A Significant Week Begins Well

A very nice start to the week today. The after hours action on Friday had left me quite nervous but my concerns weren't justified...so far. Let's see what the rest of the week brings.

But so far, so good, particularly in gold which broke down on the hourly chart back on Friday, only to regain and rally today. This is particularly encouraging given that:

  1. The engulfing candle on the daily from Friday should have emboldened the spec shorts.
  2. Today is the first trading day of the month.

That gold was able to turn around and rally today...strongly...is very encouraging. Now, before we get too excited, there's still a long ways to go before Friday so you must expect some continue volatility. However, gold had every reason to extend lower today and it didn't. In fact, the opposite occurred. This must be considered a very positive sign for the days and weeks ahead.

Take a look at these two gold charts. On the hourly chart, note that gold had broken down and out of a two-week rally. This was very discouraging back on Friday and had me quite concerned that we were going to see another test of $1350 before the NFP (BLSBS) on Friday. Instead, look what happened! Price rode along the downtrend line for about 24 hours and then finally popped back UP and through and now rests right below the $1413 horizontal resistance line. As of this moment, chances are high that this "ascending triangle" will resolve to the UPside.

And check this daily chart. It is telling us that something significant is about to happen! Notice the volatility and price ranges of the past three days as gold is pressing up against both the horizontal resistance of $1413 and the 20-day moving average, currently at $1410.90. What I believe that this is telling us is this: It's do or die time for the Spec Shorts. They've pressed their short-term advantage and run their net and gross short positions to record and unsustainable levels. IF they fail here...and gold moves through $1420 and then $1440...there can be no denying the existence of a powerful double-bottom at $1350. If gold then moves UP through and closes above the $1485 and $1487 intraday highs of late April and early May, it will be all over for the shorts. The only remaining hurdle at that point will be the old range bottom at $1525 and, once through there, the panic felt by the shorts will be palpable.

Turning now to silver, though the charts aren't quite as demonstrably bullish, silver looks OK nonetheless. It has no doubt found a very solid floor near $22 as you can count anywhere from seven to ten attempts to permanently breach that level that have been thwarted. Look first at this hourly chart and notice not only the persistent $22-23 range but the stout floor, as well. Also, if you're wondering why the $23 level is acting as resistance, the answer is clear. The 20-day MA for the July silver is currently $22.94. As in gold, moving above this key short-term indicator will put a lot of pressure on the algo and HFT spec shorts so the level is being actively defended.

And now look at what I've found on this daily chart. This descending triangle will resolve itself very soon, probably by Friday. Normally, you'd expect the resolution to be more downside and that may be the case. Who knows? But...I think that $22 is a very solid floor, gold looks to be headed higher AND I have a hunch that Friday's BLSBS dats is going to "disappoint" the econobulls. Therefore, I think chances are high that this triangle will actually resolve to the UPside, instead. We'll see. Either way, we'll know very soon.

The closing OI for FirstNoticeDay of the June gold came in at a scant 4,946. This is disappointing to say the least. However, April FND had only 6,601 standing yet we still managed to see almost 1,300,000 ounces get delivered as many folks showed up during the April delivery process and "jumped the queue". Will this happen again. Maybe. Harvey Organ keeps track of this daily so I'll monitor the situation and keep you posted. One thing is certain...The Banks had better hope that this Comex delivery demand stays low because, as of Friday, they showed a registered inventory of only 1,571,000 ounces. That's enough to settle just 15,710 contracts.

And the overall open interest in Comex gold continues to plummet. As of Friday, it stood at just 375,206, which is the lowest level since late 2008. With today being the first day of the new month AND the first day of trading after the June contract went off the board, it will be interesting to see tomorrow what kind of change we saw today in overall OI.

Anyway, putting it all together, between these charts and the CoT positioning, it seems clear that we are on the verge of a permanent trend reversal and major spec short squeeze. The BLSBS on Friday appears to hold the key unless the longs decide to take matters into their own hands before then.

Finally, my friend Dan at FutureMoneyTrends just sent over another great interview with Marin Katusa of Casey Research. You should take a look. It's worth the nine minutes.

Have a great rest of your day and let's see how things trade overnight in Asia and London. The action there will definitely set the stage for New York tomorrow.

TF

 

160 Comments

Marblesonac's picture

First

How juvenile....but so what!

proformatrillionaire's picture

2nd

Interesting stuff on the end of the last thread. I must admit I am completely confused. Just as our fearless leader wants me to be. (BO not Turd)

I am just hoping that people jump the que so that the Comex cannot meet deliveries. Also, can't wait for the GLD to be drained. That should be at least a little fun for stackers.

DirkDirkler's picture

The infamous Thurd

Yep, no content, just virtual penis lengthening.

Fredco's picture

Thurd!!!!!

Thurd!!!!!

Sorry my first one, I had to! Thanks for all your work Turd, and the humble people of Turdville!

Igiveup2's picture

5th

Ahhhh

AgNovice's picture

6th Amendment

Sixth Amendment

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.

I think the challenge will be the "impartial jury".

(Ob.Gold: Wish I had some dry powder)

SRSrocco's picture

Charlatans, Cut-Throats & Two-Bit Analysts....

The reason why the financial system is in such a mess is due to these three characters:

Charlatans, Cut-Throats & Two-Bit Analysts....

The world has been turned upside down.  Real value today is bad, and lousy values today are good... very strange.  This is especially true for the ZOMBIE BANKING SYSTEM:

I discuss this in the post:

THE GREAT BAMBOOZLE: Selling Garbage For a Premium

AlienEyes's picture

top ten ?

top ten ?

SV's picture

getting Phyzzed out

I love getting phyzzed out...best high available.

https://www.goldsilverbitcoin.com/rebuilding-the-case-for-silver/

philly's picture

Top ten...snuck in just under

Top ten...snuck in just under the wire!

Saw a column in the WSJ earlier today whose author was basically trying to make the argument that there is no manipulation of gold/silver and that gold/silver are not now, nor have they ever been, a protection against inflation.

I'll take that bet!! Now I just have to find that column again and email the author that I will pay him full spot price for any gold/silver he has in his possession!

What are the odds he won't bite on my offer?!?

Took me a while, but I finally found the column:

http://www.marketwatch.com/story/no-gold-trader-should-ignore-these-odds-2013-06-03?link=MW_story_insert

pforth's picture

Problem with draining of physical gold theories?

There is no debate that the reserves of GLD are being reduced.  The MSM theory is that people are selling their paper gold for other assets.  Our theory is that people are converting blocks of GLD shares to physical.  I've discovered an inconsistency with our theory and I wonder if people can help me out with it:

If people are desperate enough to get gold in quantity that they are draining GLD, then why aren't they also draining Sprott's fund PHYS?  PHYS also allows you to redeem large blocks of shares with physical gold.  If there really is a shortage of physical gold, shouldn't we see this draining too?  The only answers I can think of are:

1) People trust PHYS so are keeping it because they feel it is as good as owning physical.  The problem with this is, if this was really true I think we would not be seeing a negative premium.

2) Banker's don't want Sprott going public with the fact that he's seeing large redemptions.

3) The MSM story is true and ours is false.

Any other thoughts?

Mudsharkbytes's picture

Too late for the top ten

So this'll be my first eleventh.

Ok, twelvth, but whose keeping count?

JY896's picture

Turkey now has their very own Tony Bologna...

....or Officer Pike:

I realize this is a small thing, in light of what happened in Tehran a few years ago, the Arab Spring events of the last several years, and the violence in Syria at the moment. BUT I thought it more than interesting that THIS (and more) would be the result of folks deciding to make a stand that building another shopping mall is NOT what they want in the middle of their capital.

Can't have that kind of attitude in a forward-thinking, progressive Western democracy, now, can we?

"The orange broadcasting van lay on its side in the glare of an arc light on Istanbul's Taksim Square while protesters clambered over it. On its bonnet was scrawled "government crony media for sale" and on a side panel "Where were you yesterday?" " -- Reuters

On a more introspective nore -- what exactly is the origin of these protests? Would tens if not hundreds of thousands of Turks turn out over the literal / proximal reason?

"The demonstrators had been preventing workers from razing some of the 600 trees in the park, the last patch of green in the commercial area, to make way for the restoration of Ottoman-era military barracks. Residents fear that the barracks will be turned into a shopping centre." - al Jazeera

Is there any possibility there are exogenous factors contributing to this unrest? Or at a minimum that there are serious rifts/power struggles going on within Turkey at the moment?

Is it just coincidental that similar processes are underway in Syria and Egypt?

"In a further sign of spreading instability, the Turkish military said there had been an exchange of fire between its forces and Kurdish guerrillas of the Kurdistan Workers’ party (PKK) in Sirnak, in the south-east. The two sides have been observing a ceasefire as the PKK stages a withdrawal from Turkey into northern Iraq as part of an incipient peace process since the start of the year. The reported clash was the first known breach of the truce. The army claim could not be corroborated." - Irish Times

More background and interesting perspectives here. Insofar as it has the possibility to destabilize Turkey (though by no means a high probability), this is certainly an interesting development to watch.

And this after they were doing so well:

"Moody’s Ratings agency upgraded Turkey’s long-term credit rating to Baa3 for the first time today, giving the country an investment-grade rating at two out of the three major credit ratings agencies." Quartz

Mr. Fix's picture

I stand by my hat contest picks:

Gold:  $1399

Silver:  $21.99

See you Fridaywink

ancientmoney's picture

@Turd re: your message(s) . . .

I really do appreciate all your work and effort maintaining this fine venue, wherein like-minded and not-so-like-minded people can discuss PM and other matters.

However, now for the big "BUT")there are two diametrically opposed messages being delivered.

One message is that there will someday be a new currency ruling the world that will be gold-backed, and a new freedom for paperless PM markets will be upon us. Therefore, we should be happy when paper prices go down as that signals the impending death of paper and renaissance of the free PM markets.

Then we get the charts and messages of this post, that say we can now look forward with joy to rising (paper) prices! As of now, paper and phyzz are essentially priced the same. with the delta a few bucks for the middle-men.

What should we actually be cheering for? The continuation of this paper system that will magically be ridded of its cancers and disease?

Or the death of this incurable disease of a paper system, so the new can soon replace it?

margaritatime's picture

^ exactly what he said!

^ exactly what he [ancient money] said!

StevenBHorse's picture

Difference between Sprott

1) There are no AP's in PHYS.

2) The arbitrage opportunity isn't there like in GLD b/c of C) 

C) Sprott fund holds 51 tonnes of metal.  GLD holds 1000, nearly 20 times as much.

The MSM narrative is a joke anyway.  They focus on all the selling, and how that is driving down the price, but the obvious question then arises, who the fuck is buying the bars?  Who is on the other side of this trade, and what are their expectations/motivations for purchasing the bullion from the retail sellers?  If this bullion is moving from weak to strong hands, then what will prices do when the dumb fuck retail money plows back into the market (which they will), and there is less available bullion for sale?

Why do you care what MSM says about anything?  They are professional liars, and the sound board for MOPE. 

Mr. Fix's picture

ancientmoney

Death to paper!winkyes

ancientmoney's picture

@pforth re: PHYS vs. GLD . . .

I will try to frame some answers to your questions.

1.  PHYS is much easier to turn into phyzz than is GLD, and one does not need to be a AP or custodian to access the phyzz in PHYS as you do in GLD;

2.  PHYS is allocated.  GLD is unallocated--actually, it is worse for mere GLD shareholders.  It is a piece of paper that does not provide gold ownership, as does PHYS, but rather, the right to claim fiat in an amount equal to gold's value at a point in time.

3.  The banks created GLD to be able to create a pile of gold that they control and own by using the money of their clients that otherwise would have went to PHYS or to phyzz had these duped investors known better.  It is the sweetest deal on earth for the AP-bankers who run it.

I don't know whether PHYS is seeing any redemptions, let alone large ones.  But if there are any, it could be that some small guys are "going for the (real) gold" in their hand, just like the bankers draining GLD are doing.  In other words, selling shares in PHYS to buy phyzz.

freemarkettrader's picture

@Turd - Amount of Gold Standing for June

Turd,

Thanks for all you do with your site.  According to Harvey, 5,942 contracts were served last Friday.  If you look at the open interest of the June contract as of Friday, there were still 4,946 contracts still standing for delivery.  This means that an additional 375 contracts have stood for delivery since 1st notice day for the June contract.  Thus the total amount of contracts for the June contract is 10,888.  Very comparable to the April and February contracts and very threatening to the miniscule amount of physical that is available at COMEX

Mad5Hatter's picture

Nuts

its going. In 9 years, its now going nuts. Looks like hacking, could be a large number of hits, what do I know. Three days ago noticed google coming up with a new reordering, and that was weird, indicating a large number of hits. Now, cant regularly access the blob at all. Meh, this is 9 year weird stuff. Could be the solicitation to shut down wall street manipulation. Just dont know.

http://totalcontrol.blogtownhall.com/

Here is the latest, if you got a good one. PM for inclusion.

USA Nova Slang

Just in case you aint hip to the lastest slang sweeping the nation, thought a list, to set your mind straight, might be in order. Enjoy

Crimex::  The NY Comex exchange

COT: Commitment of Thieves

Banksters: Paper Pushers getting Obscene Bonuses

Greedsters: Bullion Banks raping the Traders

Holy Spinners: US Politicians

Black Robe Reapers: The Judiciary

Double Dutch Bus: The Legal Honorable Profession

Sharks: Self Interested Litigators with Clients seen coming.

Smear Merchants: Main Stream Media Anchors profiting on Libel

Gaucha Pundits: Communists profiting off Innocents

Ponzi Coupon: The Irredeemable Federal Reserve Note

More to come, Im sure.

Bill,

Wild action these days. I have to get back into Lemetropolecafe Handle  DerrickMReid

All I got is cash to snail mail to you. Please send me a fee and an address please. Thanks Derrick

Turd Ferguson's picture

I don't see where this is a conflict

MODERATOR

Yes, eventually, the dollar reserve status will end and gold will be reset multiples higher. Eventually. Maybe next week. Maybe next year. Maybe 2015. Who can say for sure?

Yes, eventually, the Comex/LBMA fractional reserve bullion banking system will fail. Eventually. Maybe next week. Maybe next year. Maybe 2015. Who can say for sure?

In the interim, if we simply sit around waiting for this to happen, we'll all go crazy.

Additionally, countless folks are being bombarded with disinfo regarding future price. My job is to counter that when I see UPward prices coming. Discouraged folks don't buy physical. Discouraged folks don't add to their stacks. Discouraged folks actually consider selling and, by converting their physical back into fiat, they perpetuate the system. Discouraged folks also wait and hope for the lower prices they've been promised by the MSM before they buy.

So, the two positions are not incongruous. Yes, the system will fail but higher prices in the short term will stem the selling, add courage to the conviction of buyers and ultimately accelerate the demise of fractional reserve bullion banking. This is why I continue to optimistically provide charts and other indicators of a paper price bottom.

Going4it's picture

SP-500 Triple RSI Divergence

I was messing around with my stock charting program and pulled up a quarterly chart of the SP-500.

An RSI shows a triple divergence between the highs of the last 13 years. Obviously, if the market continues up this picture could change, but I thought it was interesting.

Eric Original's picture

ancientmoney's question cuts to the chase

As for me, I'm long physical.  As long as I'll ever be.  I want them to go UP.  Every time someone cheers a drop it drives me insane. 

Losing Purchasing Power DOES NOT EQUAL prepping.

Those who think there is going to be some kind of weekend "reset" are living a doomers wet dream.

ag1969's picture

ancientmoney re: which is it?

I will just refer you to my post from December:

http://www.tfmetalsreport.com/comment/247082#comment-247082

Turd Ferguson's picture

We're looking at two different things, I guess

MODERATOR

And maybe I'm wrong. 

But, Harvey shows the 10,531 OI from Thursday as the total standing. The problem is, FND wasn't until Friday. Remember, the OI #s are always 24 hours delayed and the numbers released this afternoon show Friday's June OI at 4,946.

Maybe I'm missing something here but this is how I've always done it.

For example, FND for April was 3/28 and on that day the OI was 6,601. The day before it was 13,378.

FND for Feb was 1/30. OI that day was 13,910 and the day before it was 36,174.

tyberious's picture

Awesome...

Article SRS!! Great commentray!

tyberious's picture

Awesome...

Article SRS!! Great commentray!

Deaglán's picture

Great line Stevenb

"Why do you care what MSM says about anything?  They are professional liars, and the sound board for MOPE"

Well said. Bloomberg TV can´t go a minute without mentioning Buffett,  Zuckerberg or talking about their precious Iphones ........ but but but the anchors are hot.  Bloomberg works best with the sound turned down.

The Watchman's picture

Interesting USD Chart From Trader Dan

dollar+cot.png

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