Shakeout

283
Wed, Nov 28, 2012 - 10:32am

In hindsight, I'm mad at myself for not seeing this coming. Though I'd been telling you all week to expect weakness as The Cartel attempts to dissuade Dec12 contract holders from taking delivery, I didn't anticipate the severity of this morning's action.

Monday, I tried to warn you by using The Godfather as a reference. Yesterday, we discussed the possibility again. I didn't expect a huge selloff so I only gave you preliminary support levels. Boy, was I wrong. They came after it hard this morning with the deliberate intention of smashing price. Here are your 1-minute charts. Note that the sole focus, at least initially, was gold. It was hit right at the Comex open. Silver, which doesn't open until 8:25 just saw some spillover selling, initially. Silver then became the target later once The Forces of Evil saw the opportunity to attack it and drop price below the 50-DMA.

To save time, below is a C&P of a comment that I posted to the previous thread. This is the most likely explanation of the mechanics behind the attack:

Submitted by Turd Ferguson on November 28, 2012 - 8:50am.
MODERATOR
This is all just manipulative bullshit. The likely cause of the drop was the deliberate and manipulative unwinding of a Dec position, probably a spread trade. The manipulator takes the long side off all at once and then looks to cover the short side at a later time after price has been driven $20+ lower. In this case, the manipulator gets the added benefit of the momo-HFTs chasing price lower because of the breach of the 50-DMA (near $1740). Now down $30, the manipulator can begin to cover the short side for considerably less money than it would have cost if he had done the whole thing instantaneously.
Soon (later today or tomorrow) we'll get an FUBM where actual buyers pick up the discount and price rallies further on the back of the physical orders that were filled on the drop.

The goal now is to recover the damage. Gold is, unfortunately, back under "The Iron Dome" and it will have to fight again to break through. The goal for silver is easier. Get back above the 50-day, near $33.20, and the short-term technical picture will remain unchanged. I suspect this will happen later today but I also expect more raid attempts before FND on Friday.

Again, given what appears to be an extremely tight physical situation and the escalating open interest, I should have expected a raid of this magnitude today in order to frighten the remaining Dec12 longs. Live and learn, I guess, and we'll have to plan better in late January when the Feb13s go off. Until then, watch for more raids today and continued volatility through the remainder of the week. I am still expecting a very strong UPtrend in December that will carry over into 2013. Be patient. Hang in there and keep the faith. BTFD and take delivery.

TF

p.s. Obviously, trading these markets is extremely difficult. You'll recall that back in April, I enlisted Coghlan Capital and Andrew Maguire to help you navigate things profitably. To that end, I've scheduled a FREE webinar for next week with Paul Coghlan. He'll demonstrate for you the techniques he uses to trade and, frankly, we hope this encourages even more of you to join "The Army". The link to register is below. I strongly encourage everyone to attend.

https://www1.gotomeeting.com/register/240678176

About the Author

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

  283 Comments

ggnewmex
Nov 28, 2012 - 10:35am

First

I am honored!!!!!

Making a comeback?? but be careful!

only if you trade otherwise,,, THANK YOU for the cheaper price

Colonel Angus
Nov 28, 2012 - 10:38am

Just BTFD

that is all. I've been sending out messages telling everyone. BTFD now!

¤
Nov 28, 2012 - 10:39am

Predictable: Eminent Domain To Clear Housing Market

Investment Forward

A way out of the mortgage mess, finally?

The man behind the plan to use eminent domain to take over underwater mortgages says pressure is building for the federal government to solve the housing crisis. He says the White House should release decisive policy within the next six months. Video | Full Coverage

https://www.reuters.com/

Capt. Willard
Nov 28, 2012 - 10:40am

2nd

Is this the opening salvo for a retest of angle 1680?

Nose
Nov 28, 2012 - 10:42am

Dec OI

New member here, Nymex OI has shed 12,100 contracts so far today for Dec. 2012. I hope we can hold over 7,000at the end of the month. Wishful new member thinking. So glad to have the courage to finally register & comment here.

Outfitter
Nov 28, 2012 - 10:44am

The Plan

I think their plan is to just out live all of us.

Round and round we go, where we stop, nobody knows.

ReachWest
Nov 28, 2012 - 10:44am

Frustrating, for sure

Will it ever end? On days like this it seems that the answer is no - but, of course, it will end and the natural laws of economics and true value will ultimately prevail. Until that time - this really sucks.

So - how many naked shorts did the bastards have to add to their bottom line to take this action today? I guess we won't know until a week and a half from now.

luv2stak
Nov 28, 2012 - 10:44am

SECOND!

Well, nope... :-( Slow internet connection...

But, we 'honor' Turd and his voluntary efforts in his readership's behalf by eagerly checking his site for 'the latest' pearls of wisdom, and enthusiastically posting if we happen upon them first, second or often-- third...!

It's kinda like a 'Thank You'!

and, Feed The Turd... (which is probably even more appreciated by His Turdship and The Wife 'n'Kids!)

Nose
Nov 28, 2012 - 10:46am

Welcome to Turdville, Nose

And everyone, please check the "p.s." to the post and register for the webinar. Here's a sample:

https://www.coghlancapital.com/node/4765

Big Buffalo
Nov 28, 2012 - 10:46am

UCO

Got UCO?

Decrease in inventory when an increase was expected.

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