'd see the day...

    ..I started liking hyenas.

    Aug 23, 2012 - 10:48am

    ElGordo: Offensive

    Would you prefer if he used the words "dump" and "in the crapper"? Then again, some people might get sexual gratification from those too and I don't know if that is your particular fetish.

    Aug 23, 2012 - 10:48am



    stingbee30 stingbee30
    Aug 23, 2012 - 10:49am

    RE: My post from last Night-Redux

    Everything is pointing towards my contention that we will see a 5% increase today, supplemented by another 2%-3% on Friday...

    Why- because this hard asset was abused and beaten down for a long time. Now the coil is stretched, and ready to snap...

    Look at the volume, and the Asian buying overnight indicated that a major move is coming. The little drop off is a normal trading pattern. I wouldn't call it "Smack Down". Silver and GOLD are back on the radar, and it will bring more hedge funds, and other buyers into the market. The fact that OIL is poised to make a move towards $100 is also helping the cause, with a falling dollar. The upcoming Hurricane could also add more bids for Oil.

    If you are waiting in the sideline, then I wish you good luck. I think many Silver investors were so depressed and hopeless that they have given hope. Now, when we finally see a major move, we still have some skeptical and "Smack down" theorist.

    Ignore the charts for the time being...I personally think the move towards $37.00 could happen within a week or two weeks time frame. That is where you going to see a major battle. If breached, then the run toward $50.00 will happen by November/December time-frame...

    Good luck from the Trading desk of Stingbee....Sting say's sing "Field of Gold"...

    This was my post from last night...

    I haven't been posting here much, but i came back a few weeks ago when I felt like Silver probably hit the bottom...This weeks move sort of correlates with what we have been hearing the last few days-get prepared for a massive rally in the Silver market...

    This time around I think Silver is the main dish-this is the trenches where it get's ugly. I think JP Morgan Chase is definitely cornered...It seems like there is this orchestrated attack to topple JP Morgan Chase....This could be the result of the inner fighting between European Banks, Asian Banks and American Banks over the Libor Scandal, and a fight to the survival...

    I have this gut feeling that by tomorrow, we could be up 5% or so...I haven't seen this type of overnight action for a long time...The last time i recall was during that run towards $50.00 in 2011. There is not much JP Morgan can do especially now when it has a mess in many other areas-it is not just the Silver market.

    With all due respect, this Tsunami doesn't care about resistance or Battle Royal 2 ($30.50 area)...It appears this area is going to be breached before the Asian Market closes...I wouldn't be surprised to see Silver trading around $30.50+ before New York opens...

    You can see there is this frantic buying/covering in the Asian Markets....Someone is freaking with their short position, and you also have frantic buyers. Tomorrow, we could see 50,000+ contracts in the Silver market, and leading to Friday.

    My gut prediction: Thursday we close around $31.00...On Friday, we could close around $32.00-$32.50...

    In summary, this is when you throw away the charts...The Fundamentals, the JP Morgan short position, Central banks printing more money, and a pending war. Of course, technicals come into play as well. So, don't get so caught with your charts...

    Good luck...Something is brewing...The Tsunami is approaching the shores...

    Prize Fighter
    Aug 23, 2012 - 10:49am

    Uh, if you use that Bullion

    Uh, if you use that Bullion Tracker and take the time to enter all your purchases, take my advice and use the option to export that info to a saved file so you can repopulate that data should BT ever decide to just delete it all. Because deletion of an hours worth of work is what happened to me this morning after my laptop did an auto update for Adobe. BT is still there and running but all my data is gone. Oddly enough, my physical still exists. Imagine that! :)

    Aug 23, 2012 - 10:50am

    Be prepared for a Cartel takedown

    I am sure they would love to harvest the stops between 1600 and 1650. They like to pounce when no one is expecting it.

    Aug 23, 2012 - 10:51am

    Crazy ... and WAY too fast

    Smackdown imminent, surely.

    Aug 23, 2012 - 10:53am

    No smack down coming

    there's a war going on

    Aug 23, 2012 - 10:53am

    No smack down coming

    there's a war going on

    Aug 23, 2012 - 10:53am

    gold is leading the charge,

    gold is leading the charge, will silver follow?

    Aug 23, 2012 - 10:54am

    Silver situation: Just went mainstream/MarketWatch

    Aug. 23, 2012, 2:04 a.m. EDT

    Is gold heading to $4,500?

    Commentary: Are gold fundamentals, technicals most bullish ever?

    By pbrimelow[at]marketwatch[dot]com (Peter Brimelow), MarketWatch

    NEW YORK (MarketWatch) — Gold makes its move. The bugs are rampant.

    The yellow metal made life very difficult for commentators trying to keep a regular schedule on Wednesday.

    MarketWatch’s Claudia Assis can hardly have hit the send button on her story headed “Gold ends lower as other metals gain” , which dealt with the close of floor trading — the December gold contract was down $2.40 — when the Fed minutes set the market roaring.

    By the stock market close, gold had risen over $17 to stand 1% above Tuesday’s stock market closing level and at the highest since early May.

    Gold shares, too, came surging out of negative territory to finish with strong gains. The NYSE Arca Gold Bigs Index /quotes/zigman/6015494XX:HUI+0.54% closed up 2.21%, the highest since June 19 and up 17.2% since the recent low on July 24.

    This late development followed a strong day on Tuesday, which saw a floor close in the CME December contract of up $19.90 (1.23%) and a 1.69% gain in the HUI.

    This was enough to stimulate exuberant commentary by the Aden Forecast’s GCRU service, published early Wednesday morning: “AND..... THEY’RE OFF! The markets have taken off. The train has left the station, and another leg up in the bull market is getting started.”

    “Whether it be gold shares on their own, compared to gold, versus bonds or versus the stock market, gold shares are rising from the dead.”

    GCRU had a particularly kind world for silver: “Silver broke above its 75-day [moving average] for the first time in four months, showing impressive strength! Silver’s rise is the strongest it’s been since the rise earlier this year.”

    GCRU’s prognostication: “Silver must break above $30 to confirm strength that could push it to the February highs near $37.”

    The silver situation is exciting particular interest. Letter editors have noted that the metal had been achieving technical objectives earlier than gold during this move.

    Furthermore, according to Bill Murphy at the LeMetropoleCafe website, rumors of large silver purchases in London have been followed by stories of delivery problems being experienced by...


    El Gordo
    Aug 23, 2012 - 10:55am


    If it's offensive, I'll know it when I see it. Now I have to take a break from all this excitement and go lope my mule, but you all had better be nice or I'll complain some more.

    Aug 23, 2012 - 10:55am

    hedge funds

    going to get on board soon. if not already. they need to make money too

    stingbee30 Pellet
    Aug 23, 2012 - 10:57am

    No Smack Downs

    There is not much the Cartel can do at this time...You have too much bids coming, and you have a Silver shortage issue...These new purchases are going to put more pressure on SILVER because they will ask for delivery...This seems like a Coordinated attack on Silver on the BUY-SIDE...Now, you got gold that just breached the $1675 area...This is triggering more buys and a run towards $1700 will happen very shortly...

    This is going to continue tomorrow....So, your "Smack Down" theory is irrelevant. As Mr. Turd wisely suggested that the herd is getting desperate and making a move.

    Aug 23, 2012 - 11:00am

    Pullback Healthy

    As excited as we are all to finally see this breakout would a correction/pullback not be healthy here? Both Gold and silver's RSI are now above 70 and into oversold, although they can remain oversold for some time. Anyone in the miners can see that the vectors, ETF's and many miners are leaving downside gaps that should probably be filled sooner rather than later. JMHO.

    Aug 23, 2012 - 11:01am

    @Turd re: Well This Sucks

    You are right young man it certainly does suck. Though it it only one of Three MAJOR problems falling into place for the planet right now, that all is needed is a trigger event for any one of them and it is game on.

    1. Is the very real possibility of tensions in the Middle East building into a World War. Those in power at this moment in time actually think that it is survivable (for them). The dogs of war are being positioned now and have been for quite some time and all that is needed is a trigger event to let them off the leash.

    2. The Financial Implosion that at times seems like is almost a forgone conclusion. Which we deal with here every day and have a pretty good handle on how they are working things. Nothing is being done in real terms to put the train back on the tracks. And this begs the question, Is it being done on purpose or from pure greed and ignorance of what a Global Financial Implosion would do to this planet and it's people ? And it is anyones guess what the trigger event for this will be, Could be one of a million things.

    3. Fukushima Storage Containment Building 4, A magnitude 5 or better earthquake (Trigger) can bring down the structure. They are even losing robots in the facility because it is so radioactively hot. They are pumping roughly a Million gallons a day onto the radioactive material in the storage pool just to keep it from exploding Since March of last year. Every bit of that water is flowing into the Pacific. The smaller explosions at the time of the tsunami emitted enough radiation to easily reach the U.S. The resulting explosion from Containment Building 4 will pretty much radiate at high levels pretty much the entire Northern Hemisphere. Many scientists that have been monitoring the high levels of contamination already on the West Coast of the U.S. have been making plans to evacuate themselves and their families as far South as they can (South American, African and Australian Continents) in the event that Containment Building 4 goes down.

    Sorry to bring forth such depressing things on such a wonderful up day in our Metals

    Live, Laugh and Love with the ones we care about everyday, It helps make all of this craziness of our times Much easier to deal with.


    Aug 23, 2012 - 11:01am

    ' your "Smack Down" theory is irrelevant'

    I love getting things totally wrong. lol.

    Aug 23, 2012 - 11:01am

    SMack down people

    maybe they are trolls?

    Did everyone see NED on max kieser. there's a war raging on LBMA. people trying to get silver for delivery but they want let them have. these are big players in the market trying to take delivery. the issue is that these folks probably don't have the silver. when this comes out this could be the end as turd has been saying. i think there's more to the story but we will have to wait and find out

    Aug 23, 2012 - 11:04am

    Rounding the bend...

    ...and turning the page on that terrible sideways action we endured.

    While it still might fall back from here it just doesn't seem like that's going to be the case to the extent we just endured. It looks like were easily going to stay above $1650+ and $30+ going into Friday's close.

    Hey, you never know, and with profit taking on Friday to some degree we might revisit $1640/$30 but it feels different with the FOMC that just took place and the reaction to 'no news' at all from it.

    Have we turned the page? I think so. This Sunday night/Monday's action will tell the tale.

    Bob Seger - Turn the Page
    Short Stack
    Aug 23, 2012 - 11:06am

    Thank you my yellow metal

    I knew you could do it.

    My Precious....My Precious.

    Fired El Gordo
    Aug 23, 2012 - 11:07am


    I shall look forward to your complaints. <smackdown is cuming, smackdown is cuming, smackdown is cuming>

    Aug 23, 2012 - 11:08am

    "maybe they are trolls?"

    Not me. I remember April 2011 only too well.

    stingbee30 robov
    Aug 23, 2012 - 11:09am


    Once again, when you see massive buying/covering, RSI don't mean Jack...As i said before, for the next few days, ignore your charts...Chartist tend to lose on trades because they ignore the fundamentals. Your fundamentals are overpowering any technical resistance or variables or studies...Thank you, and good luck...

    See you @32.00 on Friday...

    Prize Fighter
    Aug 23, 2012 - 11:09am

    Silver anecdote.  Was

    Silver anecdote. Was watching a Conan rerun last night with Jack Black. They flashed a portrait of Paul Revere and said how much he looked like Jack Black.

    Jack said, "I actually think he looks like Andy." Andy struck a pose and then says, "yeah, and I love silver!" Who knows if he is serious but it can't hurt!

    edit: Did you know Paul Revere was a silversmith? Silver and sounding alarms sound familiar to any of you? ;)

    "Revere was a prosperous and prominent Boston silversmith, who helped organize an intelligence and alarm system to keep watch on the British military." https://en.wikipedia.org/wiki/Paul_Revere

    Aug 23, 2012 - 11:10am

    I don't know

    Looks like Battle Royale II (Electric Boogaloo) was taken out too.


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