Not-so-happy Tuesday

Just some wild-eyed speculation here so proceed at your own risk.

Recall first the concept of "Happy Tuesday". The idea behind it is this: After a week of downside manipulation, The Cartels attempt to "cover their tracks" ahead of the CoT survey each Tuesday. The Cartel short-covering (buying) on Tuesdays would often lead to UP days, thus the term "Happy Tuesday". Pondering this yesterday, I came up with the idea that today would be a DOWN day. Why? The opposite effect, actually. The short squeeze in gold of late last week was likely initiated by new longs being added by The Cartel and their buddies. Yesterday and today, in order to "cover their tracks" and not make this week's CoT appear even more bullish, selling ensues. Ring the register, book some profits and paint the CoT, all in one move.

It looks like we have seen just that overnight and this morning. In fact, there even appears to have been some brazen attempts to jam price lower and back down through the 10-day MA. It didn't work...so far...but that doesn't mean they won't try again, especially after the London PM fix at 10:00 am EDT. It's the area around 1575 that they might be shooting for so let's watch that number closely later today.

Speaking of the squeeze last week, we can finally draw some conclusions now that the OI numbers are in. Remember that the gold OI on Thursday expanded by a whopping 17,000 contracts on the initial $38 move. This was exciting as it showed new LONG interest entering the pit. However, on the extension of Friday when price rose another $17, total OI contracted by 4,300. This is short covering. So, a bottom is made and a rally begins with the 17,000 new contracts but the bounce ends with short covering, NOT more buying. After yesterday's action, we are now in a bit of a tug-of-war zone, loosely banded by 1560 and 1605 and I expect this to continue for a little while.

The silver action was even less inspiring than gold. While price rose $1.52 on Thursday and Friday, the total open interest fell from 113,663 to 112,914. This tells us that some new longs were added but even more shorts were covered. No new liquidity bothered to show up and this is a continuance of the trend that began post-MFG. There simply isn't any, regular interest in trading silver. All that remains in the pit are Cartel monkeys and HFT algos. For this reason, it's still very hard to get excited about the short-term prospects of paper silver. Price once again found a floor under $27 and that's a good thing. However, where is the enthusiasm and liquidity necessary to drive it substantially higher? FOR NOW, it's just not there. Like gold, I see a rangebound trade for a little while, banded by 27.50 on the low end and 29.50 on the high end.

Now, please don't misunderstand what I'm telling you here. I'm still extremely excited about where the metals are headed, particularly silver. The ranges I've described above are for the short term, maybe the next week or two and into early June.

Here are some news items that merit your attention and discussion. First, ZH did a little forensic investigation and uncovered some rather interesting info. In summary, it looks like the Rob Kirby estimate of $18B in losses for JPM might be a little low. http://www.zerohedge.com/news/did-fed-just-give-us-very-big-clue-just-how-big-jpms-cio-loss-may-be

Here's a post from Gene Arensberg that seems to confirm what I've been saying for weeks regarding the CoTs: http://www.gotgoldreport.com/2012/05/cftc-managed-money-short-positioning-high-for-gold-silver-.html

Egon von Greyerz has gotten some bad pub recently because he's begun to give price predictions to KWN. (Bad idea, Egon. Remember, rarely/never give date and price in the same sentencewink). Regardless, the guy is knows his stuff and he is one of my favorite gold "commentors". I want to draw your attention to something else he told Eric King yesterday. This idea that, even in Switzerland, your gold is not really your gold, is something about which I've heard anecdotally before. Well, here it is again. Smoke or actual fire??

"Von Greyerz also told KWN that a major Swiss bank did not have a substantial amount of allocated gold which they claimed to possess for their client: “We are stressing to investors to take their gold out of the banking system, not only because there are runs on banks that will continue, but the risk of being in the banking system is major.  So you should take the additional step of not just owning physical gold, but also owning it outside of the banking system.
We (just) had an example of a client moving a substantial amount (of gold) from a Swiss bank to our vaults, and we found out the bank didn’t have the gold.  This was supposed to be allocated gold, but the bank didn’t have it.  We didn’t understand why there was a delay (in our vaults receiving the gold), but eventually we found out why there was a delay (the bank didn’t have the gold).  It’s absolutely amazing, but not surprising.
This confirms what I’ve always thought.  Not only should you not have gold in banks or even unallocated gold, but even allocated gold.  It seems that some banks don’t even possess that.  So the risk of having gold in the banking system is major.”

Full text found here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/21_Greyerz_-_Customer_Shocked_Allocated_Gold_Not_in_Swiss_Bank.html

Finally, some serious homework for you. IF YOU HAVE TIME, please utilize it to read these two essays/presentations from Alasdair Macleod. This material was presented last week at the Sprott Hard Assets Investment Conference in NYC. The first "lecture" was primarily focused upon economics and the root causes (Keynesianism) of our current predicament. ( http://financeandeconomics.org/Articles%20archive/2012.05%20Economic%20speech.pdf). The second lecture focused primarily upon gold and silver and their role in the future. ( http://financeandeconomics.org/Articles%20archive/The%20gold%20bullion%20market.pdf) Again, there is a metric ton of information here but, if you take your time, you'll learn a lot.

That's all for now. Have a fun day. TF

334 Comments

tmosley's picture

All you need to know is...

All you need to know is...

edvardd's picture

about businessman who asked for his Gold from a SWISS bank

about businessman who asked for his Gold from a SWISS bank:

My source said that the gold was bought with stolen money and a businessman wanted to get physical gold for money laundering. The Bank specifically delayed the issuance of gold, to clarify the origin of money.

sorry for my bad English

recaptureamerica's picture

Silver a great business to be

Silver a great business to be in for the next 50 years at least
http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=151847&sn=Detail&pid=32

Please, don't shoot the poster.. Lol

Torpedo Fish's picture

@edvardd

exactly! :)

Also I think you are missing al-Qaeda connection as well.

Groaner's picture

This RAID takes the cake..

Just when I thought they could not be any more blatant..

boatman's picture

dr G. is correct

wayyyyyyy  more important things for THEM to do than to spy on this PM 'cult'.

************************************************

IN AN UNRELATED ISSUE>>>>>>BOTH[the only two] OF THE people on my ignore list HAVE BEEN BANNED!!!

my what good taste i have in people.

Bugzy's picture

@Torpedo Fish

Can you please add some meat to your last comment. Completely meaningless as presented. Edvard too please. 

Cheers,

Bugzy

edvardd's picture

as you wish, my source got

as you wish, my source got this information directly to the bank, however long ago it was not remember the details ...

clueless one's picture

just a side note...

posted in comments on ZH...

(The fascist state is gaining over at the TFMETALSREPORT. They are kicking posters off for posting PICS! Make the wrong statment, post or remark against a poster..BANG you're gone.)

I didn't post it.  I don't care who posted it.  What I do care about is the meaning behind it...which is probably why I spend less time here these days.  What happened to this site?  What a bummer.

Peace out, y'all.  Stay true, stay honest, stay humble.  Be well.

robov's picture

Looks like Turd called

Looks like Turd called today's action spot on.

onealpha's picture

You know, I dont say much

You know, I dont say much around here, but I have been on Turds site since its inception.  Every once in a while I post a comment, but for the most part I keep my mouth shut and just enjoy the conversation and the characters.  Unfortunately, lately the tone around here has really gotten combative.  I am genuinely getting very tired of it.  I could take a break from this place and I may still do so, but I am not doing so without a comment on this.

Turd worked hard to build this place for all of you.  Sure, he did it for himself, to fulfill some Zen inspired destiny moment, but its goal was to help others and provide a place for a healthy exchange of ideas.  When you come into Turd's house you should show at least a modicum of respect for this mans home.  If you are here to tear things down, sidetrack the conversations, and sow the seeds of dissent then you will eventually be rooted out by the Admins. Thank you Admins for all your hard work.  However, all responsible members of this community need to not engage and equally discourage this type of behavior.  Since I do not post very often, I choose to hat tip quality posts and healthy debate while using the "Ignore" button for troublemakers.    

I don't believe that everyone who causes problems is a "Troll" working for Cass Sunstein in his quest to surpass Geobbels accomplishments.  Although with the tone around here lately some of you might be recruited by his Office of Information.  If you don't agree with someone and you attack them you are bullying them.  You may not realize you have this effect as this may be your style, but this is what your doing. You are bullying someone, plain and simple.  It is the combative nature and an attempt to silence a voice through aggressive submission.  This is not necessary or productive by any means.  There is a way to challenge some ones views in a civil and polite manner.  I don't think Turd wants this place to be like ZH and has stated this himself in the past.  I know the Admins are trying to walk a fine line between policing and outright banishing repeat offenders.  However, Bullys run off people who have a lot to contribute but don't need to waste their time and energy constantly defending themselves.  Not only that, I have enough crap in my life that I don't want to fill my head with some ones bad attitude when I read rude and disrespectful comments.  I have enough stress in my life, I don't need Turdville to turn into a stress inducing experience.   Remember, your in Turd's house.  He makes the rules.  If you can't be civil in your discourse then please take your malcontent somewhere else.  If your just a grumpy old man or woman, please just try to be a little bit nicer to your fellow Turds.  

That is all I have to say about that.  Thanks

edvardd's picture

Gold from a SWISS bank

add more information about what the businessman - the bank gave him a list of numbers to ingots of gold, but refused to give up to determine the source of the money ...

Stock_Canines's picture

Looks like Turd called

He did say that we definitely want to see gold stay about 1575, it did not. So, my question is, do we now expect a retest of the lows or possibly new lows?

Eric Original's picture

Good Post, onealpha

yes

Bugzy's picture

@Edvardd

This is a recent story, I believe. Not long ago as you claim.

I would really encourage folk to examine the quality of information they provide here.

Someone mentioned money laundering and well now come to ask I dont really know - somone at the bank said and it was so long ago and oh yeh - there was a terrorist connection too and and then aliens took it and........Tungsten too! and then.....

Please apply for jobs with MSM. I stopped watching TV because this type of unsubstantiated mindless drivel.

Bugzy

Edit: Yes One alpha - I may be guilty of bullying in this comment. I will take what you wrote and attempt more tact in future. However my tolerance for dis information is very very low. We are constantly bombarded with it. 

murphy's picture

@ onealpha

Very nicely said. Also wanted to say love your avatar. Although it would be even better life size.yes

edit- nice to have some reasonable people around EO

Groaner's picture

Turd nailed it saying they would try later to keep

the metals down..  it took me by surprise since they made a nice come back only to be beaten down relentlessly

boatman's picture

onealpha

i could NOT AGREE MORE.yes

and have repeatedly said so.

this isn't a freeforall.....and i don't want it to be.....

you don't get to post whatever you want.

if you think you should be able to.........then go back to nohedge and compete with the comics and their sarcastic oneliners.

nohedge has some good info....but comments there is a wasted read.

azzatack's picture

Nothing much to say...

I don’t really contribute here all that much. I am, however, a long-time lurker, so thought it only courteous that I should say something.

I don’t pretend to be an expert on the PMs market, but I have spent the last two years obsessively reading up on the subject and like to think I have more knowledge than most. I particularly appreciate the thoughts and comments from people on this site and find it the most informative and entertaining resource out there.

The last few months have certainly been trying for a PMs stacker and I have to admit on major down-days the pessimist in me has questioned the fundamentals I normally hold so dear - especially when your average price point for Silver is $4 underwater. However, when I’m done questioning the world, each payday I just buy a bit more (my bank transfer finally went through and I bought this morning).

I started out as a journalist and have spent the last few years in PR/media relations (spin doctor for a global property company, sorry), so I definitely understand the media more than most. I’m absolutely fascinated by the control the corporate elite has over the mainstream and intrigued by the spin that is consistently churned out on a daily basis; however, I have noticed an increasing amount of the same kind of articles on sites like Zerohedge (short on facts, selective data, spin etc) which worries me – it’s almost one positive story a day on gold at the moment.

I’m not sure what will happen in the months ahead or when the eurozone finally implodes, but I do find it hard to imagine a world where the corporate elite has lost its grip on the system or what this would mean for ordinary people (positive or negative). If I’m honest, I’m sceptical that they ever could lose control.

Anyway, pleased to meet you all.

Azzatack

gatortrader's picture

Just today

The metals will recover and head higher into the comex tomorrow. Cartel just had to hide their position for the day. Count on it.

edvardd's picture

@ Bugzy

this information is about a year, to blame for my bad English (translate.google), my source was talking directly with the bank manager, the details he could not remember ...

Orange's picture

Real Time (streaming) price of Silver

The site I usually have on is not streaming the price of silver at the moment. I noticed that Kitco last quote was at 14:58 and it is currently 15: 26 

Anybody have a site that is working?

Teach's picture

Bad neighbourhood?

Talk about getting mugged in broad daylight!!  I refuse to be intimidated.  Pricks.....actually, after watching the DOW go down, and the U.S. $ go up and Facebook go down and JPM's CDS loss go up....maybe it is not "just" a mugging.  It really feels like things are getting stretched a might tight out there.  Maybe something is going to go POP?  Maybe time to get things out of the box and into the ground?  Just thinking out loud....

¤'s picture

onealpha

Nicely put and refreshing to hear from a 'lurkers' perspective.  Thank you for thatyes

Bugzy's picture

@Edvarrd

What makes you believe that von Greyerz is talking about something that happened a whole year ago?

Nothing at all to do with your English grammar. I am unclear what google translator thought I said but believe me it was not that type of criticism.

I need to go out for a bit. I will not be responding to this topic thread anymore on this page - any gripes pm me.

Bugzy

proton777's picture

Orange

HeNateMe's picture

@ Clueless One

The meaning behind that Zerohedge comment you cut and pasted was pretty obvious.  Not sure why you felt it necessary to repost it here.

Jesus people, if you don't like this website then take a hike!  My God! 

HeNateMe

proton777's picture

gatortrader

I'm guessing it's all related to the USD.   Currently +.90% or 75 ticks.  That's massive.

Silver is down 1.1% which almost completely correlates to the dollar move.

HeNateMe's picture

To All the People Who are Noting the Sentiment Around Here...

DUH!

We should set up a forum entitled "Meta-Comments".  It would be a forum dedicated to commenting about comments.

Sheesh.

And yes, my comment above would be considered a Meta-Meta Comment.

HeNateMe

Orange's picture

They are right, of course, but I did not think they would say it

There Can Be Only One: China Sovereign Wealth Fund Says Renminbi Will Become Reserve Currency

http://www.zerohedge.com/news/there-can-be-only-one-china-sovereign-wealth-fund-says-renminbi-will-become-reserve-currency

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