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Tue, Oct 30, 2012 - 3:38pm

It will be weeks before we know the true impact and effect of the epic storm that hit New York yesterday. Regardless, trading resumes tomorrow and, with it, expect a return of liquidity and volume to the metals pits.

Though the metals have been trading for the past two days, the lack of market participants has led to a holiday-like feel. The only entities trading have been HFTs which scour the books, hunting for stop orders to exploit on either side of the trade. The resulting charts are just had been anticipated, namely, rangebound within a tightening pattern of lower highs and higher lows. Because of this, we are set up for a volatile and consequential Wednesday. I was expecting a bottom this week and I think I'm about to get it.

First, I look for these pennants to finally conclude with a break out and UP. Initial resistance will come in near $1720 in gold and $32.25 in silver. Sensing a turn in the momentum, some shorts will begin to cover and the metals will then move toward $1730 and $32.50. Once above there (Friday?), even the dumbest algo will be able to see that staying short means risking being caught on the wrong side of the trade and the urge to cover becomes irresistible.

This is what happened in late January of 2011 when the Large Spec Short position declined from 10,473 to 7,203 in one CoT week (1/25/11 - 2/1/11). Could we be set up for a similar drop in the next CoT from tomorrow through next Tuesday? We'll see...

Just a couple of other items. First, if you haven't yet read the earlier post which included the latest Sprott newsletter, please make the time to do so.

Next, Bill Murphy's at it again. In this interview, he answers some interesting questions but certainly seems to raise a few more. He raises the specter of some explosive, new allegations against JPM et al and he eloquently places things in their historical context.

Video unavailable

That's all for now. Look for a total resumption of daily Turdville activities tomorrow. Until then, I think I'll go bury all my dough in the backyard. (Psyche!)


About the Author

turd [at] tfmetalsreport [dot] com ()


Oct 31, 2012 - 8:25pm

Pap Smears

Well I don't think it's funny at all, it is very sad that you ended up with cervical cancer. But you have to understand there are limits.

The links at the Wiki article are quite clear about the testing results. Unfortunately, we, as a society cannot afford to absorb all the costs of maintaining everyone's health. You, unfortunately fell off the tail end of the curve. As things get economically worse, there will be more which fall into this category. Ugly to think about, but unless things change dramatically, that will be life as we know it.

Nowadays, health care is decided by epidemiological studies and cost benefit ratios, if you end up outside the boundaries, you are f*cked.

Oct 31, 2012 - 12:36pm

I'm not a big fan of the

I'm not a big fan of the manipulation argument.

That's not to say I don't understand it or agree with the fact that large trading entities use their size to distort price in either direction to their advantage. Firstly the reason why the commercials go short against everyone else is mainly because no one really wants to be short the metals in size over a long period of time and they have their own desires on actual physical metals. (whether this is for themselves or for clients be they foreign or domestic, countries or companies I know not)

The metals are moved up and down primarily by the commercials as they are the largest players in the metals markets, they aren't the only factor that moves price but they certainly are the largest.

1) Intra day the commercials will flush weaker positions trying to piggy back on their positions (hence silver and gold often wash out weak stops with slightly higher highs or lows before reversing)

2) longer term price will be determined by a combination of physical demand and fund interest in the metals, in silver this also consist of industrial demand.

The reason why we were able to see such a prolonged down move and consolidation is because the volatility induced by the commercials scared away new long interest and a dollar rally scared away currency traders from going long, the MFG and PFG style collapses prevented many entities from trading long on the comex due to risk compliance rules of their funds.

This left only physical demand, In silver this is primarily industrial demand and with a slowing economy worldwide and a crumbling price of silver forward purchases of metal to protect against price surges was deemed unnecessary, investment demand waited to see where we would bottom and then ramped up demand into the lows.

The metal sort in physical was largely offset by drawing in new managed money and small entities short into the lows by capping price below watched moving averages and round numbers ($30 in silver and $1600 on gold) Note that these prices are now well below us and unlikely to be visited again in this bull market.

From here I expect we see a squeeze of anybody with short stops above the market as millage to the downside is now not significant enough to warrant further declines, understand that for a decline to be successful it must create long liquidation, this means using the leverage of traders against them and testing their resolve, if all long traders used no margin (or very little) then the commercials could not rig price lower by scaring them into believing price will at any moment drop $10, I believe that having dropped price $10 in silver in a day and gold $80+ on more than one occasion last year they successfully created a precedent that will make longs who can be forced to liquidate do so earlier this time and then to their shock the waterfall decline will not materialize.

However as evidenced by the COT report again the longs as a group are not backing down and physical demand is increasing on dips, thus anyone who will be stopped out is likely already out and its now time to harvest the shorts who jumped in on the decline. Having not broken $1700 or $31 the metals are now set to challenge overhead resistance again, should be interesting to see if the commercials blink first.

Either way having figured out what turds HEH predication is based on I'm expecting a solid breach to the upside of $35.


Oct 31, 2012 - 12:07pm

I should have bought silver

I should have bought silver at $4.00, then sold it at $49, then bought it back at $26.57. darn it to heck man, I never catch the swings.

Just Remember Puck T's famous words.

Dont worry about picking tops and bottoms,

but rather, get within 10% of bottom, and HOLD and 10% of the top.

In this last foray, I fired at 32 and change, about even.

Did I get bottom, HECK NO!

Do I even care? HECK NO! cas Im Alley Oop

close enough, 32.80 pullin trigger, with a 31.50 low on this move.

Tuffest man there is alive, look at the CAVEMAN HOLD

Alley Oop - The Hollywood Argyles
Oct 31, 2012 - 12:03pm

new thread

new thread

Oct 31, 2012 - 11:57am

Obamacare design

aside from the philosophical aspect-has anyone here designed and implemented a software system for a decent sized company?

If so, you know how many i's have to be dotted and t's have to be crossed.

None of that happened with the Obamacare process. So as a businessperson I have that huge problem with Obamacare--

history shows the big govt entitlement programs are not well thought out--nice to have depending on perspective but are not affordable.

Social Security is going bust with everything else--the income assumption (bruce kasting brought this into play) is 3% over inflation--well treasuries pay under 2% and we know inflation is by false govt accounting over 2%.

Benefits are underestimated-life expectancies are too long.

The pay ceiling for 2013 is going up 3.7% but benefits going up 1.7%. Medicare all screwed up-prescription drugs underfunded too.

I like precious metals chances just based on the entitlements.

not to mention ongoing deficits and enron type accounting.

Oct 31, 2012 - 11:55am
Dr GBig Buffalo
Oct 31, 2012 - 11:54am

(No subject)

Why do we call it manipulations when the price goes from 32.37 to 32.17 in seconds, but don't call it manipulation when it goes from 32.17 to 32.37?

Those events taken by themselves could indeed be manipulation. But in the greater context of evidence, it is clear that the metals are largely manipulated only to the downside. Metal bearish news causes them to go down. Metal bullish news also often causes them to go down. When other commodities are up, metals can go down. Thin trading? Huge drops (never huge ups). Big moves the same time every day? Yes, but nearly always to the downside. The list goes on and on.

Upside is always capped at % gains, as well. That happens in no other market.

Oct 31, 2012 - 11:53am


Never, say never.

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Oct 31, 2012 - 11:52am

Ride my SeeSaw

32.40 !!!

Video unavailable

On a take down, you get a sharp drop down, then roll off, and buyer bottom support. |_

On a correction, you get a roll off, then a sharp drop off of capitulation, and V recovery. \_/

On a rally, you get a roll up and then a sharp blow off. _/ Step Up, classic bull market

On a rampage, you get a sharp blow up, then a sharp roll up, exhaustion, and /\ spike up-down. Bull market probes higher.

Bulls push it up from 32.16, to 32.40 in a normal bull market rally,

and started getting disorderly to the up side, and then CAP, a step up complete.

Classic Bull market action

With all them mattresses floating around NJ NY this morning,

someone made a trip to the CRIMEX ...

Broke out over 32.25 resistance, testing 32.50, and that 25ct range until TOMORROW.


Dr G
Oct 31, 2012 - 11:51am

Gotta go a bit higher with SI

Gotta go a bit higher with SI to initiate some major short covering. Come on, girl...

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