"Jane, you ignorant slut."
Sorry but that just makes me laugh, even to this day. I was probably 12 and, Lord knows, MamaFerg would not have approved of me watching SNL back in those days, at such a tender age. I imagine my brother or brother-in-law kept me up late and let me watch. Didn't even know back then what "slut" meant...just knew that the audience roared with laughter so I laughed along. Now, in the era of 24-hour news cycles where bubbleheads drone on endlessly about topics in which they have no expertise, the line is funny once again. Perhaps now it should be "(insert CNBS or Bloomberg bubblehead here), you ignorant slut".
Moving on. I had intended to type up a full post today discussing the miners but, you know what, that simply takes too much time to do and it's a Saturday and I'd rather do something else. So, we'll save the miners for sometime next week. Suffice it to say, though, I think we've reached the point where those interested in gambling some fiat might begin to dabble. Again, more on that next week.
For today, let's just pick at our bottoms a bit. If you missed it, yesterday's Commitment of Traders report painted another compelling picture. Here's a link to the report: http://news.goldseek.com/COT/1362774776.php And here's a C&P of the immediate analysis I posted yesterday afternoon:
Submitted by Turd Ferguson on March 8, 2013 - 3:13pm.
Even more bullish than when I typed my somewhat-criticized "BOTTOMBOTTOMSOONSOON" from the CoT review of two weeks ago. Looking even stronger now!
Please open and review this post for context: http://www.tfmetalsreport.com/blog/4492/strange-days-indeed
The CoT just keeps getting better and better. For the week, price fell about $40 while total OI was up 728.
The LSpecs dumped 6700 longs and added 2300 new shorts. This brings their net long ratio all the way down to 2.23:1. The SSpecs did the opposite. They added 2400 longs and covered 2800 shorts.
This left The Gold Cartel with only 3800 contracts of wiggle room to decrease their net short position, which they did. They dumped 700 longs and covered 4500 shorts. This brings The Cartel net short ratio down to a very bullish 1.89:1.
Again, for context, at the 8/14/12 price low, the LSpec net long ratio was 3.42:1 and The Cartel net short ratio was 1.98:1. At the price lows of late December 2011, the LSpec net long ratio was 4.57:1 and The Cartel net short ratio was 2.01:1.
Chew on this, too: The gross number of LSpec shorts is now 87,661. On 8/14/12 it was 47,131 and on 12/26/11 it was 36,625. Now 2X the level seen at major, recent bottoms, that's a lot of fuel for a short squeeze!
Also extremely bullish. Refer to the "Strange Days" post above for a bunch of historical data. Below I will just show the same dates as the gold analysis.
For the week, price fell about 70¢ but total OI rose by 1,475. The LSpec added 700 longs but also added a whopping 3800 brand new shorts. This brings the LSpec net long ratio down to 1.94:1. Recall that just four weeks ago it was over 6:1! Just as in gold, the SSpecs added 300 longs and covered 1100 shorts.
The silver commercials added 265 shorts to bring their total gross position up to 52,774 and The Silver Cartel covered 1400 shorts, dropping their gross short position down to 81,957. The new commercial net short ratio is a very, very bullish 1.55:1.
Again and for perspective, on 8/14/12 the LSpec net long ratio was 1.93:1 and the commercial net short ratio was 1.49:1. On 12/26/11, the LSpec net long ratio was 1.41:1 and the commercial net short ratio was 1.34:1.
Lastly, at 19,846 the total gross short position of the Large Specs is, by far, the largest number I've ever seen and it dwarfs the 6588 number that we saw just four weeks ago! That's a 3X increase inside of a month! Think these momo-chasing hedgies and HFTs are late-to-the-game and on the wrong side of the trade, about to get a truly religious experience? Me, too.
Now, an important caveat. Always remember and never forget that the CoT is already 72 hours old when we get it and, when taken by itself, is of limited usefulness. However, what does make it helpful is the historical context, given these highly-manipulated and distorted markets. This is why the comparison of The Cartel net short ratios is so important. Note that we are very near or even exceeding the ratio lows of late December 2011 and August 2012. Why is this important? Take a look at these weekly charts and note where price was then and the extent of the rally that followed.
So, what I'm getting at here is that it seems pretty likely, perhaps even "probable" that the metals are putting in at least a short-term bottom here and a rally is coming. The question is: Will the rallies die again at the trendlines or will they extend back toward the tops of the ranges, as they did in February of 2012 and September of 2012? We shall see.
And here are two news articles for you to discuss. Both were emailed to me yesterday by an observant source. First read this: http://www.chinadaily.com.cn/china/2013-03/06/content_16280875.htm No, this is NOT the fully-allocated silver exchange we are all still hoping for. Instead, this major new exchange that will price, fix and trade in competition with London and Comex.
The other item is this: http://www.reuters.com/article/2013/03/08/china-oil-futures-idUSL4N0C013S20130308 Here's the key section of the article for you to consider, with emphasis added:
"The sour crude oil contract could be priced in either the yuan or the U.S. dollar, the SHFE has previously said."
Hmmm. Well that's interesting, isn't it?
Finally, the GLD shed another 3.31 metric tonnes yesterday. This drops it's total to 1,239.74, down from 1,349.92 on 1/2/13. Yes, that's 110 metric tonnes (8+%) (3.5MM ounces) (8,841 London Good Delivery bars) that have been pulled out YTD. The popular bubblehead "analysis" is that this metal has simply been returned to Authorized Participant vaults as "investors" move out of gold. Is that the case? Maybe. I mean seriously, who am I to say? I'm just a dope with a MacBook, banging away in his parents' basement. Of course another scenario is that shares are being redeemed as a simple and easy, convenient source of physical metal and the gold is being shipped to points East, never to return. I guess that, one day in the future, we may finally get some answers. Until then...
I hope that everyone has a safe and relaxing weekend. Get ready for next week and the rest of this month. Fun and interesting times appear right around the corner.
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