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

Spinny
Jun 23, 2011 - 6:02pm

Today is the

Today is the maddest/discouraged I have been yet since I started trading. The shittiest news possible comes out, our economy is going down the shitter and the markets ralley. I feel like throwing my hands in the air and giving up.

What will make equities come down? Anyone? Will they fall next week. Should I cut my big losses and get out now only to watch everything plunge? Someone please help a young trader out. My emotions are getting to me and I'm doing stupid things.

I am short the russel 2000. And expect to get killed again tomorrow since it is rebalancing day. I guess the means since I am sure it will go up it will probably tank. Which is why Im still in. I don't know up from down anymore. Nothing makes sense. When will gravity take over again????

zenith191 Agophillic
Jun 23, 2011 - 6:07pm

Silver is not gold.

Silver is not gold. Forget silver. Central banks hold gold, not silver. There is no silver shortage. Comex represents a fraction of the silver market. The silver is being transferred out of the Comex and stored in London so it looks like there is a shortage. JPM is actually long silver, not short it. You cannot see all their books. They are fooling you.

GSFL
Jun 23, 2011 - 6:08pm

Wrong, wrong, wrong

There is absolutely no use in trying to call this market at this time. Technical analysis will fail, fundamentals will fail, and those who try will fail. Too much happening too fast and too far reaching. Corruption, collusion, fear and greed have gone wild and it's every crook for himself.

I am going to watch, pick my spots, and let the market give me what it will. Over the last couple of days I have made some good money playing small and quick, taking the gains and adding to my cores.

As Santa has stated, nothing has changed. Stop worrying about today and prepare for tomorrow because we all know where this is going.

SilverDosed
Jun 23, 2011 - 6:09pm

Stacking

Thanks for the discount on my silver today big brother. Picked up some pretty cool stuff, a couple fat 20 crown pieces, some peace and morgan dollars, and my favorite of all coins, a big stack of Maria Theresa Thalers. Still saving plenty of dry powder though. I'd love the shorts to get it down below 33 and then the mother of all short squeezes right behind it, a short squeeze that makes april look sideways. Do I think its actually gonna happen? Probably not, but I always save a little dry powder just in case.

A warning I got from my coin guy today, he said state and local LEO have been told to crack down on tax-free bullion. It is apparently illegal to buy silver bullion online and have it shipped to you without paying state taxes. How are they gonna enforce this, I dont know, but he was given a stern warning not to sell silver for cash without charging tax. Then he sold me silver for cash without charging tax, lulz. I dont know if this means anything but felt like it was worth sharing.

Sterling
Jun 23, 2011 - 6:11pm

Do not feed the troll

Do not feed the troll

kliguy38
Jun 23, 2011 - 6:14pm

NICE ACTION FORMING IN SEVERAL MINERS

I hold a large basket of Miners. and follow some closer than others for technical signs of life. Most of these positions were zeroed out a few months ago after the jan feb run up...now I am finally back into some of my favs. ANV is one I follow and noticed a big volume turn at the recent bottom with large green follow up candles. GPL is interesting in that it is above its 50 and held today. I'm seeing higher higs in several with big boyz coming back in. It could be a choppy trade this summer but I am very suspicious we MAY have seen the bottom in miners ....Watch the $HUI for higher highs and higher lows....there are a number of inverse HnS formations in many of these miners so gl to you if you are playing them.

Exergy
Jun 23, 2011 - 6:26pm

Summer Time Summer Time

Let's recap what we do know:

The Bull trends for precious metals are intact.

The Bear Trend is intact for the USD/POSX.

Inflation is rising but currently is under-reported in the USA but clear, present and substantial in the rest of the ENTIRE world except for maybe Canada that saw it's currency rise 25% in the last 2 years muting the effects until now (but watches it's currency rise/fall a penny for every $10 change in the price of oil).

What we don't know is what the EE,Cartel,Banksters,Boyz plans for the next few weeks... basically what I hear Turd saying that that short term pattern's are broken and there is too much chaotic activity to sense short term trends to reliably trade off of them.

so what.....

Buy unleverged physical on any dips... prepare for an explosive summer... but hope for a dull one.

Remember the rules of the Bankster game are to take away your gold and silver bullion and stocks and get you to think they are not valuable when they and the rest of their commodity cousins are the only thing that are valuable because they are real. (forget land at this point in most areas)...

Gold and Silver function in a special way in that you can by bushels of wheat for Gold or Silver..but not Gold and Silver with bushels of wheat....YET.

The ECB is leveraged so badly that a 4.25% haircut on their "assets" would wipe out ALL their capital. Ireland just had a default event, Greece CAN'T pay their bills even if they get the loans, Spains real estate assets look like Japan's 15 years ago when the Emperor"s palace was valued at more than the entire value of all the real estate in the USA...Portugal ditto and now Belgium says half their sovereign gold reserves have been leased out. The hidden question in this great game of "economic bugger your neighbour" is just who has a Credit Default Swap for what and backed by whom...kinda like not knowing who has AID's and who has a rubber while at a swinger's resort and you can"t find out unless they tell you or until AFTER you do the deed... (sorry could not resist that even though it's really bad)

The Fed is leveraged so badly that it would only take a 2.5% haircut on their assets to wipe out all their capital.

Both are holding "assets" that are marked to market so clearly they must be worth what the book says ...right. plus Fannie, Freddie, AIG, GM, Toxic paper, 600B out to foreign banks under Qe2 etc etc.

China has liquidity problems and India is overheating.

For all our sakes...I hope it's a dull summer and we can enjoy some fun in the sun before this house of cards collapses from all the shaking going on!

The game here is to survive first... get wealthy second.

Let's all look around the dinner table tonight and be thankful we are still in the game and remind ourselves WE are the 1% that are preparing!

awaecha
Jun 23, 2011 - 6:27pm

DO NOT GIVE UP ON THE SUMMER RALLY YET

Santa's Angel of 1521 is HOLDING, Gold Miners look the best they have in weeks.

Monedas
Jun 23, 2011 - 6:42pm

No Summer Doldrums ! Think Summer Trade Winds !

In 40 years of modest hoarding.......I've never heard so much buzz about the PM's ! The world financial predicament has never been so obvious ! I hear from new converts everyday ! I'm excited ! I feel like the spot light is on us hoarders ! The Hunt brothers never got this much attention ! Victory is here......I can taste it ! Rejoice ! I smell the vegetation of the promised land, the coconuts, the girls in grass skirts, the rustle of the palm fronds swaying in the Summer Trade Winds ! Monedas 2011

ginger
Jun 23, 2011 - 6:47pm

Monedas, Are you afrum in

Monedas,

Are you afrum in disguise??...

lol.. I love your posts.

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