Step One Completed

264
Wed, Oct 31, 2012 - 11:51am

The first step in confirming a bottom is finding one. We found one last week and the action today looks to confirm it.

In the previous post, I asked you to watch for a break out and UP today and we've gotten it. First things first, however. Remember, any gains made while the metals are closed or on holiday are almost always clawed back once trading resumes. Almost always. And we saw this again today. The good news is that, once again, the old adage is holding...namely, "what was resistance becomes support and vice versa".

So, now what? Again, I must caution you against expecting too much, too soon. Though we have been base-building for over a week, we still need to overcome some additional resistance before the bottom is clear to everyone and the shorts begin to aggressively cover. Silver is still slightly ahead in this process and should continued to be watched for clues. For now, as you can see below, silver has clearly broken through the downtrend lines on both the 4-hour and 12-hour charts. This is undeniable and an obvious sign of the bottom to this correction/pullback. Closing above $32.25 is our first goal, followed by a close above $32.60 or so. Once that happens, the mealy-mouth, panty-waste spec shorts will begin to cover and price will extend toward the area around $33.35, where they will make their next defense.

The gold chart also shows a clear base and breakout on the 4-hour chart. It shows this on the 12-hour chart, too, but a case could still be made gold needs to clear $1720 first. OK, that's fine. $1720 is our pivotal level, anyway, so watch that area closely. A close above there and gold will jump toward $1730. The area between $1730 and $1740 might present some challenges but, ultimately, besting $1755 will become our next main goal.

I only wish to discuss one "news" item today and it's something that I don't think is getting enough press. Our old pal, KosherDakota made a speech yesterday that is being overlooked.

I began to ridicule this knucklehead a few years ago as it seemed he was trotted out to give the "hawkish" or "dovish" monetary policy view every time a little additional MOPE and SPIN seemed necessary. Here are a couple of samples. First, from August of 2010, three months before the announcement of QE2: https://www.minneapolisfed.org/news_events/pres/speech_display.cfm?id=4525. Before you know it, ole KosherDakota was all in favor of "bond buying" by The Fed: https://blogs.wsj.com/economics/2010/11/30/feds-kocherlakota-wants-inflation-expectations-increase/

But then, by the end of QE2, he was trotted out to assure the markets that QE could be bad and was perhaps gone for good. There might even be a rate hike just around the corner, maybe as soon as late 2011: https://www.minnpost.com/business/2011/05/fed-president-sees-possible-rate-hike-2011-economy-slowly-improves. And here we was in late June of 2011, dissenting at the FOMC and calling "stronger easing measures" the "wrong approach": https://wtbx.com/news/articles/2011/jun/27/tax-code-hurts-stability-feds-kocherlakota/

So, what happened yesterday? Chuklehead The Clown was back in the news! He was speaking in Duluth and he openly stated that:

"The U.S. economy is recovering from the largest adverse shock in 80 years–and a historically unprecedented shock should lead to a historically unprecedented monetary-policy response".

He went on to add that:

“Given how high unemployment is expected to remain over the next few years, these inflation forecasts suggest that monetary policy is, if anything, too tight, not too easy".

You can read all about it here: https://blogs.wsj.com/economics/2012/10/30/feds-kocherlakota-fed-may-not-be-providing-enough-stimulus/.

Even the left-leaning and progressive (Keynesian) website Slate has an article about it today: https://www.slate.com/blogs/moneybox/2012/10/31/narayana_kocherlakota_s_duluth_speech_a_masterpiece_of_intellectual_rigor.html

Intellectual rigor my ass. This guy just flips and twists in the wind. For now, he is simply being trotted out yet again to foreshadow the next direction of Fed policy. We should now fully expect a formalized increase in the projected 2013 QE∞ plan when the FOMC next meets in December, regardless of the SPIN and MOPE that comes out on BLSBS day or from O'Bomney.

To that end, I've received several emails wondering what I expect from the metals if Romney is elected. The answer is simple: MORE OF THE SAME. Those that fear a downturn in price because of a Romney-imposed austerity or firing of The Bernank are delusional. Let me state this very clearly as a reminder for all eternity:

QUANTITATIVE EASING CANNOT END. NOT THIS YEAR. NOT NEXT YEAR. NOT EVER. IN 2013, THE FED WILL PURCHASE OVER $1T OF NEWLY ISSUED AND REFUNDED U.S. GOVERNMENT DEBT. WITHOUT THE FED PURCHASING MBS FROM THE PRIMARY DEALERS, AUCTIONS WOULD FAIL AND INTEREST RATES WOULD RISE DRAMATICALLY. THIS WOULD RAPIDLY ACCELERATE THE DEMISE OF THE GREAT PONZI AND THIS CANNOT BE ALLOWED. THEREFORE, IT MATTERS NOT WHOM WILL BE THE NEXT PRESIDENT. QE WILL CONTINUE UNABATED, REGARDLESS. ALL OF THE TALK ABOUT THE BERNANK AND SPENDING CUTS IS SIMPLE POLITICAL SPIN TO GET VOTES, SIMILAR TO THE PHRASE "BORROW FROM THE CHINESE".

Lastly, I leave you with another great article from Jeff Nielson at BullionBullsCanada. https://www.bullionbullscanada.com/gold-commentary/26018-the-great-gold-scam

Have a great day!

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  264 Comments

ancientmoney Hawk
Oct 31, 2012 - 1:58pm

@Hawk

You need to read thoroughly Ted Butler's archives from the last 5-10 years. Then, you will understand silver manipulation.

Dr G
Oct 31, 2012 - 1:58pm

Turd is being the HULK for

Turd is being the HULK for Halloween :)

Turd ANGRY at some members for calling him DRAFT DODGER.

Goober
Oct 31, 2012 - 2:00pm

Thank you Mr Ferguson

Thank you for everything you do.

rl999 worldend666
Oct 31, 2012 - 2:01pm

stupid garbage reporting + reading fast = stupid a* conclusion

Note: I am NOT attacking worldend666, I am attacking the article..

This article is f* stupid. ABSOLUTE BS. Complete garbage. And the fact that it has been on the board for almost two hours without anyone refuting it is ridiculous.

Read it carefully and you will see why.

Demoncraps= worth $10,920 at the close of trading yesterday.

Rebloodicants=grown to $2,087 on the dayGeorge W. Bush left office.

So the 4 year difference in 'accounting periods' is ok right? What has the stock market done since the day the last idiot left and this one started?

Where the f* is the critical thinking? Please note my bipartisan disgust with both of the fools mentioned in said 'news article'

(Edited: spelling)

Republicans Good For Stocks.... Not....

Submitted by worldend666 on October 31, 2012 - 12:07pm. Hat Tip! 0

https://www.bloomberg.com/news/2012-02-22/stocks-return-more-with-dem-in-...

“The BGOV Barometer shows that, over the five decades since John F. Kennedy was inaugurated, $1,000 invested in a hypothetical fund that tracks the Standard & Poor’s 500 Index (SPX) only when Democrats are in the White House would have been worth $10,920 at the close of trading yesterday.

That’s more than nine times the dollar return an investor would have realized from following a similar strategy during Republican administrations. A $1,000 stake invested in a fund that followed the S&P 500 under Republican presidents, starting with Richard Nixon, would have grown to $2,087 on the dayGeorge W. Bush left office.

Groaner TF
Oct 31, 2012 - 2:06pm

Where is that manipulation doubter?

The past two days the usd was falling and so was gold.. whats with that too?

silver66
Oct 31, 2012 - 2:09pm

meeting with Sprott Asset Management

Hello Turdites, had a meeting with a VP of Sprott Asset Management(SAM) today. In preparing for this meeting I had sent him a number of questions I wanted to discuss. The key request was are these Eric's thought's or the Firms thoughts. The reality is the Firm's thoughts are Eric's.

I made notes during our meeting and thought I would share. I will point out that this is my recollection of the meeting, not necessarily what was said!:-).

Disclosure, I very much want SAM to be successful as my wife and I have had money invested with them for a number of years. I also recognize that I think a lot like Sprott so I may not be as objective as I think I am.

2 Turdites sent me questions to ask, they were very specific to their situations so I have just sent a PM back to them with the answers.

First, I was curious if Eric and team thought gold would form part of a new monetary system. SAM is of the opinion that gold is already part of the monetary system. CB's are buying, not giving up to back bonds, being introduced as a reserve asset for banks.

VP indicated that Eric's opinion is bullion dealers are now shipping directly to China and not just going through HK. They believe that 1000 metric tons have been shipped to China year to date not 600 as is official report.

SAM is of opinion silver will form some part of the new monetary system, not necessarily in NA. China actively encouraging population to save in silver.

SAM is of opinion that China is shoring paper so they can take delivery of physical at lower prices, although they have no proof other than anecdotal from their contacts.

Second is their investment in silver and silver equities a monetary play or a supply play. More of the latter not the former was his response. Not a lot of physical to deliver. In early Sept 2012 LME contracts stood for delivery and could not be met and were settled in cash at premium. Late Sept- commercial signal failure(not clear in my notes) and shorts got overrun by physical demand

Third, what do they see as catalyst to significant price change. He is not sure, however the leverage in Silver Gold and Oil is off the charts . There are 2 markets as most Turdites know, paper and physical.

3 examples he gave me

a) 150-160 x's value of paper traded daily in silver vis-a- vis daily production of silver

b) 80 x's paper gold traded daily to daily production of gold

c)40 x's oil paper traded every day vs daily oil production.

A few other tid-bits.

PSLV is stored at the Canadian Mint for you American investors.

In Canada, by law investment funds must store physical bullion at a Schedule 1 bank, they have chosen Scotia.

got to go to another meeting, hope fellow Turdites found these notes useful

Silver66

rl999 Fred Hayek
Oct 31, 2012 - 2:10pm

@ Fred Hayek

Yes, I caught that interview, and I highly recommend everyone else do so as well.

His theory is that you hold metals at the Free Lakota Bank (I posted on their coins having a high face value, but not the word dollars), and they be instantly exchanged based on live spot prices when you make a transaction, thus your money is almost always physical, but you can still interact with the market in dollars, and electronically. The downfall is that there has to be at least one transaction cost in there somewhere.

I think this is a good idea, and a good step, but I will always carry silver with me and attempt a transaction that way.

I would also argue that gold and silver are money, and the only things we argue over are the level of acceptance / popular perception. I think it might be a good thing that only a limited number of people are aware of the value, based on the thought that if everyone knows it means that something horrible happened (dollar collapse, etc).

Take the story about the gold business cards the Asians are using as bribes today. If it didn't have value it wouldn't be accepted as a bribe. Plus Iran oil for gold, plus Zimbabwe gold/bread, etc, etc.

__________

Submitted by Fred Hayek on October 31, 2012 - 12:55pm.

Hat Tip! 1

Over at Donttreadonme, Chris Duane had an interview in which he and Rob Gray discussed that they're looking to set up a system where you would have a silver card, one made with 1 oz of real silver and it would work like a regular card in stores but it would connect back to silver holdings at the Free Lakota Bank.

Swineflogger
Oct 31, 2012 - 2:11pm
Beastly Stack
Oct 31, 2012 - 2:14pm

Sat Out this Long

What is another 4 trading days?

Funny how Bonds crept all the way back to 149,is it not?

This morning was very telling with the Euro over 130,Oil 87+,Gold almost 1730.I hope the fireworks hold off a few more days.

I still do not see anything to make me want to buy anything from the long side just yet!

Turd-Thank You for all you do!

TJeffson
Oct 31, 2012 - 2:15pm

@Dr G - correction

Turd Angry! Turd Smash! It's the Hulk's classic line... Hulk Smash! Just thought I'd toss that one out there... Avengers is my new favorite movie of all time (pretty much).

Edit to add: Turd, if anyone can't read the article or the all caps section near the bottom, there's no need to respond to them because they're just completely stupid or a troll. You've been quite clear and I don't even trade the markets at all. If I can understand this stuff, anyone can.

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