Burning Down The House

We had an awesome week and the charts look great. More importantly, a fire has begun that will eventually consume the entire House of Lies.

At first glance yesterday, the CoT hit me like a punch to the gut. I was wrong about something and I hate being wrong. You see, as last week progressed, I became increasingly convinced that JPM's massive silver short position was coming under assault by the other "commercials". I likened this idea to a pack of hyenas sensing the weakness of the leader and turning upon him. Clearly the report, which shows positions as of last Tuesday, does not support this analogy.

Yet.

Instead of attacking the leader, the pack chose to support the leader, instead. All of the buying in the 8/15-8/21 timeframe came from the specs, both large and small. All of the selling (to the tune of net short 9000+) came from The Forces of Darkness. The Evil Ones unloaded 4651 of their longs (10%) and added 4424 brand new shorts. (For those keeping score at home, that's about 22,000,000 ounces of paper "silver" created out of thin air.) Never fear, Captain Metaphor is here with a new one for you to consider.

The action last week is akin to the actions of an arrogant and drunk homeowner who foolishly built his castle along a tinderbox-dry ridge, confident that his homemade firewall would always protect him. Through the years, his house has stood firm against the elements and the homeowner has grown complacent and comfortable. Last week, the homeowner started down his usual path of preparing for the winter. He has once again begun to stockpile gasoline, liquid propane, kerosene and other accelerants. He places them within his house, confident that he can safely use and remove them at his leisure and blind to the danger a fire would present to his fiefdom.

What he apparently doesn't realize is that a conflagration will soon jump the firewall. His castle, which he thought impervious, will soon be consumed in a fire of his own making.

So, upon further review, I am not the least bit concerned about the makeup of the latest CoT. The homeowner has simply placed himself in greater peril by his actions this week. His house is burning yet he slovenly continues his business. Fat, happy and blissfully unaware of the disaster at hand.

As we prepare for next week, I thought it appropriate to give you these charts. Look very closely at them and they will tell you a lot. Let's take them one by one. First, an up-close look at a weekly silver. Note that the price has apparently closed right on top of the Battle Royale II line. Might a raid come from here? Of course. However, silver closed Friday above all of its moving averages. Every single one. This is very bullish from a technical perspective and will almost certainly lead to a rally on Monday as technical-based, momentum-chasing spec money comes charging in. The next resistance point that I see is near $31.50, which would be well above the BR2 line.

The weekly chart of gold shows that is is clearly above its Battle Royale line and, like silver, gold closed Friday above its 10-day, 20-day, 50-day, 100-day and 200-day moving averages. Once it surpasses 1680, gold will move effortlessly higher toward 1700. (More on that level in a minute.)

And these next two charts should be as reassuring as a hug from an old friend. Note that, after peaking in late April of last year, silver price declined into May of this year, where it began riding higher and consolidating along the long-term trendline. If silver could not be broken down last September, last December or even this May, it ain't gonna be broken down now. Soon, The Battle Royale will be won and silver will move on toward further fights at $33 and $36. For now, though, study this chart and smile.

And while you look at this gold chart, keep in mind that ole Turd very much likes to discover patterns that no one else has yet noticed. Look closely. Gold has followed this channel, this "managed ascent", for nearly four years as part of the larger bull market that began in 2001. Now, look even closer.

Recall that, just yesterday, we discussed the significance of 1665-1675 as it related to the S&P downgrade of the U.S. and The Panic which gripped The Gold Cartel in the weeks that followed. Beginning the following week, gold began to trade uncharacteristically above and outside of its long-term channel. If you count the total amount of time between the breakout UP and the final fall back WITHIN, you get a total of 17 weeks. Fast forward to today. In early May this year, gold fell DOWN and out of its long-term channel. If you count the total amount of time between the breakout DOWN and today, you get a total of 16 weeks. Does this mean that next week is the transition week where price straddles the lower line of the channel, currently near 1700? Will the first week of September bring price action that finally places gold squarely back within the channel? Who knows. But, would you be the least bit surprised by a "candle" this week that lies upon the channel line and a "candle" next week that lies within the channel? I wouldn't be.

Well, that's all for now. Go relax and enjoy your weekend. Do not let the CoT (or anything else for that matter) bother you. Over the past eight trading sessions, silver has rallied nearly 10% and The Evil Empire has not participated. In fact, the have only impeded the rally at their future cost and peril. What is coming will truly be explosive and historic. Like me, you should just remain patient and diligent, adding to your stack whenever possible.

TF

267 Comments

twippers's picture

First?

No way.  Holy smokes, I can happily go to silver heaven now.

Mariposa de Oro's picture

Numero uno??

Can't be.....  wink

Edit:  Should've known better with my stupid dial up, lol. 

Katie,  how is the garden?

Cononish1314's picture

Gold, silver lor bronze medal or something

Courage, brothers [and even Ayn Rand-reading sisters]. There's such a thing as the last days of the Hapsburg or Byzantine Empires.

tobydaniel's picture

Well

I considered not even writing second because I actually do have a life other than checking TF metals on Saturday:)

ferretflat's picture

Im going in again today

I'm going in again today to stack more phyzz!

tobydaniel's picture

Geeze, I dont feel bad after all!

Four people wrote before me! Man! lol

Galearis's picture

Thurd?

I am flummuxed so much I forgot what I was going to say!
L.

tobydaniel's picture

Turd, two serious questions

First off, what is the EE? Also does the CoT really matter anymore? The reason I ask that is because in the past, there have been really good CoT reports and really bad CoT reports but none seemed to change the boringness of the metals this summer. They did nothing out of the ordinary until now. It seems as though we are being lied to. I mean, why would they not lie to us and put a fake OI out there for everyone to see? They do it with Unemployment, inflation and on and on. To me, the only way that we can really know whether or not the Cartel is truly in trouble is with delivery troubles like Sprott is having and also the mainstream media when they say that gold and silver are not a good investment to cover their butts. Im just learning like everyone else here on this board but those have been on my mind. Thanks!

SV's picture

Loving the Sunday Reports!

Exciting times for TF Metals! Hey, man, your adsense ads don't show on my computer, but i don't have an adblocker. I will double and triple check, but its true for me and one other person. I get zerohedge ads fine...

Kodak Drive-By Shooting? Selling Their Silver?

Eastman Kodak announced Thursday that it is eyeing an end scene to its print film, photo paper, photo kiosk, commercial scanner, heavy-duty commercial scanners and corporate software divisions, as it looks to sell them. The move comes on the heels of chapter eleven bankruptcy this past spring, and as the business auctions off its portfolio of digital patents.  The move was expected, but not until the beginning of the year. The company said that it is selling a business unit which includes its “traditional photographic paper and still camera film products.

According to Bloomberg News, Eastman Kodak consumes approximately 8.5 million ounces or $300 million worth of silver each year for its manufactured goods and supplies. This is a sufficient amount of silver to put pressure on the silver market considering inventories at the COMEX are purported to be around 35 million ounces of unallocated silver.

Sprott Asset Management had communicated with investors just days before the Kodak bankruptcy informing them Sprott’s Fund has raised enough money to take delivery of ten million ounces of silver. The big question is, from where would they take this silver delivery?

The Kodak bankruptcy will be handled by a specialist from FTI consulting, Dominic Di Napoli, who has worked for JP Morgan and Goldman Sachs.

Kodak Drive-By Shooting? Selling Their Silver?

heyJoe's picture

@tobydaniel

EE is Evil Empire.  Check out the Turdism tab at the top of the page.  Other definitions can be found.

Boswell's picture

Top Ten!?

Cryin' shame about Kodak...

My Great Grandmother worked there on the roof making prints. Passed down some "valuable' stock, now worth ZIP!

edit: Bah! eleven. I'll type faster next time.

¤'s picture

The Captain

Thanks for the new thread on a Saturday  yes

Tomorrow nights opener in Asia should be interesting, you would think.

cavalier's picture

We are the hyenas!

We are the hyenas or at least some of them.

Turd's army is buying now, we, and others like us, will bring the leader of the pack down.

Time is on our side.

Stack  away. Bring the leader down!

Turd Ferguson's picture

Yes, DPH

MODERATOR

Keep in mind that the first order of EE business will be claw back the 15 cents or so of gains that were put on after the Comex close.

This happens so frequently on a Sunday that it is almost certain to happen again tomorrow. After that, I'd expect an Asia rally, some London selling and then a continuance of the rally in NY. $31.50 would seem to be the next target.

Response to: The Captain
Puck T. Smith's picture

@Boswell: Kodak

When I was in junior high and high school, back when they called them that, I was a photography buff.  I had my own darkroom where I made B&W prints and color slides (yay, Ektachrome!).  When I left home for the service and eventually a life on the road I had to give it up--no place to set it up.  I've always wanted to get started again, but I guess I've put it off too long :(

Digital photography has come a long way, but to me it cannot yet match film processed by hand.  Something about the minute fractal qualities of silver iodide crystals gives it a warmth and living quality that pixels just can't duplicate.
 

Jeremiah Jr's picture

@SV

I happen own a company in the photographic industry and know many of the senior executives at Kodak, some of whom are personal friends for many years. It is a shame what has happened to a great American icon such as Kodak, their market cap used to rival many of the major US corporations in years past.

Kodak may very well not emerge from the Chapter 11 reorganization, I see it as 50-50 right now, they have not received the bids they hoped for from two large block of digital imaging patents that are on the block, thus my segment of the industry went up for sale last Thursday.

Hard to say what will happen, hopefully someone will grab the output segment and continue the brand perhaps with different ownership. If not, and they are broken up, Fuji will then be in control of the silver halide output for the entire world. They will absorb as much as possible the demand from the Kodak customers, but it may end up like musical chairs if one needs photographic paper to run your business. In the end Fuji would by those oz's that Kodak would have used.

Either way it is sad to see the garage sale that is unfolding at which once used to be Eastman Kodak.

rz's picture

re: London selling

Note that London bullion market is closed Monday 27th Aug for the bank holiday...

ancientmoney's picture

got through to some relatives . . .

my aunt bought $6k of 1oz. Ag bars and my mom is going for $5k of ASEs.  It's a start.

Strongsidejedi's picture

Is Samsung the next Kodak?

Remember those days when Kodak was a sponsor of Disney theme parks?

Wow...Kodak is yet another company downed by Apple Inc.

Will Samsung be next?

I don't think so.

Here's why.

The Koreans and Asians have been stockpiling gold for the past few years.

Instead of paying Apple the $1.05 billion in damages, Samsung should string out the litigation.

They should plow the $1 billion in USD's into the silver market.

Then, Samsung can cut a deal with the Chinese for the FoxConn production.

Apple may have won the battle, but they've just managed to kill their supply chain and to assist the NorKor and PRC in hobbling the defense of South Korea.

One billion dollars is enough to screw up South Korea's economy, but the South Koreans are one step ahead.

http://www.bullionstreet.com/news/south-korea-buys-16-metric-tons-of-gold-in-july/2493

Note:  "The total book value of its gold holdings was at $3.0 billion, it added.  The South Korean central bank said it now ranked 40th in the world in gold holdings at the end of July, up from 43rd in June."

Why is this relevant.

Apple needs Asia more than Asia needs Apple.

Tim Cook needs to play nice, or his company may find manufacturing costs skyrocketing and the availability of rare earth elements for construction very restricted.

¤'s picture

$31.50

A'hhh...that has a nice ring to it at this point.     It's been awhile.

The Death Ceiling's picture

RIP Neil Armstrong

A proper hero

Jake.at.SSH's picture

Re-Posted From Previous Thread

COT ANALYSIS AT SILVER STACKER'S HAVEN

http://www.silverstackerhaven.com/index.php?/topic/509-cot-analysis-8-24-2012-huge-change-this-week/#entry3352

Here's The Latest COT Report From The CFTC:

http://www.cftc.gov/...es/deacmxsf.htm

WOW!

--The commercial banksters have REALLY increased their net short position. This is the forth real significant change in a number of weeks, They are continuing to show a trend that should accompany a significantly higher silver price trend.

The banksters increased their shorts to 75,623 from the previous week's level of 71,199, but  decreased their longs by a HUGE amount from 47797 to 43146 contracts last week.

This Is A Big Change! Some People Might Wonder If This Is Actually Bearish On The Short Term Price Trend. In Reality, The Banksters Have Virtually Unlimited Sources To Draw From In Order To Pound Shorts Into A Rising Price Trend. This Will Continue Until They Can See That Long Accumulation By Morons Who Step Up To Play In The Paper Market Is Exhausting. Until This Exhaustion Materializes, Extremes In Positions Occur. This Is Why Holding Physical Is The Only Way To Avoid, And Eventually Destroy These Criminals.

The most recent percentage of net bankster shorts as compared to the total Comex silver inventory has increased (VERY dramatically, this week), to 116.06% (this is a Huge rise from 83.18% last week and is now roughly 67% higher than the re-test  low made on 7-15-2012 at 48.76%. Thus, we have seen a shift in trend in progress now for 4 straight weeks.

Here's how the chart shapes up:

We are now seeing much larger increases in the bankster net short positioning as their pattern of shorting into price rises  Price has now reacted is on its way to higher levels. There are a lot of contracts to accumulate and unload. These patterns continue for longer than you might think. These banksters are playing for keeps and they are ruthless in their methods. Just sit back and watch the fun with buckets of physical in your possession!

BTW--I'm No Longer Concerned About The Anticipated QE3 On September 13th.

Last Week's Statement In COT Analysis 8-17-2012:

Maybe they want to wait until Aug 24th? Anyway, They sure know how to put everyone on the edge of their seat! It's so ridiculous--following this Ben Bernank criminal!

When I noticed The Expected Dissemination Of Shill Information Through Willing Bufoons At The CNBS and Bloom(Bilderberg) Networks Was Not Happening Fast Enough, I Became A Little Concerned, But, As We've Recently Seen, They've Now Begun To Leak "QE3 Propaganda", Making Me Feel At Ease That They'll Execute Their Necessary Currency Printing Press On Queque!

REGISTERED COMEX SILVER CATEGORY
The registered category has a even more dramatic look now. The net shorts as a percentage of Comex registered silver has risen to a level of 457% from the 330% last week. t's easier to see here than in the Total Silver Inventory Chart.

BTW---I Notice Others Ending Their COT Analsis With An Appeal For You To Write To The CFTC, Listing Their E-mails Addresses---COME ON PEOPLE!---ARE YOU THAT OUT OF TOUCH?---THE CFTC WILL NEVER LISTEN TO YOU---GIVE IT UP---AND DON'T WASTE YOUR INK WRITING THEM!---SO FUNNY! YOU REALLY THINK GARY GENSLER AND THAT HIPPIE ARE GOING TO DO THEIR JOB?---GIMME A BREAK---MOVE ALONG!

Now Get To Your Coin Shop Before They Run Out!

swampman's picture

The CoT and the Cartel

For those of you who have followed the CoT report for years (I haven't), was the report a fair indicator of upcoming price action, years ago?

and

Has the report remained as indicative as it was in the past or has it become less so? I know if I was the Cartel and wanted to muddy the waters, I would have started manipulating the numbers to obfuscate any attempt at gleaning upcoming price action.

Does anyone have a guess at how intuitive these reports were as compared to now?

Jake.at.SSH's picture

Try Interpreting These COT Reports Longer Term

Try Interpreting These Reports In Terms Of Longer-Term Unfolding Trends.

Go Here And We Can Discuss It Directly:

http://www.silverstackerhaven.com/index.php?/forum/49-jakes-take-on-cot-and-comex/

Recent "Previous Week Reports Also Available" There too.

The answer to your question is focusing on "Manipulation in the Silver Market"

I Believe The Commercials Do The Manipulating---Other Groups Follow.

thus---Focusing on This Group Is Key---This Is What I Believe. Do I Have All The Answers---No. But I've Also Tied In A Relationship To The Physical Comex Inventories For Comparison Purposes.

¤'s picture

Jake

Welcome to Turdistan.

I'm not sure if you're the former Jake who used to be on board  awhile ago (cool person/smart). Not that it matters if you are or aren't. Thanks for the info. yes

Byzantium's picture

Question to Turd

Hi Turd, 

I have some questions regarding your third chart, the one that goes back to 2007 for silver.

It shows a support line that stretched back to late 2008, and has been the effective last-gasp operating support these last few arduous months, which has held firm so far. I notice that it appears to allow a $5 per year rise in silver. Though the silver price often races ahead, it has come back to this trend line as support.

I presume that from a strictly TA perspective, that this line may continue in its role as the key support line.... but would it continue to trend up at $5 a year, or would the critical mass of market algorithms apply some kind of log scale rather than a linear one, facilitating an increasing nominal annual rise rather than the linear $5 one?  

Cheers 

Byzantium

opticsguy's picture

captain, my captain

In the early days of digital cinema, we offered Kodak a chance to be one of the pioneers.  They declined..."film will always be around", they said.  I think this was 1998 or 1999.  What is really sad is that Kodak had most of the good IP for digital imaging and printing, but the MBA's didn't realize the impact of new technology.

A Fantastic Voyage, it has been.

Jake.at.SSH's picture

DPH---Thanks For The Kind Words!

DPH---Thanks For The Kind Words

Same Guy---But Now---I Have Another Spot To Post Some Other Stuff---Check It Out

http://www.silverstackerhaven.com/

It's A Purely Stackers Site---We Don't Believe Trading Paper Makes Any Sense---Just Stack Physical. This Doesn't Exclude Us From Talking About The Going's On In The Paper Market. Or Speculating About It---Or Even Using Analysis To Interpret It. It Just Means That We Believe If You Try To Battle Manipulating Banksters Who Have Inside And Exclusive Information About How They Are Going To Control The Market Against You, You Must Lose In The Long Run. Anyone Claiming Otherwise May, In The Short Run Get Lucky And Think He's Right.

However,  Eventually, They Will Destroy Your Trading Capital---And That Could Be Bad For Your Health. Thus, The References On Our Site About "Visiting Coin Shops", Etc.

Lumpy's picture

Reply to: Wild Thing A look

  • Reply to: Wild Thing

    A look back to Feb. 2012 by Lumpy

    4 days 11 hours ago

    $30.58  is the 200-day moving average for silver.

    $30.92 is the 200-week (50-Week MA)moving average for silver.  (Edit  50-week MA not 200-week) Uki corrected me on that.

    I wouldn't be surprised to see silver hit either one of those numbers this week.

    The last time silver went thru the 200-week (Edit 50-week) moving average silver was at around $35.40

    The people who make a living by robbing us let it run to $37.58 then a quick scalping to close under the 200 week (Edit 50-week) moving average.

    Take a look at the chart.

    http://stockcharts.com/h-sc/ui?s=$SILVER&p=W&b=5&g=0&id=p49620888742

    Just keep it in mind if silver starts moving higher without a lot of resistance.

  • Reply to: Wild Thing
Why am I re-posting this????  I am trying to raise awareness about what happened the last time Silver closed the WEEK right under the 50-week moving average.  As you can see from the chart below Silver was allowed to run a few dollars above the 50-week MA only to be beat back down the following week.  Silver closed the week under the 50-Week MA and kept going to $26.11 over the next several months.
 
Yeah I know I could be dead wrong, but isn't this how the EE operates???   Stand aside from time to time and let silver go thru key levels to trigger buying.  Then smash is down.
 
This is the third attempt at the 50- week MA, and the third time might be the charm.  I'm just pointing it out.  Please take a look at the chart and you'll see what I'm talking about.
 
 
Thanks for looking :)
 
 
 
 
¤'s picture

Jake

Welcome back Bro' cool    and thanks for sharing it with us.

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