"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

Trader Dan's free work will soon be available at www.traderdan.biz

Monday, September 22, 2014

Perfect Harvest Weather Sends Soybeans and Corn Lower

Excellent warm, dry weather over the weekend and in the shorter term weather forecasts have combined to send soybean prices sharply lower this AM, as well as providing additional pressure to corn. Corn/Wheat spreads are reversing a bit as well as some feel US wheat prices are low enough to generate some increased export-related interest. The reason for that was some business announced with Egypt. We shall see about that however.

Selling is increasing however as harvest results thus far are coming in even better than expected in many locations. This afternoon's crop condition reports will further set the tone for the remainder of this week, assuming the weather forecasts continue to hold.

Beans are working their way down towards the next level of chart support focused around the $9.20 region. Below that is psychological support at the $9.00 mark. Stronger chart support however emerges near the $8.80 level.

Incidentally, last Friday's COT reports showed more of the same when it comes to corn, namely big spec interests still increasing their overall net long position as the market drops and drops and drops. They are using corn as the long leg of spreads involving both wheat and beans. I still have my concerns about how that is going to impact corn prices once harvest really gets rolling and storage and transportations issues become a major concern.

At this point the trading session, cattle remain lower reacting to a Cattle on Feed report that was considered Bearish. Let me rephrase that, the report was not bullish as the market was already working under the assumption of reduced numbers. However, it did show a bit more cattle than the market had already baked into the cake and that is causing some longs to go ahead and book some profits. Cattle has proven to be amazingly resilient as it is one of the few commodity markets out there that the longs have been able to make some money in recently.

That camp is going to continue to defend their long positions as much as possible. We will have to see whether these high beef prices eventually bring them back down to earth. The market appears sandwiched between the loss of demand and reduced supplies. Both sides are digging in.

That being said, the bulk of the commodity complex is REELING this morning. Here is the latest Goldman Sachs Commodity Index chart. For any commodity ( and that includes both gold and silver) to escape the general downward tug being produced by money flows OUT of the overall sector, it is going to take some incredibly powerful fundamentals for that specific commodity.

Case in point is gold today; the weakness in the equity markets is producing some safe haven flows ( Bonds are higher and the Yen is stable). That is producing a bit of a bounce in gold but the blip higher is attracting sellers up near $1220 at the moment.

It should be noted that GLD, the giant gold ETF, reported a very sharp drop in gold holdings of nearly 8 tons this past Friday. Total holdings are not at the LOWEST LEVEL for this entire year, (down some 21.78 tons from the start of the year) and the lowest level in nearly SIX YEARS!

Here is a closer in view:

Here is a longer dated view:

One has to go way back to December 2008 to find a comparable level of reported gold holdings in the ETF. Just to remind the reader, that was the point that the markets began to respond to the very first Quantitative Easing round implemented by the Fed. Another way of saying this so that it perhaps serves to bring more force to the argument, is that nearly every single bit of gold purchased in GLD at the initial implementation of QE has been SOLD. That is astonishing! Those who keep talking about STRONG DEMAND for gold are simply incorrect, at least as far as the West is concerned. They have been selling their holdings and buying equities and look to continue doing that unless there is some sort of strong catalyst that changes the equation and thus the prevailing sentiment.

It just goes to illustrate how much gold has fallen out of favor as an alternative investment class by Western-based investors. That is the reason ANY FALTERING IN ASIAN-based DEMAND will be brutal for gold.

Based on the above-mentioned collapse in GLD holdings, AND the fact that the TIPS spread is also plummeting, there is simply no reason to buy gold at this time in the minds of Western-based investors.

Here is the latest on the TIPS spread and the comparison against the gold price. Notice that both lines are moving in unison. As inflation expectations fall, ( and I might mention as the Dollar moves higher ) the gold price is falling.

I will get some more comments up later on as time permits. I am most interested in seeing the extent of harvest progress in this afternoon's reports from USDA.


  1. 2 questions:

    What happens to the price of gold if the trend changes in equities and the stock bubble bursts?

    What happens to the price of gold, hypothetically, if the US goes into another recession?

    1. imo it's not a one to one relationship.
      Everything is intertwined.
      Look in 2008 : everything went down in the same time because there was a lack of cash.
      Maybe next time gold will go up while stocks go down because many other parameters will be different.

    2. About the only thing keeping the US out of recession is years of central bank monetary intervention Matt.

      Its looks to have only been hiding the recession and deflation that wants to happen all along.

    3. Turn the sound off and just what the visual impact of the characters in this video: https://www.youtube.com/watch?v=aZwSiHBxm0c

      I have long since given up on what Harvey writes, but his appearance and body-language are what I would term unimpressive; if your financial adviser looked like that, behaved like that, and expressed himself like that, would you have confidence in his advice?

      Whether years of exposure to complex pharmaceuticals have taken their toll, or whether he was like that all along, I think Harvey is a perfect case-study in how to tell people what they want to hear, without ever feeling the need to know what you are talking about, express it lucidly or have even basic presentation skills.

      Who knows, he may be right: "gold at $3,000 per ounce, and there will be no offer, and it will rise by $500 a day. It will come in 2014. ..... silver will trade at “$200 per ounce .... By December, this whole thing is going to collapse"

      Personally, I'm not banking on it

    4. FOFOA predicted this GLD selloff 2 years ago.

    5. Usually gold goes down with sp500

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  3. Dan, I hope you don't mind I pollute the blog with a last post on that topic, but as we were having an intercultural discussion with Lan, I'm happy to conclude by sending her the results of my research : I found the guy who most personifies what is a French nowadays. This is your typical French guy. And if you watch my avatar, you'll wonder why I didn't think about him before! :)

    OK, I stop, promise :) But hey, the guy is worth listening, I swear.
    Have a nice day all,


    1. besides I think it could help some depressed gold bugs...

    2. Hubert;

      No worries my friend although I must admit watching you and zhang lan handle this topic has been quite amusing!

  4. Dan,

    I know everything is intertwined and I as well would like your take on Matt's question above. It seems quite likely a possible scenario that:

    --Interest rates likely rise at least somewhat, hurting bond prices
    --This helps support the dollar which continues rising
    --This hurts or at least slows/lowers profits of many companies in the market and the market pulls back or stagnates

    What does this do to gold? Does it make it any more or less attractive if two other major asset classes aren't doing as well as they have for the past years?

    All speculation of course!



    1. A falling bond market will put downward pressure on the dollar because a bond selloff means lots of dollars will be entering the forex markets.

      Historically gold will front run the bond selloff until interest rates become positive and only if the currency is stable.

  5. glad Dan mentioned long corn short beans spread, as that is what good commentators were suggesting last week: soybeans have much further to drop to get the beans-corn ratio into a more 'normal historical ratio', with the huge final bean crop size that is expected to be lying around.

    'Sell Rosh buy Yom' is also a grain market saying, and rosh is 9-24. Also saw blurbs 'SPX getting an early start on sell Rosh' as it's also a stock market saying.

    fall equinox today and new moon coming in tomorrow- SPX has not been red on turnaround tuesday during this bull phase after a poor monday, so it will be interesting tomorrow, i.e. another red would be a change in character.


  6. stocks down today. dollar flat and gold dribbles into close. Silver fought its way back from the overnight dump. GDX took a late day dump before short covering right at close. HUI closes at low. It just does not look good for gold.

    The range it's currently in suggests a hard test of 1200 in the next couple days. Even tomorrow barf floor spike. Keep the hedges in place.

    I feel sorry for all the average Joes who chose silver over gold. The poor working stiff has been decimated - once again.

    Lindsey Williams is out with a new DVD saying to keep buying gold and silver. He says next year there will be divine intervention and gold will skyrocket when interest rates spike and the stock market collapses.

    He says housing prices will collapse.

    He is now more adamant about a dollar collapse forthcoming.

    According to boards out there many people still listen to this stuff. These gloomers have been wrong on every front for three years now.

    The Bible says that Satan in the last days will wear out the patience of the remnant. This is one sure way to do it, get a wilfully ignorant (or worse) fool like Williams to help impoverish the people who will not go along with the NWO, so they are powerless when they need their assets the most. I wonder how many marriages have failed on his account.

    The patriot shows are talking about his predictions again like he was a special source to listen to. He was wrong with real estate, debt, stocks, the dollar, oil prices, gold and silver, Iran, etc etc.

    1. I have discovered a crystal ball

      As I write, it is 0653 Singapore time on Tuesday 22nd September 2014, and I have just come across this masterpiece (timestamped at 1016pm London time tonight - about 21 hours in the futurehttp://www.investing.com/news/commodities-news/gold-prices-higher-to-steady-in-asia-ahead-of-hsbc-china-pmi-310367

      "old prices were higher to steady in early Asia on Tuesday with the focus on HSBC's China flash PMI figures for September."

      But wait: it's not just The Future which has become flexible under the writers pen - The Past also looks unfamiliar to me: on Kitco's live chart I have Gold now precisely where it was a this time yesterday, but in the Altered Reality we find that

      "Overnight, gold futures posted modest gains on Monday"

      How did I miss this?

      Incidentally, Standard Chartered in Singapore are tipping Copper to rally due to Chinese demand https://research.standardchartered.com/ResearchDocuments/Pages/ResearchArticle.aspx?R=122816

    2. @ EPH

      The average joes are in bonds. And that slaughter will be something to see. But .... bond prices havn't fallen since the cold war.

  7. Corn condition scores unchanged in MN, NE, NC, PA & TX, down modestly in CO, IA, ND & SD & higher in all other states.

    45% of soybeans were dropping leaves Sept 21, versus 24% previous week & 5-yr avg for week of 53%.

    would guess cattle traders take out options to offset the risk of their positions golly alot of limit moves!

    Cold Storage Report: #Beef 343.664M lbs vs 430.236M lbs 2013 #Cattle

    Cold Storage: #Pork 546.305M lbs vs 548.975M lbs 2013


  8. Whereas I would expect gold has further to fall, maybe considerably further, some of the comments here are becoming a bit hysterical; much like they were when gold was $1900, and equally hysterical comments promised this would go on forever. Now we are talking about $600 gold and $10 silver, with 27 years for the market to recover. I wish I had crystal balls like that!

    1. Peter Dykes;

      Just follow the charts and ignore all the price predictions. I never make them unless the chart shows broken support levels or resistance levels and then all we can do is find the next level of chart support/resistance.

      Who knows where price is headed? I certainly do not although I will say that both charts are ugly and there looks to be no help coming from the miners at this time.

    2. The miners couldn't seem to find sustained support as did Gold and silver today. After perking up for a while, they slid back down with the equities selloff...

    3. Peter, the 27 years mentioned is a reference to Mandela's stay in prison. It is not a real forecast about gold. Thanks.

  9. The GLD holdings shows how quickly sentiment changes with gold. An increase of over 500 tons in 6 months starting Oct 08. A decrease in 400 tons over 6 months starting January 2013... Those are huge % changes as well. Looks more like a COT report than an etf!

  10. Turdless

    Craig Hemke has started writing vapid nonsense under his own name again, rather than using his faecal alias; in this instance he is trying to pummel the World into supposed 7.8-year and 8.6-year cycles http://www.investing.com/analysis/where-the-long-term-silver-cycles-are-now-226561

    Miraculously enough, the conclusion of this erudite analysis is that "Q4 2014 is a time of great possibilities for buyers of silver."

    If only everything were so predictable. Why not just tell it how it T-I-IS and say "I don't really know, but this is looking pretty ragged just now"

    1. After years of talking about inflationary scenarios (or hyperinflationary after the USD collapses) and advocating precious metals as an inflationary hedge it appears The Turd has recently taken a more deflationary point of view going forward and believes something significant took place in the UST market at the beginning of September.

      It's always going to be something, even if it's made up and then forgotten about only for some other important, historic or explosive event to happen.

      Remember, the vaults are empty. }:^)

    2. Interesting--that article is a verbatim transcript of a TFMR article by maximum dork Argentus Maximus. Either Turd is plagiarizing, or Craig and AM are one and the same person, a fact scrupulously avoided on the site

    3. I thought the exact same thing about the articles content. I read it over there already.

      Remember....all content posted there becomes property of tfmetalsreport. So it seems.

    4. I went and looked again just to make sure and I see NO attributed reference to the article by argentus maximus but instead just The Turds byline on there.

      There's another article on there also regarding some type of war cycle and metals that A.M. did.

      Maybe they have some arrangement where A.M. doesn't care if The Turd uses his writings without being credited or mentioned at all.

      I guess it should surprise me but like I said earlier...one look at the disclaimer says it all. The need to be right at any cost (or profit) runs deep in some...like a gambling bug type of thing. Losing (or being wrong) is their main fear.
      Gamblers do desperate things out of necessity...their necessity, no one else's.
      That would explain much.

      Let's see if he'll publish the in-depth Black Masses/Satanic/Christian debate that's been going on over there for the last 3 days. (shakes head)

      The rabbit hole gets deeper and creepier by the day.

    5. i would say that the site has become a total joke except that so many have lost so much.

      something stinks bad here even if Turd and AM have some kind of an agreement.

      my comment on Stane's weekend levity is that anyone comfortable in their beliefs would not be threatened by these so called black masses. i did some research, and it is doubtful that even the so called "satanists" take this stuff seriously. but this paranoia and persecution complex is part and parcel to the fringe right wing distorted world view.

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  13. Here, on the other hand, is something which appears to be both sober and well-reasoned in its analysis


  14. and also this...

    Reply to: Pailin’s Trading Corner
    Alonzo Jazzberry by pailin
    2 hours 36 min ago

    Alonzo Jazzberry wrote:

    Pailin – for a newcomer, could you describe what the relationship is philosophically between this thread and TF’s site? The folks there, particularly TF, seem all-in on an imminent (next year or so) financial collapse, simultaneous with huge gains for gold and silver. The talk around here seems to be a little more measured. Would you say the people commenting here like yourself share roughly the same long term view, but are more ambivalent short/medium term, or is it a totally different mindset altogether?

    Okay good questions. To start, this is all Turd’s site. And I’ll only be speaking for myself here.

    What I do here is a reflection of how I view things, and to some extent, as much as it would be for anybody, that’s in flux based on my own experiences and changing external inputs. But you’ll always see me admit when I’m wrong or have gone over the line. For sure I don’t know it all, maybe nothing at all :) That’s called intellectual honesty.

    I think everybody on this site, whatever area, agrees that “things are not good” but what the endgame is and when it will happen…probably as many opinions are there are people. Opinions. That’s an important word. Nobody has The Answer. No specific dates, prices, correlations, etc. I most often play devil’s advocate and welcome many/all opinions that are logical and presented with solid premises and a conclusion that follows. Those that don’t (that I care to address), I’ll tear apart.

    What really bothers me is the financial and social destruction that’s been wrought by those following gurus and bad advice. A lot of people have lost a lot of money (or serious opportunity cost), not to mention damage to businesses and families, by going all-in or making sweeping ‘any day now’ changes to their lives. There’s also a rotten lack of accountability for that damage by the advisors. How many bottoms have been called? How many amateur chart analysts have ignored the most basic bear signal of all…lower lows and lower highs? How many say out of one mouth the charts are all manipulated, ‘painted’, throw ‘em out, etc. then go on to analyze them as if there’s grains of truth to be extracted? Hypocrisy.

    So much of the metals (and by extension libertarian) story is about self-empowerment and self-reliance. Yet the advice/guru thing persists. And the ego thing. The leader thing. All of that. None of which is self-empowering or encourages self-reliance! I’d rather help people figure out answers for their lives than tell them what to do or warn of general impending doom. And I’m for sure not trying to sell subscriptions, a newsletter, or anything for that matter. So you’ll see me come out against that stuff when the advice tends to require payment.

    Dunno if that’s what you were looking for…I tried :)

    1. peckerwood;

      maybe, just maybe, we are making some inroads over here and reaching some of folks and waking them up... just maybe.

      The gold cult leaders ( and I include Mr. Hemke in that lot) have ruined many people financially with their idiotic and discredited wild theories.

      If it wasn't that fallacious BACKWARDATION nonsense ( Turk was also a ringleader in that), Negative GOFO rates, JP Morgan long corner of gold, dwindling Comex inventories, bail ins, COT short covering squeeze "imminent" crap, famed insider calling for a big rally any day now because BIG MONEY was going all in, etc. YOU NAME IT, they came up with it and pontificated on it left and right and savaged anyone such as myself who dared to call them out on it and expose the utter worthlessness of each theory.

      Now, the damage they have inflicted has been so severe and they have been SO COMPLETELY WRONG, that even many of them can no longer escape their worthless track records.

      Some of them are now going to have to engage in "covering their asses" in order to keep what is left of their dwindling subscription base.

      A perfect example of this is Mr. Hemke, who after advocating so many of these worthless theories and giving a forum to those advocating them, suddenly recommended hedging AFTER the market has surrendered most of its gains for the year. Those who have now hedged have LOCKED IN HUGE LOSSES.

      I cannot tell you in words how great my disdain is for these charlatans, hucksters, flim flam artists and all around deceivers. They know little if anything about markets and yet hold themselves out as if all wisdom resides in them.

      Here is a nice Scriptural reference: A bit out of context but applicable to them nonetheless:

      "Professing themselves to be wise, they became as fools"

      And the old adage:

      "A fool and his money are soon parted" although in their case it is more the countless hundreds if not thousands of wrecked lives they have left in their wake.

      A pox on the whole damned lot of them

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    3. "...these charlatans, hucksters, flim flam artists and all around deceivers."

      You forgot...panhandler.

      One read of the red disclaimer over there says it all.

      I still wonder though at what point (or for what rational reason) why the monitoring of certain posters private conversations was implemented and condoned...for years.

      I guess being spied on doesn't bother some folks sense of integrity.

    4. Casey research has called each big selloff perfectly and has recommend shorting every time. Here was the last one:

      August 26/2014

      Trade #1: Buy the December 2014 puts on GLD at a strike price of $115 for $1.05 or less. Buy 1 put contract for every $10,000 in physical precious metals you own.

  15. you then surely understand my anger. i was part of that cult up to and until the secret JPM whistle blowers, and Santa's big birthday. at that point i BTFD, basically doubling down, and the rest (of my IRA) is history.

    Pailin above however was always a voice of reason over there. i regret sparring with him at one point. had l listened to him, i would be able to look forward to retiring someday. i do not think i'll be able to earn and save enough now in this crappy economy, which btw, is about the only thing the doomers have been right about.

    thanks Dan, and remember that you are reaching plenty of people. a sucker is born every minute you know, so these charlatans can go on for many many years, and they do! besides, even if you had only ever reached one person, and kept them from wasting their life's savings, i know you would say it was worth it. but you have reached many more. so keep on doing what you are doing. and thanks for putting up with me - or maybe you are just getting used to me:-)

    1. peckerwood;

      I surely do understand your anger. So many of the gold cult leaders seem to have no functioning conscience. They could care less what their "advice" ( I have a different name for it ) has done to their many victims.

      They go on unscathed while they leave a path of ruin, devastation and destruction behind them. They are FINANCIAL TORNADOES, sparing nothing.

      However, if there is any comfort in this, God will judge them for ruining so many. I have the emails from some of their victims that testify to the carnage that they have left in their wake.

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    3. And then there's plagarism on top of it. Or maybe it's just a simple case of "paid posters at tfmr".

      See above/Zhang at 3:51 and comments thereafter.

      8. Has an exaggerated sense of power (entitlement) that allows him to bend rules and break laws.


      And no one will dare say a peep about any of it. That's a cult mentality albeit a virtual online one.


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