Another Parallel

Tue, Oct 23, 2012 - 10:40am

Continuing with the current theme, here's another reprint for you. Party like it's 2011!!

Just six, short days after calling "Turd's Bottom" and issuing a guarantee, ( all looked lost. It was January 27, 2011. Prices had peaked three weeks earlier in the post-QE2 euphoria and now nearly every "maven" was dumbfounded by the continuing weakness. Sound familiar?

So, for today, I invite everyone to go back to "The Watchtower" and review this post:

You'll find all sorts of parallels to today...even references to the sudden appearance of a shadowy "insider" who had begun posting cryptic messages on the Yahoo Finance boards.

Anyway, keep the faith and hang in there. This, too, shall pass.


About the Author

turd [at] tfmetalsreport [dot] com ()


Gold Five
Oct 24, 2012 - 10:29am

There is no conspiracy

With this Chyron stuff. I used to run one at a news affiliate. Amongst other things, I had to furiously type in the latest sports scores during a commercial break while the sportscaster would race in from covering local sport events to do his pants-free report (only the weather guy has to wear pants). "Trousers-free" for you giggling Europeans.

One evening after we did the six o'clock, the producer asked me to type something into the Chyron "just in case" it turned out to be true while I was out grabbing dinner. I expressed my reservations, but in the end I had to type in that OJ Simpson committed suicide during the low-speed chase that was currently going on.

During the Cosby show, Master Control accidentally displayed the crawl text I typed in rather than the lotto numbers that were on another screen.

Stuff like this happens. It's more about incompetence than conspiracy. If anything, the placeholder election numbers perhaps reveal the bias that is pervasive in those that take jobs in the media.

Gold DogSRSrocco
Oct 24, 2012 - 1:24am


If you give me the company you wish to know about I will try to "boil the fat" out of their costs and see if I can't get a little closer to what the actual cost of producing an oz is for you. Dog- Masters in Accounting and MBA I am so smart I make myself sick! LOL

Gold DogSRSrocco
Oct 24, 2012 - 1:24am


If you give me the company you wish to know about I will try to "boil the fat" out of their costs and see if I can't get a little closer to what the actual cost of producing an oz is for you. Dog- Masters in Accounting and MBA I am so smart I make myself sick! LOL

Oct 24, 2012 - 12:39am


Don't see it on NetDania?

Was exciting for a couple milliseconds. ;-)

Oct 24, 2012 - 12:02am

how long before kitco scrubs

how long before kitco scrubs the spike to $33.50

Oct 23, 2012 - 11:47pm


Big Brother is watching you. Well, seems like we have drones now spying on people in the US and the NSA is building the huge new data center in Utah to collect every scrap of information possible on all of us. But this can't be happening.... George Orwell's book was only fiction.

The Watchman
Oct 23, 2012 - 11:21pm


NO Central Bank holds ANY SILVER-the manipulation will be over soon-it is a "House of Cards" and and it's collapse is guaranteed,it will be sudden and unstoppable.

From Ed Steer:

" Nowhere on Planet Earth does any central bank hold even one good delivery bar of silver...and when that silver thermonuclear device finally does reach critical mass...look out. Ted Butler was hard at work on this 15 years before GATA showed up on the scene...and it's an unknown which metal will explode first. But one thing is for sure, the one that blows up first, will take the other with it...and when the smoke finally clears, the world on the other side of this event will be totally different than the one we live in today."

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Oct 23, 2012 - 11:12pm

Jim Sinclair speaks in annoying riddles and nuisances.

Jim Sinclair speaks in riddles and nuisances. It's really annoying.

Thankfully one of his readers posted this explanation of what Jim actually meant by "spread". The dumbest thing is that this is actually what we already knew already, it's like saying "buy low, sell high" for investment advice. So what's Jim's point? Perhaps he's pissed at people buying high and then blaming the cartel for the price smack, then the people get fear and sell at the lows only to see their position get raped to the upside......


The Spread From An HFT:

Traders are NOT stupid. They are attempting to maximize gains while minimizing risk. They look at the same charts you do. They read the levels, know the fibs (in fact CQG has this as a standard charting tool), and are aware of support and resistance. The manipulators also have huge bank accounts to draw from.

The basics of a spread:

Traders use correlated markets to hedge risk. Direct correlated markets are DAX to S&P 500 (depending on time of day) and German Bund to US 10 year T-notes. If you don’t understand correlated markets then you will NEVER be able to HFT.

In the case of gold, correlated markets are silver, and to a lesser extent platinum. Currencies and bonds can also be used as inversely correlated markets, however the correlation is not as rigid.

Spreading means to have a balanced position across at least 2 markets (more if you are a big hedge fund). This means a balanced position such as US 10 year T-notes to German Bund. HFTs will also use the yield curve to hedge risk when a spread position is getting dangerous such as “hopping” into US 30 year bonds. In the case of gold, this can be using June contracts to offset December contracts.

The way market manipulation works with spreading:

When gold was at $1650 in early September, gold was a BUY. Everyone knew that the Fed would announce QE to infinity (Jim was saying this for years!). Gold was also testing support at $1650, so when it bounced off that level, the long trade was on.

Traders could lock in profits at $1700 prior to the fed meeting, but they don’t. The position is already in a profit, Fed is about to hand traders a windfall and December (square the books and take a break) is a long way away. So, add to the winning position, still in profit and with minimal risk.

After the fed meeting, that position makes a whopping profit.

So, square the position by shifting contracts (Sep to Dec) and lock in some gains. This is the consolidation at the end of September. Some of the added contracts are withdrawn while volume is up to lock in gains.

These traders still have their initial wining position. They know it is a good position, but now it’s time to hedge some risk. To do that, shorts are added. These can be in the farther out months, or in a correlated market. This lowers the net risk. While the market is filled with speculator volume, more spreads can be added without moving the market too much (remember these are HUGE sums of money in a small-ish market).

As we enter October, the price of gold is being capped at $1800. Every single long push is balanced by shorts. The long pressure dries up, specs that made money to $1800 start to close out and look for a pull back. To a manipulator, that’s great! Any longs at $1800 are in late and have near position stops, so the easiest thing in the world to do is make ‘em hurt.

In a spread, you are holding longs and shorts. Remember that selling a long is the same as buying a short. So by hard selling a long position, you are buying a short. If you have a short position, selling the long moves the market in your favor at these volumes.

To move the market in your favor, all you need to do is pull one leg of your spread (at critical price and timing points). Remember that the long leg is ALREADY in profit on the books. So, close the long leg and book the profits. Time it so that market news releases hit harder and you’ll understand the action in October.

This closing of the long positions, in volume and timing, is targeted at hitting “stop loss” orders on weak longs. This has a cascading effect of pushing the market quickly lower. This brings in the momentum traders and algorithms that trade momentum. This forces the market even lower, creating more profit on your position.

As action stalls, the market consolidates at the end of the trading day when the momentum traders book profits. The rule of thumb for most HFT is “no positions open over the night.”

The short spread is now in profit, so it can be held without risk of loss. Spreading into Asian markets, however can make a nice little profit for the night session.

Overnight, Asian demand (heavy on physical) brings the price up. This means that any spec longs with an overnight position will be booking profits in the morning (if they are smart). The overnight long spread brings the cream to a wining position. This can be closed out to start the selling pressure for the NY open/London close. Asian traders will be booking profits at close, adding to this selling pressure.

If you have deep pockets, this position can be shorted through the EU/London session further adding to your position, but hedging your risk (ie. locking in gains from the Asian session).

Just before US open, the market gets a slam as traders through London close the night long positions and prepare for another round of bashing the US market. When the market opens, specs that didn’t take their “chop” early (book profits) now realize they will be lucky to pull out at even. (The second best trade you can make is a scratch). The slow specs will soon feel the crunch on their stop levels.

This starts the cycle rolling all over again, putting the short leg of the spread more into the green. As price gets to a level of resistance ($1726, $1700, $1696, $1678, etc.) the short positions are gently closed at a profit or the long is added to balance the position for a "wait an see" (election year).

Remember, it’s an election year… and a long way to the December Holiday season. After the last couple of months, it will be time to square the book for the end of year bonus and take a Tahiti holiday. So, if you are into physical, the new year will indeed be golden.

Thank you for helping me secure my future with physical gold.

CIGA Henry

Oct 23, 2012 - 11:03pm

The White House Situation Room

knew within two hours the group Ansar al-Sharia had claimed responsibility for the attack in Benghazi.

A third email, also marked SBU and sent at 6:07 p.m. Washington time, carried the subject line: "Update 2: Ansar al-Sharia Claims Responsibility for Benghazi Attack."

The message reported: "Embassy Tripoli reports the group claimed responsibility on Facebook and Twitter and has called for an attack on Embassy Tripoli."

While some information identifying recipients of this message was redacted from copies of the messages obtained by Reuters, a government source said that one of the addresses to which the message was sent was the White House Situation Room, the president's secure command post.

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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
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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
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5/6 8:15 ET ADP jobs report
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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
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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
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4/24 8:30 ET Durable Goods

Key Economic Events Week of 4/6

4/8 2:00 ET March FOMC minutes
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Key Economic Events Week of 3/30

3/31 9:45 ET Chicago PMI
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Key Economic Events Week of 3/23

3/24 9:45 ET Markit flash PMIs
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3/26 8:30 ET Weekly jobless claims
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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

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