What Now?

254
187
Thu, Jun 23, 2011 - 4:28pm

What an interesting seven weeks it's been. From the jubilation of late April to the frustration of early May to the despair of today, we've certainly ridden the trader rollercoaster.

I've tried to lead the way through the darkness but this sorcerer/soothsayer stuff is pretty challenging, particularly when you're dealing with a criminal enterprise on the other side of your trades. Regardless, let's recap so that we can begin to decide where to go from here.

First, back on May 18th I gave you what some began to call a "roadmap". Here's a link:

https://tfmetalsreport.blogspot.com/2011/05/its-finally-over-now-what.html

I'll be the first to admit that the silver prediction for June came up short. I was looking for a rebound to $42-43 based upon the same fundos that had driven silver since August. The fundos are undoubtedly still there but the buyers aren't. All of the C/C/C shenanigans have scared them away for now. Silver made it to 38.84 on 5/26 and 38.76 on 5/31 but that was it. The gold prediction turned out pretty well, however. I was looking for a June peak between 1560 and 1580 and we made it to 1559.30 yesterday. Here, then, are the salient points going forward:

"5) Having accomplished all of this by the end of June, the metals will enter their typical summer doldrums. Silver will have painted a double top on our "white out" chart. Gold will have a near perfect double top on its actual chart. The PMs will selloff through July and into August, just like they did in July and August of 2010 and then January and into February of this year. Gold will likely retrace all the way to $1450 or so. Silver will trade back down to this 33-35 area.

6) By this point in late summer, all will seem lost. Every two-bit technician and topcaller will be proclaiming the end of "The Great PM Rally", just like they did back in late January. But it won't be the end, it will be the start of a new beginning.

7) The metals will rally from late summer into December. Gold will trade to a peak near $1750. Silver will again trade near $50, this time for real."

Then, there's this, which I wrote on June 8:

https://tfmetalsreport.blogspot.com/2011/06/hoping-to-be-wrong.html

In this post, we discussed how a rallying POSX might be the final nail-in-the-coffin for the gold rally from January. I hoped that it wouldn't be but I feared that it was. (Against my own advice, I bought those August gold calls Tuesday. Turd dumdum. "Walk in middle of road. Get squished like grape.") From this post, here is the most important point:

"The dollar rally has added to what was already a rather tenuous position for gold. Take a look at the chart below. If we again use the white-out to wipeout the blowoff from early May, we get a chart that made a top about five weeks ago, corrected down, moved back up and now has made an attempt at a "new high". Failing the new high, it instead has rolled over and is now pointing lower. I hope I'm wrong but it looks like we have found our range for the summer. It looks now like gold will trade between 1470 and 1550 for the foreseeable future. Do not despair, this pattern of four months UP and two months sideways has been going on for years in this bull market. This new range would just be a continuance of the pattern and it certainly is consistent with the "roadmap" I posted several weeks ago. I still believe that, by late summer, gold will finally break higher and rally toward a December high between 1700 and 1780."

So, how does this relate to today? To me, today's action was the final, crushing blow to the 5-month rally in gold and the hoped-for recovery in silver. I now have no doubt that Santa, Turk et al will be proven wrong over the summer. There will be no "explosive" summer rally that will "confound the experts" and "make contrarians money". The PMs will simply be in another 8-week consolidation phase as they prepare for the next 18-week rally, which should begin by late August/early September. Until then, my advice to you is to not play. If anything, take advantage of dips toward the lower end of the described ranges by adding and stacking your physical. You'll have several opportunities over the next 8 weeks or so to buy some physical on "sale". If greed convinces you to trade paper on the Comex, you will only find yourself in the end with less fiat than you started with and you're going to want as much fiat as possible in your warchest when the next major UP move begins.

I leave you for now with these words of wisdom that Santa emailed out earlier today. Relax. Be happy. Enjoy the summer. Be ready for fall. TF

Dear Friends,

Economic statistics are taking a hard fall.

Without QE who will buy US treasury issues?
Without QE where is the basis of world equity markets?
Without QE what do you think the chart of unemployment will look like?
Without QE how do you think the camouflage of the insolvent balance sheets of the financial industry will fare?
Without QE where is mortgage money coming from?
Without QE what do you think home prices will do?
Without QE how will the present Administration and the legislative be re-elected?
Without QE how will the States of the United States of America finance themselves?

Be prepared for a reversal of the decision to curtail QE at the end of June.
Be prepared for a snap back at a greater percentage of QE with a different name.
Be prepared for covert QE between July 1st and late August when stimulation goes wild.
Be prepared for gold to take out $1650 on the upside as magnets at $12,544 come into play.
Be prepared for the Inflationary Depression of all time.

Stand firm on your gold positions.
Stand firm on your discipline of NO margin.
Stand strong in your Swiss Franc and Canadian dollar positions.

Survive the MOPE and market manipulation that is so obvious today.

Respectfully, Santa


About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  254 Comments

Richard Booze
Jun 23, 2011 - 5:26pm

Help me out here . . .

Hey, guys, I'm a newcomer, recently acquired a few coins of gold and silver to stack when I can. Lucky for me I wandered on to the Watch Tower site, then here -- now a bonafide registered disciple of Mr. T. Ferguson.

I find the site to be very enlightening, though I stumble over all the acronyms you veterans take for granted. Most common, EE and POSX. See em all the time and have my ideas, but don't have a clue what they mean actually.

I'd like to request that you get off your high horses and spell the various words out for me. But I know that dog won't hunt.

A great addition to this already great site would be an acronym dictionary. If you like, call it Acronyms for Dummies. I'm not proud. I'll use it anyhow.

Thanks, T Ferguson, for an extraordinary and informative website. Hey, I'm learning. Soon I'll be able to lose as much of my life savings as anyone here!!

speconomist
Jun 23, 2011 - 5:29pm

A personal message from Santa

A personal message from Santa himself? Woah Turd, you really have good connections!

Rhinestone Cowboy
Jun 23, 2011 - 5:36pm

@ Richard Booze

click on Turdisms at the top of the site and you'll have your answer.

thecoloredsky Richard Booze
Jun 23, 2011 - 5:36pm

RE: Richard Booze

Richard Booze.... no high horses here. Click "Turdisms" at the top to get definitions of acronyms. Glad you are around!

Puregold Richard Booze
Jun 23, 2011 - 5:40pm

enlightenment

Hit the "turdisms" button at the top of the page. It'll be like turning on the lights.

Eric Original
Jun 23, 2011 - 5:40pm

Looks like someone picked the wrong week to quit smoking...

It's also the wrong week to walk away from the metals, IMHO.

Looks like I picked the wrong week to quit smoking...
I Wazere Richard Booze
Jun 23, 2011 - 5:45pm

@ Richard Booze on June 23, 2011 - 5:26pm.

I agree with you about the acronyms, especially the made up ones that no one else uses.

If a person is running a blog, and hopes to see increased participation from the public, at least write so that everyone can understand.

There likely is an acronym dictionary somewhere on site, but I'm certainly not going to refer to it for every blog post and every third comment.

magis00 I Wazere
Jun 23, 2011 - 5:50pm

@ I Wazere -- Put Forth A Modicum of Effort

Hey Man, I know it's daunting when all of this PMs information is fresh to your eyes, but ain't nobody on here going to hand it all to you. (and everyone goes through the growing pains in their own way, believe me)

If you want to understand, and prepare, and insulate yourself as best you can against what's coming . . . you'll have to take some initiative.

And I don't think Señor Richard Booze took a swipe the way it appears you did - I think he asked where to find the dictionary that "is likely somewhere ... that you're not going to refer to."

Not the best hustle, so far, but best of luck to you amigo.

~Magis

Richard Booze Rhinestone Cowboy
Jun 23, 2011 - 5:51pm

Turdisms

Thanks much, Cowboy! Should have known the answers were here somewhere.

A colossal help!!

Richard Booze bullwhip29
Jun 23, 2011 - 6:01pm

I beg your pardon!

He didn't promise you a rose garden.

Bullwhip, I haven't seen anywhere on this site a promise to take you from rags to riches. I'm here because it is an immediate source of reliable information. As important, it is a supreme forum of others who are precious metal investors and buffs. And, did I forget to mention, it's free.

You get the data here. Do with it as you will. Don't cry when you lose!

Better luck tomorrow.

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