Nonovercomplication

Sometimes the answers are right in front of your face.

If you've been reading along in the comments of the past few days and/or if you're a subscriber at TTM, you know I've been watching the price of platinum and the growing OI in gold. Both were signs that the lows for the December selloff were in. In hindsight, I just wish I'd moved sooner.

Here's what I mean. If you can, you should print off all six of these charts. Take the hourly PL and hold it up to a light source with the hourly silver. Do the same the hourly gold. Then repeat this exercise with the daily charts. I know it's no longer the holiday season but "do you see what I see"?

Note how closely gold, silver and platinum tracked each other through 2012. However, suddenly on 1/3/13, they began to disconnect. Now, maybe there's some fundamental reason for this that I'm overlooking? Maybe, though, the beatdown at year-end and following the FOMC minutes was a deliberate washout attempt on gold and silver only? I'm going with the latter. And maybe now it's simply time for gold and silver to catch up?

And it's not just platinum, take a look at the broken correlation from the euro and copper, too.

Further confirming this is the change in open interest, particularly in gold.

Gold total OI bottomed on 12/27/12 at 423,459. Price that night closed at $1664. Since then, though price fell as low as $1626 in the wee hours of last Friday morning, total OI has risen. At the close this past Tuesday, price was $1662 but the OI was UP to 441,304. (Remember the adage: "In a bull market, volume precedes price".) So, OI is up 4% while price was flat. Here's another nugget to chew on: The last time OI was this high was on 12/3/12, right after the beatdowns that commenced with Dec12 expirations. Back on 12/3/12, the total OI was 441,062 and what was price that night? $1721. To me, this is a very bullish signal.

So, what can we begin to conclude? Today's action is just another sign that the very nasty selloff that began on 11/28/12 concluded on 1/4/13. Gold fell from 1755 to 1620 (7.7%). Silver fell from 34.50 to 29.25 (2X at 15.2%).

We'll know it's truly over and begin to sound the "all clear" when gold is back above $1705 (currently the 50-day MA is 1700 and the 100-day is 1717) and silver is back above $31.50 (though the Mar13 silver 50-day is near 32.08 and the 100-day is 32.56).

As I close, I see that this morning's rallies are extending. Gold is 1675 and silver is 30.75. Very nice and a very good sign. Let's keep it rolling!

TF

283 Comments

Turd Ferguson's picture

I'd say that this is somewhat important

MODERATOR

"If last year is any indication, the December total will be roughly the same amount, and will bring the total 2012 import amount to over 800 tons, double the 392.6 tons imported in 2011."

http://www.zerohedge.com/news/2013-01-10/chart-day-chinese-november-gold-imports-soar-91-tons-2012-total-720-tons

Turd Ferguson's picture

And can somebody help me with this one?

MODERATOR

China imports over 800 tonnes in 2012 and 392.6 tonnes in 2011 yet their "official holdings" are 1054 tonnes.

Hmmmm. Confucius say: Something rotten in Denmark!

Turd Ferguson's picture

Again and with meaning

MODERATOR

ONE DAY SOON, CHINA WILL SURPRISE THE WORLD BY ANNOUNCING AN ALTERNATIVE, GLOBAL RESERVE CURRENCY. IT WILL BE ASSET-BACKED AND IT WILL SUPPLANT THE U.S. DOLLAR.

WHEN THIS HAPPENS, THE FIAT-CONVERSION VALUE OF GOLD WILL RESET MULTIPLES HIGHER.

HiHo_Silver's picture

reply to auNau

Great point sir!  The cracks are appearing much more rapidly, which is the reason for the frantic gun grab.

The cracks are getting almost wide enough to slip a trillion dollar platinum coin through!

Wise advise: Don't give up your guns and don't sell your PMs.

Dr. Fix's picture

There has been a lot of things disconnected for quite a while.

Maybe it is time for gold and silver to catch up, and maybe they're not done monkey hammering it down, who's to know?

We can only use this God-given opportunity as price suppression finally winds down, to grab what we can, while we can.

I really think that all of these  anecdotal reports regarding shortages, are going to start increasing,

and that is a much more telling sign than anything on a chart right now.

DayStar's picture

RE: Shortages

And, Mr. Fix, if you sit there with your fiat in miners or under the mattress or whatever, when Mother Hubbard goes to the gold/silver cupboard to fetch her poor dog a gold "bone", it is going to be bare, and anyone with a fistful of dollars is going to be out of luck.  Better to be a year early than a minute short.  There will not be ANY other way out.  Get your metal now and the means to protect it (food, etc.) or you will end up scrabbling through dumpsters looking for anything or in a FEMA camp waiting for your name to be called.

DayStar

Lady Gaugau's picture

Kcap you might want to check your facts

Geo W Bush never said it. The word "strategery"  came into being when it was used in a Saturday Night Live sketch, written by James Downey, airing October 7, 2000, which satirized the performances of George W. Bush and Al Gore, two candidates for President of the United States, during the first presidential debate for election year 2000.[1] Comedian Will Ferrell played Bush and used the word "strategery" (a mock-Bushism playing on the words "strategy" and "strategic"),

luv2stak's picture

LOVE THE CAPS, TURD! Will Silver value soar along with it?

and at the current 56:1 (or whatever ratio it is today), or back to the traditional 16:1 ratio?

Opinion, please!

Road_Scholar's picture

RE: "Offical" gold holdings

The reset HAS TO happen- there is NO WAY to repay the debts.  It's all smoke and mirrors (money printing and derivatives) but in the end, price discovery will happen.  I still believe that the top people in government/finance/business know the "deal" and are riding it out for as long as they can keep it on the down-low.  It's a win-win for them:  keep acquiring PMs while living the good life and screwing the ordinary people.

shell-game3.jpg

tobydaniel's picture

Income Tax and why it is useless

http://faithfinancefitness.com/why-income-tax-is-pointless/

On another note, check out the dollar while it swan dives! Ouch for those in paper:)

brad_pitts_betterlooking_brother's picture

re: can somebody help with this one?

i will try.   i got me a 6th grade edumacation same as jethro.

anyway...  2012 minus 800 tons leaves 380.   but when you decipher in 2011 x 392.6 the quotient is now closer to 1000 even, right?

add in 54 for the chinese new year and i get 1054 too.

it's easy really.

treefrog's picture

look out below

pigatha plunging.

porkydawky's picture

Bugger the Bankers

Just love that vid. Thanks for sharing!

agNau's picture

I am watching the $31.20 area basis weekly.....

for near term resistance/BO.
******
AND as the indicator COUPLED WITH RISING TREND LINE mentioned by me/others several previous posts, on the weekly as well, the 150ma.
Squeeze within the two.
Did not want to mention the support until it looked more valid.
*inside a manipulated market....it could fail today....

Urban Roman's picture

China "official holdings"

Boating accidents?

Response to: And can somebody help me with this one?

HAVEFAITH's picture

HMMM SANDY HOOK FUNDRAISER TRIBUTE B4 DISASTER

THOUGHT I HAD SEEN EVERYTHING
APPARENTLY WEB SITE FOR FUNDING SANDY HOOK VICTIMS UP BEFORE DISASTER

http://www.youtube.com/watch?feature=player_embedded&v=zhpN4WWUuPc

BLESSINGS ALL

MORE POSTED IN FORUMS CURRENT EVENTS CT MASSACRE

exiledbear's picture

@Grublux

Avoid bitinstant. They have a tendency to rip people off.

There's no way to buy BTC that doesn't involve some legwork. What works for me is opening a MtGox account and then following the options to funding it. Then it's like buying and selling stocks (or commodities). I usually issue a limit order and see if anyone will bite at it, and keep playing with limit orders until someone does.

The real problem is funding the MtGox account though, once you're over that hurdle, it's pretty smooth from there.

One last piece of advice - don't leave bitcoins hanging around on intarweb servers, get them xferred to your wallet. And get your wallet encrypted and back it up regularly!

Turd Ferguson's picture

Any thoughts?

MODERATOR

I think it's a facility for resmelting kilo bars out of LBMA 400 oz bars.wink

http://www.wired.com/dangerroom/2013/01/google-earth-china-hunh/

DayStar's picture

RE: Boating Accidents

Yes, Urban Roman, precious metals are known to TFMR to be hydrophilic and have been known to even capsize a boat in their efforts to find water. smiley

DayStar

Ten_of_Swords's picture

KC fed statement

From market watch via netdania:

FED: KC Fed Pres George's (FOMC voter this yr) outlook speech says the slow and uneven recovery is building momentum and ests '13 real growth at over +2%. Seems to be against QE and prolonged low rates, says cannot be 'sanguine' about ease: "FOMC must weigh the benefits and the risks of maintaining an unusually accommodative monetary policy stance for a protracted period. Like others, I am concerned about the high rate of unemployment, but I recognize that monetary policy, by contributing to financial imbalances and instability, can just as easily aggravate unemployment as heal it. Economic models tend to highlight the benefits of such a policy, but cannot fully account for the future risks." Lists risks of QE: complicates exit strategy, holdings "will eventually need to be shed" tho likely "well into the future"; "could be potentially disruptive to markets and market functioning, or cause an unwelcome rise in mortgage rates";
reinforces perceptions that monetary policy will remain highly accommodative for a prolonged pd, "thus risking an announcement shock." She stopped short of previewing whether she will dissent at the Jan 29-30 FOMC.
 
Second verse, same as the first. QE could be bad and might end soon...well, not really. We wouldn't want to risk "announcement shock".  
 
I also like the first risk of QE is pretty comical. Complicates your exit strategy? WHAT EXIT STRATEGY?
 
Grublux's picture

@ exiledbear

Thanks for your help.  I looked @ mtgox and it seems the best way is to just wire from bank account although the fees are substantial (mtgox and bank wire fees)

Was thinking of a brain wallet or paper wallet where private key never hits a connected cpu.  Thinking longer term with this one...

¤'s picture

TF's new 'strategery'

Nice to see and read. (insert thumbs up here)

You can't go wrong by looking forward & prepping some newbs and current doomers by keeping it positive/realistic and teaching those things (knowledge & foresight) that is still within their control.
The China gold positioning and global reserve currency changes that are coming are the story of the century.

In that respect, there is a lot of meat on that topical bone going forward.

silver66's picture

Research paper on portfolio diversification

Damn it... Posted to last thread when I meant to post to this thread crying

Was rooting around on the web today looking for some info on Harry Browne's Permanent Portfolio. Came across two research papers by Ibbotson Associates from 2005 and 2006 that I thought Turdites may find interesting.

Here are the links

http://www.hardassetsinvestor.com/docs/pdf/IbbotsonStudy.pdf

http://www.bmgbullion.com/doc_bin/Ibbotson%20Executive%20Summary%20-%20BMG.pdf

Enjoy

Silver66

GS_PHYS's picture

Daystar: Logical Markets ???

GS_PHYS:

EXACTLY which part of this market is logical?  I want to know, because all markets that I see are so blatantly manipulated that there is no logic--only dictats from the local politburo on the desired price.  If there is a LOGICAL market anywhere in the world, then I want to go there so I can trade it without fear of having my principle confiscated through fraud and manipulation.

No I did not mean Logical Markets.

Logical conclusion is as follows:

Sprott is saying Shortages, that means he is saying shortages are there at that point (ONLY) and deducing that the shortages are NOT going to be there for eternally or infinite period time from the time he made that statement.

Also logical conclusion I make in this market is that perpetrators and criminals has not lost control. They are taking price where they want at will. So don't take positions where you may be bothered with margin calls !!!

So, as Turd says, take a physical position and sit tight. And hope that criminals loose control sooner than later and you are positioned to take advantage of prices of all tangible assets when SHTF.

If you go by this logic, you may live anywhere in the world you would make money from any market wheater it is manipulated or not. Respect the ability of criminals to turn the market.

Ten_of_Swords's picture

Q&A from KC Fed

George's remarks remain tame, says FOMC has exit strategy but does not know when will implement. Must keep eye on rising farm prices.

She wouldn't say what the strategy was, but the farm price comment was interesting. 

Correction: not from Market Watch. Market News International (MNI) – A Deutsche Börse company. 

ag1969's picture

Any thoughts?

Looks like a waste treatment facility for T-bills.

Dr Jerome's picture

Chinese imports

I wonder what is heading to inland China on this boat?

Byzantium's picture

George Bush

Don't misunderestimate him!

Bollocks's picture

Looks like the monkeys got distracted today ;)

Syndicate contentComments for "Nonovercomplication"