Exploiting Inefficiencies

Thu, Apr 15, 2021 - 10:52am

You and I are nobodies. Just simple little peons trying to get by and plan for the future. However, there is Big Money in this world and one of the ways Big Money got big and stays big is by having the wisdom and experience to spot...and then exploit...market inefficiencies.

Think of that lizard creature Soros and his career-making trade in the British Pound. Perhaps for a more current example, think of the guys that were profiled in The Big Short. What do these people have in common? They spotted market inefficiencies and exploited them for profit.

And it's not just these two examples. Major hedge funds, institutions and trading desks are on the lookout 24 hours a day for market inefficiencies that they can exploit. Spot what has been overlooked. Take action and position yourself ahead of the crowd. Wait for everyone else to catch on and catch up.

OK, are you with me so far?

In 2021, all the Big Money in the world has been focused upon Tesla and FAANGS and Bitcoin and bonds and everything else that has been moving with volatility and it has completely forgotten about gold. Comex gold has been in a downtrend since August and Big Money has moved elsewhere.

Through their neglect, they've failed to spot this a glaringly obvious market inefficiency. Are you ready for it?

August 2020: US 10-year note real rate was -1.05% with nominal rate of 0.55% and CPI at 1.6%. Comex Digital Gold price? $2080.

April 2021: US 10-year note real rate is -1.02% with nominal rate of 1.58% and CPI at 2.6%. Comex Digital Gold price? $1750

THAT is a market inefficiency. The good news? You and I have spotted this first and are positioned correctly. In this case, we are Soros or Burry.

And on this fine Thursday morning, do you sense that the rest of the Big Money might be starting to catch on?

In last evening's podcast, I urged you to consider yesterday (and Monday, too) as just "days"...and that's all they were. The Much Larger Issue is this market inefficiency and with the 10-year note rate falling even farther today, the world is waking up to the relative undervaluation of Comex gold versus real rates. And how quickly might CDG (and CDS) correct higher if the yield on the 10-year note continues to fall toward 1.50% or even 1.40%? I'll answer that for you...VERY quickly!

The action today has also accomplished this...Do you realize that the price of Jun21 CDG has been BELOW its 50-day moving average since FEBRUARY 2?!? Until today that is.

So now look closely at the chart above. After breaking down and through the 50-day on January 8, price spent about four weeks trying to get back above and then two full months trending well below and lower.

You with me?

Now look at the chart below of the Apr20 CDG contract and look at the two similar occurrences of this exact same pattern within this ongoing bull market.

  • Mar-May 2019: Price below 50-day. Price moves above on May 31 and then rallies from $1320 to $1572 in the next 100 days. That's a move of 19.1%.
  • Oct-Dec 2019: Price below 50-day. Price moves above on December 24 and then rallies from $1505 to $1705 in the next 70 days. That's a move of 13.3%.

So let's see...

  • Real rates are back to the levels last seen when CDG was at ATHs near $2100
  • Big Money has yet to notice
  • CoT and BPR "washed out"
  • Price breaking higher above key short-term trend indicator

If we just assume a 15% rally from here...as an average of those two moves in 2019...then we are looking at a goal by early July of at least $2000. Why? Price at breakout today was $1755. Add 15% and you get $2018. Now that would still put price up just $118 YTD and we'd still have to wait for the next wave to take us to our $2300 target for 2021 but we'd certainly be on our way.

And where do you suppose your mining shares would be trading in July at $2000 CDG?

And how about CDS? If CDG moves 15% then CDS should move...what?...25%?? That would take price well above $30 to maybe $33 or so. What would physical demand look like at that point? More fun, what would your silver juniors and the SILJ look like?

So let's see where we go from here. Today is just one step and it's CRITICAL that price remains above and pulls away from the 50-day. Next up will be a test and breakout of the "bull flag" that has been brutally enforced since September. Getting above there will not be easy but, once that breakout is accomplished and easily recognizable, we'll have another spark for our rally and momentum.

OK, that's it. As I close, I see that we are very near our highs of the day and looking to move even higher as the bond market continues to rally so put a smile on your face, go out and have a great day.



About the Author

tfmetalsreport [at] gmail [dot] com ()


Apr 16, 2021 - 8:15am

lose money

You certainly will lose money on those

Apr 15, 2021 - 6:58pm

Bullflag at 1770

I bought some Knockout puts with barrier of 1770 when we were shortly under and yields were slowing down. Up so far, really hope i am going to loose money on that one. Lets see the nightly pleasantries.
Apr 15, 2021 - 6:24pm

@ Degraives,

We are looking at another property in that town... We may yet get a mortgage on it to buy a 3-plex. For now, I'm enjoying not owing a dime to the banks!

Apr 15, 2021 - 5:44pm

If every loan is a currency creation

What about credit card usage? Does every use create currency, which is then "fractionally" malinvested?

If so, I am appalled at the implications.

Where is everybody? Did I scare you all away? Money banksters go BOO?

Apr 15, 2021 - 4:06pm

I smell blood in the water

Why? Whose?

Let's just say that there are ever widening cracks in the foundations of the swamp.

Powell mentions “possibility” of problems.

Makes sure that EVERYONE KNOWS how much he has done for BLM and Covid.

CRIMEX volume! Both up and down (ratio also).

LBMA mentions Wallstreetsilver……no problem (LOLOLOL)

Then says……COULD be a problem!

Ivermectin news! Thank youuuuuu matt!!!


Pfizer announces 3rd Jab!!!

WHY??? To TRY AND SELL as many vaccs as possible, BEFORE Ivermectin news gets out?

Just a trace of blood in the water, but over the last few weeks it has increased, from more and more little cuts, from many different directions.


Apr 15, 2021 - 4:04pm

SILJ closes above $16

First time in a while and tomorrow is equity option expiration day. Will be interesting.

Apr 15, 2021 - 3:54pm

Im going with rates as the

Im going with rates as the reason for up

tonym9gold way p
Apr 15, 2021 - 3:53pm

Here ya go. At least its an

Here ya go. At least its an attempt

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

Apr 15, 2021 - 3:13pm
heffe silverthorn
Apr 15, 2021 - 3:13pm

Mother Nature is pissed off!

I don't quite understand all the minutiae. All the this-n-that. Puts, calls, shorts, longs. Whatever. The overpowering, and overarching truth is that Mother Nature is really pissed off, and she's having no more of this BS! Call it God, Jesus, Mother Nature. Whatever. I like the Mother Nature angle. The powers-that-be, or shouldn't be, appear to be running out of ammo. It seems like their system is on it's way out. It seems like a new paradigm might be coming into view. However, I wouldn't exactly cheer that on just yet. Disruptions in the supply chain? Widespread power outages anyone?

This could get really ugly before it gets any better. Be careful what you wish for. These maggot-infested cockroaches will do anything to hold onto their power, anything!! Here's a what-if for ya. What if we have a soaring uranium price, and we are obviously on a no carbon trajectory, and nuclear power starts looking good. And then, OOOPS, we have a tragic accident at some antiquated nuke plant somewhere in this country. Can you imagine?

Most of our nuke plants were built in the 60's and 70's. They're antiquated! It doesn't surprise me that countries around the world don't see any progress in green energy, and they want to go nuclear. Good! Have at it! But! I see these mutherfuckers doing some kind of accident to shut down nuclear power. Our nuke plants in this country are so old it wouldn't be surprising that they use one of our old, decrepit nuke plants to stage another false flag. Nuclear power is def on the table. It has to be! But, I think the cockroaches in charge are gonna do something to one of our old, antiquaited, outdated nuke plants. Call me crazy, and I hope I am!!

Subscribe or login to read all comments.

Become member and subscribe to Turd's Vault


Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 5/10

5/11 10:00 ET JOLTS job openings
5/11 12:00 ET Goon Brainard
5/12 8:30 ET Consumer Price Index
5/12 9:00 ET Goon Chlamydia
5/12 2:00 ET Federal Budget
5/13 8:30 ET Producer Price Index
5/14 8:30 ET Retail Sales
5/14 8:30 ET Import Price Index
5/14 9:15 ET Cap Ute & Ind Prod
5/14 10:00 ET Consumer Sentiment

Forum Discussion

by 11IMIX, 3 hours 13 sec ago
by Sovereign, 4 hours 1 min ago
by Green Lantern, 12 hours 3 min ago
by Green Lantern, May 9, 2021 - 5:55pm