A short-term bear

Wed, Nov 23, 2016 - 7:13am

I recall back in the wild days leading up to May of 2011 that a number of regulars on the old blogspot site began to warn of a downturn in silver. They were nearly shouted off the discussion boards with some blunt words. This place was a bullish as it gets and I watched the AG price rise up through the 40s with greed and glee.

But the bears were right, and those who took the warning seriously and hedged their stacks did not regret it. I suspect that some of you have been hedging all the way down to $14 last year. I wish I had, but my own bullish bias has prevented me from hedging. Even when I opened up an account to trade futures in order to hedge my stack, I blew out the account by getting all excited that gold was rising and putting on bullish positions. I try to douse my bullishness with the reality of the charts these days.

Back in October, I noticed a pattern that I want to share.

Link to chart in case it will not display

Gold has been trading in a downward channel from its highs at 1370 last August. I first noticed the channel when it bounced off of 1245 after a large orchestrated manipulative takedown through the 200 day MA. Election night is the anomaly, briefly breaking out of the channel. The banks quickly demonstrated their control by morning. Today, we are back at the bottom of the channel, riding the channel down for the past 7 days, and now supported by the 100 week Moving Average that Turd has brought to our attention.

I suspect another Banker-orchestrated takedown approaching.


By year’s end, gold cannot be seen as a better investment than stocks.

We began this year at $1120 in gold. Can you imagine the turmoil if gold had held $1370 to the end of the year, closing with a 22% gain? Meanwhile, the S&P only rising from 2037 to 2200 or so? A gain of a mere 8%?

Link to chart

What would all the portfolio managers, hedge funds and other investors do for 2017? Buy some gold!

Money must NOT flow into gold, not even a little bit, especially with the degree of leverage that is present. Thus, the levels must once again be manipulated, giving stocks the advantage, enabling financial headlines to argue that stocks outperformed gold, once again, as they have for the past several years. Hence, we have seen anti-fundamental moves in gold and stocks since August.

What needs to happen to achieve the results that the Banker-orchestra wishes to have? Higher stocks and lower gold. If gold were to close at the bottom of this channel ($1180), Stocks would need to close at 2290. Raising the S&P up 90 pts from here is possible, but it still shows gold with a nice 11% gain on the year.

If the S&P stays flat the rest of the year, gold will need to be lowered a mere $60 to $1140. This seems more likely to me. The orchestra can do that overnight, when they want to. And with gold sitting on its 100 week moving average, can we expect the bankers to NOT take advantage of this and kick gold down through, then keep the pressure on?

Also, the USD/JPY is challenging resistance at 111.10, a level that served as support three times earlier in the year, then held as resistance two more times. This will be the dollar’s third try to break back up. If so, it brings further pressure on gold.

Edit 9am: Gold was decisively shoved down through support of the 100 week MA as the USD/JPY broke through $111 resistance. Crap! We'll watch to see if it stays down, or bounces back up...

Link to chart

And why should the Bankers not try for an additional $80, down to $1060 to show a loss on the year for gold? But, only an evil, slimy crew of career criminals would do a thing like that.

OK then. That is my thesis--the return on gold must be less than stocks for 2016. The probability of it being correct is high enough, in my view, that I thought it would be worthy of discussion, debate, and even refutation. I hope I am wrong. But if not, and we break down below the 100 week MA, I'll be shorting gold in my trading account and have some dry powder waiting for the late December lows.

But after the lows are in, I think we are off to another 20% gain for gold into 2017—as long as this doomed economy holds together.


Now, on to socio-economic politics and a fifty-cent word: Consubstantiality

Several years ago I had two job interviews. My teaching position at the time was raising my blood pressure as well as my weight. The silver slam of 2011 sure didn’t help matters. I learned about real stress for the first time in my life as the department grew and responsibility for administering it was dumped on my desk.

Time for a new job and a change of life.

My first interview was for my dream job in the town where I was born in Colorado, where my grandparents lived (deceased) and many relatives still do. I just knew that God had ordained my position there.

Ooops. These college teacher interviews take all day and you never know how things will go.

During the interview, somebody took me on a campus tour and we walked into a fancy new building and he said “This is the Paul Wubbin Science building.” Oh, I replied, trying to show my connection with the community, “He was my family doctor when I was a kid—sewed up my busted lip after I fell on my grandmother’s porch.” No response. By the end of the day, after several more “strike outs,” I realized that every single person I had talked to came from out of state. By showing my deep connections to the local area, I was showing the faculty that I was quite different from them. I didn’t get the job.

A few weeks later, I interviewed for a position in AZ. Most of our immediate family lives within two hours. If I had a second choice of a dream job, this would be it.

I approached the interview more professionally. I bought a new suit and chose a shirt that matched the school colors. Got a haircut, shined up my shoes, even brushed my teeth. The interviews went well—nothing stands out except one thing. In the afternoon, we had an “open session” where anyone who wanted to meet me and ask questions sat down at a conference table and fired away. It was supposed to be social, but the questions were serious. At one point someone asked me, “Which one of our discipline’s theorists has had the most impact on your research?” “Hmmmm…” I mused, “well, the older I get, the more I appreciate Kenneth Burke.” This brought a round of professorial chuckles from the group.

In that one comment, I revealed to the faculty that we had “consubstantiality.” Literally, the term means “made of the same stuff.” Everyone on the faculty was from out of town and studied at a major Midwest university where Burke’s theories were taught—even highlighted. Ironically, in this case, Burke taught that you persuade a person inasmuch as you are consubstantial with them. My comment about Burke showed this consubstantiality. Their laughter confirmed it. I got the job.

I feel a high degree of consubstantiality here, on this blog, with the other members.—even with Libero. We all come from very diverse regions and families, different levels of education and status in life. But we have been growing in a shared experience that touches our intellect, our understanding, and the deepest aspirations we have for our lives and families. We recognize together that a Keynesian monster feasts upon our community’s wealth, wrecking the likelihood of future prosperity for our children and grandchildren. We all are persuaded that this globalist monster will burn the world down in its demise. We have all concluded that investments in real commodities is the best path to survival We all seek to avoid being destitute upon reaching the other side of the disaster. We are being transformed into the “same stuff” as we discuss, argue and rant on this blog, becoming educated, informed, and increasingly civil in our differences. Not much flaming lately… Had you noticed also?

I have met with three different members of this blog, all of whom I hope are still readers—CpnScarlet, Silverwood, and Geofarmer—an electronic engineer, a restaurant owner, and a farmer. I felt an instant connection with each, and as we talked, I recognized each of these men fully understood and shared the beliefs and reasons that set me on the path that led here. They each had much to teach me. Even our wives seemed to share that connection. We are made of the same stuff. I only wish we were neighbors. I have also privately corresponded with a few dozen of you out there over the past 5 years, sensing that same connection.

Unfortunately, as life progresses, I sense that the consubstantiality I have shared with members of my own family is diminishing. Several close relatives are Trump haters—and they have a problem with me. I am not a Trump hater alongside of them. As Scott Adams explained, it was not enough to simply not vote for him, you had to be "anti-Trump" to be acceptable to progressives.* I expected the resentment from my liberal colleagues at the University, but not the spite from my flesh and blood—people with whom I should have had the highest degree of consubstantiality.

I invest in gold and real estate. They invest in mutual funds. I oppose the Keynesian monster. They worship its masters and serve its social ideals. And they, unknowingly, support a fascist/socialist, centralized economic governmental system that will oppress us all. I see it coming. We all do here. But my efforts are casually dismissed when I attempt to educate my relatives on the reality of this socio-economic threat. Our consubstantiality is diminishing. It's not just families that are moving apart, rifts in our society are deepening. And soon, I believe we will face the “Fourth Turning” revolution that may bring violence between people who ought to love one another, people that have been persuaded by different narratives--one false, and the other sensible.

I chose to study rhetoric in graduate school so I could understand and recognize such situations when they asserted themselves, so I could call it out and expose the sophistry that empowers propaganda. But alas, even though I have a PhD in the subject, my loved ones think they know more, and that they are immune to the effects of the polemical mass media.

The worst thing about being deceived is that you are deceived.

So, I'll be driving to Phoenix later today to see family for a bit. Hopefully, I'll find that their anger is waning, that their hatred for all things Trump is diminishing and that our consubstantiality is recovering as they come to their senses.

Thank you for this community.

* Adams (creator of Dilbert) mentioned this in the final seconds of an interview:


About the Author


Captain Caveman
Nov 23, 2016 - 7:22am
Mr. Fix Captain Caveman
Nov 23, 2016 - 7:42am


Have a happy Thanksgiving

Nov 23, 2016 - 7:47am

Good read Dr. J

I'm up early this morning roasting a turkey for my co-workers, who are more receptive to the metal message and all that goes with it, than my own family is. My NAU attending daughter will be coming home tonight for the Thanksgiving weekend and of course we'll talk about her Facebox memes where all Trump supporters and/or Hillary haters are racist and a bunch of other big words used to label us. All her talking points come from the MSM and that may be the weak link now in turning the conversation. Even the kids are realizing they are being manipulated and lied to. Happy Thanksgiving from Phoenix!

Nov 23, 2016 - 8:14am


I keep my mouth shut around my NAU colleagues these days when politics comes up. I hope your daughter doesn't get pulled into the highly liberal activism on campus, but simply gets a solid education. It is still possible. Good news to hear that the kids are recognizing it. My son sees it for what it is. I suspect my daughter is seeing the cracks in the liberal perspective also...she doesn't talk about it much.

Edit: Watching the markets today... Isn't it interesting that at 8:06 AM we touched the 100 wk moving average in gold, and the 111 .35 resistance level for the USD/JPT ... at the same instant?

Nov 23, 2016 - 8:43am

Nice Job Doc

Food for thought with the upcoming Thanksgiving social events.

Dr. P. Metals
Nov 23, 2016 - 9:00am

Thanks for the post

Can't disagree with any of your logic :(

Nov 23, 2016 - 9:05am

Excellent post, Doc

Very well done and much appreciated.

Nov 23, 2016 - 9:10am


I added the direct links to the pics that open in a new window.

Nov 23, 2016 - 9:10am
Nov 23, 2016 - 9:17am

Enjoyed The Article Doc

Miss Your Pictures Though As They Are Not Coming Up For Me. Keep Stacking

Talk about 2011 and Silver Positivity! Doc do you remember JAKE he got kicked out of here and Silver Doctors a while ago. I sure liked the guy and kind of miss him Lol

Nov 23, 2016 - 9:33am

$6 Billion Puke Sends Gold Plunging

I just laughed at this . . .going crazy? maybe! My stack is still here and our time will come sooner, I believe. My problem is family doubting me and our silver stack, that is a burden.

Nov 23, 2016 - 9:42am

Yes that is true

My stack is just as shiny and valuable as it was yesterday and in early July. My miners...not so much.

Regardless, we are once again being shown the lunacy of the paper derivative pricing scheme. Is PHYSICAL metal being exchanged at these prices OR have the valueless paper derivatives fallen in price due to changes in Forex driving HFT liquidation?

Nov 23, 2016 - 9:53am

Thanks Dr J. Have a nice

Thanks Dr J. Have a nice break. The time spent together is all by itself itself healing and good.

Nov 23, 2016 - 10:02am

Uplifting Essay

I just wish to highly recommend this article that was recognized in the previous thread. I, too, found it uplifting. I would also suggest you read the comments at the end of the article as the author answers some reader's questions which provides some further insight. Happy Thanksgiving! _______________________________________ Markedtofuture's picture Understanding Elections, Gold & The US Dollar Via Manipulation Submitted by Markedtofuture on November 22, 2016 - 5:24pm. Hat Tip! 10 Understanding Elections, Gold & The US Dollar Via Market Manipulation Written by: Avery B. Goodman _______________________________________________________________________ @markedtofuture - 5:24pm post Submitted by James Crighton on November 22, 2016 - 9:46pm. Hat Tip!12 Thanks MarkedToFuturee, for posting this: https://averybgoodman.com/myblog/2016/11/22/making-sense-of-elections-th... The last paragraph: "Nothing I’ve discussed in this article addresses the thorniest issue of all. The Obama administration, working in conjunction with other western leaders and the major central banks, have created what is probably the biggest financial bubble the world has ever known. Even if the new President’s policies are as successful as they can possibly be, it is hard to imagine how he can prevent the implosion of this unstable situation. If the bubble implodes, then all bets are off as to how high gold prices can soar." excellent piece - most encouraging - I encourage all who need a shot-in-the-arm to read it.

Nov 23, 2016 - 10:04am

When Craig's away...

the Monkeys play

Ferd Torgerson
Nov 23, 2016 - 10:26am

Thanks, Dr. J. for Another Insightful Article

I always look forward to your thoughts. Hope your Thanksgiving with relatives and friends turns out amicably.

I was finally able to understand Craig’s discussions about the relationship between the USD/JPY ratio and gold. Since his comment in last week’s A2A with Greg Hunter titled “Well, here we are”, I’ve been following the ratio closely. At the time, he cautioned that if the USD/JPY got to 114 or above, we’d see gold below $1200.


We hit that level this morning. And, sure enough, gold dipped below $1200. At this time, all my miners are down five percent or more. In looking at the charts on Finviz, about the only things I own today that haven’t lost value are the three-pack of orange juice bought at Costco last Friday and the gas in my pickup truck. I’m pretty worried, though, about my coupon for a free pillow. If that Lindell guy announces a price reduction to move inventory for the holidays, I stand to lose there as well.

But, looking on the bright side, with the price drops in the metals, the volumes in the mining shares don’t seem to be at panic levels, at least not yet. I noted that there was not that much volume earlier this week when some miners were up. Maybe it’s just me but I believe that the noise we are seeing now is just that and we’ll see a return to normalcy after year-end.


Nov 23, 2016 - 10:30am

Thanksgiving Greeting

Form the warm hearts and pure minds of the sociopaths on Wall Street.

Dr. P. Metals
Nov 23, 2016 - 10:32am

Have you noticed

That every single data point they "don't like" was "unexpected"? Those geniuses! https://www.cnbc.com/2016/11/23/new-home-sales-reported-for-october-2016...

Nov 23, 2016 - 10:33am

I New it!

I was going to post a warning last night as the price of gold had been capped again for three days or so at 1207 to 1217.

Sure enough this morning I see Gold got slammed for $20 bucks, this is the same pattern as last week as Gold was capped and held at 1225-1230 before getting the big slam.

It's like the manipulators break down price and then naked short all the new specs coming in at the new lower price which can take several days and after the bid stack of new specs has been worked down they hit the big SELL NOW button and there you have it.

The SELL NOW button is activated by pumping the USD which Craters JPY.

It's easy for them as they can see all market put/call pressure along with all stops limits in real time.


Nov 23, 2016 - 10:38am

I'm still sporting

A nice 42% gain on my miners despite the HUI now only being 8 points higher than where I originally bought most of my miners. Still not selling. This has to be close to the bottom.

Nov 23, 2016 - 10:41am

More please!

Thank you Dr Jerome for this fine write up. I also want to thank Turd for this website, this place (and ZH) is IMHO one of the best places to sharpen ones own critical thinking skills. On a side note, I have really enjoyed listening to "Dire Straits - Brothers In Arms" album lately. Can't believe its been 31 years since it was released, I remember listening to it my teens.
Here is a small taste , this is the track called "The Man's Too Strong", Enjoy!

Video unavailable

I have legalised robbery
Called it a belief
I have run with the money
And hid like a theif
I have re-written history
With my armies and my crooks
Invented memories
I did burn all the books
And I can still hear his laughter
And I can still hear his song
The man's too big
The man's too strong

Nov 23, 2016 - 10:44am

Miners should turn before b.s.metals prices do on COMEX

Perhaps today is reversal? Either way, miners turn first

Nov 23, 2016 - 11:14am


They were able to control the price of gold to maximize their profits for options expiration. Now maximizing their naked shorts for xmas bonus. Scum. Where are the regulators? Also scum.

Nov 23, 2016 - 11:28am

Thanks for the write up Doc!

Well put, well thought out.

Thanks for sharing a bit of insight.

Joseph Warren
Nov 23, 2016 - 11:32am

View 'the system'

as being created and run by a group of criminal gangsters, and there are fewer surprises & disappointments. So, what would criminals do ? Regulators ? Simply take them over. Derivative bets go south ? Change the accounting rules. Lawsuits ? Simply take them over - - - all the way to the 'supreme' court. The gangsters greatest success has been convincing the public they're not criminals.

Nov 23, 2016 - 11:32am

10 year treasury 2.41%, 30 year 3.08%

Looks like a rate hike in Dec to me!

Dr. P. Metals
Nov 23, 2016 - 11:36am

@Joseph W

You forgot the main item: - Lie about everything. Then lie about your lying.

Nov 23, 2016 - 11:38am

bear in mind

we all know even dead cats bounce but did you know a live one can jump 7 times its own height? fwiw, even i don't know how that is relevant but hey ho...

Dr. P. Metals
Nov 23, 2016 - 11:51am

Congrats and job well done

To the banksters: https://www.zerohedge.com/news/2016-11-23/dow-overtakes-gold-year-date-f... PS I've almost but not quite yet got my spell checker to allow the word bankster...I can tell it's thinking about it. It allows it "uncorrected" like that about 1/2 the time now

Nov 23, 2016 - 11:56am

Got non-google links for the charts?

Nice reading, do you have links that don't require Google acounts to read the charts? There must be more people like me who refuse to touch anything from Google with less than a 10-foot pole.


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