Lights Are On, Nobody Home

Many have said (and continue to say) this about me. In this case, however, I intend it for the silver market where seemingly no one is left. Besides, more appropriate cliches for yours truly are obviously:

  • Doesn't have both oars in the water
  • A few sandwiches short of a picnic
  • A couple aces short of a full deck
  • Not the brightest bulb on the tree

Look, I know it's frustrating to wait for silver to turn and rally. It's driving me crazy, too. Even though I'm on record predicting an exciting and explosive summer for silver, it looks like we're going to have to remain patient. Why? It's all in the open interest.

Back on Friday, as gold was rallying almost $60, silver managed to eke out a gain of just 75c. Then today, it turned around and gave back 2/3 of it. Blechkkk. And why is this? Because the lights are on and nobody's home.

Last Thursday, silver fell 23c and open interest jumped by 2,000 contracts. On Friday, silver surged 75c and OI dropped by 2,000 contracts. What's the deal? I would imaging that today's numbers, when we get them tomorrow, will show OI returning. Why? Because silver is simply getting jerked around here by The EE. They let silver fall in order to suck in some WOPR/algo shorts and then they let silver rise to force those same shorts to cover. Back and forth. Wash and repeat. Until/unless real money returns to the silver pit, it's going to be very hard to break this cycle. Either that or a breakout above $30, which would be needed to entice some spec long buying. Until then, silver will just keep churning away in this current $27-29 range.

One thing of note, however. The internals of the silver open interest are interesting. The OI rise on Thursday came almost entirely in the Sept12 contract as it went from 11,310 to 13,394. On Friday, it was flat at 13,428. In the July12 contract, Thursday was flat and Friday saw a drop of 2,300. Hmmmm. Not sure what to make of that.

Anyway, here's a 12-hour silver chart. You can clearly see the current range. <Yawn>

Gold, on the other hand, looks almost entirely different. Back on Thursday, when price fell a little over $1, total OI contracted a bit but the front-month, Aug12 contract OI was virtually unchanged. Then, on Friday when gold rallied $58, total OI surged by 12,000 contracts with the Aug12 surging by nearly 14,000. Here we have a somewhat "normal" market. Open interest and price both rising by over 3%. Together. In tandem. What a concept! Gold undoubtedly saw a little profit-taking today so I would expect OI to contract a bit when we get the numbers tomorrow.

As for price, the second consecutive close above $1610 should confirm the breakout of the range but that doesn't preclude a brief drop back toward 1600 or even 1590. Regardless, the quintuple bottom near 1525 is definitely now the floor and I think that gold will continue to trade higher here. It won't be easy, though, so don't expect another $60 day anytime soon. For now, 1630 will be resistance. Actually, the entire area between 1630 and 1650 looks like tough sledding so I would imagine that we'll slog along a bit here.

Additionally, with London closed again tomorrow, expect more volatility. Without an AM or PM fix to be worried about, The Cartel can literally bang price any way they wish. Since they likely added longs on Friday, they may want to sell some before the survey tomorrow in order to "paint" it a little. We'll see. Regardless, I for one am looking forward to Wednesday in order to see how physical demand looks after the 4-day respite.

Just one other thing today. One of your fellow Turdites created a new video game that pits both classes of Republocrats against each other. You should check it out. I know he's looking for feedback.

http://www.kickstarter.com/projects/1493481645/democrats-vs-republicans?ref=recently_launched

OK, that's all for now. Sorry for the late post today but I wanted to watch all of the action before writing. As I close, I see that the metals have rallied a bit on the Globex and this is encouraging. Let's just hope we can get through tomorrow without too much damage.  TF

p.s. Anyone still wondering IF there will soon be a gold-backed global settlement currency would be wise to read this: http://www.zerohedge.com/news/hoarding-continues-china-purchases-record-100-tons-gold-april-hong-kong. It's only a matter of time.

304 Comments

koan's picture

Where?

oh where

EDIT: oh yeah

alphamorph's picture

Bonds!!!

So the NikKei tanked yesterday and investors rushed to the safety of.... 10 year bonds, of course.  We can only assume that there were at least a few idiots that did the samee thing in the USA today.  LOOSERS!!!

Zenith's picture

First

Maybe... second time :-)

Bah, at least first to say first.  (sorry for ones who hates first who say first).

SV's picture

THIRST!

I THIRST for FIRST but not as much as I THIRST for the destruction of banking vampire zombie raptors up-on-high!

Free Silver @ http://silverliberationarmy.com

Istack's picture

I finished my homework

now i'm lookin for extra credit.  What can I say.  I must be an over-achiever

Einherjar's picture

Some charts...any thoughts?

http://www.bilderload.com/daten/ziob711RUX29.gif

http://www.bilderload.com/daten/ziob720C2ZLU.gif

dolphindude's picture

Cliches

Elevator doesn't go to the top.

Marc Grail's picture

Starlight coming out

Thought I'd take a step toward the light and shed my handle of Starlight and just be me. Great to be here with all of you!

squib's picture

Sorry to announce this sad

Sorry to announce this sad news: Eduard Kihl has passed. RIP old friend.

http://trololololololololololo.com/

I still can't get enough.

And thank you Turd for what you do!

Pax Argentum's picture

Cliches

(from down Texas way...)

Ain't got enough cheese on his enchiladas!

recaptureamerica's picture

Getting real!

Egan Jones Downgrades The UK From AA To AA-

http://www.zerohedge.com/news/egan-jones-downgrades-uk-aa-aa

koan's picture

T, glad to see you escaped!

And lovin your work dude.

Marc, howdy - and interesting, does cross my mind now and again how odd the whole Neo/Mr. Anderson thing we all do is!?

bluefish's picture

sideways wedge pattern

Using a four hour spot silver chart I can draw a sideways wedge pattern from May 11. As it gets tighter question is which way will it break?

Zoltan's picture

TROLOLOLOLO was a ZH classic comment

Wow Squib, 

1 minute old on my news search.

That comment was the perfect troll response.  So many needed to upgrade to new handles and sock puppet accounts after getting that noose hung around them.

Here is a new home work assignment.  If you don't know what TROLOLOLO is it is now required viewing in honor of Mr. Khil's passing.

Z

Lanikai's picture

Thread title is for others, not the Turdites, not you!

Lights are on 'cause we're all home doin' our homework.

from http://libertyblitzkrieg.com/

If there was ever an article that should spark every British citizen to immediately shift their savings into physical gold this is it.  Basically, proposals are on the table to change the way inflation is calculated for bonds that payout based on the rate of change in prices.  Unsurprisingly, they are purposely attempting to use an alternative measure of inflation that allows substitution

Outfitter's picture

Appropriate quote

"Don't sell yourself short Judge (Turd), you're a heck of a slouch."

Wallace Hartley's picture

Turd's Silver Market Description

Continuing your list, I always enjoyed this one...

"No sharper than a marble."

As far as you go Turd, I've heard that certain CNBS shills have been caught on record claiming that you, and I quote, "couldn't pour piss out of a boot that had directions on the bottom."

Keep up the good work my friend, it is deeply appreciated.

SRSrocco's picture

LOOKS LIKE WE ARE READY FOR A NICE MOVE...

MANAGED MONEY SHORT POSITIONS...THE BEST INDICATOR OF A BOTTOM

I have been following Gene Arensberg for years.  His two charts below give us a good indicator that a bottom in close at hand, and a nice move higher is in the cards.  Again, its not the managed money, or speculative longs that control the market, but the COMMERCIALS.

The MANAGED MONEY SHORTS have given us a trend that shows the following.... as the managed money shorts reach a high peak in contracts, the price of gold and silver hit a bottom. 

As we can see from both of these charts the MANAGED MONEY SHORTS are now hitting new highs... silver actually looks like a new high record since 2008.  If we go back to 2008, we can see that the first high peak (IN BLUE) showing the managed money positions, the price of gold and silver were almost at their final lows.  After a brief move higher, gold and silver did fall again until the end of OCT 2008.

Furthermore, the managed money shorts now have more positions than they did when silver was falling in SEPT-OCT 2008.  If you take a good look at both charts, you will notice when the managed money positions hit peaks, the price of gold and silver had hit lows and were about to move higher.

We don't know what the short term move in the price of metals will be, but this is a good way to see how the managed money shorts correspond with the LOWS of both GOLD & SILVER.

Lastly, time for everyone to HAVE SOME BALZ and stop complaining.  I have been in silver since 2002... and I have seen some big moves up and down.  I feel more confident today than I did when silver hit $8.90 back in 2008.

dropout's picture

Heres Larry Edelson's Latest

He sees gold at $1,373.10 and silver at $20.22 by the end of July.

"The next round of money printing, when it comes, will also be ferocious. The biggest yet. And with very few exceptions, like the Chinese yuan and other Asian currencies, it's going to dilute the purchasing power of nearly all paper money."

http://www.uncommonwisdomdaily.com/what-i%e2%80%99ve-been-warning-you-about-is-here-14378 

So far, his prognostications have been right on and not very popular with some.   

pickaxe's picture

Waking up the "man on the street"

Turd & all, earlier discussion of 1930's depression era experiences was excellent for for thought - never forget that the current crop of troll detractors are only the tools of the mighty EE and will be the ones knocking on our back doors, hat in hand,  looking for scraps once the coming great depression of the 21st Century hits full force. 

The general public is so hypnotized by the razzle-dazzle bread and circuses available through multiple media/entertainment outlets that it will unfortunately be necessary for much pain to be inflicted before the man on the street sits up and takes notice of what we already know to be in store.

Pardon the rant - just finished having lunch with old friend who's just not understanding that the coordinated actions of governments and central bankers over the recent span of years has changed the world forever.

Hold over's picture

Nice boy, but about as sharp

Nice boy, but about as sharp as a bowling ball.

Not the sharpest crayon in the box

Id say he is a sharp as a bag of wet mice.

balz's picture

to SRSrocco

"Lastly, time for everyone to HAVE SOME BALZ and stop complaining.  I have been in silver since 2002... and I have seen some big moves up and down.  I feel more confident today than I did when silver hit $8.90 back in 2008."

Yeah ! Time to have some balz !

Seriously, SRSrocco, when will you start your blog ? That would be nice.

dropout's picture

Into the Wormhole

"The world is waiting to re-learn an old lesson: that untruth and reality exist in an adversarial relationship.

http://www.kunstler.com/blog/2012/06/welcome-to-the-wormhole.html

SRSrocco's picture

BALZ....LOL

BALZ... I guess I don't need to remind you about the BALZ...aye...LOL

Xty's picture

The world, and Xty, want to know:

from recaptures Important link:

"The world [and Xty] wants to know how we conceive the political union that will accompany monetary union, and we have to provide an answer to this question in the foreseeable future," [Merkel] said.

.

BTW if you didn't read it, you should.   Everyone wants everyone to print, starting yesterday.  And Merkel's 'foreseeable future' is tomorrow, even if "Herman Van Rompuy, said he would put forward a roadmap to design a plan for closer economic union in the euro area by the end of this year."

 
Groaner's picture

I dissagree with that!

Maund has been wrong more than right too.

dannyhaha's picture

A favorite of mine:  Dipstick

A favorite of mine:  Dipstick isn't touching the oil...

California Lawyer's picture

Euphemisms

Wiki has a great page.  Fascinating stuff, if you are, like me, a wordsmith.

Here are some that I like, and use:

Not the sharpest tool in the drawer.

Not playing with a full deck.

Lights on but no one home.

Turd, thanks for the comic relief.  You know as well that you are just being clever, as usual.

Be Prepared's picture

22.2 Million Households on Foodstamps....

and the amount received per household is dropping.  The Number of Families entering the Soup Kitchen line is increasing (3.6 Million New Families looking for help the last two years), but the amount of bread and soup is decreasing....

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