The Games Continue - 1630 & 29

As we await what could be an historic weekend, we might as well take some time to look at the current state of the paper metal markets. In a stunning development, prices appear to be capped.

First of all, we have to address what happened this morning. Even ZeroHedge, which for whatever reason attempts to completely ignore metal price manipulation, got in on the act this morning.  (http://www.zerohedge.com/news/gold-stop-hunt-goes-full-retard). In this instance, they are correct about the "stop hunt" but the bigger news (which isn't mentioned) is "whom" is doing the hunting and, even more suspiciously, the timing of it all.

Take a look at the chart below. Note that the $10 spike UP occurred at 8:26 EDT. At exactly 8:30 EDT, the NY Fed released a completely dreadful "Empire State Manufacturing Index" update. ( http://www.zerohedge.com/news/plunging-empire-manufacturing-index-confirms-ongoing-economic-slide-imminent-central-planner-in). If we were to assign rationale for a $10 spike to the "disappointing" economic number, shouldn't the spike have occurred at 8:30 or 8:31? Hmmm? Nope, As you can plainly see, the spike occurred at 8:26.

Now, we could probably spend all day asking questions like:

  • Was the data "news" leaked?
  • Were the trades executed by a stop-trolling spec algo or a stop-trolling Cartel algo?
  • Was it all pre-designed to act exactly at 8:30, using the headlines as "cover"? And did someone just get antsy and/or program the trade to begin prematurely?

Of course, well never know. The CFTC couldn't give a rat's ass about things like this. They're too busy planning parties where they spend the money saved by Gensler and Chilton never seeing a barber. Regardless, all of this is simply today's "Exhibit A" of the total farce which the paper metal markets have become.

So, anyway, back to 1630 and 29. Take a look at the chart above and you'll see something else: Another foray above $1630 that was quickly beaten back. Why is $1630 so special. Well, I could cite a number of reasons but let's stick to the charts. First, I lifted the chart below from Trader Dan. (Dan doesn't get to post much but that doesn't mean you shouldn't still be checking his site daily http://www.traderdannorcini.blogspot.com/

Note the horizontal and diagonal resistance around 1630. You can also see The Cartel capping action on this chart:

The effort to keep silver below $29 is even more obvious and...odd. Seriously, why $29? What makes $29 so important to JPM? (Since we know from the latest CFTC data that JPM is the only firm shorting at this point, it is logical to deduce that JPM is the party capping price at $29.) July12 silver options expire on June 26. That's still 7 trading days away and $29 is an odd number to defend for that sake. There's far more known option open interest at $30 than there is at $29. Maybe you think I'm crazy. Maybe you think I'm seeing things. Maybe you should have a look for yourself.

At any rate, price is clearly being held below $1630 and $29 and I sure don't expect that to change over the remainder of the day. There might be some fluctuation but why on earth would anyone be willing to gamble by taking a large position at this point. It's much safer to lay low, watch the headlines and get ready for Monday.

As you all know, the Greek elections are Sunday. Regardless of the outcome, we can expect fireworks when everything re-opens Sunday night. And do not overlook the Egyptian elections which are also this weekend. Boyohboy, if you want to talk about long-term, Middle Eastern geo-political ramifications, look no farther than the Egyptian elections.

In the time it has taken me to type this, I see that another foray above $1630 has been beaten back. That's pretty funny. Again....what a complete joke the paper metal markets are. However, that should not stop you from buying even more physical metal. I am still expecting a hot, explosive summer for gold and silver prices. Physical demand is extraordinarily strong and events are swirling that will change forever the dynamic of how gold and silver are priced. Be patient and continue stacking.

Have a great weekend but be prepared for a very wild and volatile week ahead.

TF

334 Comments

rocoach's picture

maybe?

Does anyone have a theory as to the significance of $29 silver?

Island Teal's picture

2nd ?????

Hang on for the coming ride

Everyone have a good weekend

Big L's picture

Thurd

Turd's Thurd?

Edit:

In what point of time were 1630 and 29 the average prices of those metals?

That is, on or about those dates, what was going on in the broader financial markets? Or currency markets?

Those numbers have been agreed upon for a reason. If we can tease out the reason, perhaps we can finger a cause?

Perhaps we can deduce the players by the timing?

proton777's picture

A Classic Line

(the CFTC is) "too busy planning parties where they spend the money saved by Gensler and Chilton never seeing a barber."

What a gem!

Slick's picture

Significance of $29

After 29 comes the 30s then the 40s

Big L's picture

Jan 2011 for silver and gold

Right before a big jump/change in price and trend? I'm not good with charts but it looks to me like a 'natural' top, or what I would call a 'hitch' upward. Not so technical at term, but I think you can see what I mean.

Same thing with gold, that level is about the same time, and precedes a strong move upwards in the prices.

That's the way it appears on the Kitco 5 yr chart.

If I was negotiating a 'fair' price for metals, I'd be willing to take those numbers based on the historical charts.

What else was going on, at about this time in financial history?

Anybody else think this has merit?

sdstacker's picture

36

Is a major battle line.  It is also rumored that if the price of silver is above 36, JPM's derivative losses are multiplied.  Not sure the truth to that but silver has been defended as if it were.

Headswim's picture

China to buy LME

http://www.usatoday.com/money/perfi/stocks/story/2012-06-15/hong-kong-stock-exchange-buy-london-metal-exchange/55610362/1

I've been lurking here for the past several months and saw this gem on my USA today app (I like to keep abreast of "news" for the occasional gems that hint at what's really going on).

I've seen some discussion over the last few weeks about what China's plans are....and here it is! After reading this I knew I had to make an account and post right away.

Thanks to everyone in the community for all the discussion, and keep stacking!

Doc1800's picture

If you draw trendline on the

If you draw trendline on the daily chart from 1 March of 2012 until the first part of June 2012 that trenline leads to the price of around 29 I suspect what they're doing is holding it under that trendline just as long as they can  with op ex coming next week to hold it under the trendline gives them a shot to keep it under 30 barring conditions following this weekend. Besides that any whole round number 30 4050 those numbers will be defended at the lower point in order to keep momentum from occurring

Chris P. Bacon's picture

Seasonal Charts

peckerwood's picture

significance of 29?

it could just be an arbitrary number chosen to defend - to throw traders off and to confuse them as to where to set their stops.  it could be that that is where the big short begins to feel major pain on the near month futures shorts - where is JPM average short for the upcoming month?  or is that where the straddle across several months starts to get painful?  the derivatives these crooks play with could make almost any seemingly random number the line in the sand to be defended mercilessly.  so i guess what i'm saying is that i have no idea :-)

SWCroaker's picture

Equities op-ex?

Maybe the $29 is linked to "assisting" related plays, namely those in mining equities? (To day is a quad witching exp).  The miners often look to the metals for a lead, and it might be much easier to get to max pain on specific equity options if the spot is also managed to set the "tone".  I've often wondered if JPM & friends would chose to limit their profit arena to just futures, when they have the (pun intended) option to set up hedges or even grossly profitable counter plays in other leveraged markets.  (Lose a little on the future shorts, but harvest nicely in ancillary markets that aren't under such scrutiny).

top_shot's picture

Podcasts on the iTunes site

If possible that would be AWESOME!

Thanks

Obama Bin Lyin's picture

Significance of $29 Silver

They do not want Silver to reach $30 because then a boatload of options will expire in the money.

They probably chose $29 as the line in the sand to defend as it is a less obvious number and gives them a little breathing room.

-OBL

peckerwood's picture

another family member just bought silver!

i'm really getting good mileage on the greece situation.  those of you that have parents or grandparents old enough to remember the depression - they will remember the significance of bank runs and capital controls.  send some articles their way if they still aren't getting it.  

those so inclined, say a prayer for your European brothers.  things are getting real ugly over there, real fast.

iceman321_2k2's picture

Are Gold Bugs Pessimists or Realists?

Money isn’t everything, but it sure helps. If people are unable to access their money, it will be extremely difficult to take advantage of any opportunities that market turmoil may provide. The people located in the eurozone are quickly realizing this hard truth. Greeks are reportedly withdrawing up to almost 1 billion euros a day ahead of the election on Sunday. However, countries are beginning to introduce capital controls in order to maintain the status quo of fiat currencies for as long as possible....

http://wallstcheatsheet.com/stocks/are-gold-bugs-pessimists-or-realists.html/

gjervis's picture

Dont care

I will happily thank JPMorgue for keeping physical silver below 29.00. More cheap Phyz for me.

Dr G's picture

Facebook is back above silver

Facebook is back above silver again. 

Buy physical metals. The paper price is rigged IN OUR FAVOR for purchasing physical metals. 

Prices will probably get kicked in the nuts and move lower from here. No big deal. 

Be Prepared's picture

or Bust.....

Be Prepared's picture

No substance... Just Gaffe... from the One Party System...

Be Prepared's picture

Rights Banning... let's hope it doesn't catch on...

Be Prepared's picture

Almost four years.. and it's still all Georgie's fault... rright

ivars's picture

GRS continues to form head

GRS continues to form head and shoulder pattern that may lead to rise in silver prices starting from June 21st or later.

After yesterday GSR starts to form second shoulder:

So far, it is staying in about the same level today. Neckline a bit above 55, so June 21th st is the first day it could be broken as a support. Yesterday when posting GSR I did not count the Saturdays and Sundays in so I got June 19th as first date for silver way up, but that now seems a bit too early.

I wonder was my worries about USDx shooting up next week (and treasury yields  down) for a spike next week that would cause sharp drop in gold and silver at least for a moment of panic.

There is one scenario from ZH that supports it: http://www.zerohedge.com/news/positioning-weekend-bofas-risk-cheat-sheet

Its called BEAR case. Us 10 year treasuries Yield down to 1,3%, EUR down to 1,2 USD, or about 3%, so USDx up around 3%, or > 85. Naturally I expect exactly this to happen: Greece does not form pro-EU government, policy response- limited.

At least the 10 year treasury  note yield is already moving in that direction.

eyeswideopen's picture

Ted Butler June 15

The Springbok's picture

$30 mark

Have the bankers sold a boat load of options at this level and don't want them to expire in the money? I'd love to know...

kingboo's picture

What do these pictures have in common with our Economy/Wall St?

Should i have made the question harder?
Big Buffalo's picture

Barack

He really has turned out to be a very disappointing President.

I'm not really for either party, but honestly, we really can't have such a lack of leadership for another 4 years. The next President is going to have a very tough job.

gosave's picture

29

er maybe forestalling  imbedded  societal  memories  of  1929?   possible,  but  more  likely a thumping opaque   otc  short  there  by our  fine  friends.   thats  fine,  another  silver  freighter is  docking  in Macau as  we  speak, and the  rest of this busy  fleet chugs East across the Pacific at thousand mile intervals.

   They  have to spread them  out a bit  on account of very inefficient  dockhands in the Chinese ports, since they tend to roll around laughing with  glee inhaling  the worlds nearly  gone  silver  at  29.

kingboo's picture

No comment......

robov's picture

Silver Cap at $29

Harvey Organ continues to state daily that the high OI interest in silver is of great concern to our banksters and that a price above $30 would put massive amounts of calls in the money. From a daily chart perspective I see a rather large longer term symmetrical triangle and and a shorter term ascending triangle with $29 being the breakout for both patterns.

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