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

ginger
Jun 23, 2011 - 6:51pm

Why has everyone assumed that

Why has everyone assumed that the only way to play this is short term? Whether or not TF is right or Santa and Turk are right about the shorter term, they ALL seem to agree about the longer term out 6 months from now. ...I'm confused as to why we all aren't enthusiastic about long NTM calls in gold & silver. As my buddy kumanari has told me more than once 'Buy time right now...you won't regret it'.

With his words ringing in my ears the past several days I went long on some UXG Nov11 7.50 calls. I'm not sure this was long enough however and am thinking of going for some Jan12 or longer UXG.

Which brings me to my 2nd point here. Is there currently an ongoing discussion in any of the forums for options traders? I've looked around but haven't stumbled on it yet. I would really love to brainstorm some good potential miner call options. OldNavy spoke of this some weeks back in a discussion about what to buy when SLV call options no longer seemed to be a good bet. I haven't seen OldNavy around though (I miss him!). ......Anyone got any good ideas for silver/gold miner call options they want to share...or direct me to a forum thread? EGO? EXK? UXG? GPL? ....heck.. just about any of the good solid miners might be a good bet for calls.

Spinny
Jun 23, 2011 - 6:53pm

Exergy said, "the game is to

Exergy said, "the game is to survive first, get wealthy second"

Worth a hat tip.

tmosley
Jun 23, 2011 - 6:57pm

lol, looks like we have our

lol, looks like we have our first troll.

I'm surprised it took this long.

NCdirtdigger Richard Booze
Jun 23, 2011 - 7:00pm

You're looking for 'Turdisms'

Check out the tabs across the top of the page, Home, About, Blog, Chat, Forums, Turdisms etc.

Turdisms is a collection of definitions of the acronyms.

ewc58
Jun 23, 2011 - 7:01pm

I fear that larger events

could easily intervene during the same interval Turd. This cannot be overlooked. Things will not unwind in a predictable manner in the Summer of 11. Something big is going to break, or go boom. Somewhere, soon. Not a prediction, just a very unpleasant hunch. I think many feel something similar.

So yeah, buy phyzz. With some urgency.

Big Buffalo
Jun 23, 2011 - 7:11pm

Happy Days...

Sorry to those that didn't do well in today's market.

I, for one, am very happy. If the charts and Turd are correct and Gold is swinging 1470-1550...i'm a buyer of some gold coins under 1500. Personally, i just had a fantastic week in my business and made a crap load of frn's and i'm looking forward to getting some shiney's.

I think some American Buffalo's, a couple Eagles (kinda boring though), and bunch of British Sovereign (they just look cool).

Question for those holding physical:

What are some of your favorites for gold?

and Silver? Does anyone have Golden State Mint 1/2oz .999 Morgan BU Silver Rounds or the 1 oz .999 Buffalo BU Silver Rounds? How do you like them?

Mickey bullwhip29
Jun 23, 2011 - 7:11pm

The manipulation

We cannot underestimate the effect of the games. Remebr this mornings SPR which took down the markets ESP commodities. The Ron Paul hearing (what happened) The debt ceiling walk out (political) You name it. How can TA work when the .pressure is put on? Remember, we cannot have qe next until the debt ceiling is increase because the treasury cannot issue new bonds due to current debt ceiling. But it can defer payments to say retirement plans or vendors, which is what states like Illinois have done with litle success. In a word, we are FUBAR, and it's better to protect yourself before the event than after the event.

Kumanari ginger
Jun 23, 2011 - 7:14pm

Drink upsteam from the herd

As' how Ginger, never mind everyone else group think will get you everytime.

bought gdxj 40 nov calls mon sold yesterday for 35% bought back this am at -8% from original stiil holding 44,45 jan. plus 10,12.5 uxg jan Buy time . Plus doing calender spread oct 1475 put vs dec 1700 call. Go with the trend, long term bull, short term NO ONE knows I distill Santa, Turk, and Turd then USE MY BRAIN & BROKER. Sometimes it pays to pay. Remember Turd is very good but he has his distractions, he has a life, yogurt, kids, wife,gin,golf. Don't expect him to be as good as when he did this full time. When you watch this crap all day it can cloud your thought process, I appreciate his honesty in relating his confusion. I don't care how confused or confident he or anyone else is, all that matters is my state of mind and how I respond to price. With that in mind I go take my dad to the beach. A hui hou malama pono.

deadcatbounce
Jun 23, 2011 - 7:15pm

get a load of this...

Another crack in the armor of Keynesianism. Professor Robert Mundell is the world’s most distinguished Economist, fuck Krugman. He is a Nobel Economics Laureate and founder of the euro, and is urging gold convertibility for the Euro and the dollar. Read this article from Forbes about Mundell’s idea for a new Bretton Woods style “multilateral convertibility of currencies to gold”. Must read..

https://blogs.forbes.com/ralphbenko/2011/06/13/the-emerging-new-monetarism-gold-convertibility-to-save-the-euro/

Peace

Rui
Jun 23, 2011 - 7:22pm

My favorite PHYZZ

Reply to thanh

Maples, ASE and Perth Mint(kinda expensive tho). 97% of my PHYZZ are official minted products. 92% are 1-oz coins. A few 5-oz rounds and 10-oz bars. Don't have nothing above 10-oz b/c of liquidity issues.

zman ginger
Jun 23, 2011 - 7:22pm

options

Yes, where is the place to discuss options? I just bought a call option on HL Jan. 2012 9 strike, looks silly cheap for sure, one can even buy Jan.2013 options as well, that's over 18 months of great leverage!!!! If we are all bulls on the miners in the next 6-18 months, why not crank up the leverage? In fact, we can buy options even on low market caps stocks such as AXU, GPL, EXK, RVM, and of coarse GDXJ.

mauee
Jun 23, 2011 - 7:23pm

July PMs WILL SURPRISE To The Upside

The registered CRIMEX Silver inventory now rests at 27.72 million oz ...an all time low. Silver Open Interest in the front silver delivery month of July at the open today was 33,656. These contracts, at 5000 ounces each, is the equivalent of 168.28 MILLION ounces of Silver. First Notice Day of intent to take delivery of a July Silver contract is June 30th. Ray Charles is phoning in the supply versus demand shortfall to the CFTC as I type this.

Dumping Oil on a market that is NOT in short supply to "save the economy" by lowering gas prices, is just one more "trick in the bag" to stifle the commodity markets and silence the Gold and Silver canaries. It too shall fail.

Do not be surprised to see $1600 Gold, and $45 Silver in July. Seasonally, Gold and Silver, on average, close higher in July, fade in August, and launch in September. Why should this year be any different? What we have just witnessed in Silver in May, and so far into June, is "seasonally accurate". On "average" Gold "double dips" in June and bottoms for the summer the first week of July. Why should this year be any different? If anything, Silver and Gold will perform "above average" from July 5th forward.

Turd's Bottom is safe down to $1475 in Gold. A weekly close above $1518 should set the stage for an above average Summer in Gold. Silver would have to close below $33.75 to justify breaking a sweat ...and you'd be backing the truck up at $31 if it did.

Hey, if you think Silver and Gold are going to double or triple from today's levels, why all the worry? Just buy some, or buy some more, and quit whining. Silver under $38 an ounce is going to look like a robbery by the time Christmas 2011 rolls around.

650 Years of Silver Prices
This is a 650 year graph of silver prices and silver/gold ratio.
[Silver is cheaper today than you can even imagine!]

NW VIEW
Jun 23, 2011 - 7:27pm
146

DON'T LOOK A GIFT HORSE IN THE MOUTH !!!!!!

I'm not talking about buying metals on the dips but about the time and effort Mr.T.F. has placed into this site. When a person gives us free talent that few have and we still display a lack of thankfulness, then he may want his horse back and will take it to the barn. I for one, took his advise one day and did not make a cent but saved $8000 on a trade by getting out of the stock before it crashed. (Thanks T.F.) . I have paid for two other sites and this one is better and I will not want to renew the old ones again (Thanks T.F.). Many professionals really do not have great insight to their markets but T.F. stands alone and his is FREE (Thanks T.F.) . Lastly, if the prices of metals and stocks that are bouncing up and down all day controls our life, then it is time to ponder what this life is all about. Stack up your metals, buy a bit of miners, go to your kids/grandkids ball games, love your spouse, pray for the nation. j.m.o.

Rui zman
Jun 23, 2011 - 7:32pm

The thing w/ options

... is if you fail to time it at the exact uptrend you are in for a butcher.

Seacap81
Jun 23, 2011 - 7:55pm

I'm not a trader, at least

I'm not a trader, at least not anymore. I'm only an observer. But how does anyone trade in this environment with any amount of conviction when they can throw a headline out at any given time - "GREECE AGREES TO AUSTERITY" - and it moves markets, moves currencies, moves commodities, the shorts and longs take immediate cover sending prices violently in one direction or another. Or how about this one - "THE STRATEGIC PETROLEUM RESERVE WILL SELL 30 MILLION BARRELS OF OIL." This crap comes right out of left field and again moves markets violently. Whether a trader trades on fundamentals or technicals, no one can escape the damage created by these types of headlines. Here's another today, albeit political, "Rep Eric Cantor and Senator Jon Kyl walk away from budget talks with Joe Biden." This moves markets and no one can anticipate them. These headlines are becoming more and more earth shattering each day. So why bother with trading of any kind, you are only there to be sheared by greater powers, greater money, and I don't think I'm going out on a limb to assume these powers have these headlines already traded before they hit the wires. Don't be fooled, we are all sheep for the shearing. The sooner we recognize this fact the more peace in our lives we will retain because we can all turn the tables on these bastards and bring our precious metals into the new currency at some given point. Just stack and be done with it. Don't be meat for the wolves!

I used to watch FAST MONEY on CNBC when they had Jeff Macke on the panel. Macke was the kind of guy us realists here on Turds forum could sit down and drink some beers and shoot the shiola with. He spoke the truth. Anyway, a few years ago he had gotten very agitated with the markets and how things changed daily with respect to new rules, the bailouts, Fed intervention, just all the nonsense. He couldn't make heads or tails with his trades he put on because of constant change. He said if the crap kept up and the rules kept changing in the middle of the game traders would just eventually take their ball (money) and go home. Sound advice for us all. We have long passed the point Macke was referring to.

I can recommend one stock to buy, it's ticker is STFO. It's called STAY THE F@$K OUT!!!

SRV - ES339
Jun 23, 2011 - 7:59pm

Not About Silver (or Gold)

I for one think it's nice to see blatant manipulation in something other than PMs for a change!

Today was all about the oil reserve move, which will last about a day or two and is much more visible to the general public... maybe they'll begin to understand how much the financial world is controlled... they needed lower oil prices and they got it. Everything else was sold off to meet margin calls, and the market did the rest with the negative momentum.

A good time to buy some silver (straight up, no margin)... I did.

Dimeboy
Jun 23, 2011 - 8:26pm

Junk for me

I'm with the 90% crew, especially the dimes (what a surprise!)

Dimes are universally recognized, they have the lowest premium per ounce (right now) and the lowest denomination, they are too small to be realistically counterfeited (like dollars), they are easy to spend if necessary without having to flash too much silver and you don't need change - it is change.

And - they are not making any more. (unlike Doritos)

I've always got a few sacks of silver dimes and if the SHTF, or we get TEOTWATKI, I'll likely be making change for ASE and Maple holders (for a small premium, of course) /:^)

I've been accumulating Ag for a long time and I still can't think of a better way to stack phys than dimes!

surfeitndearth
Jun 23, 2011 - 8:34pm

MOPE

Propaganda is the dissemination of information aimed at influencing the opinions or behaviors of large numbers of people. As opposed to impartially providing information, propaganda in its most basic sense presents information in order to influence its audience. Propaganda often presents facts selectively (thus lying by omission) to encourage a particular synthesis, or gives loaded messages in order to produce an emotional rather than rational response to the information presented. The desired result is a change of the cognitive narrative of the subject in the target audience to further a political agenda. Propaganda is the deliberate, systematic attempt to shape perceptions, manipulate cognitions, and direct behavior to achieve a response that furthers the desired intent of the propagandist.

surfeitndearth
Jun 23, 2011 - 8:40pm

re: MOPE

Forgot to include that the definition of 'propaganda' is from Propaganda and Persuasion by Garth Jowett and Victoria O'Donnell.

Monedas ginger
Jun 23, 2011 - 8:44pm

Afrum ?

Afrum ? I guess not.....what is an Afrum ? Afro ? In disguise ? How do put you the winky face on your posts ? Thanks for liking my posts ! A kind word and I go to pieces ! Oh, I get it ! Afrum was another poster before my time ? I'm just a second hand afrum ? I've never posted under another name but I am banned on the Kitco Fora until July 17 at 3:45 PM or something like that ! I post on Zero Hedge ! I hope I've answered your question ! Get back to me when you can ! Monedas 2011 Comedy Jihad World Tour

FriedEggs
Jun 23, 2011 - 8:47pm

Fellow Disgruntled

Fellow Disgruntled Turdites...

Nothing has changed. All the factors since the start that are causing PMs to go higher - are WORSE today for 'them' then they were yesterday. Period.

Was the US National Debt erased? No. Was it worse today then yesterday? Yes.

PIIGS financial troubles wiped out? No. Was it worse today then yesterday? Yes.

Volatile MENA area improving? No. Was it worse today then yesterday? Yes.

Etc...

You need to think from a different angle in order to ease the financial sliver in your brain on markets like today...

Think more logically then emotionally.

Fried(e)


Jun 23, 2011 - 9:17pm

THIS IS EXACTLY RIGHT!

And what I've consistently said. Hmmm...do you think Vanity Fair would ever quote me??

Right now, thanks in large part to Federal Reserve policy, Uncle Sam can borrow at an average cost of just 2.5 percent. The average borrowing cost over the last three decades was 5.7 percent. Our debt is now $14 trillion and scheduled to grow to $25 trillion by the end of the decade. If interest rates normalize over that period the added interest costs in 2021 alone will be $800 billion—more than 20 times the mere $37 billion in budget cuts that tore up Congress in March. It would take virtually all of the cuts in the Ryan budget just to cover that added interest, much less to start bringing down the national debt. Unfortunately, the Fed is now in a fiscal box. A normalization of interest rates would break the Treasury. Hence, a normalization of rates really can't happen—we're stuck in a world in which the Fed must keep rates artificially low in order to prevent a budget disaster.

- Lawrence Lindsey writing in the Weekly Standard June 13, 2001

Eric Original
Jun 23, 2011 - 9:23pm

Thanh

My favorites are British Sovereigns ( they DO look cool!), and old U.S. Double Eagles ($20 gold pieces) just because they are so big, beautiful, and bodacious!

TheGoodDoctor
Jun 23, 2011 - 9:23pm

@Turd Damned if we do, damned

@Turd Damned if we do, damned if we don't. Just like Santa says it is QE(n). It's the only bullet they have left. Unless they devalue the currency by revaluing gold. Really those are the two choices.

Gramp
Jun 23, 2011 - 9:26pm

Perception...      Jumped on

Perception...

Jumped on and read the Latest Blog Entry from Turd before even opening the charts. ( Been w/o access to markets all day) Man, from the 'tone' of the post, I thought the sky was falling, though after opening the charts, things looked acceptable for my comfort level. No big surprise really.

I know, I know, Hind sight is 20/20.

Well, that sucks if you get Stuck on those calls Turd.

The EE is skilled at PP manipulation... :0 ( Price, and Perception)

Keep driving the price down you Fockers... I will stack even more...

OldGlory
Jun 23, 2011 - 9:29pm

silver tree

Amen brother/sister... A song down memory lane puts it into perspective," don't stop believen'' = faith...in my humble opinion. Best post of the year! COL Turd

Darth Smoker Big Buffalo
Jun 23, 2011 - 9:39pm

Thanh

re: Golden State Mint 1/2 oz round. Beautiful Medallion.

I was afraid they would be rough, but were finely struck and finished.

Eric Original
Jun 23, 2011 - 9:42pm

Ginger re:options

Just did a little checking for you. Looks like Jan '12 NGD calls are pretty active. Available in strikes of 10, 11, or 12.50. Look cheap to me. Stock currently 9.98. I'd take a hard look at those.

ginger
Jun 23, 2011 - 9:53pm

kumanari, Thank you as

kumanari, Thank you as always. I'm so glad when you can pull yourself away from those gorgeous beaches and post! ...Your words are always wise. I always re-read you. You have solid advice I need. .........Trade you a NC beach for a HI beach.

zman, yes it would be great if we had an options forum. I would just like to brainstorm some good plays. I think the message I got from kumanari though was that the best little gems might be the oft overlooked gems that maybe not everyone has jumped on yet en masse. That's good advice. We need to be able to seek out the path less traveled perhaps to find the biggest gains. Once a play is overbought and overused.... well.. stands to reason that it would cease to be the BEST play. Much like SLV became. ...SLV might still be a good long term buy but everyone and their brother does that one. I get kumanari's point (At least I hope I do!) ......still, it would be great if TF would give us an options forum so that we could avoid the groupthink together.. ...wait...

monedas, NO!... you are not a 2nd hand afrum!! ...Afrum was/is very unique and so are you (That's a compliment). Your posts are witty and engaging and sometimes I have to re-read to absorb what you said. Same way with afrum. Go back to TF's old blog and do a search for afrum and you will see what I mean. ....A few of us really didn't get afrum at first but he is someone who grows on you. He was very poetic and had a way of making his point while making you smile and yet his posts are sharp as a two-edged sword. I haven't seen him on the new blog here but maybe I just haven't crossed paths with him. I sure hope he isn't gone for good. We would all miss out. ...Glad you are here too. ..And as far as the winky faces are concerned, just look at the thin little tool bar directly on top of the comment box when you are making a post. If you click that smiley face it brings down a whole menu of other facey-expressioned little guys. HTH!

Eric-O, thank you! I was poking around after my post awhile ago and researched NGD actually and a whole bunch of other solid miners. ....Not sure now is the time to be going long these miners.. ...........scratch that.. I'm pretty sure NOW IS THE TIME to be going long these miners!

Eric Original
Jun 23, 2011 - 10:01pm

Mark Fisher oil comments

Mark Fisher is one of the smartest guys around, especially in the oil trading pits. His views are generally sympathetic to those of us here in Turd Town. He was on CNBC today. He comes on at about 3:40 into the video.

https://video.cnbc.com/gallery/?video=3000029360

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Key Economic Events Week of 3/18

3/19 10:00 ET Factory Orders (Jan)
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Key Economic Events Week of 3/11

3/11 8:30 ET Retail Sales (Jan)
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Key Economic Events Week of 3/4

3/5 9:45 ET Markit and ISM services PMIs
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