November Begins

As anticipated, the shorts are putting up a fight, desperately attempting to resist the next thrust higher. However, fear not. They are on the wrong side of the trade. As Drago says: "You will lose".

Please keep in mind what I have been preaching for almost two weeks:

  • This pullback is almost identical to the pullback of January 2011.
  • Once a bottom a found, a volatile consolidation takes place.
  • The paper spec shorts, just recently drawn into the trade, will initially fight the rally by "throwing good money after bad" in a desperate attempt to protect buy-stops and re-ignite downside momentum.
  • The initial resistance is $1720 in gold and $32.25 in silver.
  • The next resistance is $1730-36 in gold and $32.50-60 in silver.
  • Once that level is cleared, even Helen Keller can see and hear the bottom. Gold will move toward $1755 and silver will advance upon $33.35.

The main thing you want to avoid is frustration and lack of patience. Give this process some time. Tomorrow's BLSBS may provide the impetus for the short-covering to begin in earnest. It also might not. Whatever. Just be long and strong. The metals are headed much, much higher from here.

Let's continue to lead with silver as it is clear that silver is currently leading gold, at least from a chart-advancement perspective. This is mainly due to the strong hands that are accumulating silver, not just in physical form in London but paper form in NY. This accumulation is increasing the pressure upon the shorts with each passing hour.

And, again, let not your heart be troubled by gold. The harder the shorts work to build a line of defense, the more violent the eventual short-covering spike will be.

OK, what else is there to discuss today? Well, there's this new gem from Jim Quinn on the Keynesian fallacy that storm damage is good for GDP growth. http://www.theburningplatform.com/?p=43305

Speaking of Sandy, we are now wrapping up the "First 72 Hours". The reason that I have "" marks around that term is that that is the title of a seminal study done by a renowned psychologist/sociologist a few years ago. If so inclined, you can read the entire paper here: http://www.atsdr.cdc.gov/emergency_response/common_misconceptions.pdf. In summary, it goes something like this:

  • The first 24 hours are shock and disbelief.
  • The next 24 hours are realization marked with determination and hope.
  • After the next 24 hours, panic and mayhem can set in as those affected by the disaster begin to clamor for food, shelter, fuel, warmth etc.

To that end, here we go: http://www.nydailynews.com/news/national/gas-pains-pumps-dry-lines-long-new-york-article-1.1195237 & http://news.yahoo.com/tempers-flare-nj-city-where-thousands-stranded-171518266.html & http://www.nydailynews.com/new-york/brooklyn/looters-target-coney-island-sandy-article-1.1195080

My point is this: Watch this deterioration very closely over the next few days. If things begin to get out of hand, the negative publicity for the federal government could have a rather dramatic impact on late-deciding voters. In this case, it's pretty tough to hang it all on Romney. Obama will get the blame, deservedly or not.

To that end, I'm still getting questions about the impact of a Romney victory on metals prices. Let me state this a different way from yesterday:

DO NOT BE FOOLED BY THE OBVIOUS PLANTING OF MISINFORMATION IN THE MEDIA. ADDITIONALLY, SOME WOULD HAVE YOU BELIEVE THE QUANTITATIVE EASING IS SIMPLY AN ECONOMIC STIMULUS PLAN/EXPERIMENT, HATCHED BY THE EVIL BERNANK. AGAIN, PLEASE NEVER FORGET THAT QE IS ABOUT FUNDING THE ONGOING FEDERAL DEFICIT AT EXTRAORDINARILY LOW RATES IN A DESPERATE ATTEMPT TO PERPETUATE THE GREAT PONZI. ROMNEY AND RYAN CAN TALK A GOOD GAME BUT THEY WILL NOT BE ABLE TO IMPOSE "AUSTERITY" AND THEY WILL NOT BE ABLE TO STOP QE. PERIOD. END OF STORY.

Moving on, The Doc recorded and posted this interview with our pal, Ned, yesterday. Nothing earth-shattering but be sure to listen to the entire thing as plenty of relevant topics are discussed. Ponder, too, the topics mentioned toward the end of the podcast. When will we reach a point of "critical mass" where countries around the world suddenly rush to reclaim their gold before the imposition of a new, gold-based international trade settlement system? Next week? Next month? Next year? Hard to say but that point is definitely coming. Soon.

Lastly, today is the first day of November and this is significant, mainly because of this: Back in July and again in August, ole Thunderlips promised us resolution to the four-year silver investigation. He publicly stated that he expected this in "September or October". http://www.bloomberg.com/news/2012-07-23/cftc-s-chilton-sees-silver-probe-concluding-this-year.html

Well, it's November now and...still...nothing. If you have a few moments, perhaps you should politely nudge Commissioner Chilton and ask him what the holdup is. The CFTC itself issues all of the information that is so obviously indicative of concentration and manipulation, yet they dawdle. Has anything new come to light recently? Some 11th-hour-type proof of guilt or innocence that is delaying the verdict? I'd be interested to know. Anyone wanting to contact The Mullet can do so by emailing him at bchilton@cftc.gov. If you hear anything back from him, please feel free to post his reply in the comments section of this thread. (And again, I ask you to be polite. I know for a fact that he receives plenty of emails but that he only takes seriously those who pose serious questions.)

Have a fun day. Don't get too stressed about today's Comex action. The "positive economic news" and resultant rally in The Pig is simply being gamed by the HFTs and algos. The real fun will come tomorrow with the reaction to the BLSBS.

TF

149 Comments

Istack's picture

I buy these all the time

Are Mercury Dimes Really Made of Silver?

Absolutely! U.S. "Silver" coins minted before 1965 actually contained quite a bit of silver. That means that silver dollars, half dollars, quarters, and dimes all have silver content in them. The Mercury Dime is 90% silver, 10% Copper. During World War II there was a shortage of the metal nickel, so the US Mint made 1943 Buffalo Nickels from silver as well.

A Mercury Dime contains 0.0723 troy ounces of silver. That means that if you wanted to sell the coin to someone who would melt the coin down for its metal value you could earn about $2.33 (coinflation.com)

 
I figure when silver gets to $1000 an oz each dime will be worth around $75.  I dream big.
Colonel Angus's picture

Better line for Blythe and Jamie...

Out doing my part by buying the phyzzzz

The Watchman's picture

LONG and STRONG

Yup

Gramp's picture

Just read the Entire post... 

Just read the Entire post...  wonder what # I hit here...

Thanks TF!

Money By Trading's picture

The Gold Bull in 3 Charts

November is also gold's strongest month since this bull began in 2001.

Onto the charts....

http://wp.me/p2CT0a-6U

Dr G's picture

Good post. Silver leading

Good post. Silver leading gold, that's for sure. And I also find it very interesting.

Turd's initial resistance of 32.25 is holding as good support thus far. It's done so multiple times already today. Me likey.

Oh, and I thought I would add: Winter is coming.

thecoloredsky's picture

Don't forget to Vote during your lunch hour....

harlan07's picture

72 hrs

I can vouch for things starting to break down about 72 hrs after a storm.  People who are otherwise orderly and law abiding get desperate pretty quickly after a major storm. I've seen it several times.  Most people just simply aren't prepared for life without trips to supermarket when the fridge is empty. Katrina was a good dry-run for if the thin veneer of law and order is peeled back in an economic collapse.  When someone got shot over a bag of ice i knew it was time to stay inside until things calmed down. Aren't firearms banned in NYC?  No way I would want to be up there during this without one.

Dawg's picture

I buy these all the time

Good recap, but.....not Buffalo nickels, Jefferson nickels 1942 to 1945 (35% silver).

Arf,

Dawg

Groaner's picture

I dont think us slaves get

I dont think us slaves get lunch anymore do we?

Revelation's picture

CFTC - A Division of You Know Who

Dr G's picture

All of us (yes, really all of

All of us (yes, really all of us), are about 3 meals away from complete unrest. There are very few things that the most logical and level-headed among us wouldn't do in order to secure food for their children after missing 3 meals.

It is what it is. Be prepared.

The Watchman's picture

SLW and MINERS=showing strength

Very good sign for Silver price-SLW touching $41.00.

Southern Cross's picture

1,000 ounce silver bars

Yesterday, I posted asking readers why retail 1,000 ounce silver bars are now much harder to come by.  No one seemed to provide a knowledgable answer.   Does anyone know why 3 years ago 1,000 ounce silver bars were everywhere for sale and today they are almost nonexistent?   Some retailors seem to sell them in IRA's but not directly. 

If you look at retail silver right now,  100 ounce silver bar availability is about what 1,000 ounce silver bar was 3 years ago.    Why is this?   Is this due to physical scarcity?  Shipping difficulty?  Demand?  Anyone know the REAL reason? 

Thanks in advance for any reply. 

boatman's picture

personaly seen

a fist fight over the last grocery cart in '99 [hurricane floyd]

and for those of you that think govmint knows best----- I10 was a parking lot westerly ..........while the eastbound lanes were deserted.........and they gave tickets to those who u-turned the grass median.

"if government ran the sahara desert they would be out of sand in 3 years"

Milton Friedman

145Bluesman's picture

Get ready for a "HOT AND

Get ready for a "HOT AND EXPLOSIVE WINTER".

lol

rl999's picture

It worked so well last week with CA

Jobless claims fall, but missing data due to storm

The number of Americans filing new claims for unemployment benefits fell last week, a sign the labor market's slow recovery was gaining traction.

Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 363,000, the Labor Department said on Thursday. That was below the median forecast in a Reuters poll of 370,000.

An analyst from the department said New Jersey and Washington, D.C., did not turn in data due to the mammoth storm Sandy, which hit the Northeast earlier this week. The Labor Department estimated results for the state and for the nation's capital.

Economists have said the storm could lead to volatility in jobless claims over the coming weeks.

________________________________________

Businesses created 158,000 jobs in Oct.: private report

NEW YORK - U.S. companies added 158,000 jobs in October, data from a payrolls processor showed on Thursday in a revamped report on the private sector labor market.

The historical data for the ADP National Employment Report was revised as part of the new methodology, which was used for the first time in the October report. September's increase has halved to 88,200 new jobs from an initially reported 162,000.

Economists had forecast October's report would show a gain of 135,000 jobs, according to a Reuters poll.

Separately, the number of planned layoffs by firms jumped 41.1 percent in October to the highest level in five months, although the number includes more than 10,000 jobs in U.S.-owned auto plants in Europe, a report from consultants Challenger, Gray & Christmas, Inc., said.

Employers announced 47,724 planned job cuts last month, up from September's 33,816, according to the report. It was the highest level since May.

[Harvey called for a raid last night stating wither thrus or fri. Not sure if this is the impetus, but when the BLSBS comes out tomorrow we now have a pretty good idea what to expect. Personally I expect more shenanigans]

realitybiter's picture

1000 oz bars

are hard to find because the CME needs every single one that exists.  and they don't (exist).

SLW is strong like bull

Stocks were strong in Zimbabwe, too.

The Keynesian experiment won't get destroyed overnight.  Lighten up Francis.

Speaking of stocks, Seagate is trading at a trailing PE of 4, pays over 4% div yield, and Orwel is its largest customer, funnelling scads of fiat their way.

If you are going to get your 4th amend stolen, might as well make some dinero on it.

peckerwood's picture

one of these days blythe

you will get yours.  but it will be real. 

Jimmy James's picture

I have been planning to write

I have been planning to write covered calls on SLW for the last week, but it just keeps making new highs.

I don't want to have my shares called away... maybe Nov 42's?

Jimmy James

Punk-Assets's picture

I sure hope your right but I

I sure hope your right but I get the feeling the metals are going to roll over one more time. I got money to spend so lets get on with it.

RaulP's picture

SLW

There it goes.. 10$ spread b/w SLV/SLW now.. why the hell did I buy SLV and not SLW this time.

The Watchman's picture

Good Info

Silver Futures - Concentration, Confidence and the COT Reports

Wednesday October 31, 2012 15:59

Silver Futures - Concentration, Confidence and the COT Reports

The real value of the Commitment of Traders or COT Report for silver traders, (as Ted Butler, GATA, and others have been pointing out for years) lies in revealing the marked concentration of short silver futures positions held by the major bullion banks, who are classed as commercial traders.

Some observers predict that the Commodities Futures Trading Commission or CFTC will eventually simply hide this data or even change the classification like they have done in the past.

Of course, this would probably only serve to destroy confidence in the silver futures market once and for all.

The Issues For Silver Longs

For the long holder, the concentration of shorts is the main issue, and not simply:

  1. Banks hedging positions in the futures market against client business that leaves them long. Yes, banks typically have little choice but to cover long positions with short positions for risk management purposes, as well as for the sake of earning a profit to provide shareholders with value.
  2. Swaps.
  3. Dealers’ positions being taken on or off or played both ways.
  4. No limits on positions.

These details simply detract from the core issue of market manipulation and lend credence or play into to the conspiracy phobia prompted by the mainstream media.

Most traders can use the COT Report to observe changes in positioning without worrying about the concentration structure. This could explain why the CFTC remains silent about this key issue, and why the CFTC has not done away with or dramatically altered the COT Report to hide it.

Effectively, there are only a few large commercial traders (i.e. bullion banks) selling silver futures against a huge variety of longs.

No Great Conspiracy?

This manipulation may be easier to see when looked at from the perspective of an attempted long market corner. Who cares what the Hunts were doing with the other side of their long position? The issue for regulators was the Hunts’ concentrated long position.

In this case, the real pink elephant on the couch, which shows up clearly in the COT data put out by the CFTC, is that the majority of the outstanding short position in silver futures is held by only one or two commercial traders.

Nevertheless, somehow 'hedging' — which is another word often thrown around loosely (like conspiracy) by mainstream media — makes this concentration 'okay'.

Yet when two large shorts hold 60 percent of the entire sell side of a relatively thin market against a whole crowd of diverse longs, something questionable is definitely going on. The Hunts were chastised and persecuted for doing this on the long side, so why not the heavily short bullion banks?

Can you imagine if oil or copper had the same market commitment profile or IBM for that matter? Sure, there may be naked shorts in those markets, but the shorts are as diverse as the longs, which is how things should be in a fair and balanced market.

It really does not matter if those two heavily short entities are hedged elsewhere. The illegal and immoral concentration of positions still exists in the silver market.

The Confidence Question

Not only does this concentration create an artificially depressed price reality for silver, but it also prevents the investing public from noticing an otherwise healthy way of avoiding wealth destruction by using silver as a non-paper inflation hedge.

Additional dangers of this concentration include:

  1. Big shorts throwing caution to the wind.
  2. Shorting is a treacherous game that has potentially unlimited losses.
  3. Who else but the big banks could afford to take this kind of risk?

Of course, the real danger here is the unlimited downside risk inherent in short positions potentially triggering a daisy-chain of derivatives-led bank failures. This risk scenario could result in a much bigger systemic problem that would send shock waves reverberating throughout the already fragile world financial system.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit http://www.silver-coin-investor.com

By Dr. Jeff Lewis,
Editor, Silver-Coin-Investor.com

rtabit's picture

SLW

Currently hitting pretty strong resistance (41.30 area), may be good time to take some profits. Will post a chart in a little bit.

SRSrocco's picture

THIS WAS A SURPRISE.....

TOP SILVER MINERS AVERAGE YIELD DECLINES MORE THAN GOLD

I have been researching the declining ore grades and silver yields in the top silver miners.  I thought the decline would be equal to the gold miners... but it turned out to be a great deal higher.

This is the chart for the top 5 gold mining companies average yield per tonne:

From 2005 to 2011, the average gold yield from the Top 5 Gold Producers declined 27% or roughly 3.8% per year. 

I don't have a chart for the TOP SILVER MINERS, as it will be included in my next article.  But, I will give out the preliminary data.

From 2005-2011... the top 5 SILVER MINERS average yield fell an astonishing 33.5%.... or 5.6% per year.  This is nearly a 50% higher annual percentage decline compared to the top gold miners.

This does not include the newer silver miners such as SilverCorp, First Majestic and etc.  These figures come from the big boys such as Fresnillo, BHP Billiton's Cannington, Polymetal's Dukat & Lunnoye, Pan American Silver and Hecla.  I have two other large silver producers that may be factored in.  I have to wait and see.

Anyhow, this shows us that the TOP SILVER MINERS are seeing their annual silver yields per tonne fall 5.6% per year compared to the top gold miners that declined 3.8% per year.

COMING SOON.... NEW BIG SILVER ARTICLE

rl999's picture

business as usual

U.K. Informant: Ex-NYSE Director Provided Iinsider-trading Tips

A U.K. man who pleaded guilty to conspiring in an insider-trading scheme told a government informant that illegal tips he got could be traced by to an ex- New York Stock Exchange director, according to court papers.

Taiyyib Ali Munir pleaded guilty to conspiracy in federal court in Brooklyn, New York, on Oct. 15. Munir, who lives in London and worked in the financial industry, admitted that he agreed to obtain and sell confidential earnings reports of public companies from December 2011 to July 2012.

Munir, 30, told U.S. Magistrate Judge Robert Levy that he “spoke with a person located in New York who said he could obtain earnings reports for companies before public release of that information,” according to a transcript of his plea hearing.

Munir didn’t identify the person at his plea. He is quoted in court papers as saying one of his sources of inside information got leaks from a former NYSE director.
 

Gramp's picture

Had long since  drawn my

Had long since  drawn my conclusion, and took notice of the Metals prior to ever reading anything from Turd, Or Silver Doc. or any of the other sites like that.

   All that one has to do is a bit of research into the history of currency and money here in the U.S. and other Countries. The Debasement of Coin has been going on for hundreds of years here in America, and much longer in many other Cultures. 

   Now we are at the point where even the term "Debasement of Coin" is inaccurate, as we now hold wealth or purchasing power in the form of Paper Monies or even Digital Accounts! Never mind 'Coin'! lol

  They even reduced the size and content of Copper coinage almost 200 years ago, and that was after the population initially resisted the issue of Copper coins of any kind, preferring Gold or Silver over any else. It was a common event for the Metal value to outpace the stamped Coin value, thus Silver Gold and even Copper coins were often hoarded/ possibly melted, throughout early U.S history.   The Official response to curtail this activity seemed to be reducing the size of coin, or it's  quality of metals composition. All the while maintaining the same, or even enhanced struck coin official value. Thus making it more valuable as currency than for metal content...

   Does any of this sound at all familiar?... Here we are today with our currency, Paper, with only the Full Faith and Credit promise backing it up. We have come so far from a PM based currency, that what are they going to do next... Reduce the size of our Paper Dollar? lol!! Nope, they will just push interest rate so low that savers get nada. Engage in QE which appears to have the effect of higher cost for Goods/ Services   Food and Fuel. The additional  catch being, Businesses are feeling the crunch, so Worker's Pay remains the same or even reduced from what it was prior to the sharp rise in Fuels a few years back!  If 10 years ago fuel was 3 times less, But the pay rate about the same as now... Now pay rate the same as 10 years prior, or even reduced, or worse no Job opportunity exists... but fuel is 3 times higher in cost...? ( i. e. All things transported by fuels... the PMs ect)  How is that working out for us? lol!

Rant off!

realitybiter's picture

SLW vs SLV

In the last two silver up cycles SLW out performs exceptionally for the first 2/3 of the move, measured in time.  When it starts rolling over, better think long and hard at cashing some chips in the next 3 months...  It is easy to see this on stockcharts.com.  SLW:SLV in the symbol column.  Ironically, that last third has seen MASSIVE moves in the price of the metal....

Right now, SLW is in the back of crowded room, clearing its throat, being ignored....(ahem....AHEM!)

what?

the next leg is here.  I don't care whom gets elected, if  anybody anybody, if the Mayans are right, whateva.  Argentum, bitchez.  Its whats for breakfast, lunch and dinner.  

benque's picture

RaulP & rtabit

SLW operating costs (what little there are..LOL) are in $CDN, and Nov. is seasonally weak for $CDN.

Check out Aug. 2010 to Dec. 2010, looking at $CDN:$US, $CDN:Silver, and SLW alone and in comparison to $CDN, $US, Silver.

Tell me if you don't see a double from here, on a near identical chart as this year.

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