ChartDaddy Returns

Tue, Jan 8, 2013 - 1:36pm

This is way more charts than I've ever given you in one post. I hope you're ready.

For now, the metals are both being contained below their 200-day moving averages of gold at $1667 and silver at $30.82. So, while the metals continue in a holding pattern, I thought that today would be an excellent day to give you this massive update and, perhaps, make some general assumptions about 2013.

The problem with doing this is knowing where to start and how to put these into an order that makes some sort of logical sense. Since "logical sense" eludes me at this moment, I'm just going to dump them on you, instead.

First up, here are daily charts of the euro and copper. Note how closely they tracked each other through 2012. Actually, it would probably be more accurate to say "look how closely copper tracked the euro". Also notice how both declined in mid-December but recovered in late December.

Now look how closely silver has also tracked the euro in 2012. Note that silver fell in mid-December, too, but did not see the rebound that copper did. Hmmm. Is paper silver undervalued by 10%?

Next, let's look at the bond market. I've suggested to you that QE of $85B/month is not enough to fund the 2013 deficit, which looks to be in the $1.6-1.7T range. Falling prices/rising rates would also suggest that more Fed "support" is needed in the bond market. My guess is we'll see it soon...probably when the 10-year approaches the 127-128 level and the Long Bond is threatening to break down through 140.

Let's begin the currency discussion with the POSX. Remember and never forget that the POSX is simply a reflection of The Pig versus other rapidly-devaluing fiat currencies. The fact that the POSX is flat over the past five years only means that other global fiat have declined in value by an equivalent amount.

So, in that context, look at The Pig vs the yen. Yikes! Were you aware of this? We'll definitely need to watch this relationship over the next few weeks and months.

Another very interesting currency chart is the Swissie. From mid-2010 through mid-2011, the Swiss franc rallied almost 40% as it was perceived to be the final and only "safe haven" fiat currency. Well, the Swiss didn't like that too much as they keynesian-foolishly feared that a strong franc would wreck their economy. So, they did what all centrally-planning keynesians do, they devalued by pegging the swissie to the euro in early September of 2011. (Recall, too, that this left gold as the only remaining "safe haven" currency and it was carpet-bombed a full five minutes before the announcement was made and has been firmly held in check ever since.) Well, now, the swissie (and, by extension, the euro) has begun to form a massive, bowl-shaped bottom on this weekly chart. Hmmmm....could this foretell a POSX breakdown in 2013?

Let's now switch to crude, where a trading opportunity may be developing. (Full disclosure: Like most everything else, I missed the boat quite often in crude in 2012.) Look at these charts. A pullback to 91-92 would sure seem to present a buying opportunity for a move to 98-100. From there, a consolidation would paint the chart with a massive, cup-and-handle formation and would make the chart look like 115+ by mid year.

The old adage among grain traders is "buy on Valentine's Day and sell on Mother's Day". That strategy certainly looks like a good idea in 2013, too. The drought in the U.S. Midwest has not lessened at all this winter ( so you can rightly expect some rapid gains this spring if the next growing season begins dry, too. I'll definitely be looking to dabble in beans next month, especially if price can fall a bit further, toward $13.

And this is interesting. Have you been to the market lately and thought, "Damn, that shit's expensive" when looking at steaks and burgers? If so, this next chart will show you why. It's a weekly chart of Live Cattle and note that since the advent of Quantitative Easing in 2009, beef prices have risen over 60%. Is your salary up by 60%, too? No? Hmmm...the major problem here is that soaring "protein" prices will ultimately lead to civil unrest, first in the 3rd world but, eventually, here in The West, as well. Watch this closely in 2013 as it has the potential to develop into a real problem.

And get a load of this next chart...Lumber. Apparently lumber didn't get the memo post-QE∞. Since mid-September, it's up over 40%. Permanently low rates means a housing recovery? I don't think so but clearly the lumber market does! Either this sucker rolls over soon or, eventually, a lot of other commodities are going to have to play catch up. Another chart to watch closely in the weeks and months ahead.

And, finally, here's the S&P. I guess we're all just dumb-as-a-box-0f-rocks for buying metal over the past four years when we could have been buying and holding stocks, instead. UP over 100% since the initiation of Quantitative Easing in March of 2009, more than just about any other paper "asset" and you get a dividend! Isn't it interesting that all of this money printing leads stocks higher than everything else? Gee, I wonder why that could be?

Perhaps THIS has a little something to do with it. Please take the time to read this very important and informative article from ZH. It's one of the most important things they've written in quite a while.

And buried within that article is the paragraph near-and-dear to my heart and the hearts of all of Turdville. This is the mechanism through which JPM conceals their manipulative actions from the CFTC and everyone else:

"Now the JPM spin is well-known: the CIO was merely there to "hedge" exposure, as a direct prop bet would be illegal as per the Volcker Rule, not to mention the avalanche of lawsuits and the regulatory nightmare that would ensue if it became clear that the firm was risking what amounts to deposit capital to fund massive, highly risky prop trading bets. Which, when one cuts out the noise, is precisely what JPM did of course, especially since the "hedge" trade blew up just as the market tumbled in the spring of 2012, a time when it should have otherwise hedged the balance of the firm's otherwise bullish posture. That it did not do this refutes the logic that this was a hedge, and confirms that what JPM was doing was nothing short of using an internal, heavily shielded hedge fund, which had $323 billion in collateral as investable equity, to trade away, knowing very well no regulator would dare touch JPM."

OK, that's all for today. I look forward to reading your comments.


About the Author

turd [at] tfmetalsreport [dot] com ()


Jan 8, 2013 - 1:37pm
Jan 8, 2013 - 1:38pm

Did I refresh first?

Man! That was quick. Lots of quick fingers here in Turdville!

Jan 8, 2013 - 1:39pm

Nice stuff

Looking forward to reading and absorbing at my leisure

Jan 8, 2013 - 1:39pm

Still could use some ideas

I was returning some SBSS coins to the mint through USPS. I printed a label on line with signature confirmation. I took it the post office and the clerk taped the label on priority mail package, but she failed to scan the package in. She does not deny receiving the package and putting the label on. Anyway the package is missing Inspector General cannot find the coins. I failed to buy insurance, not to smart, but does anyone think there is any recourse being the postal clerk did not follow protocol?

Mr. Fix
Jan 8, 2013 - 1:39pm

Wow, that went fast.

 That may have been the most highly anticipated post yet.

 Thank you, Turd!

Jan 8, 2013 - 1:40pm

Happy Tuesday

Better than the alternative.

Jan 8, 2013 - 1:40pm

Great googly moogly

Some of you are FAST...

In the meantime, waiting for these beauties to show up.

2013 Slave Queen One Ounce Silver Medallion

Jan 8, 2013 - 1:40pm



argh... don't forget the most important part, even after those pretty charts:


Jan 8, 2013 - 1:45pm

A small contribution

I am not sure about all those charts. I am simply going to go buy three little silver eagles at lunch.    Every little bit helps.

my mothers keeper
Jan 8, 2013 - 1:50pm

need a scenario, please

hello all, i'm still trying to figure out in my own mind how things will transpire if the fed is the buyer of last resort and if they continue to buy all us debt. interest rates will never rise, it would seem. so then what happens? tia to anyone who can propose a reasonable scenario that would bring the whole mess to an end. best to all, litf


and a big thank you to turd ferguson for hanging in there with us and maintaining this site!

Jan 8, 2013 - 1:56pm

Chart Dump

Awwwwww wahhhhhh no gold chart. Well, I guess we all know what it looks like anyway but I miss it... where's the gold?

What I'm looking forward to is the end of the index rebalancing... perhaps that's where the gold is.

Jan 8, 2013 - 1:58pm


No dstage, you have absolutely no recourse.

No soup for youwink

Jan 8, 2013 - 1:58pm

My Turd Friends, need advice

If, when doing a 401K rollover, what have you found to be a good PM

holding company for an IRA. I think of Swiss America, Investment Rarities, Both are

great companies, but I am just wondering if there may be better options, or different.

Just curious now....

thanks all


Jan 8, 2013 - 2:01pm

Watching out of the corner of my eye...

I've had this on the corner of my screen since the first week of October last year. What you are looking at is a fibonacci retracement on a daily chart from the low on 6/28 to the high on 10/1. The red average line is the 200dma, the yellow is the 100dma, and the green is the 50dma. I put these annotations on just because we were talking about it here at the time and the levels seemed to correspond pretty well with the support and resistance lines at the time. I've left it up because it still fits the support and resistance lines. I know what I see from a technical perspective... the area around $30.75 is going to be a fight, there is support, resistance, its at the 50% fibonacci level and the 200dma... If ever there was a level to watch that would be one. We are currenlty in no mans land with consolidation betweeen $29.60 and $30.50. If we break up through that level it will be on to about $31.80 where the 100dma is meeting up with the 38.2% fibonacci level as well as previously established support and resistance levels. If we drop and stay below $29.60 for very long, It will be a fast and painful ride down to a $28 handle... Just my $0.02. And below is the Euro-Silver charts on top of each other, as Turd suggested in the last thread. I just decided to do that instead of printing out the charts and holding them up to the light :-)
Jan 8, 2013 - 2:03pm

Go (Chart)Daddy!

Nice work with the new ruler and sharpie... Keep Stacking!

Jan 8, 2013 - 2:06pm

USDA report Friday

Also there's a USDA report out this Friday - 11:00 am (EST?) I think.

silver66 Road_Scholar
Jan 8, 2013 - 2:21pm


I can't get work done when you post such thought provoking pictures!!!!


Jan 8, 2013 - 2:21pm

Gold priced in Yen

The Yen is still very strong by historic standards; there used to be hundreds of yen to the dollar.

Indeed, though today's gold price in Yen is around 145,000, the nominal all time official high, was 203,368 on 21st Jan 1980.

So, one of the few, perhaps the only currency where the 1980 high has not been exceeded.

Possibly of little significance, or maybe it does has some relevance in the great scheme of things, but interesting to know.

Jan 8, 2013 - 2:27pm

Gold priced in yen, part 2

Yep, the penny has dropped.

Because over the last few decades, the yen has strengthened so much, the price of almost everything has been falling for them, to the point that there was no point in investing in any 'commodity,' including gold, and not least as an inflation hedge, because they haven't needed one. The Yen itself was appreciating faster than most everything else.

If and when that arrangement reverses (and we look like we are on the cusp?), then we might have a major, major new buyer on the scene. I hope they will be smart enough to buy physical.

Jan 8, 2013 - 2:33pm


Thanks for all these charts Turd!

Jan 8, 2013 - 2:38pm

Japan Pension Funds looking to shift more into Gold. WOW!

“If Just 1%Of Japanese Pension Assets Shift Into Gold, The Gold Market Would Explode” Tyler Durden's picture Submitted by Tyler Durden on 01/08/2013 11:54 -0500

Last night we reported that in the encroaching attempt to globalize the fiat ponzi regime, in Japan's latest rush to crushTM (sounds even better than race to debase) its currency it would proceed to monetize even more debt, only not its own debt - a strategy that has failed miserably to stimulate inflation for the past 30 years - but that of Europe.

So far so good, and perfectly expected in a monetary lunatic asylum in which coining money without an appropriate collateral backing is actually considered sound monetary policy by Nobel prize winners.

What gives us some hope that there may be at least one sane voice left in the wilderness is the far less trumpeted news overnight that "Japanese pension funds, the world’s second-largest pool of retirement assets after the U.S., will more than double their gold holdings in the next two years as the new government pushes for a higher inflation target, according to an adviser to the funds. Assets held by Japanese pension funds in gold-backed exchange-traded products may expand to 100 billion yen ($1.1 billion) by 2015 from less than 45 billion yen at present." The reason for the move is fear that Abe is actually able (unlike last time when his failure was accompanied by an inexplicable case of career-ending diarrhea) to hit his goal of 2% inflation, without in the process sending bond yields so high all tax revenue goes solely to cover interest expense on the JPY 1 quadrillion pyramid of debt and rising. Which, incidentally, according to many traders is the reason for the move higher in gold prices today.

From Bloomberg:

Mitsubishi UFJ Trust and Banking Corp., which introduced Japan’s first gold ETF in 2010, expects assets held in the product to double over the next several years from 26.2 billion yen as of Nov. 30. Global investors are holding a near-record amount in gold-backed ETPs that are valued at $139.6 billion, data compiled by Bloomberg show.

Assets held by corporate pension funds in Japan amounted to 72.24 trillion yen as of March 2012, declining 0.9 percent from a year earlier, according to Yasuo Sugeno, director at Daiwa Institute of Research in Tokyo. Of the total, about 72 billion yen were allocated to commodities including gold through hedge funds, he said Dec. 10.

Government Pension Investment Fund of Japan, the operator of the world’s largest pension fund with 113.6 trillion yen, stays away from commodity investment as 67 percent of their assets were allocated to Japanese bonds, Sugeno said.

Japanese pensions oversee $3.36 trillion, according to human-resource
and consulting services company Towers Watson & Co.
pension funds in Japan will diversify 72 trillion yen in assets after
domestic stocks produced little return in the past two decades,
according to Daiwa Institute of Research.

So after the rotation, paper gold holding will double to a whopping... 0.03% of all pension fund assets! Now imagine what happens to the price of gold if Japan does indeed succeed in generating inflation, and pension funds scramble to push 1, 2, 5% or more of their assets into gold. Sure enough:

Perhaps it is time for the punditry and the chatterbox media to start considering what happens not when the much anticipated rotation out of bonds and into stocks, which has not happened for 4 years now, and won't, at least not until the government bond bubble finally pops which will only happen when the central banks finally lose control, but what happens if even a tiny amount of the global pension capital allocated to bonds and/or equities, is rotated into gold.

“Pension money invested in bullion is ‘peanuts’ at the moment,” Toshima
said. “If 1 percent of their total assets shift to the metal, the gold
market would explode.”

Could not have said it better ourselves.

Jan 8, 2013 - 2:38pm

crude > $90 = war?

Turd, you still think crude being over $90 might be an indication of escalating turmoil in the Middle East? Did you see Assad's speech? He called out the west for backing the extremists he's fighting. Pretty heavy stuff. We know Russia, China, et al. are prepared to put the breaks on further US military conquest, but this speech was remarkably in defiance of western powers covertly funding and aiding fighters in Syria. Assad seems to be holding his own much better than Ghaddafi did.

Anyway, you have eluded to a correlation between crude and unrest in the Middle East before and I'm curious on your thoughts here.

Jan 8, 2013 - 2:44pm

@ Ballyale

regarding your post, perfect timing!

Jan 8, 2013 - 3:01pm

Golf near Tampa

looking to use my other silverware later this month on a trip to Tampa. Anybody have a good course recommendation? I know about World Woods, TPC and Innisbrook. I'm looking for something with a relatively high course rating (for me--8hc) and relatively lower slope rating (for the wife--bogey-ish). Few forced carries, less water, little or no housing; and pristine condition (she's a golf snob). Within 20 miles of downtown Tampa.

I posted some metals stuff on my golf forum and got a good response. I'm seeing if the reverse works, here.

Jan 8, 2013 - 3:03pm

Quick visit to the LCS today

Picked this up at spot today... 1/10th

Jan 8, 2013 - 3:08pm

Dr. Jerome, how on Earth did

Dr. Jerome, how on Earth did you manage that!?

Jan 8, 2013 - 3:10pm

Interesting OI

With the $16 rally yesterday, total gold OI surged by over 5,000 contracts. Very interestingly, almost all of the surge came in the Apr13, which grew from 57,826 to 63,324. This was no short-covering bounce yesterday, this was actual initiation of new long positions. And not in the Feb13 but the Apr13, instead. This would seemingly be patient, strong-handed buing.

Also, at a total OI of 433,837, the total number of outstanding contracts is above the 432,183 level. Why is this important? 432,183 is the closing OI level from 12/13, the day of the $21, post-Fedlines beatdown that set the tone for the remainder of December. That evening, gold closed at $1697. Yesterday, with total OI back to 432, 183, gold closed a$51 lower at $1646.

Hmmm....Turd smells a bottom.

Jan 8, 2013 - 3:10pm
Jan 8, 2013 - 3:14pm
Jan 8, 2013 - 3:16pm


I have only been to Innisbrook in Tampa, but I loved it. Played like a hacker though. Actually, some of the worst golf of my life. But anyway, just chimed in to say, don't forget Ybor!

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