Gold and Silver Fun and Games

Wed, May 23, 2012 - 4:00pm

This is just getting to be far too predictable.

Let's see, first it was the April12 gold. Then it was the May12 silver. Today it was the June12 gold. What do I mean? Today was, once again, one day prior to option expiration and today, once again, we get a round trip in the metal as the poor losers who are left trading and hedging get their arses handed to them by the controlling powers of The Cartel.

As a refresher, what we saw in March and April, we saw again today. Namely, the handful of poor saps who had sold put options on the front month, thinking they had free money (Wouldn't you have thought that selling the June 1550 put looked like a safe bet back in February? Heck, maybe even late last week?) Lo and behold late yesterday, with just two days left before expiration, gold gets smoked on the Globex and is driven below its 10-day MA. WOPR selling ensues and before you know it, gold is near 1550 and headed lower. YOU, the poor sap that is short 100 June puts, have no other option but to sell short 100 June12 contracts, just to hedge yourself. Your selling (and everyone else caught in the same vise) sends gold even lower, toward 1535. All of this selling is gladly soaked up by The Cartel until...snap, boom, bang...they spring the latch on the trap and begin rallying gold back higher. Your new short hedge is suddenly squeezed and you eventually cover. This is particularly likely once price rallies back through and above that personally dangerous 1550 level. With gold back at 1560, you are now left with your original 100 naked puts that will expire worthless at 1:30 tomorrow as scheduled, however, you were just lightened of some considerable funds by the coercive, manipulative power of The Gold Cartel. Wash, rinse and repeat next month in July silver if prices continue down at these levels.

The selling of yesterday and today has established the basing/trading ranges that we began to discuss here yesterday. See this for a refresher: Of that post, this line in particular is the most relevant:

"Now, please don't misunderstand what I'm telling you here. I'm still extremely excited about where the metals are headed, particularly silver. The ranges I've described above are for the short term, maybe the next week or two and into early June."

Here are your charts that show these new ranges:

Here are some other nuggets that I've picked up as I've gone through the day. First, Jesse had this little ditty about KosherDakota who, as you know, is one my favorite Fed douchebags. This guy is a complete clown. Anyway, the speech Jesse references is not the first time KD has muttered this current bit of nonsense. I actually saw a headline on ZH about a week ago where this buffoon said the same thing that he said today. I was going to write about it at the time but by the time I doubled back to C&P it, the ticker had moved on. At any rate, enjoy the nonsense.

Trader Dan has a good comment today on commodities, in general. He also made an appearance on KWN. I highly recommend both: &

If you haven't yet, you should speed through this. I often listen to Coast-to-Coast as I'm shuttling LT#1 back and forth to ballet class. I caught part of this episode the other night. The stuff with Peter Schiff is definitely pertinent and well worth your time.

Video unavailable

And this is interesting. With the FB/silver spread now at just $4 or so, can the closure of the latest Hat Contest be very far away?

Have a great evening! TF

About the Author

turd [at] tfmetalsreport [dot] com ()


May 23, 2012 - 4:04pm

A bit of light at the end of

A bit of light at the end of the tunnel... thanks Turd.

May 23, 2012 - 4:11pm


Thurd, whatever you want to call it.

May 23, 2012 - 4:14pm

More manipulation

"Capitulation, or the Apex of manipulation? NetDania’s 1 hour silver chart indicates 105,231silver contracts were dumped on the market this morning between 9am and 10am EST, as silver was smashed a dollar from $28 to $27.

To put this number in perspective, 105,231 contracts is north of 500,000,000 ounces of silver, nearly 2/3rds of entire world annual silver production trading in a single hour!"


May 23, 2012 - 4:16pm

I just wonder what it will

I just wonder what it will look like when things finally blow.

May 23, 2012 - 4:16pm

Holy smokes !!

I didn't have a first in over a year and now 2 in one day?! Come on guys, someone tag in!

On a much more serious note, Turd mentioned on the last thread that the end is closer than we think. I'd love to hear everyone's prognostications on how much time we have left.

Greece, Italy and Spain aside, the JPM and now Facebook scandals certainly aren't restoring any confidence.... with each passing day it feels more and more that things are about to come to a head. I think we have a month at worst, a year at best before there is some sort of major event. My gut feeling is that it will happen before the end of this year, possibly the end of the summer.

May 23, 2012 - 4:17pm



May 23, 2012 - 4:17pm

Wow, HUI and XAU rocket ship this afternoon...

Somebody must know PM's are going higher!

10% move in an index in 5 hours!!!

May 23, 2012 - 4:19pm

Silver Vigilantes Taking on TheMorgue!

Look at the desperate banktards doing what they can to keep the precious metals down so that their fiat oblivion can be maintained over their victims!!! The Silver Liberation Army is gonna bring this paper system down to its knees!

Roger Godberd
May 23, 2012 - 4:28pm

Turd nailed it

You know Turd, I sat there yesterday thinking the same thing (ish)...and today was even worse. The naked affrontery of it it all. Bare faced larceny.

It is incredible to behold.

Perhaps I am late to the party but I have now concluded these are not markets which can be traded. Doh!! Finally I hear you all shout. Nonetheless I still have a position in the red and so will be trying to trade out.

GL all with your endeavours. Thank goodness I have kept stacking too even if it is only Sterling silver cutlery!!!

rock collector
May 23, 2012 - 4:30pm

"I'll Have Another"

Most miners in the green today!

GG showing real signs of life, up 6.78% today. Whew!

I'll Have Another" indeed!

May 23, 2012 - 4:32pm

The Exits

For what it is worth, I know at least one large size regional US investment management group that liquidated its clients positions in the metals/mining/ag commodities areas between a week ago and today. I suspect that we may be seeing exhaustion . . . but who knows for sure. It just struck me as something to highlight.

May 23, 2012 - 4:42pm

I.A.B its all bollox!

Feed me jamie & blythe! i luv ya shorts!

May 23, 2012 - 4:43pm

Bad timing...

I have a real time virtual trading program that I've built and sometimes I use it to practice trading by pretending to buy and sell silver. Today I went short silver at the bottom of the lowest minute bar of the day. Wow, it's SO rare you can execute a trade exactly at the top or the bottom, too bad I got the direction wrong... no wait... I'll take the "too bad" out... I'll have pretend losses all day if it means my real world holdings go up :)

Prize Fighter
May 23, 2012 - 4:45pm

When I was in the bank making

When I was in the bank making a wire today I also had to make a deposit at the teller window. Both the teller and the branch manager asked me separately what I planned to do with the money in my account and asked if I would like to open a money market account. Maybe it's standard stuff and I'm just overly sensitive to banker products but it had an air of masked desperation IMHO. I said I was actually there to reallocate my capital but they would be the first to know if I needed their services. She then asked the required wire question, "What are you purchasing?" 'Sound money' was my answer. Cricket cricket.

I Run Bartertown
May 23, 2012 - 4:45pm

Present Trajectory

"The only new buildings along this stretch of highway further emphasize what is seemingly important to our society. There are numerous architecturally grand bank branches dominating this highway. There is a beautiful new building housing the Social Security Administration for this area. This is where the obese, depressed and unemployable flock to sign up for the SSDI gravy train. And lastly there are a few medical facilities that are top notch. It seems that banks, government and medicine are doing just fine. But what do they produce?

I think this is a reflection of why this area has deteriorated over time. Industries that made things left this area and left this country. Small businesses were overwhelmed by mega-corporations who cared only about next quarter earnings. They met these earnings targets, set by Wall Street, by shipping the good paying blue collar jobs that supported these communities overseas. The middle class families living here saw their wages stagnate or decline. Wives were forced into the workforce to just keep their households afloat financially. The family unit suffered, with children raised by strangers or left to fend for themselves.

"As you drive down the 30 Blocks of Squalor you meet the ghost of Squalor future for West Chester Pike. The population along this corridor is ignorant, dependent, and represents the dregs of our society. There is virtually no legal commerce along the squalor. The Asians, Koreans, and whites that attempted to open stores have all been shot down in cold blood. The once proud homes are in shambles. Bags of garbage dot the landscape. Most of the people who live here are parasites on society. Personal responsibility, work ethic, education and marriage are unknown concepts in this community. Even though more than 50% of the students in West Philly drop out of high school and the SAT scores of West Philly High students are lower than whale shit, the bankrupt school district spent $70 million to build a new high school/prison to babysit derelicts and future prison inmates. The windows do not have steel bars yet, as the architect was smart to put all windows at least eight feet above street level."

May 23, 2012 - 4:47pm

Oh the irony .....

Thanks for the update Turd and from the Marketwatch article the line that leapt out at me was:

'to a warning that Facebook’s one of the “black swans” that could eventually bring down the global economy.'

That would be a bitter sweet irony ....

Sorry this tune just jumped into my head

The Verve - Bitter Sweet Symphony


May 23, 2012 - 4:48pm

I thought the conventional wisdom was…

…sell in May and go away.

Not that I'm selling a damn thing, but last Summer was really the doldrums. Is Turd predicting a more interesting Summer than last year?

May 23, 2012 - 4:52pm

Collateral damage, Fed and JPM share 93 trillion balance sheet

reposted from last thread: Watch, it's very educational starting at at 14:45 with Francine McKenna

JP Morgan losing money on hedges every time the Fed dumps money into the market causing them to take on more hedges....

Great irony, the collateral damage: due to JPM's lies and their destruction of global economy we have QE which has now trapped JPM. The end game is speeding up; 'the game' is not fooling anyone like it was in '08. A few months, a year, maybe two... be prepared.

May 23, 2012 - 4:54pm

"eye-watering size of trading positions" JPM

Fed data expose $100 billion JP Morgan position

Wed May 23, 2012 2:52pm EDT

LONDON, May 23 (IFR) - Official data from the US Federal Reserve have laid bare the eye-watering size of trading positions built up by JP Morgan's chief investment office in synthetic credit indices, raising further questions about risk management standards at the bank.

According to the figures, which are reported by banks on a quarterly basis and posted on the Fed's website, JP Morgan's position in investment-grade credit default swaps jumped eightfold from a net long of $10 billion notional at the end of 2011 to $84 billion at the end of the first quarter this year.

... My original guess was 78 billion - looks like I might have low-balled it.
May 23, 2012 - 4:56pm


Explosive and historic. But I want the entire summer. 6/21--9/21

May 23, 2012 - 4:59pm



The reason why I am so happy to own Gold & Silver, even though I know we will have paper volatility is due to the following chart below:

I have emailed Nate Hagens, who put together this graph back in 2009. He said he was going to update and I hope to get that to put in a future article. This chart proves that the US TREASURY MARKET will be taken out to the WOODSHED and cut to pieces. As you can see from this chart, total US TREASURY DEBT was not quite $12 trillion. Today its topping $15.7 trillion.

You cannot have exponential increases in DEBT and a declining domestic energy base if you market is based on a Fractional Reserve Fiat Ponzi System. We must remember in a FIAT MONETARY SYSTEM BASED ON COMPOUND INTEREST & FRACTIONAL RESERVE, you are required to grow the energy supply to be able to grow the GDP. By growing the GDP you can repay past debts and interest. It takes growth in ones energy supply to grow the GDP and the economy.


This provides further proof along with JIM WILLIE's newest article on the US Treasury market that this is a very unsustainable financial bubble.

Best to be in PHYSICAL METALS when the house of cards comes tumbling down.

I Run Bartertown
May 23, 2012 - 5:02pm

Summertime...and the livin's easy

"Explosive and historic."

Sounds good. The TITS will be epic.

May 23, 2012 - 5:03pm

@SRS US Treasuries to go even higher

Just got this email:

The market is now in “Orange alert territory” as the great hole may be opening again sucking in all things financial. Europe debt problems with a possible Greece withdrawal from the Euro is opening up a giant pandora’s box. Europe is preparing for Greece’s exit from the Euro. Investors are pulling money out of European banks by the billions. A mass exodus of capital is fleeing. Giant flows of money are heading into (once again) US Treasuries. Our interest rates therefore are dropping again!

Meanwhile the implosion fuse is lit and officials will try and downplay Greece’s exit but you are about to get a lesson in economics. Watch the fireworks. Even those in control do not know how this will play out and they will assure us everything is ok. (Sound familiar?). The ramifications on all the debt, the insurance written on the debt and massive derivatives intertwined here and there and everywhere has all the makings of a potential nuclear financial blast that could be much worse then the Lehman Brothers blow up that started the 2007 crisis. No one can tell you what will happen but I can assure you it won’t be a walk in the park on a nice sunny day. It will be a severe event for Greece and probably for us as well. I can guarantee you more bank bailouts are now baked into the cake and on the order of billions if not TRILLIONS. As for money already spent by central banks everywhere, its gone down the rat hole like we warned. All those billions used to bailout Greece twice and their banks multiple times were wasted.

Watch for the:
Be Calm Spin. No Big Deal Spin, Another US Federal Reserve Twist Program and/or QE program, More Euro bank bailouts, A new round of US bank problems, more Fed Job talk and volatile markets. Beware. Hold cash and be sparse with new stock positions. A market bounce may be coming albeit temporary.

All for now but be careful. Markets look dangerous and the Euro problem is like watching a slow motion train wreck. Greece’s exit will rattle markets and banks everywhere. Greece’s new currency will plummet and hyperinflation is most likely in store for Greece when they issue it. By no means does their exit solve their problems. They will explode in their faces soon thereafter

Drachmas anyone?

Grigeo TF
May 23, 2012 - 5:06pm

But I want the entire summer. 6/21--9/21

Hey, you are our Cult Leader, we will give you the Fall as well!

May 23, 2012 - 5:09pm

Did you all see that end of

Did you all see that end of the day ramp? Wow!

R man J
May 23, 2012 - 5:09pm

If you knew...

If you knew that the price of silver would double by next year, would you be stupid enough not to buy some. (sorry, had to get that off my chest)

May 23, 2012 - 5:10pm

Killer good live AU/AG charts

And looking at the 5 minute chart for both one REALLY has to go Hmmmmmmmm to Turd's analysis.

May 23, 2012 - 5:19pm


I don't post much..........Read A LOT, understatement.

Wanted to say thanks for all your info & work.

Sure is nice to know someone else has pretty much the same conclusions going on, especially as it feels like your at a carnival, throwing a weighted ball, trying to knock the person in the water. Your charts are fantastic..........

KUDOS.... To Mr. T as well, as a small business owner I can appreciate the TIME you put into your blog.

It's the littlest things that seem to take the most effort.

May 23, 2012 - 5:20pm


I know I am late to the party from the last thread, but wanted to throw something out there. Anyone else ever thought that Alan Greenspan might be Francisco D'Anconia?

I don't really believe he is, but it is fun to think of him intentionally hastening the end of fiat.

The Doc
May 23, 2012 - 5:20pm

Jim Willie says JPM CIO losses will end up over $100 billion

in his latest Hat Trick Letter, which is exactly what a hedge fund source informed me the true losses were the day after Jamie went public.

Quit worrying about spot price and stack the phyzz while it's still available! Turd might not always nail the bottom precisely, but at least he's steering you towards PHYSICAL precious metals!


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