Because I Said So

Mon, Aug 8, 2011 - 3:34pm

Just when world markets were seeking assurance, our esteemed and supremely qualified leader uttered this:

"Markets will rise and fall, but this is the United States of America. No matter what some agency may say, we have always been and always will be a triple-A country," Obama said.

Nothing quite like living in FantasyLand. I hear it's particularly beautiful at this time of year.

How are you feeling about your gold and silver today? Let's see...Dow is down 506. The S&P is down 66. Crude's at $80. Copper and the grains have been pummeled. I know that silver is pissing you off but, considering the absolute demolition of everything that isn't gold, you should actually feel pretty good about it.

Speaking of silver, here's a 2-hour chart. When the selling of everything finally relents, silver will rally sharply. It will carry through 40.40 and it will move rapidly toward the highs of last week near $42.

However, gold is your clear, hands-down winner on the day. I have a last of $1714, up an amazing $62. There's more to come, too. First up, here's your 2-hour chart. It shows another "stair" higher.

More significantly, I've tried to recreate Trader Dan's weekly chart. Notice the clear breakout of the three-year channel. If it can hold in this area and extend gains...and it's hard to see why it wouldn't...a breakout of this magnitude is extraordinarily bullish. I can see why JPM came out with their "$2500 gold by year end" prediction today.

Three years is an awful long time so we must be careful. Gold could easily fall back into the channel and give us a "false breakout". However, the fundos are so strong at present that it may very well stay up and begin a rapidly accelerating extension higher. Watch this very closely as we may be about to be given a once-in-a-decade opportunity to make big fiat, real fast.

Lastly, I did switch a few things around today in order to take maximum advantage of what I see coming. In silver, I eliminated my Sep spreads and am now simply long the $42 calls. In gold, I dumped my October 1700 vs 1800 spreads and went long just the straight 1800 calls. I'm still long my December 1700 vs 1800 spreads, though.

Thanks to all who entered the new contest. If you haven't entered yet, you must pick the Comex closing price for this coming Friday in the September11 gold contract. Use the previous thread to post your guess. No entries submitted later than 5:00 EDT today will be accepted. Btw, if someone has a few extra minutes, would you please help The Turd by compiling all of the entries onto a spreadsheet? Thanks in advance to anyone who can help.

That's it for now. Keep the faith! TF

5:10 pm EDT UPDATE:

As the Globex closes, gold is back to $1722. I can't imagine that it won't make new highs overnight, particularly when Asia is in full swing at around midnight to 2:00 am EDT. For your comic relief, I present below something I just received from a friend. It's the opening paragraph of a "SPECIAL BULLETIN", just released by MSSB. What absolute fools these people are. They can't even spell "committee" correctly! If you are currently working with a traditionally-trained "financial advisor"....well, you know what they say about a fool and his money.

Latest Report from the Global Investment Policy Comittee: Downgrade .

GIC Special Bulletin: Impact of US Credit Downgrade on Markets

Applegate, Jeffrey – Morgan Stanley Smith Barney

August 8, 2011 6:37 PM GMT

The downgrade of US long-term debt by Standard and Poor’s, which is notable politically and historically, is having a prompt and negative short term effect on global financial markets. However, the next stop is not a recession—nor is it a drop in corporate profits. This a split decision on ratings, as the other two major ratings agencies, Moody’s and Fitch, have maintained their respective top-drawer ratings for US debt. As this latest sell-off abates, expect the markets to refocus on the fundamentals: an intact global business-cycle expansion that in our view, should deliver double-digit profit-growth into 2012. Our base case remains that a US economic rebound will occur in the second half of this year and that European policymakers will eventually be forced to take more decisive action to stabilize their debt markets and the euro.

11:25 pm EDT UPDATE:

These late nights are wiping me out. Holy cow, gold is up another $42 as I type at $1755! The S&P is down 28. Crude is down another $4. The grains and copper are getting smoked. At least silver is hanging in there at 39.12.

Two things. Watch gold overnight. Santa's number of the final frontier is 1764. For whatever reason, his numbers usually pan out and he's maintained for weeks that 1764 would be defended by The Cartel. In silver, watch this triangle play out. Silver could collapse through 38.50 and head toward 37 but I doubt it. I expect silver to instead charge through the down-sloping line overnight and begin heading higher. We'll see. Anything can happen. Have a great overnight. See you in the a.m. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 8, 2011 - 10:07pm

5% rule

that is how i play this frustrating miners game...of course after i am aLL phyZZ'ed out. so before the market opened i had stink bids in at 5 and 10% on aLL my holdings....most were fiLLed today...thinking we wiLL get another down day until the QEIII comes out in the afternOOn. lets hope we get some help sOOn. HL, SVN, SLW etc. etc. geTTing kiLLed. goTTa BTFD!!! AU just poPPed 1740 and AG stiLL under 39....hMMMMMM

Aug 8, 2011 - 10:08pm

Is Nothing Sacred??

The ONLY commodities up right now is GOLD and LEAN HOGS. I have lots of gold, but also lots of silver, energy, and agriculture. Please make it stop......

Oh, A also have a chunk of TBT as well......waaaahhhhhhh!!!!!

Kumanari stoneeh
Aug 8, 2011 - 10:09pm

Markus has words of wisdom

Markus has words of wisdom today, your no downer your real. You are correct. I too will continue to drink upstream from the terd.

Dr G
Aug 8, 2011 - 10:09pm


Nothing to worry about with oil. It's trading at it's common summer number, or at least the number it is at the past 2 years. Look at a USO chart for the past 3 years. You can clearly see it has been at this price last summer and the summer before. Thereafter it marches up to $100 and beyond.

Turdle GG
Aug 8, 2011 - 10:10pm
Aug 8, 2011 - 10:11pm

Gold buyers globally swamping the EE

Gold buyers globally are swamping the EE's capacity to cap the price such as we have seen with nearly 100% control in the past. Two trading days where gold closes over 2% is unprecedented. How long this continues depends upon how long and deep this market contraction is sustained. We are clearly in the midst of a global market meltdown. All are advised to use extreme caution. Buy silver and sit on it, it's a bargain as we have not even entered the season where it shines the best. Yes, there may be a dip from here, but who really knows. We have only the FMOC meeting hurdle to overcome tomorrow.

s1lentslayer stoneeh
Aug 8, 2011 - 10:11pm

That has me scared too

That has me scared too stoneeh. I'm worried we'll get a triple digit drop.

Aug 8, 2011 - 10:11pm

Thank you Kumanari. Way to

Thank you Kumanari. Way to go.

- Markus

Tom L stoneeh
Aug 8, 2011 - 10:13pm

@Markus and Crude/Silver

Commodities are getting sold with the stock markets on the 'deflation' trade. Without a QE announcement from the Fed and the markets all reeling everything that could be considered an industrial input is going to get sold and moved to cash to wait out the instability.

Gold is now trading like cash. Where will the pullback happen? I don't know. But right now anything is possible as people are grasping at perceived lifeboats, US bonds and Gold.

Silver won't move as a monetary unit until the markets stop dropping. Just hope it holds in this area as that would affirm that it is partially trading as a currency, just not enough to allow the price to rise. It looks rangebound now between 38 and 39.50. That's ok by me given that the markets sold off hard and it has not broken down technically in any significant way.

Crude is a proxy for future economic activity. Of course it's getting sold into this. I'm nibbling on cheap calls into this slaughter. Never thought I'd get PGH at $10 ever again. Wooo! $0.07CAD/month divvies on sale 30% off people. Lovin' it.


Aug 8, 2011 - 10:19pm
Aug 8, 2011 - 10:22pm


Yes it is fun to watch gold lifting off and our stack becoming valuable. One problem is that only 2% of us have any. The middle class is not fearful about the blastoff of metals but their concern is how to buy food, insurance, power, water bills, house payments, and the huge credit cards payments. The town I grew up in should have been named "Poverty Alley". In those days, many families had eight to fourteen kids and everything was hand me downs. (For you under 50, ask your grandparents what that means). The only action in town was when they formed a Boy's Scout troop and we all joined. Once a month they would take the whole troop to a high school swimming pool about 30 miles away. Things went O.K. until after the swimming was over. A few kids had parents with a job and they had a few coins in their pockets. They would head over to the 5 cent candy machines and the rest of us just watched. Those were tough days and I'm starting to have those old feelings in these old bones for the masses of the hungry of our nation. The wife ,kids, and grandkids have been helping at the local food bank for a long time and that is where one will see the real growing need. Let us not become like the greedy banksters that got us into this mess but remember where we came from. Some times when we are putting in the coins, it is good to look around at the needs of others and meet their need also. Now that is true wealth. jmo

Aug 8, 2011 - 10:22pm

Crude will rebound

Some flimsy inventory number or some war threat or headline will cause it go back up. Whatever it takes for "them" to profit from these crazy price swings. There's a lot of room for the price to swing at this rate.

As soon as a little money gets freed up in my option account tomorrow I'm buying some dirt cheap USO calls out into Jan 12'. Oil will be back over $100 before you know it. Especially if a lot more money printing and asset purchases/bond buying takes place in Europe and then over here.

Inflation will make it happen and if that doesn't do it by itself then increased Chinese and Indian demand will.

Yooper Rick
Aug 8, 2011 - 10:23pm
Aug 8, 2011 - 10:28pm

$1748.80 Wow.

$1748.80 Wow.

Aug 8, 2011 - 10:30pm

Good one!

Got a kick out of the lyrics after the weekend we just had!

When i heard it at work I knew I had to post for ya Dark Purp!

Jimmy Page & Robert Plant - Gallows Pole
Aug 8, 2011 - 10:30pm


What do you have in mind for a strike price?

Aug 8, 2011 - 10:37pm


My inner radar is going off like crazy to stay out of gold and focus only on silver. When the 'smack down; came last April/May, I stopped buying silver 5 days prior and exited everything, cuz that radar was going off at warp speed. Needless to say, I didn't lose anything. Everyone be careful, something and someone is up to no good. Focus on silver that is what they are trying to take our focus off of.

Just remember everyone laughed at Noah for building that silly Ark.... in the middle of the desert.... during a drought...... It wasn't very long before they ALL stopped laughing.

Keep stacking physical,

build your ARK,

a massive storm is brewing.

Violent Rhetoric
Aug 8, 2011 - 10:38pm

oh boy


Aug 8, 2011 - 10:39pm

Turk just hit the nail on the head on every subject here, must read imo.

- Markus

Aug 8, 2011 - 10:39pm

War in MENA? Consider the message...

...and not the messanger. Good stuff to at least consider.

Video unavailable
Awake stoneeh
Aug 8, 2011 - 10:39pm

"Buying here is buying high, and you don't buy high"

"IF you and me are wrong and the CCC as Turd calls them aren't trying to trick us into selling silver and buying gold and margin changes aren't coming (or at least not for a while), gold has still gone straight up for a couple of weeks now. Things don't go straight up. Buying here is buying high, and you don't buy high. This is not the time to enter (not trying to time the market but hey, this is obvious ain't it?). "

Agreed!! This all just feels very familiar to me. I remember the silver perma bulls in April calling for $100.00 silver by September, and stating "This time it's different!!" and then came the CME hammer.

It's not that I don't think that eventually gold will prevail as the preserver of wealth. It's more that I've become wary of the cartel's arsenal of weapons, and the CME current margin rate on gold appears to be a massive nuclear bomb that they are just waiting for the perfect time to drop.

Not trying to down the enthusiasm on gold, just apprehensive about the bomb I see.

Turdle GG
Aug 8, 2011 - 10:40pm

Early indicator for US/Canadian miners on Tuesday?

About this time yesterday I bought some shares of Newcrest (Australia's biggest gold miner) because AUD gold was up 4% and Newcrest was down 1% or so.

It didn't work. Today, AUD gold is up 3.5%% and Newcrest is down 2%.

If gold miners are going to start to perform then it's investors/traders in Europe and North America who are collectively going to have to bid them up, because no-one wants to do so in this part of the world.

TheGoodDoctor Violent Rhetoric
Aug 8, 2011 - 10:43pm

@Violent Rhetoric They don't

@Violent Rhetoric They don't even open for another 4.5 hours!!!!!!!!

Aug 8, 2011 - 10:46pm

The Prez was correct for once

The U.S. does have a triple A rating !

1. Obama= Ass Clown

2. Congress = Ass Clowns

3. Treasury = Ass Clowns

Thats a triple A rating that can not be down graded.

Aug 8, 2011 - 10:47pm


The $45 and $50 calls look cheap and pretty reasonable. approx. 10 -15 cents a contract

And those prices don't even reflect the beatdown thats going to happen further tomorrow once the market opens. All they need to do at those prices is go up $.05- .10 cents and it's a solid gain.

My problem is that I tend to stay in too long and let things ride and I get stuck. This last beat down in May taught me alot. (i hope)

Aug 8, 2011 - 10:47pm

Miners need to act

I have been thinking that gold producers should be selling some future production into futures market and locking in their future energy needs for example diesel contracts.

Violent Rhetoric TheGoodDoctor
Aug 8, 2011 - 10:48pm

@ Good Doc That was FTSE futures off the Bloomberg terminal

That was FTSE futures off the Bloomberg terminal

It scrolled across as a red headline. Now -364 -7.172%

FTSE 100 Index Futures / Underlying Index: UKX Index / BB Ticker Z U1 Index

Other futures of note...

Dow -253 -2.35%

S&P -26 -2.34

NASDAQ -50.25 -2.466%

Aug 8, 2011 - 10:49pm

Thank you

DPH that is what I had in mind, was just seeing if we were on the same page.


Violent Rhetoric
Aug 8, 2011 - 10:51pm

off to bed. good night to all

off to bed. good night to all and good luck

Aug 8, 2011 - 10:51pm

I was wrong

I bet my cousin we'd breach the new debt ceiling next summer, in time for the elections:

Because according to the once again exponentially increasing debt balance of the US Treasury (there is another $51 billion in debt/cash coming in next week), the total US treasury balance (subject to the ceiling) is $14.54 trillion (and $14.58 trillion for total), an increase of $20 billion overnight, the Treasury will hit its latest ceiling no later than the end of September. As the latest DTS statement indicates, the debt ceiling now is $14.694 trillion: a number which Tim Geithner will hit in about a month.


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