The Criminal Element

Another day, another Globex raid by the EE.

Longtime readers will recall that Tuesday afternoon, Globex raids are commonplace for The Evil Empire. Once the CFTC completes their weekly CoT survey, the criminals are free to act, knowing that they have a full week to cover any new short position that might establish. We've discussed this many times in the past, beginning with this post from last December. It's not a long note so, please, take the time to read it now. Note that it was also written on a Tuesday:

http://tfmetalsreport.blogspot.com/2010/12/ok-now-im-pissed.html

Frankly, you could see it coming. Right after gold blew through 1800 and silver recaptured 35, the metals began to sell off. Not a sharp selloff, mind you, just continual selling into the close. At the time, you had to wonder why the metals were going down. Well, now we know. The Forces of Darkness obviously tipped off a few of their "friends" that a raid was coming and those with this inside knowledge gladly moved out of the way. How can I make such a claim? Well, look at these charts. First up, here's The Pig from 12:30 to present:

paper_11-8pmpig.jpg

Note that The Pig was relatively stable until 1:47 when it began a 25 basis point drop in the next 8 minutes. Now look at gold and silver over the same time period:

paper_11-8pmgold1a.jpgpaper_11-8pmsilv1.jpg

So the dollar pukejob ends at 1:55 and the PMs are attacked at 1:57. Does that make sense? Of course not! All of the WOPRs are programmed to buy PMs after such a decline. Instead, the decline in the POSX leads to metal selling. You're now probably wondering if other "commodities" like crude and copper fell, too. Let's take a look:

paper_11-8pmcrude.jpgpaper_11-8pmcop.jpg

What we have is clear PM manipulation event. After the dollar drop, the EE attacked in the hopes of keeping gold below 1800 and silver below 35. They've succeeded, at least for today. At this point, I think we have to beware of more selling overnight and in London. Here are two charts to show you where support should be found:

paper_11-8pmgoldh.jpgpaper_11-8pmsilv2.jpg

In the end, all we can hope for is that the eventual enforcement of position limits will force JPM et al to exit the metals markets. If that ever happens, we will finally get to see true price discovery and valuation for the metals. Until then, expect these shenanigans to continue.  TF

178 Comments

Louie's picture

First

FIRST!!!  First! First! First! 

OK, so I am a child at heart. 

I think it is important for the integrity of the markets for position limits to eventually be enforced, but I am not hopeful.  Swaps were supposed to be defined by November 1st.  I understand FM Global and all, but are we really expecting that definition anytime soon?  Then there will be another 60 day delay.  If position limits are enforced 60 days after the definition of swaps is released I will send Mr. Ferguson a Morgan dollar. 

In my opinion, it is more likely that a physical squeeze will eventually punish (severely) those who are using shorting to manipulate the gold/silver market.  Last month China took advantage of the discounted prices to purchase more physical gold, more than they have ever purchased in a single month.  Eventually there is going to be a run for physical, the EFTs are going to implode, and no one will be able/willing to deliver physical at the paper price. 

On the day that happens, I wonder if we will still be waiting for position limits. 

Be like China, buy the dip. 

GoldMania3000's picture

The will...

go to jail.

first

SilverLeaf's picture

Thanks for the charting analysis!

Thanks for getting back into the rhythm of presenting a daily analysis of the chart targets, Turd. I recognize it's hard to keep plugging away day in and day out in the face of blatant EE manipulation, but your analysis is the single biggest thing that makes this site so valuable and differentiated from other precious metals resources - keep up the great work!

On a positive note, I guess it's a good sign that despite the raid, silver is still hovering around $35.  A few more days of consolidation, and hopefully we can break above $35.70 and towards $38 or $39. I'm cautiously optimistic by the strong bullish conviction that people like James Turk, Jim Sinclair, John Embry, and to a lesser extent Ben Davies, Robin Griffith's etc. have for the PMs over the next 1 to 2 months.  Turk and Embry for example, are calling for $60 to $75 silver within the next 2 months. Hope they're right!

Be Prepared's picture

Craziness As Far as the Eye Can See....and Beyond (Fixed it)

Just Saying...

I can't wait until they define the word "swap"....... I mean come on CFTC already....you're supposed to be in charge of the Commodities Market and this "term" has been in usage in this market, as well as the financial markets, forever.... 

*Fixed Title for Peace Silver..... :-}

Dr Durden's picture

Quick!

Someone spray some unRAID on the chart and make it go away!

GoldMania3000's picture

Craziness Ahead

umm. i believe the last 4 - 6 weeks was craziness:)

survivalwstyle's picture

this is a HUGE shocker

NOT! take this back down below 34 at least...shEEt.

taking a liTTle more paper oFF today on a 20% blast in SZYM...just incase we get a significant dip

ewc58's picture

Stupid conspiracy theories is all

Buncha damn dopes.

ivars's picture

@Silverleaf

Turk and Embry for example, are calling for $60 to $75 silver within the next 2 months. Hope they're right!

No way, unfortunately.

Bay of Pigs's picture

I thought gold fell

because Berlusconi is quitting? LOL. No doubt...

I Run Bartertown's picture

@ivars

I hope so. It'd take the bite out of the rapid inflation that you say isn't going to happen for years. They must have me on the pre-payment inflation plan at the grocery store.

Economical Disaster's picture

Inflation

I just paid $4.99 a lb for a lousy Orange and Red Pepper..came to almost $2 for ONE lousy Monsanto tasteless PEPPER!

A L I E N's picture

Always Annoying

While the manipulation is something that I expect throughout the week, every time it happens I can't help but become irritated because it's so blatantly obvious. 

cpnscarlet's picture

Algos change in Gold

Tom L - Unless it's proprietary, how did you catch that algo change in gold risk? Or is it just a gut check?

Rear Flank Downdraft's picture

This Loathsome Manipulation Dance....

Much thanks Turd for the sleuthing with the charts.  Always helps to see graphically what we know conceptually.

When you hear Chilton speak to the fact that only 1 case in the CFTC's thirty-five year history has been successfully prosecuted, that doesn't bode well if they are our only institutional hope, being they are there for oversight, etc.  Short of proving JPM's and others' intent to criminally manipulate the metals market, and since we don't expect the "Financial Cheetahs" to voluntarily exit stage left, is the CFTC all we have to expose this scheme and remedy things?

At least there's heat being applied, and like the proverbial cockroaches slinking away into the crevices in the light, we should indeed expect volatility in the flurry.

And isn't the problem concocting clever names for these manipulative entities-- like "Financial Cheetahs"-- problematic too?  Is Chilton applying the concept of the cheetah to the JPM's?  Or just anyone who wishes to move speedily out of their places of risk?

I realize the sensitivity with which Chilton takes his position as just one among  many there and it makes for a good speech, but you just got to call it what it is at the end of the day.  I behold the cheetah with admiration and wonder at its skillful place in the created order, but I don't reserve that reverence for the financially criminal.

Bay of Pigs's picture

Just for the record...

John Embry did not say silver would be at $60-75 in "two months".

Here's the quote,

"I mean it’s hard to get silver and you have to pay premiums for it.  The real price of silver is in the physical market.  This paper market is a complete and utter sham and when the paper market it broken, and I think we’re close to that happening, silver will double overnight into the $60 to $70 area and that could happen within months."  

Not that accuracy or credibility is all that important around here these days. 

cpnscarlet's picture

@Ivars - I guess this is

@Ivars - I guess this is where the rubber meets the road - I have your Ag chart for the next few months (impressive so far) and Embry's quotes of the day at KWN. I've followed John for quite some time and I trust his knowledge of the PM sphere. Between the two of you, I'm approaching a line and need to make a choice.

Your charts show a pretty good match to cycles so far, but some offset on amplitudes. What I'm thinking of is getting out of 60% of paper Ag positions (PSLV SIVR CEF) if we hit 37.50 in the next 6 weeks, then sit tight and wait for a swing down to 32 or up to 43, then all in. That's about as fine as I can cut this given the data you guys have given me. Au? Not sure about that, but might actually sell a couple of Kruggys when we hit 1900.

cpnscarlet's picture

"within months" - I always

"within months" - I always figure for people in the financial realm, if it's more than 3, they'd say "a quarter".

Bay of Pigs's picture

cpn

Whatever cpn. You go whichever way makes you happy. But if I was you, I'd be listening to Dr G, selling that paper and buying some physical to stack.

You want to listen to a "newbie" to the PM sector that's your call.

cpnscarlet's picture

I'm taking you mean Ivar is

I'm taking you mean Ivar is the "newbie"? Yep, but I don't see what Dr G means by "consistently wrong" when the pattern match is pretty good - matching inflection points primarily. I know the highs/lows %-age wise leave something to be desired, but the timing appears decent.

Always converting paper to phys little by little - itching to get past the EOY so I can get a big withdrawal from the IRA to turn to stack.

Rear Flank Downdraft's picture

@Irene: The Thin Veneer of Civility....

(response to this from last thread)

Just so disheartened to hear about how this calamity continues to unfold, while our infrastructure lumbers on in impotence and negligence.  Prayers for your (and others) restoration.....

It makes me wonder how many municipalities in the US are encumbered by similar fashions of cronyism, neglect, pilfering, complacency-  all to the ends of a debilitating collapse on the local level when some event like this occurs.  The stories of localized collapse are becoming a mainstay....if our cities can't even keep the lights on, just how will we know our local systems will show up when needed?  They are indeed proving they cannot.

We pay exorbitantly just to be insured in an emergency only to be punished further by the insuror's technicalities when called upon.  Kind of a clever, subtle "calamity-tax" that is just darn-near impossible to identify beforehand.

In September of 2008, nearly 2 million Ohioans were left without power in a freak windstorm- some for over a week- as a result of the remnants of Hurricane Ike combining with a unique set of meteorological circumstances.   We were only without power for 5 days.  However, a few days in, my once semi-reclusive suburban neighborhood realized that we were going to have to start looking out for each other in this.  We starting having conversations in the streets, and talking about organizing watch groups to protect each other's properties and coming up with a benevolence food pantry.  We just weren't sure how long it was going to last.  Looking back, I was woefully under-prepared, but no longer.  Thankfully, it wasn't in the dead of winter.

What Irene is having to deal with may only be a harbinger of things to come  as the number of potential crippling events ever multiply to threaten our communities.  The tyrants scurry with their wealth, as the facade of the Keynesian regime crumbles and the common folk are left in waist-deep snow, toppled trees, hefty bills and the untimely deaths of neighbors.

But we have each other and promised justice of God, under whose hand the miscreants and perverters of the good will be subject.

cpnscarlet's picture

Wow - false alarm

Almost thought there for a minute we had an actual price move in Sydney. I wonder what those pulses are? Bad algos, bad data, bad connection?

Irish-Mic's picture

Ivars - re your comments on deflation and silver

Ivars, you wrote:

Superb minus some pressed on selling points. I especially disagree about silver. When he talks about crashing of bubbles everywhere and in fact, deflation and recession all over the world, and then suddenly -silver is scarce. 74% of silver is of industrial use.  If there is recession, it will be not so scarce, at least not until 2018.

You note 74% of silver consumption is for industrial use, and conclude that if/when deflationary and recessionary pressures hit silver will no longer be so scarce.  Just curious, which of the various, unique aspects of silver did you take into account when drawing this conclusion (aside from any charting or TA)?  For example, did you consider that 70% of all silver produced annually is as a byproduct of industrial/base metal producers?  Did you consider that these producers make production decisions based on metals other than silver?  What about the effects of these deflationary/recessionary pressures on industrial/base metal producers?  What happens to annual silver production if/when some or all of them go by the wayside (or react with production decisions that adversely affect byproducts, like silver)?  How much slack can silver miners pick up?  As I'm sure you know, primary silver miners are few and far between thanks to the exceedingly low price of silver until recently, among other reasons. 

¤'s picture

Thanks for the update TF

Thanks for the charts and trend recognition that's relevant.

Hope the newbs are paying attention and appreciate your efforts as well.

silverstool's picture

Sacre bleu

A freee press en France? Zut alors!  You must bee crazee!

http://www.bbc.co.uk/news/world-middle-east-15637271

SRV - ES339's picture

21st

Twenty First... Wow, too bad Mom wasn't still with us to see this!

Irene's picture

@Rear Flank Downdraft

That's it in a nutshell!  Civilization is pretty fragile and we need to be ever vigilant. 

Be Prepared's picture

The Calamity of Greece

As we have been pondering the malfeasance of "Don" Corzine and his senior thugs over at MFing Global, it grieves me greatly to know that many of my fellow turdites are suffering financial hardships due the criminality of that corporation.  Regardless of how we feel politically about the situation in Greece, I personally think its important to understand how this is affecting the average Greek citizen, who like us, is trying to live their lives against forces that are pretty much beyond them.  I thought I would share one Greek's perspective on how things are going in that part of the world.....so many are suffering for the acts of the EE and TBTF.

The situation in Athens is bad (I haven't been around the rest of the country).The city is clearly in a depression. But what I keep telling people who ask me about it is one has to put the Great Depression into context. There were soup lines and bread kitchens and those are the images that time conjures up. But you also had some of the greatest clubs in the world operating like the Cotton Club. So although there is a depression in Greece it's not the equivalent of the end of the world or War of the Worlds type scenario. When one walks through Athens about 20% to 25% of all business have shut down. There are empty shops left and right. If one goes out to nightclubs you notice that although people do go out they'll only buy a drink and slow sip it. Any business operating will tell you that even if they are profitable they've been massively hit by new taxes. Most business are owed massive amounts of money by customers. Crime has gone through the roof. Roberries, assaults, burglaries are up hundreds of percentages. In fact the only businesses reporting bumper profits in Greece are security companies. Crime is massively underreported in the statistics (who would've thought Greece would provide false statistics about its crime) but when watching the news or reading the paper the amount of circumstantial evidence of higher crime is overwhelming. Also stories from friends and family abound of victims of crime. The real turning point was the 28th of September in Greece. The 28th is the equivalent of the 4th of July in the US. It's known as "NO" day, which is the day Greece refused to surrender to the Axis powers. Citizens were attacking politicians and blocking military parades in every city of the country except Athens. The Athenian city marching band performed with black ribbons on their instruments. Students walking in the parade in Athens would hold up black handkerchiefs when passing the politicians on the stands outside the parliament. 

So after the 28th my best guess is that all the politicians but especially Papandreou realized that they had completely lost legitimacy. The system no longer works in Greece. There is simply no light at the end of the tunnel for most people. You have to remember that Papandreou's government has been characterized by almost a split personality disorder. He got elected on the promise of "there is money out there". He kept repeating after each bail-out package that there wouldn't be anymore austerity, then he'd implement more austerity a month later. This has happened so repeatedly that the entire population thinks the man is incompetent. In the meantime since his reign began the Greek economy has shed over 300,000 private sector jobs. Sales tax has gone from 18% to 25%. The latest emergency tax, which was a 10% surcharge on monthly income and a property tax was included on people's ELECTRICITY BILLS!!! So if you didn't pay the tax they would shut off your electricity. It's just absolutely insane. In the meantime the public sector hasn't shed a single-job. Now that the government is even considering cutting 30,000 public sector jobs by 2014 all hell is breaking loose on the streets again. So the situation is beyond insane. I actually agreed with Papandreou's referendum and the Greek people really should be asked "do you want to default or do you want more austerity". It is time for the people to make the responsible decision for themselves. And underlying a lot of the anger in Greece is the realization that despite all the austerity, the higher taxes, the firings, the constant riots, the rising crime, that more debt is still being added on and that there is no end in site. If you ask most people "will it be better ten years from now" they'll tell you no, it'll be worse.

Another few things, everyone complains about not having money all the time. You ask people if they want to go out and even people who are in the shipping business (which is performing like shit these days) will tell you they don't have dough. People are constantly talking about leaving the country. I have friends that ask me all the time what it's like abroad and if they can come stay with me while they look for a job.

¤'s picture

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