Off To The Races

126
Wed, Nov 30, 2011 - 10:03am

As the great Trevor Denman would say: "And away they go"! (fast forward to 2:05)

trevor-isms.

My intention this morning was to discuss this:

Submitted by Turd Ferguson on November 29, 2011 - 10:30pm.
MODERATOR

We seem to be very near a capitulation of the spec longs where those who are going to sell will have sold.
At the same time, The Cartel is rapidly covering short positions.
I'm getting increasingly bullish.
Let's see what tomorrow brings.

And now look what tomorrow has brought! Free money!!! Bailouts of everyone and everything!

https://www.zerohedge.com/news/foreign-currency-liquidity-swaps-aka-global-bail-out-plan-b-faqs

Rather than focus on the inevitability of the failure to print our way back to prosperity, let's go ahead and dissect the latest CoT report, as there are several interesting trends within it.

First up, the perspective of someone who actually knows what the heck he's talking about. I'm going to have a slightly different take on the numbers but you need to be aware that my interpretation is not necessarily the correct interpretation.

https://www.traderdannorcini.blogspot.com/2011/11/commitment-of-traders-reports-confirms.html

I haven't spoken with Dan about this but I think I know where he's coming from. Margin rates are high and traders, both spec and commercial, are being driven from the pits and, without their interest in participating, it will be difficult for the metals to rally.

I have a somewhat different point of view. What I see in this week's CoT are markets that are very close to a bottom. Why do I say that?

1) Spec longs in both gold and silver were bailing out at a very quick pace. This is bullish for two reasons:

a) It's a contrarian indicator, first and foremost. If specs are a sort of "dumb money", do the opposite.

b) Spec money will, eventually, flow back in. You want to be ahead of it.

2) Commercial longs are also selling but commercial shorts are covering.

a) More long liquidation leads to a point where everyone who is going to sell will have sold.

b) If The Cartel is the "smart money", follow them, They are covering shorts which means they are buying.

Let's look at the specific numbers. In gold, specs longs fell by over 11,000 contracts while, at the same time, spec shorts covered 13,000 contracts and The Cartel covered another 12,000. Longs selling and shorts covering...that's exactly what we're looking for when we go looking for signs of a bottom.

In silver, the picture is much the same. Spec longs fell by almost 10%, over 2200 contracts. All the while, The EE covered a huge 3,270 of their shorts. Again, specs bail while the banks cover. This is a bullish set-up.

And the trend has continued this week as we've approached December contract expiration. As of Monday, the total OI in gold had receded to just 426,000 contracts and silver fell to 99,000. It would seem that many traders liquidated their December contracts but chose NOT to roll into Feb12 or March12. That pent up demand is clearly the main driver of the huge move you are seeing back into the metals today.

And this is ultimately why these CoT numbers are so bullish. Similar to late September, almost all of the spec money had exited the PM pits as of yesterday. Today you are seeing the initial impact of that money rushing back in. Are the bottoms in? Probably. Especially with the kick-starting of the printing presses today. Let's see where this all takes us. There will likely be a pullback later this week as the reality and gravity of the situation takes hold. Could that be the dip to buy? Maybe. Let's wait and see. I'll keep you posted.

In other news, the Middle East continues on the path to war. Here's just some of the latest:

https://www.zerohedge.com/news/uk-iran-situation-escalates
https://edition.cnn.com/2011/11/30/world/meast/syria-unrest/

https://www.reuters.com/article/2011/11/30/us-pakistan-nato-idUSTRE7AT0JZ20111130

Also, I last night I found this interesting piece from the always-entertaining Mark Steyn. Worth a read:

https://www.ocregister.com/opinion/debt-328730-government-spending.html

Lastly, just a reminder. Today is the final day of the great, once-in-a-lifetime, genuine, real deal, autographed, big yellow hat sale. I'll be deleting the "sticky" thread at midnight EST so anyone wanting their own piece of precious metal antiquity had better act fast...or wait until the next "hat contest".

Have a great day! TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  126 Comments

bellyacre
Nov 30, 2011 - 10:06am

first

first

RedRover
Nov 30, 2011 - 10:08am

Well alright!

Well alright!

boil_in_the_bag_rice
Nov 30, 2011 - 10:21am

Great work Turd. Highlight of

Great work Turd. Highlight of the day! Thanks for all you do.

ewc58
Nov 30, 2011 - 10:22am

Boiing!

Oh yeah baby, hit me with your Rhythm Stick, hit me, hit me, hit me!

Ian Dury - Hit Me With Your Rhythm Stick [Official Video]
GoldMania3000
Nov 30, 2011 - 10:27am

An Inisde Job

Based on your assessment TURD, if the cartel/ee where covering their shorts and where buyers, they must have known something was up. the word was passed along...they knew....it seems way to obvious. Follow the criminals...they always know where to find the money

Silver_investor
Nov 30, 2011 - 10:27am

Fed announcement this morning

Earth dwellers, the world's problems have been solved.

As I type this, the Dow Jones Index is up almost 400 points. What utter nonsense. While I'm glad that PMs are rising, this action by central banks around the world could hasten the arrival of hyperinflation.

juanmehrisewc58
Nov 30, 2011 - 10:32am

wow - about the time the sax

wow - about the time the sax player starts playing two at once it got a bit surreal.

GoldMania3000
Nov 30, 2011 - 10:33am

ok TURD

Where do we go from here...you gave us earlier this year the Turds famous call. Can we get another one of those calls.....aummmmmmmm TURD:)

GoldMania3000
Nov 30, 2011 - 10:33am

ok TURD

Where do we go from here...you gave us earlier this year the Turds famous call. Can we get another one of those calls.....aummmmmmmm TURD:)

GoldMania3000
Nov 30, 2011 - 10:34am

I'm working on it.

I'm working on it.

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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