Clarifying The Picture For June

Since it is abundantly clear that the chart-painting of May was in preparation for June, it's best that we take some time again today to look forward to the month ahead and make some projections.

Again, the painted pennants of May were designed for the sole purpose of inspiring Spec selling in June. The Cartel Banks use this Spec selling to buy, taking the other side of the trade and closing short positions. We saw this in last week's CoT data. We'll see more of it this week and in the BPR, as well.

All of this did not conclude with last week's $40 downdraft. Too much effort was made to set the table so there is almost certainly more weakness to come. Further evidence was presented this morning when a lousy ADP resulted in a measly $4 price rally, a rally which was almost immediately unwound back down. The result is the chart below. Recall what you know about holding patterns like this. Namely, they almost NEVER resolve themselves to the UPside. Think of those two 12+ hour periods two weeks ago where price was inexplicably held in a $2 range. What happened next? Downside. Well, what do we see here? Regardless of news, the price of gold has been held in a $5 range for three days!

For me, this simply confirms the fact that They are not going to allow prices to snap back higher...at least not yet. There's still work to be done and positions to cover. I laid this out in last Friday's podcast. Do you recall seeing this?

DATE           LARGE SPEC NET LONG               COMMERCIAL NET SHORT                 PRICE

6/25/13                         +24,000                                                      -35,000                                very near $1180 bottom

12/24/13                      +27,000                                                        -27,000                             very near $1180 double bottom

5/27/14                          +73,000                                                        -78,000                                            $1265

5/30/14 (proj.)             +55,000                                                        -55,000                                            $1251

5/30/14 projection based upon Wed-Thu OI drop of over 23,000 contracts

So, The Forces of Darkness will be working to cover shorts this month. That much is a given. But what else is going on? Let's look back at June 2013 (close of H1 2013) and December 2013 (close of H2 2013) for clues as we are now closing the first half of 2014. Let's also take the shifting GOFO changes into account, too.

As you know, GOFO was positive for 5,993 days of the previous 6,000 until the contrived selloff of 10/1/12 - 6/30/13 concluded. Then, after gold bottomed on June 28, 2013 at $1180, GOFO slipped negative for the first time since 2008 and stayed there for an amazing, 40 consecutive days. Over that time, price rallied nearly 18% from $1215 to $1430. Price then drifted downward as GOFO oscillated from negative to positive, culminating with a Double Bottom on 12/31/13 at $1180. GOFO had once again turned negative in late December and spent half of January in negative territory. It then flipped negative again on 2/4/14 and stayed negative or near zero until 3/17/14. From the low of $1180 on 12/31/13 to the high of $1392 in the wee hours of 3/17/14, gold rallied again by nearly 18%.

So, here we are. Just as in June and December of last year, a calendar half year is coming to a close with price being pressured and GOFO rates in positive territory. Knowing that these "markets" remain fully-controlled by The Bullion Bank Cartel, why on earth would we expect price action in June to be significantly different from June or December of last year? Oh sure, fluctuation by date will vary and GOFO negativity or positivity will vary, too. However, the song remains the same. Wash, rinse, repeat of The Spec momo sheep.

Here's a daily chart of the last 12 months of price action. Note that once GOFO flipped and stayed negative on 7/8/13 and 12/19/13, The Forces of Evil could not break price any lower.

Last June looked like this:

6/7/13: -$33, 6/13/13: -$14, 6/18/13: -$16, 6/20/13: -$88

Price then washed out and reversed on the very last day of the month, Friday 6/28/13.

Last December looked like this:

12/12/13: -$32, 12/17/13: -$14, 12/19/13: -$41

Price then washed out and reversed on the very last day of the month, Tuesday 12/31/13.

So, here's the deal. DO NOT get itchy to buy or get long...YET. Let this play out. Take the month off. Whatever. Since there is no reason that this month shouldn't work out just like last June or last December, just chill. Take a vacation (I plan to.) Turn off your computer. Raise a mountain of dry powder and wait. Lay in the weeds with full knowledge of what is coming and then pounce later this month. Don't be fooled by the first time GOFO slips negative. Recall that it did so on 12/9/13 only to move back positive on 12/12/13 before moving decisively negative on 12/19/13 ahead of the 12/31/13 Double Bottom.

Of course, in the long term, it matters little whether you add to your stack at $1240 or $1200. I get that. And anyone simply stacking should be sure to add on a consistent basis. For traders of metal and/or miners, however, the main opportunity awaits. Just give it time to present itself and don't get antsy.

TF

27 Comments

Bollocks's picture

Just logged on

And got a FURST!

Bollocks's picture

Might as well

take second as well wink

Bollocks's picture

Why not make it

THURD too surprise

"Take the month off" Turd? I think everybody has already...

infometron's picture

@Bollocks

Let me be the furst to congratulate you!

CPE's picture

So...

in 3 weeks the 1 year chart on gold & silver will be positive!  Put that in your hat and smoke it London Primates!

SteveW's picture

LBMA gold forecast

So can we get down to the consensus 2014 average price of $1219 or even the consensus low of $1067? After all we hit the consensus high of $1379 on March 17.

http://www.lbma.org.uk/assets/Forecast_2014_Final_interact.pdf

I still want to stack and have no need to sell. Would help to reduce my average cost.

alivecatbounce's picture

Interesting piece

wildstylechef's picture

Turd

I'd be

tyberious's picture

@alivecatbounce

You broke My new rule :(. No Armstrong post. 

And the Ecuadorian Gold is already in the market. 

deadcatbounce67's picture

alivecatbounce...

I almost like that better than my name... 

alivecatbounce's picture

hehe

@tyberious Armstrong isn't a fool , see no problem with his posts .

@ deadcatbounce67 Tried throwing a dead cat from the 10th floor once and it did not bounce , so I realized only alive cats do bounce. You might consider changing your nickname .

ag1969's picture

Uh Oh!!!

China Scrambling After "Discovering" Thousands Of Tons Of Rehypothecated Copper, Aluminum Missing

Tyler Durden's picture

Submitted by Tyler Durden on 06/04/2014 09:22 -0400
 

 

inShare9

"Banks are worried about their exposure," warns one warehousing source, "there is a scramble for people to head down there at the minute and make sure that their metal that they think is covered by a warehouse receipt actually exists."

The rehypothecated catastrophe that we discussed in great detail here (copper financing), here (all commodities), and here (global contagion) appears to be gathering speed as the China's northeastern port of Qingdao has halted shipments of aluminum and copper due to an investigation by authorities after they found "there is a discrepancy in metal that should be there and metal that is actually there."

http://www.zerohedge.com/news/2014-06-04/china-scrambling-after-discovering-thousands-tons-rehypothecated-copper-aluminum-mis

Verus nemo's picture

Has anyone been watching the future's price of copper?

After the ZH article was posted a few hours ago, I've been glancing occasionally at the future's charts and wondering if we wouldn't ultimately witness----rather than the initial, irrational drop in copper futures-----the expected spike in copper.

But it seems that the price has now been been stuck on $3.0950 for a very long time. Has that market too now been busted? Is it possible that the real price of physical copper is considerably higher? Anyone? Has trading been suspended? No big deal?

Clarki Stomias's picture

Well, My Theory on Bankster Mine Confiscation is Coming True

Veris Gold just got "vultured" by Deutsche Bank. 

http://online.wsj.com/article/PR-CO-20140603-911371.html

They are currently on step "3" below.   

Banskter's Guide to Maximizing Gold Price Manipulation (for Dummies)

Extract from: Chapter 13 - How to Exploit a Miner

1) Make a loan to mine operator to give them just enough cash to bring the property to production.

2) Suppress the PM price so that miner operates at a loss and eventually defaults on loan. 

3) Call loan and Seize assets (gold and/or silver mine).

4) Let PM price rise and sell the asset at 500% gain.

Markedtofuture's picture

Uh Oh!!! @ag1969

In other words, from a purely mechanistical standpoint, the unwind of China's shadow banking system, while negative for all non-precious metals-based commodities, may be just the gift that all those patient gold (and silver) investors have been waiting for.  This of course, excludes the impact of what the bursting of the Chinese credit bubble would do to faith in the globalized, debt-driven status quo. Add that into the picture, and into the future demand for gold, and suddenly things get really exciting.

So if tens of thousands of tons of copper and aluminum are suddenly "missing", one can assuredly say: "at least the gold is still there." Right?

smcpvalu's picture

the last washout

Craig,

I've been thinking since last December that we would see the final takedown at the end of the 1st half. Nenner's long term gold price rally shows it starts in July. Here's the problem that I see for stackers. If we all wait till July  to buy and the gold price reverts to a bull move I think all the gold and silver to buy will be gone in a few days. All the online companies will be on long delays for delivery and the one's that short the deliveries to customers will be bankrupt and have fails to deliver before yearend. See Tulving.

My own view. Don't be cute. Know how much metal I want for forever and buy one third of it each week for the next 3 weeks. I've been wrong before. And I've been right, too. We'll see.

Marchas45's picture

@ smcpvalu

I'm with you, I continue to stack no matter what because I'm a Stacker preparing for the crash and I want my metals now, not when there's none left when all the sheepel wake up. Keep Stacking

Turd Ferguson's picture

I hear ya

MODERATOR

Thus this concluding paragraph:

Of course, in the long term, it matters little whether you add to your stack at $1240 or $1200. I get that. And anyone simply stacking should be sure to add on a consistent basis. For traders of metal and/or miners, however, the main opportunity awaits. Just give it time to present itself and don't get antsy.

Response to: the last washout
4 oz's picture

Right there with ya Charlie!

Right there with ya Charlie!

Want to consistently add–every week.
There was a time I paid attention to spot price–was actually very concerned about it.
(Still keep an eye on it.)
I hope to be able to just stack on.
Sure I like to BTFD….but as time has gone on, what matters most to me is not price or cycles; I KNOW people will spend $50+ for an ASE---Because I've done it!

For me…it’s all about availability.
I am completely convinced that   availability   is where the rubber meets the road.
It’s not what’s spot price today….. it’s –Can I get some if I want some today?
Today I can.
Tomorrow I likely can.
One day…I wont.

ag1969's picture

Yep, Jeff Nielson agrees with me

Not too long ago, several people here took issue with me posting that I can't take Rickards seriously because of his position on 9/11.  Well, start listening at the 13 minute mark and you can hear how Jeff Nielson feels about Rickards:

By the way, this if you are compelled to listen to the whole thing, here is part 1:

gldslv's picture

No bank bailins, just steady rising inflation

and steady growing repression.  Finally listened to Fitts and agree with her that we will not have any confiscatory bailins.  Its not needed and the evidence proves it.   The US  created $16T in loan swaps in the last crash  with the ECB and no one sneezed.   So what's another say $16T to cover all domestic IOUs.

The end will be a sudden loss of confidence,  gold rising,  commodity inflation becoming unbearable, unemployment through the roof,  debts unservicesble, I guess thats what stocking all those weapons and ammo are for.

Physical gold and silver will at least be a fresh start.

CPE's picture

Are you of Paul or of Apollos?

This was a great question in the early church.  The even better answer was that neither Paul's nor Apollos' version of Jesus was as important as just Jesus being preached.  God would make up the difference.

I've read a lot of comments of both praise and criticism of Rickards.  I'm fine with the discussion continuing and read it with interest.  But my view of the bigger picture is that as long as sheep are awaking, an incomplete message will suffice.

Some have said that Rickards' message is intended to shake up but still be accessible to somewhat mainstream outlets.  I have no idea what he says behind closed doors, but his message has enough truth in it that I will continue listening and recommending so as to wake more sheep.  I know that his message is much easier to hear than my own to friends and family...

Regardless, I don't follow Rickards, Turd or anyone else without thinking and comparing as no one has a complete lock on all the truth all the time.

Just my 2 cents...

wildstylechef's picture

This is extremely important trend line and has yet to broken

Masterson9's picture

commentary on silver. http://www.marketanthropology.com/2014/

Screen+shot+2014-06-04+at+9.10.04+AM.pngCoiled.

silverwhere's picture

S&P 500 versus GDX

Turd

Here's another gap visual. Check out the second chart in this article. It's the S&P 500 versus GDX. Brutal "management" yet very precious to the establishment.

Nothing to see here?...

http://seekingalpha.com/article/2252953-value-can-hide-in-the-least-favorite-sectors-market-vectors-gold-miners-etf?uprof=45

Bollocks's picture

smcpvalu

Indeed, just get out of them totally-corrupt and worthless currencies.

A space-alien would see what's coming easily. Many who have an inkling of what's coming can't fully see because they're worried they'll lose - they're attached to doubt, and that attachment always breeds fear.

Stand well back and just look is my motto. Like a space-alien would.

The ship is going down. Nothing to think about or doubt. It's there, screaming right in our face.

agNau's picture

I am convinced....

that something besides the metals BO will happen....before...during....or after that loss of control.

It makes no sense that they have no "plan" for this coming day..........would you, in their shoes, not have planned for the suppression failure?
I believe it will be removal of the reward....in some form/manner. Knowing your reward may well become difficult.
Our country has created many enemies.

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