Time To Lay Low

Even though we've tried to warn and prepare, none of that makes the inevitable Spec wash-and-rinse any easier to watch.

At the end of the day, it just is what it is. The year 2017 has unfolded almost precisely as we initially forecast back in January with two steps back following every three steps higher. We had carried a target of new highs for 2017, near $1320, through this most recent rally that began on July 10. That we instead reached $1360 was just a bonus, I guess.

From here and with Bank NET short positions hitting extremes over the past two weeks, we must expect further downside as Specs continue to be washed out and USDJPY/CDG reacts negatively to any hint of positive economic news that serves to reinforce Mother's hogwash of yesterday. As we discussed in yesterday's podcast, this period of frustration could very well last all the way through the next BLSBS two weeks from tomorrow. Once that's behind us...and hopefully haven't fallen too far from here...the stage will be set for the final three-steps-forward part of this year's pattern.

So, how far is "not too far from here"? Well, in CDG we've been mentioning the 50-day moving average as being the first target for The Banks. As of today, this level is $1291.30 and thus far we have a low in the Dec17 of $1292.06. See below:

And why are The Banks targeting this level? As we've been discussing for the past three weeks or so, the three primary moving averages are all bullishly crossed. This configuration prompts the Spec HFTs to buy the dips and this generally promotes price strength. Therefore, the first key to unwinding the Spec longs and allowing The Banks to cover shorts is to break price down below the key short-term MA...the 50-day.

From here, attempts will be made to take price all the way down toward the 100-day ($1274) and 200-day ($1252). The Banks likely won't be able to get there all at once due to that Spec buy-the-dip thing. However, they WILL try to get down there over the next two weeks.

The area around the 100-day should be supportive as $1280 looks like decent chart support, too. Maybe that's as far as they will be able to go? We'll see, I guess. Anything can happen over the next two weeks and maybe something completely unexpected will prevent The Banks from pulling this off. However, IF things simply play out in the usual orderly fashion, I expect a low to this cycle near $1250 or so and, from there, we can begin to rally into year end.

Turning to Comex Digital Silver...Now that price is below BOTH the 200-week MA AND the 200-day MA, JPM has The Specs Longs firmly on the run. There's also a general sense of commodity DEflation again post-Mother and this is prompting selloffs in just about every industrial metal, too.

This now the SEVENTH TIME IN JUST THE PAST TWELVE MONTHS that the criminal JPM et al have allowed Spec long positions to be built, only to flush them back out by smashing price back below the 200-week MA. Incredible!

So now the only question that remains is: How far can they smash price down this time? I can see where some will expect new lows for 2017 and while that's certainly possible, I don't think that's likely. Instead...and consistent with what we've discussed all year...I think a sort of bowl or rounded bottom is forming on the chart.

If we go back further and look at the weekly chart, I think you'll be able to see what I mean. There's a reason we bottomed in early July near $15.50 and it's the same reason we'll bottom now somewhere between $16 and $16.50. This chart doesn't show you exactly what I mean but I think it gives you the general picture. After this current phase concludes, I still think we rally into year end with highs up near that $18.50 level...setting us to break out with a solid start to 2018.

And that's where we are here on Thursday, September 21. I wish I had better news but, again, it is what it is. With The Banks still firmly in charge (and NOT on the run or any of that other BS: https://www.tfmetalsreport.com/blog/8494/same-it-ever-was & https://www.tfmetalsreport.com/blog/8554/guard-against-banks), we all knew that this latest Spec rinse was coming and that it was only a matter of time. All we can do now is sit back and watch while we wait for the next entry point and rally. As of today, it looks like we'll need to give it about two weeks or so to play out. In the meantime, we'll try to have some fun and keep our sanity, perhaps drawing a small level of confidence from knowing how and why The Game is played by The Banks.

TF

www.tfmetalsreport.com/subscribe

67 Comments

infometron's picture

First?!

Yippie! Fire Sale on some junior silver miners.

Bought some SCZ. Might buy more BBB and IPT.

Lots of buzz over HIVE... bzzzz

Turd Ferguson's picture

And as evidence of Cartel intent...

MODERATOR

Consider that since the initial reaction to Fedlines yesterday, USDJPY and long rates are both DOWN.

CDG and CDS however are getting pounded. 

As you can see, CDG "should be" about $1305. That it's instead below $1295 demonstrates The Banks intent to drive price down to the 50-day.

infometron's picture

mississippi leghounds

'nough said!

YukonCornelius's picture

I only watch the best - TFMetals, Christopher Aaron are as

good as it gets... listen to Turd daily, and Christopher Aaron does a free video each Wednesday night. No hype. Just great charts and thorough analysis. This week he covers the Fed Reserve balance shit shenanigans.

billhilly's picture

Sorry Charlie...

...but I have to break your winning streak.

Turd Ferguson's picture

Not a good development

MODERATOR

This would not seem to be a welcome development. And I'm the idiot who only voted for Trump because I hoped he would help avoid WW3.

 

Orange's picture

Trump

Very disappointed. Every time I see him form the triangular illuminati sign, I realize my vote was a waste of time. 

He can't drain the swamp, it's too powerful. We need a revolution. A worldwide revolution and a few key assassess.

YukonCornelius's picture

TF, I posted last night that the last time USD/JPY was

this high (112.40) was back on July 17th and at that time gold was around $1230 an ounce, and that since gold  at this time in U.S. dollars is $1300 is seriously outperforming USD/JPY significantly. Would you agree or am I off base? Its possible I am oversimplifying it since have to factor in North Korea, hurricanes and all sorts of other b.s. or is that just all noise in lieu of USD/JPY?

Turd Ferguson's picture

Yukon

MODERATOR

We watched this "outperformance" as it happened in late August. At the time, we attributed it to a rush of Spec money into CDG due to Nork and other concerns. This Spec buying overwhelmed the usual HFT link and pushed price higher.

Now it's a question of how much Spec money comes back out. This is what The Banks are attempting to prompt by maneuvering price back below the 50-day. 

Taking this into account, this is why we discussed CDG heading lower in last night's podcast. USDJPY looks to head now to the 114.00-114.50 area. That gave us a target of $1280 but, with today's slam on a flat USDJPY, that target may now need to be $1270ish. And, if The Specs flee even faster, we'll get that $1250ish level that is explained in this post.

Turd Ferguson's picture

Orange

MODERATOR

My apologies for the slight edit of your post. However, you never know what kind of intel spider could be crawling around so I'm always uncomfortable whenver that word is thrown into a comment.

canary's picture

I guess, we'd have to wait...

For the economic data to show that the Fed was wrong and overconfident again....Meantime the cartel will have time to cover shorts.

There're many skeptics about the COT...but over time, it's been a good indicator of things to come.

bently's picture

Will the Fed really "Normalize" its Balance Sheet?

Perhaps its a slim reed of hope, but the PMs appear to be hanaging tough with silver currently back above $17. One wonders, after such a seemingly hawkish announcement is there so little follow through? Why is the dollar down and USDJPY not rising further?

Denver Dave argues that Mother's talk/threat of normalizing the balance sheet and hiking rates is smoke and mirrors meant to slow down the decline in the dollar. He notes the Fed's stated intent, beginning in October to no longer re-invest the proceeds from its Treasury and mortgage holdings and let the balance sheet "run off." However, as Dave reminds us, Treasuries never really "mature." Rather, the maturities are "rolled over" by refinancing the outstanding Treasuries due to mature. So the government is going to issue more Treasuries to fund its spending and Dave says,"Unless the Fed "reverse repos" its  Treasury holdings right before they are refinanced by the govenrment, the money printed by the Fed to buy the Treasurys WILL REMAIN in the banking system. Dave says, "I'm surprised no one has mentioned this minor little detail."

Is Dave certain the Fed will not reverse-repo?  I don't know myself and invite others here to share your expertise. However, if Dave is correct, and the market is sniffing this out, perhaps it helps explain the weakness we're seeing in the $ and strength in the metals.

fluxplus's picture

Miners are strong today

Turning green.

OOOBuck's picture

Idiot who voted Trump

....and your alternative was????

I don't care how you cut it; there was no one else.  You voted out of hope and faith; two things that should never be used in any investment strategy but this is politics 21st century USA style.  I'm thankful that Orwell isn't around to write his sequel to 1984.

It's a done deal and we're pretty much cooked.  Just wish we had a little thing that popped out to let us know when we're done.

YukonCornelius's picture

Thanks for your thoughts TF! The plot continues to thicken

and what an interesting close to 2017 it should be. 

The Wetback Surgeon's picture

Won't hold my breath

But boy would it be nice to see that asshat Jaime Dimon get some substantial blowback:

http://www.zerohedge.com/news/2017-09-21/jamie-dimon-faces-market-abuse-claim-over-false-misleading-bitcoin-comments

How incredibly ironic if this douchebag who has been blatantly manipulating the silver market for almost a decade faces legal problems from a stupid remark about bitcoin.

Well, they did nab Capone on tax evasion, so we can hope...

Orange's picture

oops sorry Turd

I thought I had a typo and put it back. Then saw your note and change it again. And I thought I was being generous not naming a few illuminati.

canary's picture

I ask myself...how long the equity market will go higher?

As long as the QE is more than the QT (or just a few months before that)....ECB and BOJ are still printing tonnes of (digital) money.

Noteriety's picture

Cowlez - Beaten Wife Syndrome

I disagree with your application of Beaten Wife Syndrome to us Turdites.

I think we left our Influential, wife-beating Husband. He is now stalking us, causing as much pain as he can. The police are on his side, some of our friends don't believe us and we are suffering some financial hardship in the short term as we deal with lawyers, custody battles etc. 

However, in the long-term, we will be much better off having left the asshole.

There are many beaten wives being set-up with indebtedness, misallocated investments and overpriced assets that will be given a beating of a life-time the next time their husbands come home drunk.....

Poundwize's picture

Where's Maguire?

Aren't we way past due his latest nirvana prediction?

Jihk2431's picture

Great post Noteriety

A perfect metaphor for our plight...it is a lonely fucking road on days like these, but we know where the other one leads.

imfd's picture

Morgan Freeman

You know what`s terrifying, not that he spouts BS that says Russia is attacking us, but that the majority of Americans who didn`t give a damn one way or the other will now start taking this BS seriously, after all, he`s played important people on TV, he must be telling the truth. I`ll tell these people this, he is a F***ing actor reading from a F***ing script, think about that for a moment, we are fucked, people are more likely to believe an imaginary character than a real one. There needs to be standards for people having a vote, something other than the ability to write X.

Just a rant and hopefully obviously not directed at any Turdites,...shakes head sadly and exits

infometron's picture

@imfd

my sentiments exactly...

democracy is a total sham if people are not well educated >and< well informed...

Turd Ferguson's picture

Brent Cook Ask The Expert

MODERATOR

This was just recorded late yesterday.

 

brolgaboy's picture

off topic.....

speaking of actors, who decided that actresses now have to be called actors? don't get it....

matt_'s picture

How to profit from Janet speaking to the press...my analysis

After yesterday's beat down, I looked into dates that Janet speaks and the effect it has on NUGT prices.  I've identified a pattern that you all are welcome to discuss and refute.  If there is something to this pattern, I hope you all can profit.  I also hope that you all can take some of the profits from the douche bags who typically profit.

As a reminder, here is the 1 minute chart of NUGT from yesterday:

A big red candle day, but the day before was a white candle:

according to this: https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

the last time Janet spoke before that was June 14, 2017:

here is a 1 minute chart from that day:

Daily chart from the June 2016 time frame:

How about the time before that? March 15, 2017.  Here is the 1 minute bar data from that day:

and a daily chart from the March, 2017 time frame:

...and the time before that? December 14, 2016.  Here is 1 minute bar data from that day:

and a daily chart from the December 2016 time frame:

...and the time before that?  September 21, 2016.  Here is the 1 minute bar data from that day:

Here is a daily chart from the September 2016 time frame:

So if you had the following trading algo: open a position at 1:50 PM on the day Janet is scheduled to speak, close the position at 3:50 PM.  Your position would be long if the previous day had a red candle and short if the previous day had a white candle.  Your fraction of profitable trades would be 100%, and your total return (assuming reinvesting profits) would have been 83% from the Sept. 2016 Janet presser to the Sept. 2017 one.

The pattern did miss in March 2016, but it worked in Dec. 2015.  I haven't looked back farther than that.

Who knows if this means anything?  The number of data points are too low for statistical signficance.  If what I post here helps to take profits from the market manipulators and send some to Turdville, I will be very pleased. 

I'M SICK AND DISGUSTED OF DAYS LIKE YESTERDAY!

chocolatechiphorses's picture

Platium vs Palladium

Platinum @ $939

Palladium @ $912

How long before Palladium is higher than Platinum?

billhilly's picture

It just hit me...

...it's probably been stated here before but it just came to realization that another way to look at Too Big To Fail is simply that 'They" are Too Big (deep) in their pockets that there is simply no way they can Fail (in their trading schemes).  The little guys do not stand a chance against these big pocket guys.  

I am watching the Vix products and it is unbelievable how each and every pop upward is almost instantly hit with a sell (short) order, and usually magnitudes higher in volume.  There is no way to compete with this.  They have unlimited buying/selling  power and everyone else is at their disposal.  

I'm just sickened watching it all.  

Angry Chef's picture

U.S Senators Introduce Bill in Direct Attack On US Gold & ...

...Silver Mining

http://www.maxkeiser.com/2017/09/breaking-u-s-senators-introduce-bill-in-direct-attack-on-u-s-gold-silver-mining/

They've already destroyed the middle class. The manufacturing base doesn't exist. Is it me or do you ever get the feeling that the long term plan here is to kill us off and keep some around as slaves ?

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