Option Expiry, a 3-day Weekend and a Raid on Gold and Silver. What a Surprise!

271
Fri, Feb 17, 2012 - 11:03am

It what should come as a shock to no one, the metals have been mercilessly driven lower today following a positive Comex open. All while the dollar was flat, too. Hmmmm. Who would have seen that coming?

Today is the third Friday of the month. This means that options on stocks and stock indices expire this afternoon. This includes all ETFs, most importantly GLD and SLV. So, after a surprisingly positive overnight and Comex open, the raid was ON. Further impacting the selling pressure is the 3-day weekend that lies ahead for the U.S. With all the crazy shit going on in the world these days, nervous and weak-handed longs would rather be out than in over the weekend and, in all honesty, can you blame them? Here at 10:30 EST, I expect the PMs to remain under pressure for a while longer, maybe stabilizing and trending higher toward the close and on the Globex. We'll see.

paper_2-17gold1.jpgpaper_2-17silv1.jpg

So, I'm sitting chilly right now. I don't want to fiddle with silver just yet because it faces its own option expiry next week. I'd like to buy some gold but I'm waiting for it to dip toward 1705 again and I still think (hope) that it could fall to 1680, as well. Again, we'll see.

paper_2-17gold6.jpgpaper_2-17silv6.jpg

Here's an updated chart of the POSX. For now, it looks like its wants to head lower. (Now that I've typed that, I'm sure it will head higher.) At any rate, until we get some kind of actual resolution in Greece next month, The Pig will likely continue to fluctuate around in this 79.60 + 1.00 area.

paper_2-17pig.jpg

A Turdite pointed out yesterday that main metal correlation is actually silver vs the euro. He has a valid point. Take a look at the charts below. For fun, do what I do: Print them. Put one on top of the other and then hold them up to the sun or some other bright light. (This is how we did it in the old days!) Note the ridiculously high correlation and then ask yourself this all-important question: WHY?? Why would these two, mostly-unrelated items trade in such close correlation? To me, the answer is WOPR. Some folks claim that 90%+ of the PM markets are HFT algos (WOPRs). These two charts would certainly seem to confirm that. Why else would a monetary and industrial metal move in lock-step with a particular currency? For instance, does silver mining capacity and production have anything to do with European stability and growth? Not really. So, again, if the fundos are unrelated, why do these two trade together?

paper_2-17eur.jpgpaper_2-17silvd.jpg

Crude is rolling again today. I have a high of 103.88 and a last of 103.26. The area around 103.50 is very significant resistance. Be on the lookout, though, for a false breakout that stops at 105. Above 105, it's headed back to 115 and $4.00/gallon gasoline. You've got to figure that The O'bottom Regime would very much like to avoid that eventuality.

paper_2-17crude.jpg

Lastly, I give you this ES (mini S&P) chart without further comment.

paper_2-17es.jpg

Just two "news" items for you today. First, there's this. In one sense, it's a happy story as the folks that found this stash will be rewarded. Primarily, though, this story makes me kind of sad. I imagine that someone, fearing confiscation by the Nazis, hid their gold. That person then never returned get it because, I imagine, he/she died in the conflict. In the end, it just goes to demonstrate once again that humans and fiat are mortal. Gold lives eternal.

https://news.yahoo.com/blogs/sideshow/raining-gold-secret-1-million-gold-stash-discovered-203724430.html

And then there's this. I saw this earlier today and now it's been picked up by ZH. I have no idea what the heck is going on here but something is seriously f'd up. First there was this:

https://zerohedge.blogspot.com/2009/06/open-letter-to-secretary-of-department.html

and this:

https://zerohedge.blogspot.com/2009/06/guardia-di-finanza-to-bloombergdie-welt.html

And now there's this:

https://www.zerohedge.com/news/6-trillion-us-bonds-seized-zurich

and this:

https://www.zerohedge.com/news/why-were-trillions-fake-bonds-held-chicago-fed-crates

Thoughts anyone??

That's all for now. I'm recording this week's podcast in an hour or so and I'll post it later this afternoon so please come back and listen to it. Also, keep a close eye on the CoT numbers and any changes in the silver lease rate heading into the weekend. Next week promises to be another wild one!

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  271 Comments

Xeno
Feb 17, 2012 - 11:05am

Firsts

Good one Murph.

SuperLeggera
Feb 17, 2012 - 11:05am

3

because I don't try hard enough

murphy
Feb 17, 2012 - 11:07am

first

first?

Me and Pining Mc Gee

janis joplin me and bobby mc gee

Edit: I was getting a complex of always being a thurd

SuperLeggera
Feb 17, 2012 - 11:07am
proton777
Feb 17, 2012 - 11:09am

My watch stopped

and after putting in a new battery, I noticed the very sharp decline in the PMs. So I conveniently was able to set my watch for 11:00 a.m. Thank you, EE.

Tyler
Feb 17, 2012 - 11:10am
lairdwd
Feb 17, 2012 - 11:12am

Previous 1735 raids ended at 1715

other than the 1705 raid done on a stronger dollar background. Expect the same.

1715/33.05 - go LONG

Senseosensei
Feb 17, 2012 - 11:12am

And then there is this, thoughts anyone

Yeah i have some, but this plunges you deep into the rabbit hole.

This is the story about Dragon families battling it out with the Rothchilds, presented by David Wilcock.

https://divinecosmos.com/start-here/davids-blog/995-lawsuit-end-tyranny

The story you present today could be part 2, or the same bonds.

SuperLeggera
Feb 17, 2012 - 11:15am

2 trillion

The $2 trillion was a story from Feb 20, 2011.


Feb 17, 2012 - 11:18am

Hey Murph!

I like you. Alot. But perhaps not quite THAT much... ;-)

Well done on your first, I'll see you in the bacon-off pools later.

agrock
Feb 17, 2012 - 11:19am
Groaner
Feb 17, 2012 - 11:19am

It wasn't too long ago that Fridays

were always up days for the metals.. but they have to kill those in the money options.

I think this is clearly shown when you read the charts.. duhh


Feb 17, 2012 - 11:23am

For those interested

I have an order in to buy an Apr12 1750 call. Currently trading at 25 and my order is at 23. I'll keep you posted.

Tyler
Feb 17, 2012 - 11:26am

This story may indicate

there is more of a power struggle among TPTB than we realized.

or

it's a bizarre false-flag. why else would it be in the MSM?

it does seem important though

Red Pill Senseosensei
Feb 17, 2012 - 11:28am

Yeah i have some, but this

Yeah i have some, but this plunges you deep into the rabbit hole.

This is the story about Dragon families battling it out with the Rothchilds, presented by David Wilcock.

https://divinecosmos.com/start-here/davids-blog/995-lawsuit-end-tyranny

The story you present today could be part 2, or the same bonds.

this "story" is nonsense, the "law suit" presents no evidence, the story tellers believe in Aliens and millions of tonnes of secret gold hidden under Taiwan, and Fulford is clearly on psychedelic drugs.

https://red-pill.org/comedy-conspiracy-sunday-dragon-files/

you cant just believe everything you read on the internet you know, a little critical thinking and investigation of your own is required.


Feb 17, 2012 - 11:30am
Groaner
Feb 17, 2012 - 11:30am

I think someone should email the CFTC and

let them know that the trading in the metals seems suspect! I am sure they will do something about it.

Senseosensei Red Pill
Feb 17, 2012 - 11:32am

@ Red Pill

Thank you for being so concerned about my critical thinking.

Tyler
Feb 17, 2012 - 11:36am

@ red pill

would love to hear your explanation for this story. i'm open to hearing anything

Dr G
Feb 17, 2012 - 11:37am

Meh, the stars are aligning

Meh, the stars are aligning perfectly for the Cartel and this is all they can do? Drop silver 50 cents and drop gold $18?

What happened to the good old days where silver would get kicked in the nuts for $3+ and gold would get castrated for $80?

Knowing me, I've probably spoken too soon.

DISCLAIMER: Long, long, long, long physical gold and super long, long, long physical silver.

Dr G TF
Feb 17, 2012 - 11:40am

Yeah, they better hurry and

Yeah, they better hurry and snatch up the London exchange (as if it isn't in Blythe's back pocket already) before PAGE opens.

I sense the fear and desperation in the Cartel.

What is the latest on the PAGE opening date? Still June?

Groaner Dr G
Feb 17, 2012 - 11:40am

don't encourage them

they are doing fine on their own

lairdwd
Feb 17, 2012 - 11:41am

Looks like one more leg down should just about do it

They set a couple bull traps and then pushed it lower. Looks like one more leg down should just about do it. (assuming DXY stays put).

I still hold to 1715/33.05 , although silver could break to 32.8, but not likely.

Red Pill Tyler
Feb 17, 2012 - 11:44am

would love to hear your

would love to hear your explanation for this story. i'm open to hearing anything

publicity hoax or scam along these lines

Jasper
Feb 17, 2012 - 11:44am

Oil vs. Gold

I wonder how long the divergence between yellow and black gold will continue?

lairdwd
Feb 17, 2012 - 11:45am

Hopefully this raid, along with Greek deal sets up Tuesday

For a nice pop. Greek deal with EUR/USD breaking through 1.33 could spell trouble for the cartel leaving them exposed with all those fresh shorts.

SRSrocco
Feb 17, 2012 - 11:46am

THE WORLD GETS MORE STRANGE EVERYDAY

This $6 Trillion in FAKE US TREASURIES is just more evidence that the world has gone completely wacko. Jim Willie has written several articles about the possibility of $2 Trillion in naked US Treasuries... so the insane PAPER WORLD continues as gold and silver gets clobbered once again.

There is also more STRANGE NEWS coming from CITIGROUP:

Citigroup Says Peak Oil Is Dead

By James Herron

Citigroup announced to the world Thursday that peak oil is dead. The controversial idea that world crude oil production is almost at its peak and will soon begin an irrevocable long-term decline has been laid to rest in the highly productive shale oil formations of North Dakota, with potentially big consequences for oil prices, the bank said.

....“The belief that global oil production has peaked, or is on the cusp of doing so, has helped to fuel oil’s more than decade-long rally,” Citigroup said in a note to clients. “This is now all changing because of what is happening in North Dakota,” where new technology has led to a large and unexpected surge in oil production from shale rock.

After decades of decline, “U.S. oil production is now on the rise, entirely because of shale oil production,” said Citigroup. Shale oil could add almost 3.5 million barrels a day to US oil production between 2010 and 2022 and has already slashed 1 million barrels a day from U.S. oil imports. One day it may allow the U.S. and Canada to be self-sufficient in oil, it said.

-------------------------------------------------------------------

This again is the BRAIN DAMAGE I spoke about in a prior post. While it is true that technology has increased production of SHALE OIL & GAS, it does so at a much lower EROI- energy returned on invested.

The notion that the United States will be able to increase SHALE OIL 3.5 mbd by 2022 is a RED HERRING because shale oil fields have TWO-YEAR 80% exponential depletion rates. There is no way to increase production all that much country-wide due to the fact you have to keep drilling these wells to keep production growing. Once drilling stops... production falls exponentially.

I am completely surprised that grown adults who more than likely went to college and got nice degrees come out with this sort of nonsense. Even if the world started to tap into SHALE OIL, the depletion coming from conventional oil fields will not allow the world to grow production. Here is the graph from my Peak Silver Revisited article showing the depletion from Shale Oil fields:

Again, it really amazes me how IQ's have suddenly dropped the past decade when I look around and see just how insane the majority of highly educated people regurgitate crap like this.

Then we can't forget about the EXPORT LAND MODEL that calculates the drop of Net Oil Exports. Here is an example:

¤
Feb 17, 2012 - 11:47am

Paper Bonds Will Need To Become Gold Bonds

Thanks for the update. Lots to ponder up above.

My short comment is "normal" bonds will become so untrustworthy that the introduction of gold bonds is inevitable and likely by the U.S. when it appears they are out of wiggle room. They'll do so before China does the same thing at some point.

I think of GLD as the perfect test vehicle that has established that trust of paper gold globally. I realize what most of us think about GLD and SLV and the fractionalized aspect we don't trust or think is valid etc. I agree with all of that but none of what we think really matters. Sad, but true.

The big picture to the majority of investors who have no clue about fractionalized gold/silver might be that a gold backed U.S. bond (never redeemable for the phyz) is the safest thing going based on our supposedly huge (and unseen/unproven) gold reserves. That's what people know and have been led to believe forever. Fort Knox is engrained in people's minds. Not in ours, but the majority of people who have blind trust and faith in the system that's in place.

Eventually, as demand for regular U.S. bonds dwindles, might the U.S. go to a gold backed bond to draw in more revenues if they offer the gold backed bonds with a higher rate of interest with a long duration of at least 20-30 years? If money is still pouring in seeking "safety" at super low rates, then what might happen if the mere mention of gold is attached to bonds and the future pay out is more fiat that they'll ALWAYS make sure is available in the future? Money will come flooding into Treasury coffers relative to what is happening right now with the outflows were hearing of.

GLD has been the test pilot the whole time and it's been proven successful even if we don't trust it or believe in it. None of that will matter if the U.S. offers gold backed bonds that will be extremely fractionalized in the same manner. Just imagine how many bonds or the size of the debt that they might be able to sell if they NEVER have to physically account for the actual amount of phyz gold they have. It will make GLD look like a penny stock at some point.

Like Dr G said a few days ago, they are extremely good at kicking the can and changing gears to whatever works at the moment until they have to shift gears again. They've been doing it for decades.

We haven't seen anything yet as far as what they might pull out of their playbook and I believe this goes on much, much longer then we feel it can or should be allowed to. Just look at who is doing the "allowing" or making the laws or changing the financial accounting standards and definitions.

JPM doesn't have to adhere to any CFTC position limits due to grand-fathering? They face no repercussion's from anyone and they're in control due to their sheer size and ability to collapse the entire system if their held to a standard everyone else must adhere to.

Why would they stop now doing what they're doing? They won't.

News thread below...

http://www.tfmetalsreport.com/forum/3172/daily-dphaze-news-machine


Feb 17, 2012 - 11:48am

Check this out

Nope. Nothing to see here. A perfectly "natural and free" market. Yessirree.

large_2-17gold2.jpg

Dr G
Feb 17, 2012 - 11:51am

Funny you should ask

I've been in touch with our pal, Ned. He's working on a new piece regarding the PAGE and he's more excited than ever about the implications of what's going on there.

Just be patient. Working with and through the mainland Chinese on things like this is always challenging.

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