On The Chopping Block

Tue, Oct 9, 2012 - 11:32am

While it seems that "everybody and their brother" is now expecting a sharp pullback, I'm not on that bandwagon.

Please don't accuse me of having my head in the sand. I mean, seriously, if anyone knows about The Cartels, the CoTs, the charts and the lease rates...it's me. I know all about it and you, as a Turdite, likely learned a few things from me. And who knows, maybe all this short-term bearishness will turn into a sort of self-fulfilling prophecy? If enough people pull their bids (especially for physical) because they expect a pullback, a pullback will then develop. However, there's also potential for quite a few people to get caught flat-footed and if a breakout rally develops, many will be left chasing.

Again, what I see is this:

  • As stated here often as of late, all reports are that physical demand in London remains robust, regardless of dips or rallies in paper price
  • Gold priced in euro and Swissie just made new all-time highs last week and have been preceding gold priced in dollars by about 4-6 weeks.
  • The desperate move by The Cartels, particularly JPM in silver, to add shorts and contain price creates a condition of extreme UPside potential if longs don't capitulate and are, instead, emboldened.
  • RSI levels in both gold and silver have worked off excesses built up during the 4-week rally from mid-August to mid-September.
  • The silver smash of 5/11 and the gold smash of 9/11 both came during periods of ending or non-existent QE. The Fed just announced QE∞ last month and those $ are just beginning to slosh around. Give it time. Additionally, QE∞ only adds to and increases global demand to exchange fiat for hard assets.

So, call me crazy but I'm a contrarian here. (Even though, as I type, I see gold being smashed down to 1766 and silver well under $34.) The dollar has rallied and reversed from its head-and-shoulder top of last week. This has surprised many (including me). The algos then use this $ strength to game the metals and any weak hands with sell-stops. The Forces of Darkness might throw on some new shorts, too. Again, though, I do not expect any serious downside momentum to develop. I suppose you could get a dip toward $1750 but that's about it. As long as the QE∞-inspired physcial demand remains strong, prices will ultimately reverse and head back higher.

Anyway, here are two charts of The Pig showing the surprise reversal:

Here are some gold and silver charts that, because of this current raid, seem a bit obsolete. Oh well, I'm posting them anyway. Take them for what they're worth.

And here are daily charts with RSIs printed below. Most of the "overboughtness" has been worked off and this current selloff has only served to work off even more.

And a just a few words about crude, too. The chart below certainly doesn't look too scary but, if I were short, I'd sure be nervous about a move back up through $92 and then $93. Especially after reviewing headlines like these: https://www.zerohedge.com/news/2012-10-09/turkey-deploys-25-f-16s-syria-border & https://www.debka.com/article/22422/US-sources-US-Israel-plan-October-Surprise-Others-Israel-can-do-it-alone

So, I'm going to go ahead and hit send on this post, even though I currently look rather foolish with gold down $14 and silver at $33.60. By later today, I could be completely wrong and maybe the newsletters writers will have been proven correct. We'll see. But this is my story and I'm sticking to it. C'mon, baby! Daddy needs an FUBM!!

Have a great day!


About the Author

turd [at] tfmetalsreport [dot] com ()


Oct 9, 2012 - 11:33am



HAHAAHHAAHHA YES!!! Finally, I get to say it!

Okay...that was fun

Mr. Fix
Oct 9, 2012 - 11:36am


That was fun........

Off to work I go now!

@ csquared13,

Enjoy the glory, you earned it.

Capt. Willard
Oct 9, 2012 - 11:37am

Santa 1764


Silver Alert
Oct 9, 2012 - 11:39am

You are putting an aweful lot

You are putting an aweful lot of faith in the longs. They've always turned tail and run when barked at by Blythe. What makes you think they will stand their ground this time?

Oct 9, 2012 - 11:39am

Rabbit Hole.

And so begins another week in the rabbit-hole that is the manipulated-fake-bogus-BS Silver market.

This post QE∞ sideways grinding is growing old. We do need a rather large FUBM

Thanks Turd.

Oct 9, 2012 - 11:40am

Thanks Turd

Thank you for the update and the wonderful site.


PS Started reading "Atlas Shrugged" last week. Going to be a long haul (well over 1,000 pages) but already see where it is going. Meanwhile I am "gone Galt".

Oct 9, 2012 - 11:41am

Next step of manipulation

This jerky manipulation model seems to be new: keep the metal rangebound until its breakout, then keep it rangebound again, for weeks. The same remains true, though - The Cartel is Undermined.


Oct 9, 2012 - 11:42am

Where is the short covering for the those put on last week?

Do they not care anymore. I guess we would have had to go back to $34.50 at least to make a difference and that takes away almost any advantage gained.

Oct 9, 2012 - 11:42am


oh shit! I will be so happy when the totally BS elections are over with.

Beastly Stack
Oct 9, 2012 - 11:45am


I'm with You 1000%.I hope you bought OIL today my friend!

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
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

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
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
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

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.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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