Wow, What A Week!

Fri, Oct 10, 2014 - 12:26pm

Crazy stuff! The "deflation bias" charts plunged only to be saved (for less than a day) by some Fed jawboning. And now here we are, at the end of the week, with stocks and other paper "assets" clinging to support.

It has been quite a volatile day so far in the paper markets. Crude plunged as low as $83.62 before rebounding more than $2. The S&P 500 bottomed out near 1913 but has since rallied over 10 points. Fear of deflation/disinflation seemingly has "investors" everywhere poised and ready to run for the exits. Will that mass exodus begin next week? Maybe. It is October, by the way...

That said, with the ever-present bid of the Plunge Protection Team, perhaps the global equity markets will stabilize again? Let's watch today's close very closely. Last week, we identified the area around 1926 as important support and a close below there would almost certainly invite a trip down to 1905 early next. Below there, the drop would likely accelerate before reaching new support near 1870. At that point we'd be talking about a 10+% correction and the bubbleheads on CNBS would be uncontrollably hysterical. Could it happen? Absolutely! That's why next week is setting up to be so interesting.

Also, we had picked out $84-86 as a potential, broad support zone for crude oil. As mentioned above, the greazy stuff bottomed out earlier all the way down at $83.62 and has since rebounded. I actually have a last of $85.83 and UP 6¢ on the day. Why does this matter. Two main reasons:

  • Plunging crude personifies the "disinflation bias" as well as the "global slowdown/collapse bias"
  • A rally/bounce in crude will help silver and gold to catch and sustain a bid

So we're going to be watching crude quite closely next week. Be sure to note how a similar plunge in 2012 brought the same oversold extremes that then led to a $20 rally:

For how this all relates to gold and silver, let's have a look at the weekly chart. First, notice that gold has bounced again from the $1180 level and, in doing so, is about to put a bullish, engulfing candle on the weekly chart. This certainly looks like a hopeful sign to me and it appears to be a precursor for a continued rally back UP to the old 2014, Cartel-enforced trendline that we've been following all year. If you look closely, that line appears to be near $1245 which, (not) coincidentally is the exact same level gold needs to best to confirm a turnaround. Are you beginning to see why next week is important??

Turning to silver, getting back above $18.20 and then $18.50 continues to be our main goal. IF IT CAN DO THIS, we can begin to get excited about a rally into year end. Crude bouncing and rallying back above $90 and toward $100 would obviously be a big, big help. (Note that, at present, silver continues to "ride the line". Any move now back UP and through $22 would be an extraordinarily bullish signal.)

I'm going to stop here because it's late and I need to get this posted. I hope you have a restful weekend and that you return on Monday with your gameface on and ready for anything.


About the Author

turd [at] tfmetalsreport [dot] com ()


Iceberg Slim
Oct 10, 2014 - 12:27pm


again..on a streak.

Oct 10, 2014 - 12:32pm


looking better and better :D

Oct 10, 2014 - 12:34pm


I am still hoping for a positive close this afternoon.

Oct 10, 2014 - 12:47pm

Let's go trade paper!

Some weeks I think this cartoon is a fine metaphor for the little guy
paper trading against the big boys on wall street.

I am the chicken!

Oct 10, 2014 - 1:07pm

Here's some brilliant advice

Go see a salesman CFP and then sit back and do nothing while the central bankers rob you blind and paper currency devalues to zero:

Oct 10, 2014 - 1:12pm


from cnbc: jamie dimon first public comments since last qtr earnings and cancer diagnosis: shadow banking is huge, non-bank financials is next to blow up, not well understood, shouldn't push risk on/at them.

Oct 10, 2014 - 1:26pm

wouldn't it be nice

if a regulator watched the banging the close that just happened in silver and arrested someone?

Sorry, I sniffed glue earlier this morning...

Carry on.

Island Teal
Oct 10, 2014 - 1:42pm

Oct 10, 2014 - 1:48pm
Oct 10, 2014 - 1:53pm

Getting crazy out there...

I dont even know what to think anymore. Everything is seemingly hanging on by a thread...

Oct 10, 2014 - 1:59pm

@ Turd, about crude

Turd, correct me if i'm wrong.

But I'm simply going off the weekly crude chart you posted going back to 2010. If we look at 2011 when crude broke $90, it took almost 3 months for it to get back above that mark on a weekly closing basis. Similar scenario in 2012 took 2 months. My point is that yes you may be right about intermediate term outlook being bullish. But this is Crude's first week/foray spent below under $90.

My point is in the short run we probably shouldn't get too excited as 2011 and 2012 showed Crude not only dipped below $90, but when it did that it declined all the way below $80 while searching for a bottom, as evidenced by the long tails (but not closing below $80 on a weekly basis).

Just trying to give myself a time frame perspective on how long we may be down here for. Especially given the deflation bias, we just may be banging around $80-90 for awhile.

My 2 cents

Oct 10, 2014 - 2:35pm

An "event" coming? Jesse comments

..."The associated trades with silver such as miners and royalty plays continue to get hammered. That they gained so sharply yesterday seems to suggest that the much remarked short interest in some of those plays really is that significant. I wonder if some of the 'smart money' isn't advantageously picking up some positions on the cheap ahead of some forthcoming event."

Reminds me of something Rob Kirby recently said......hmmmmm

Oct 10, 2014 - 2:42pm

Come on Boys! The Nasdaqian Team can do it!

Only little more than an hour, we can hold the 3910 line, for Mom, Pop, and Apple pie. You can have the whole weekend off. Otherwise........

Oct 10, 2014 - 2:43pm

ECB To add Yuan to currecny Reserves

Teh Russians owe a lot of dollar debt in December...

Boy do they want to get off the heroin ($$) asap

Oct 10, 2014 - 2:51pm


No beer or sports for you. You can still get your bonus, only trimmed.

Oct 10, 2014 - 3:00pm

Bubble heads on CNBC

will pull out Abby Jo Cohen to come on tv and say its a great time to buy on the dip--just like she did in 2000.

Oct 10, 2014 - 3:00pm

Captain! Captain! We can't Control it!

We have lost power. Our fuel has been diluted! Probably by some surreptitious entity.

Less than an hour and we will be out of this galaxy.

Oct 10, 2014 - 3:02pm
Oct 10, 2014 - 3:09pm

Well I'm All Prepared

FOR NEXT WEEK Just had two closings and I have fiat to spend. Shall I pop now or wait till Monday. Man it's a tough decision.laugh

Hell I know, it's a no brainer. I will use tonight, tomorrow and Sunday to search for week hands and do what any good Stacker will do. KEEP STACKING no matter what the price is and Buy! Buy! Buy!.

O! Bye The Way. have A Nice Week-end. smiley

Oct 10, 2014 - 3:18pm

Anybody live in San Jose, CA area

At, 2014 Saltwater Croc is almost as cheap as 2014 ASEs if buying 500 or more (~19.98 per; ebay selling for ~$24). I only want 100x. I'm looking for a 5-way split. Anybody interested?

Oct 10, 2014 - 3:24pm
Oct 10, 2014 - 3:31pm


What's with all these 666 Satan references last few days???

Oct 10, 2014 - 3:49pm

S&P 1905 just breached

Last of 1903.....massess exodus came early?

Oct 10, 2014 - 4:00pm

miners are impressive

in the face of a hundred point nasdaq drop

Oct 10, 2014 - 4:02pm

well, well, well

I step away for a few hours and what do I see upon my return?...The S&P goes out at the lows of the week and barely above the 1905 level.

As mentioned in this post, Monday and next week are going to be quite interesting, indeed...

Oct 10, 2014 - 4:04pm


Absent some major conflagration, there's no reason to think that crude would snap back 15% in a week.

All I'm saying is that:

  • from near this price level in 2012
  • and from near this is same RSI level

Crude then rallied nearly 20% over the next several months.

Oct 10, 2014 - 4:05pm


Here is the article that started it all. Somebody flashed and pulled orders for S&P mini contracts 26 times--orders for 666 contracts each time. Then the markets started tanking.


Where is that PPT today?

Oh, there they are, valiantly trying to keep a 1900 handle on the closing price for the weekend newscasts.

And its gone! 1899.75 at the 4pm bell. Perhaps the FED is not all powerful after all?

We also closed below the 200 day moving average. Let the algos chew on that one for a while ...

Oct 10, 2014 - 4:14pm

Thanks Turd......i'm on the same page brotha

It's never a straight line recovery in any market when you waterfall on the down swing. It'll certainly take time for all commodities to recover.

Oct 10, 2014 - 4:24pm


I'm getting ready to record today's podcast, which will become the primary, Vault thread for the weekend.

I'm going to quietly take the sticky off of this one and move it to "public" so that any lurkers that visit can give it a read in preparation for Monday.

Oct 10, 2014 - 4:57pm

Bond market

Closed on Monday. There will be no release valve for equities should they drop further.

Become a gold member and subscribe to Turd's Vault


Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 2/18

2/20 2:00 ET January FOMC Minutes
2/21 8:30 ET Dec Durable Goods and Capital Equipment
2/21 8:30 ET Feb Philly Fed
2/21 9:45 ET Markit Manu and Svcs PMIs
2/21 10:00 ET Jan Existing Home Sales
2/22 Day long Fed Goon appearance at Chicago Booth Policy Forum

Key Economic Events Week of 2/11

2/12 12:45 ET GCP speaks
2/13 8:30 ET CPI and three Goon speeches
2/14 8:30 ET Retail Sales (December)
2/14 8:30 ET PPI
2/15 8:30 ET Import Price Index
2/15 9:15 ET Cap. Util. & Ind. Prod.

Key Economic Events Week of 2/4

2/5 8:30 ET Trade Balance
2/5 9:45 ET Service PMIs
2/5 9:00 pm ET Trump SOTU
2/6 8:30 ET Productivity and Unit Labor Costs
2/6 7:00 pm ET CGP speech
2/7 9:30 ET Goon Clarida speech
2/8 10:00 ET Wholesale Inventories