Silver to $44

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Tue, Aug 9, 2011 - 9:53pm

In the past 24 hours, we can now count four, separate attempts at the 1770 level by the December11 gold contract. We can also count four, immediate Cartel actions to hammer price back down. However, the lows are getting higher and the pressure is mounting. Will the Forces of Evil be able to contain gold through the night and into tomorrow or will they again be forced to retreat to higher ground? I suspect we will know very soon.

Take a look at these three December gold charts. I've tried to draw the same trendline on each. Note the savagery of the beatdowns as gold eclipses 1770. Santa warned us weeks ago that The Cartel also knows that 1764 is a very significant level and will thus defend it vigorously. They have and they are. Will they be successful? You'll know by following the trendline I've drawn and watching the triangle close. If I had to guess, our Asian friends also see this chart pattern and they will make a run at putting the EE into a submission hold later tonight. We'll see. It will be great theater.

paper_8-9latepmgold3.jpgpaper_8-9latepmgoldh.jpg

paper_8-9latepmgold15.jpg

Now, what I really wanted to talk about this evening is silver. I've scoured the internet for the most reliable and accurate analysis of today's events. I of course found it at Trader Dan's site. Please take a moment to read it and then come back. Go ahead, I'll wait.

https://traderdannorcini.blogspot.com/2011/08/s-500-update-us-dollar-sacrificed.html

Ahh, glad you're back. OK, where was I? Oh yea...silver. I've lifted the most important chart that Dan posted and re-printed it below. (Thanks, Dan!)

snapshot-831.jpg

Notice that the CCI has averaged one big drop per month for the past five months. Each drop has lasted from 4-7 trading days and has been followed by a rather significant rally. The current drop just finished its fifth day and, with all of the hubbub from The Fed today, is almost assuredly going to bottom tomorrow if it didn't already bottom today. Anyway, my point is...we're about to see another 2-4 week rally in all of the commodities. Yes, copper, crude and the grains are going to rally. More importantly, I think we can feel very confident that silver is not going much lower, if at all. In fact, I bet we saw the lows today, in the beatdown on the Globex. So, from here, what can we expect? Given that silver rallied almost 25% in July, during the last CCI rally, I think a reasonable target for silver is $44 before Labor Day.

Adding to the ammunition are the utterly amazing OI numbers in silver. The latest numbers are basis Monday and show a total open interest of just over 114,000 contracts. We almost certainly lost a few more today. For perspective, the last time OI was this low was late June...right about the time the CCI bottomed!

So, there you go. I may look like a complete fool by this time tomorrow. Rigged and manipulated markets can do that to you. But, I'm sticking with it. $44 silver by Labor Day.

Have a great evening!! TF

10:05 am EDT UPDATE:

I do not have a new post this morning for two reasons:

1) I want to leave this current post as the "main story" for most of the day.

2) I'm busy watching an epic and breathtaking battle in the Dec11 gold contract.

As I type, our side is winning but just barely. Watch the 1780 level very, very closely. Above there, The Cartel will be forced to give up and retreat to safer ground. It looks almost certain that this is going to happen. As I watch the order flow, the bids are very strong and unrelenting. The chart looks like it's about to squeeze them, too.

paper_8-10amgold15.jpg

I've got a last of 1777. Stay close and keep your fingers crossed! TF

11:50 EDT UPDATE:

The global stampede of investors rushing into the safety of a 6000-year old currency has completely overrun The Cartel's defensive positions between 1770 and 1780. I have a last of 1789 in the Dec11. If headlines don't change in the next six hours, expect explosive gains in the overnight Asian trade, too. Personally, I'm darn glad I took off my spreads yesterday and went "open-ended". Looks like lots of gains to come!

Speaking of which, isn't it great to see silver participating...FINALLY! The chart below was printed before the recent surge through $39. Keep the faith. Silver looks great!

paper_8-10amsilv.jpg

More as conditions dictate. TF

1:05 EDT UPDATE:

30 minutes to go on this historic day. Gold is $20 off its highs but I'm not at all concerned. In fact, the chart below might be one of my all-time favorites. All of the smarty-pant shorts who had faith that their evil Cartel buddies could hold the line at 1780 just got smoked! HAHAHA! Rather predictably, the "market" has given back the $20 it added on the back of the short's pain and that's OK. Nothing has fundamentally changed and its looking more and more likely that we'll head into the overnight session with " a lotta mo", just like Mr T!

Clubber Lang - Best Scenes! (From Rocky III, Mr. T)

paper_8-10amgold3.jpg

Full update soon. TF

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  460 Comments

Jive Dadson bullwhip29 · Aug 10, 2011 - 2:20am

Jive

"Although Trader Dan doesn't mention this specifically, it does jive with what he is saying."

The word is "jibe."

"Jive" is a given name that means "likable genius."

TheGoodDoctor · Aug 10, 2011 - 2:24am

@Jive The square of the

@Jive

The square of the numbers formula from Jesse Livermore is where Santa got that info. Um search for Turk Sinclair and there should be a video from this week. He discusses the numbers. $1764 is where faith in fiat is lost and then the gold price can go parabolic. His other numbers are reached much quicker at that point.

Strongsidejedi maravich44 · Aug 10, 2011 - 2:24am

saying to Maravich

I'm saying that the RMBS and CMBS valuation was not worked out of the world financial system.

Instead of having some integrity and eating it, like they're forcing millions of American citizens to do, these falsely valued contract documents are propping up the accounting sheets of some of these banks.

Moreover, the lack of adjudication on how to proceed is resulting in the situation that California Lawyer is dealing with.

His thread on "show me the note" was really revealing. Because when you juxtapose his "show me the note" litigation with the holding of the RBMS, you can not identify who the real property owner should be. Is it the writer of the original note, or the guy who currently owns the note? If it is promissary note or mortgage note is resold, then it should be the new owner. MERS was supposed to iron that out, but other states are nullifying the role of MERS in the shell game.

This means that the asset line backing Fannie Mae and Freddie Mac are so nebulous that one court case will decide the fate of the GSE's and BAC simultaneously.

Therefore, my guess is that Wynter_Benton's group knows something about these instruments and they're positioning something to coincide with the Super-Congressional committee's deliberations. I also note that this coincides to the time slot between OEX and Futures Expiration. So, that should be a strong dollar week. A strong dollar play would be to blow up a few trillion in fiat paper.

More importantly, the JPMC investment ledger is posting profit on their trading because they're literally "making" the market "they" want. So, they make money in either direction, up or down on any investment they want because there is almost no other party to counter the bid that JPMC wants. If a few trillion in certain papers blow up, then JPMC would not be affected.

This would further strengthen the argument I am making...that JPM Chase could be the replacement for the Federal Reserve Bank if the Federal Reserve Bank were to fail.

Wouldn't the selective default of US Treasuries held by FRBNY do the trick?

Another might be the mark-to-market of the real estate (blows up a few trillion real estate derivatives).

Phantom · Aug 10, 2011 - 2:28am

Shorting MHP

https://www.marketwatch.com/story/law-from-2006-gives-sec-scope-to-probe...

S&P are about to get a little payback from Uncle Sam! 

CNBC and every news organization spoke on the rumor that the downgrade was coming on Friday. Someone even posted it here on tfmetalsreport. Point is, the information was leaked. 

Bottom line, S&P is going to get felt up by the long arm of the law! Time to short MHP.

Phantom

jlee2027 · Aug 10, 2011 - 2:30am

re:Magic Numbers

Jesse Livermore's 1923 formula for Square of the Numbers. Jesse Livermore was the most famous trader of them all.

https://www.youtube.com/watch?v=IF24atvNkSo

TheGoodDoctor · Aug 10, 2011 - 2:35am

@Strongsidejedi Your last

@Strongsidejedi

Your last three sentences there are hard to get my head around. I understand what you say but the outcome of getting there is the problem.

I have thought that one possible "out" is to let the Fed fail. If that is the case then maybe they just buy more bad assets from banks like they did before with the Maiden Lane crap. That to me would be the easiest way out.

Could you extrapolate your mark to market scenario? Thanks.

@jlee2027 Thanks for the vid!

maravich44 Strongsidejedi · Aug 10, 2011 - 2:37am
Strongsidejedi · Aug 10, 2011 - 2:46am

Good Doctor

If the US real estate market was "marked to market" instead of the current phantom "estimate" and "valuation" approach, then the valuation of the secondary mortgages and the home equity lines of credits would likely have to evaporate on any dwelling that has a primary mortgage worth more than the "market" price of the home.

Therefore, any new law that forces financial institutions to "mark real-estate to market" would evaporate huge amounts of debt. Naturally, the banks would be aghast at this type of proposal because it would evaporate their phantom "asset" line. (remember that your debt to the bank is their ASSET).

But, also, the RMBS and CMBS derivative contracts would also be negated. So, hypothetically, if Wells Fargo, Citi, Chase, US Bank, or BAC wrote a bond and sold that RMBS, they were already paid money by the "investing institution". The losses of the loans which were "Marked to Market" would be a write-off to the individual banking institution. That bank would then need to roll that loss to the Federal Reserve Bank via their lending window. The banks would then survive.

However, if the US Congress and POTUS passed a subsequent bill to negate repayment to the FRB of US debt, then the FRB would then be insolvent. That would evaporate huge amounts of US Federal Reserve Notes. The issue would become a power play between FRB printing more or the US Treasury department defaulting on bond payments to the FRB. It makes my head spin and its all just conjucture and war games WOPR at this point.

Strongsidejedi Strongsidejedi · Aug 10, 2011 - 2:50am

HSBC halted in Hong Kong

News on Marketwatch...no sooner were we talking about the banks, but HSBC was just halted in Hong Kong.

HSBC announced that they sold their USA credit card operation to Capital One. So, anybody with a HSBC card is now answering to Capital One.

I'm thinking that HSBC is having some second thoughts about using US credit card debt as an asset.

maravich44 Strongsidejedi · Aug 10, 2011 - 2:56am

@ Strongsidejeti.

? Currency Wars. Just trying to keep up. Years in progress?

Jive Dadson TheGoodDoctor · Aug 10, 2011 - 3:06am

Square of the numbers

Where can I find an explanation of the square of the numbers?

I watched the Santa video. They were talking about the possibility that gold would "go exponential." Gold has painted a pretty straight line on a log-scale since early 2001, which means it has been rising exponentially for a decade. Either the exponent has risen lately or gold is due for a small correction (assuming the old trend holds). $1550 (down $200) in a month or two would not put a dent in the exponential trend.

Kumanari · Aug 10, 2011 - 3:13am

SLIDE RULE, PROTRACTOR

Justin Bieber - One Time
LaMachinna · Aug 10, 2011 - 3:42am

!Clicked!

The chaos has now become the peace.....cool Freedom at last.

Proceed LaMachinna

Tesla · Aug 10, 2011 - 4:01am
beinki · Aug 10, 2011 - 5:12am

Refreshing Post Turd

This latest commentary/analysis of yours Turd was a breath of fresh air. Like what it is like to a drowning man being lifted into a boat or trapped miners seeing the first glint of light. Time to take a big deep gulp of air and of course feed the Turd. 

illyasviel · Aug 10, 2011 - 5:46am

Trading bull certificates on

Trading bull certificates on gold is much more fun then silver; Gold actually moves in a predictable pattern; like it should; while all silver does is trade sideways or down lately. Im sure silver will be $50 sometime soon but im only loosing money trying to trade that shit, while gold actually puts a few extra fiats in my pocket :D

BlackHawk · Aug 10, 2011 - 6:17am

The Mother of All Bull Traps - MABT

Quote:
I suspect that they are going after higher equity prices in an attempt to gin up confidence in the US economy by creating a rising stock market. What more can I say than YIELD. Here we go again - chase and chase yield.

Thanks Trader Dan for clearly explaining yesterday's market action. We have now entered the next phase of the FED's great unwinding henceforth known as the Mother of All Bull Traps.
nathan1234 · Aug 10, 2011 - 6:19am

Anyone who beds the Wicked

Anyone who beds the Wicked Witch will find his precious metals and his family jewels missing.

OliverTwist · Aug 10, 2011 - 6:26am

Silver $44

So, there you go. I may look like a complete fool by this time tomorrow. Rigged and manipulated markets can do that to you. But, I'm sticking with it. $44 silver by Labor Day.

Hi everybody! This is my first post in this blog, though I'm following it for a year or so. I just wanted to say thank you Turd for the work you are putting into this site. It helps a lot. Especially on the psychological level. It is remarkable that Turd is risking exact price predictions into the near future. Not many "pundits" do it! And they know why. Yes, Turd you are right, there is a good chance that the rigged market will make a complete fool out of you by tomorrow but this is not the point. The point is that you give psychological support for your blog readers in difficult times. And that is also very important in the market. I know you know it and you know a lot about psychology. One can feel it reading your blog.

I just wanted to tell you that regardless of what will be the price of silver tomorrow or the day after for me you won't be a complete fool.

Best regards,

Oliver

Violent Rhetoric · Aug 10, 2011 - 6:33am

Good stuff. Wish I could

Good stuff. Wish I could sleep as well as Turd writes.

Larry · Aug 10, 2011 - 6:34am

Manure on sale

BofA will "sell" part of it's home mortgage business to Fannie Mae. 

Those clever Cartel rascals sure know how to help their ally banks avoid all sorts of legal and financial problems. They simply move the manure from the HSBC books over to a well known toxic waste dump. 

Wonder if JPM and Goldman will "sell" their garbage and their shorts to Fannie. Then, when the Fannie dump spontaneously combusts there will be only one big fire and the banks will not lose a nickel. Guess who gets to pay for that.

maravich44 OliverTwist · Aug 10, 2011 - 6:36am

@ Oliver Twist.

Oliver Twist, one of my favorite childhood movies. Welcome!

HB · Aug 10, 2011 - 6:47am

Goldmoney acct vs/HKMex

I was recently in Mainland China and got a BOC account with a small deposit, a friends local address and local cell number. Also got a HSBC acct. in Hong Kong. Had to show a passport and be physically present in their offices to open both accounts.

Thinking perhaps to sell my PM in my Goldmoney account and send the $$ to HSBC in HK and then buy-in on the HK Metals Exchange. Seems to me that if NY is trading paper and Asia is trading physical, I don't wanna be holding the bag when a big move happens. I'm on vacation in Asia and happened to be online when I saw the USA announcement on the credit rating downgrade. It seemed to be carefully timed on Friday evening so investors in the USA wouldn't be able to buy or sell until market opening on Monday. Which means that investors in Asia got the jump on it. By the time NY opened on Monday AM, the price of gold has skyrocketed. Great news for those that already owned it, but if you had wanted to buy over the weekend and you were in the USA, ya coulda been out-a-luck. It's a crazy time and I'm wondering if any Turdites might have some experience in HKMex and any ideas?

Thanks Turd for the venue. Also thanks to Purple Haze for the cool videos. Hendricks is still the best ever. Saw him and Jefferson Airplane at Monterey Pop in 1967 and missed my Jr. High graduation. Never been the same since.

maravich44 Larry · Aug 10, 2011 - 6:50am

@ Larry It's Blatant.

They are operating freely without fear of anything. = Downfall.

piranha82 · Aug 10, 2011 - 6:53am

gold/silver ratio

Looking at the gold/silver ratio of the last couple of months I am asking myself: Could the gold/silver ratio go to 60 before it goes to 16? Talking about a spring... any thoughts? Turd: I don't have an agenda but an open mind.

ewc58 · Aug 10, 2011 - 7:15am

Mama don't let your babies grow up to be

Seal boys.

At least not until we get leadership that won't have them killed for political expediency.

https://www.reuters.com/article/2011/08/09/us-afghanistan-usa-obama-idUSTRE7784J620110809

ewc58 · Aug 10, 2011 - 7:27am

Notice that Moody's and the others have left S&P out on a limb?

Beyond Absurd: The Senate Moves To Investigate The S&P Downgrade

This is truly right out of the Randian Playbook as presented in "Atlas Shrugged." If I didn't think the actions of our leaders were so ridiculously funny as they lead our country into collapse, I would be crying...The TRUTH is that the Senate should hold up a mirror to itself and look at the obvious reasons why Congress and the White House are complete failures. The public approval of Congress is at an all-time low and this will take it even lower. But since the name of the game in DC is "Blame Someone Else/Pass The Buck" (note: Obama now blaming previous administration completely for his failure to deliver on his campaign promises), we may as well watch the Senate fiddle - and spend more Taxpayer money on a useless investigation - while the country burns. 

I really can't believe that the Senate wants to shoot the messenger rather than spend productive time trying to solve the real problems destroying our system. Why don't we start by cutting Congressional salaries and benefits across the board? And I would like to call for an investigation of every Senator expressing interest in investigating S&P. Let's start with a complete audit of every Congressman's campaign donation bank account and generate a detailed report on who is donating and how much. Then reconcile those donations with each Congressman's voting record. THEN let's get a detailed audit of each Congressman's personal bank account. They work for us, right? The Government can now audit any citizen and monitor cellphone calls. Let's demand quid pro quo.

This really is a modest proposal and I would urge Ron Paul to incorporate it in his campaign platform.

“When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see money flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self sacrifice - you may know that your society is doomed.” (Francisco D'Anconia, "Atlas Shrugged")
Posted by Dave in Denver at 11:20 AM 5 comments Links to this post
Hard Rain · Aug 10, 2011 - 7:36am

@HB : Monterey Pop Festival

Now I am insanely jealous! That had to be incredible. Jimi's coming out party in the US. I still marvel at his genius.

That right there is worth skipping graduation, or just about anything else to be there. That right there is pure gold (pun intended).

Rain

Larry · Aug 10, 2011 - 7:36am

Maravich, they aren't even breaking the "law".

After posting the above I went back and read the thread from beginning (usually do that first) and saw where the Good Doc and Strongside Jedi were all over the BAC discussion last night (while I sawed logs).

Whether HSBC or BAC fails doesn't matter to the Cartel. They will protect their own boys that run them. Moving manure around just allows the banksters a free pass on debt and legal obligations. They make money either way - if their risk (crime) makes money they keep it. If it blows up they "sell" the bad parts to 'socialize' the losses and get reimbursed by the Cartel.

A seeming no-lose situation for the banksters... until the end. Then, they will lose that which they should value most.

The Hat Tip · Aug 10, 2011 - 7:39am

Stealth QE3

Check out this video:

https://video.ft.com/v/1101860017001/QE3-by-another-name-

FT pundits describe in the video how the FED can actually engage in stealthy backdoor QE3 even though Bernanke didn't announce any significant quantitative easing.

They argue that by promising not to raise the interest rates for two years, the FED can refinance their debt cheaply and buy long-dated mortgage bonds with cheap prices.

Notice: If you do not see your new comment immediately, do not be alarmed. We are currently refreshing new comments approximately every 2 minutes to better manage performance while working on other issues. Thank you for your patience.

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Key Economic Events week of 12/10

12/11 8:30 ET Producer Price Index
12/12 8:30 ET Consumer Price Index
12/13 8:30 ET Import Price Index
12/14 8:30 ET Retail Sales
12/14 9:15 ET Industrial Prod. and Cap. Utilization
12/14 10:00 ET Business Inventories

Key Economic Events week of 11/26

11/27 9:00 ET Case-Schiller home prices
11/27 10:00 ET Consumer Confidence
11/28 8:30 ET Q3 GDP 2nd guess
11/28 10:00 ET New home sales
11/29 8:30 ET Personal Income and Spending
11/29 10:00 ET Pending home sales
11/29 2:00 ET November FOMC minutes

Key Economic Events week of 11/19

11/20 8:30 ET Housing Starts
11/21 8:30 ET Durable Goods
11/21 10:00 ET UMich Sentiment
11/21 10:00 ET LEIII
11/21 10:00 ET Existing Home Sales

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