Time To Lay Low

67
Thu, Sep 21, 2017 - 11:00am

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 (74) and 200-day (52). 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 80 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 50 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 .50 and it's the same reason we'll bottom now somewhere between and .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 .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

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  67 Comments

Sep 21, 2017 - 11:06am

And as evidence of Cartel intent...

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 05. That it's instead below 95 demonstrates The Banks intent to drive price down to the 50-day.

infometron
Sep 21, 2017 - 11:07am

First?!

Yippie! Fire Sale on some junior silver miners.

Bought some SCZ. Might buy more BBB and IPT.

Lots of buzz over HIVE... bzzzz

infometron
Sep 21, 2017 - 11:09am
YukonCornelius
Sep 21, 2017 - 11:21am

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.

Gold & Silver Price Update - September 20, 2017 + Federal Reserve Smashes Gold
Sep 21, 2017 - 11:31am

Not a good development

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.

#UNGA
YukonCornelius
Sep 21, 2017 - 11:40am

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?

YukonCornelius
Sep 21, 2017 - 11:44am

Yukon

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.

Sep 21, 2017 - 11:46am

Orange

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.

billhilly
Sep 21, 2017 - 11:46am

Sorry Charlie...

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

bently
Sep 21, 2017 - 11:51am

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.

Key Economic Events Week of 12/9

12/10 8:30 ET Productivity and Unit Labor Costs
12/11 8:30 ET CPI
12/11 2:00 pm ET FOMC fedlines
12/11 2:30 pm ET CGP presser
12/12 8:30 ET PPI
12/13 8:30 ET Retail Sales
12/13 10:00 ET Business Inventories
12/13 11:00 ET Goon Williams speech

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Key Economic Events Week of 12/9

12/10 8:30 ET Productivity and Unit Labor Costs
12/11 8:30 ET CPI
12/11 2:00 pm ET FOMC fedlines
12/11 2:30 pm ET CGP presser
12/12 8:30 ET PPI
12/13 8:30 ET Retail Sales
12/13 10:00 ET Business Inventories
12/13 11:00 ET Goon Williams speech

Key Economic Events Week of 12/2

12/2 9:45 ET Markit Manu PMI
12/2 10:00 ET ISM Manu PMI
12/2 10:00 ET Construction Spending
12/4 9:45 ET Markit Services PMI
12/4 10:00 ET ISM Services PMI
12/5 8:30 ET Trade Deficit
12/5 10:00 ET Factory Orders
12/6 8:30 ET BLSBS
12/6 10:00 ET Wholesale Inventories

Key Economic Events Week of 11/25

11/25 8:30 ET Chicago Fed Nat'l Idx
11/25 7:00 pm ET CGP speech
11/26 8:30 ET Advance Trade
11/26 9:00 ET Case-Shiller home prices
11/26 10:00 ET New home sales
11/26 10:00 ET Consumer Confidence
11/27 8:30 ET Q3 GDP 2nd guess
11/27 8:30 ET Durable Goods
11/27 9:45 ET Chicago PMI
11/27 10:00 ET Pers Inc & Cons Spndg
11/27 10:00 ET Core inflation
11/27 2:00 pm ET Beige Book

Key Economic Events Week of 11/18

11/19 8:30 ET Housing Starts & Bldg Perms
11/20 2:00 ET October FOMC minutes
11/21 8:30 ET Philly Fed
11/21 10:00 ET Existing Home Sales
11/22 9:45 ET Markit November Flash PMIs

Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Key Economic Events Week of 11/4

11/4 10:00 ET Factory Orders
11/5 9:45 ET Markit Services PMI
11/5 10:00 ET ISM Services PMI
11/6 8:30 ET Productivity & Labor Costs
11/6 Speeches by Goons Williams, Harker and Evans
11/8 10:00 ET Consumer Sentiment
11/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
11/1 9:45 ET Markit Manu PMI
1/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

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