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 ()


Frontal Labottleme
Aug 9, 2011 - 10:12am

F*#k the dragons...

I prefer monsters! Another box of eagles might be in order at these prices - could be our last chance? If they keep the boot on Ag prices eventually it will happen: the paper price and physical price will diverge completely and supply will dry up.

Aug 9, 2011 - 10:13am

ewc58, yes, but poop?

"Things keep going this way, you and I will be hanging out on some FEMA camp just for posting stories and thoughts like these. But I'll be dipped in shit if I'm going to stop. I will sooner die on my feet than live on my knees."

Believe me, I've considered that. But who will stand up? The way I see it, we have to stand against evil, no matter what comes. But we should stand and speak truth with peacefulness, never in violence. If we resort to violence in this country we invite Marshall Law and all sorts of blatant tyranny. Watch London for a prequel.

So, I'm with you... all except for the dipping in poop. I'll go for bamboo under the fingernails, waterboarding, electric shock and beatings rather than the poop dip. If those don't work, they'll probably resort to torture. :)

Frontal Labottleme
Aug 9, 2011 - 10:20am
Aug 9, 2011 - 10:25am

Silver support @ 37.60

Could be the launch pad @ 37.60 Interestingly enough, this area that silver is hanging out in 37.80 level is the 50% fib retracement level from the last low to the peak @ 42.29. The 61.8 fib level extends down to 36.88, which if that level is breached wold indicate a failed rally from 33.50 to 42.29.

I use these fib levels to tell me where a pullback is still a pullback and not a failure of a move.

Aug 9, 2011 - 10:26am


I just experienced what you just described in my options account with SLW calls about 20-30 minutes ago. I've never seen anything like it.

Up over $5500 and down $450 in a blink, literally. It'll come back if not today then some other day soon because there are sparks and smoke coming out of the system or comex maybe. I have to look at it like a half full glass right now because I'm a little shell shocked from that electronic HFT type turnaround I just saw.

If I would have opened my account a minute or two later I wouldn't really know the difference right now. I do realize that if I would have had a sell order ready when it spiked hard like that it would have sold (hopefully) and I would have made some money back. But I never would have set the sell price that high (over %100) so I would have gotten less but at least something.

A classic woulda, coulda, shoulda. The best part is it will happen again at some point and be sustained. We're getting closer to that.

Sit tight and be right and eventually they'll soar like a kite.

TitanAe Violent Rhetoric
Aug 9, 2011 - 10:28am

Violent ???

Your looking for a pullback ???? What do you call the last 2 weeks ??

Element 47
Aug 9, 2011 - 10:31am


Now here is the bounce. The only asset left behind is silver.

Dakini Throwing Sliver Hammers
Aug 9, 2011 - 10:35am

Great Vid Throwing Silver (Collapse Explained in 3 mins)

Great Vid Throwing Silver - I sent that out to be Distribution list!

Aug 9, 2011 - 10:36am


I wasn't able to fill my USO calls today. Bank transfer from yesterday didn't take place yet so I'm stuck another day.

I watched crude last night and when it bounced off $75 my jaw kind of dropped a bit wishing I had the opportunity to buy right then. I remembered our conversation and I was sure you were thinking the same thing at that point. Damn!

The worst thing about options is they don't trade pre or post market and your stuck until it opens and they just mess with the underlying commodity to skew the whole thing. You just can't be responsive until it opens and they know most people are almost itching at the beginning to trade and they use that investor psychology against us whenever possible. (can you tell I'm a little bitter about my SLW experience this a.m.?)

Aug 9, 2011 - 10:36am

IF QE is coming later on with

IF QE is coming later on with Berny boy, be ready for Gold 1850 and silver 45 ! Either way gold is gona go up.

Aug 9, 2011 - 10:42am

GTC in full effect

You should have super duper wooper gtc stink ass bids on all trading positions ( buys and sells)to possibly catch this volatility IF that is what is happening. I learned this from the flash crash.

Aug 9, 2011 - 10:44am
silver foil hat
Aug 9, 2011 - 10:47am

Re; The world's most fraudulent man clears his schedule

How many different ways can you say "blah, blah, blah"?

Here's a transcript of the speech he was going to give released earlier today:

We are the USA.

GO TEAM! (praising the military)

I am talking with industry to create jobs. Jobs = good.

Same as the previous 7 times.

Aug 9, 2011 - 10:53am


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