Another Happy Tuesday
We speculated yesterday that today would be another "Happy Tuesday" where The Cartel relents and the metals rise as short positions are covered. Looking good so far. Before we get started, though, a holiday treat that the LTs introduced me to last year.
So, anyway, here's what we mentioned yesterday:
"Just a quick update this morning as not much has changed since Friday. In gold, it's quite clear that The Forces of Darkness and Evil would like to see gold stay under $1600 for a while longer. The CoT survey is tomorrow and it covers the period that begins with the beatdown day of last Wednesday. Though we clearly saw some bank short-covering late last week, something tells me that they'll want to cover more of their tracks before the close tomorrow. Therefore, let's see if they hold gold down for most of the day today before relenting. Tomorrow could/should be a "Happy Tuesday" as the EE covers and new spec buyers join the fray."
Again, the concept of "Happy Tuesday" is quite simple. On weeks (like this past week) where The Cartel has massively rigged a manipulation event, they like to "cover their tracks" prior to the next CoT survey. Those surveys are taken at the Comex close every Tuesday so...Tuesdays like today are typically UP days as The Cartel is covering some of their recently-established shorts. The rationale is: If the CoT report this Friday were to show a huge spike in the commercial short position, it would be just another obvious clue that Cartel was the primary driver of the selloff last week. However if, by the close today, you can buy back most of your shorts, you can paint the CoT to look like the commercial short position is relatively unchanged, week-to-week.
That said, take a look at these charts. Gold continues to improve and 1566 looks more like a double-bottom with each passing day. Now that it has finally been allowed to rise through 1600, it should continue to rally to the 1630-50 area. IF it can move through 1650, we will finally be able to declare with certainty that the bottom for the September-December, manufactured correction is in.
Silver, for all of the reasons frequently discussed here, continues to struggle. Maybe we can get Mr. Sprott to announce that he intends to fill his entire $1.5B shelf offering in Q1 of 2012? Absent, overwhelmingly positive, fundamental news, it's going to continue to be challenging for paper silver to sustain a rally.
Lastly, I've decided to continue posting my daily prognostications on the price of paper gold and silver. My simple TA is what prompted the start of all this last year and I know it's the primary reason why the site has grown so quickly. However, if you are trading, buying or holding precious metal within the current C/C/C system, you are literally begging to become a victim of it. I read an article yesterday by Kevin Williamson. In it, he likened the MFing Global theft to this: Imagine you are a customer of a bank that went bankrupt. Your only exposure at the bank were the valuables you held in a safe deposit box. At bankruptcy, you would rightly expect your valuables to be returned to you. Instead, creditor banks of the failed institution are allowed access to the safe where they dump the contents of all of the deposit boxes onto a big pile on the floor. Then the creditor banks pick through the pile, claiming for themselves whichever assets they'd like to keep. Only after the "community pile" is picked over are you, the rightful owner, allowed access to whichever assets remain. Banks being banks, you'd be lucky to be left with anything of value.
If you remain trustful of the current system, this is your likely fate. Keep in mind what Jim Willie told us last week: "Leave only the amount of money in the current system that you intend to, or are willing, to lose".
Please read these three items in succession and then decide which is the best course of action to take.
On that happy note, I will take my leave for the morning. Let's see where the action takes us today. I'll be keeping an eye on things and checking in whenever necessary. TF