Friday Afternoon Link Dump

221
Fri, Apr 20, 2012 - 5:49pm

The Turd humbly submits a short reading list for the weekend.

First of all, we should discuss the latest CoT. I was all excited to see the numbers and, instead, it's mostly a non-event with no clear signals either way. Gold, as discussed here repeatedly, has seen its total OI fall under 400,000 which is down about 20% from the OI highs of late February. This past reporting week alone, total OI fell over 1% but the internals are kind of strange. Spec longs and Cartel longs both cut about 2,300 contracts while The Cartel short position increased by about 2,700. Interestingly, long and short small specs both fell by nearly 2,000. What the heck is going on here? Beat's the living daylights out of me! Here's the weirdest part: Large spec shorts declined by 7,648 or roughly 22%. It's only one indicator but, on balance, this report does not indicate that gold is ready to explode higher. Maybe sometime soon but likely not yet.

In silver, the picture is equally confusing. In stark contrast to gold, the large specs did virtually nothing. The small specs though, who were busily dumping long and short positions in gold, were busily adding long and short positions in silver. Huh? Very strange. On top of this, the EE added long and short positions, too, though the longs addition was about twice the short addition in percentage terms, bringing the net short ratio down to 1.59:1. Again, in contrast to gold, total OI surged over 6% to 121,448, all while price for the period was essentially flat. Very, very strange.

https://news.goldseek.com/COT/1334950407.php

I mean, it's just weird. Total OI is the highest it has been all year but price is down $6 from its high. And, a month ago, silver OI was just 107,000 while price was roughly $32, right where it is today. So, why the tug-of-war? A 13% rise in OI while price is flat. Gonna have to think about this one for a while but something odd is going on. Just can't put my finger on it yet.

Perhaps it has something to do with this? The changing tides of registered and eligible silver are getting a lot of attention these days. Andrew Maguire told me earlier this week that he didn't think it was that big of a deal as he was once in a vault where registered vs eligible is simply delineated by a big, blue line on the floor and silver is routinely moved by forklift each way and back. Maybe that's the case but it seems that Jesse doesn't think so.

https://jessescrossroadscafe.blogspot.com/2012/04/comex-silver-inventory-watch-heading.html

More on the silver story comes from Goldcore. (Maybe they should rename it Gold&Silvercore?)

https://www.goldcore.com/goldcore_blog/silver-seen-over-40oz-2012-%E2%80%93-store-value-remains-undervalued-0

And if you haven't watched this yet, you probably should:

Video unavailable

ZeroHedge posted this interesting compilation a few hours ago. They address the negative press that gold has gotten this week. I enjoyed reading it because I had no idea that these articles cited were even out there. The one that addresses gold OI I found to be particularly negligent as it paints a picture of declining Comex demand as an indicator of declining investment demand. What a joke! As a source, it uses a London-based analyst with Credit Suisse. The source, Cilline Bain, four years removed from university, is either hopelessly inexperienced, deliberately misleading or just plain stupid. (https://uk.linkedin.com/in/cillinebain)

https://www.zerohedge.com/news/other-side-gold-and-silver-coin

Here's another fun piece on gold manipulation, this time from Patrick Heller at Liberty Coin.

https://www.coinweek.com/commentary/opinion/major-gold-and-silver-price-suppression-now-a-weekly-occurrence-so-what/

And, finally, when looking for the CoT numbers at goldseek, I found this piece of TA. It's reasonably well-written and likely worth a few minutes of your time.

https://news.goldseek.com/GoldSeek/1334944357.php

Alright, that's it. It's late Friday afternoon and I need a beer (or 6). It's officially springtime so I think I'll crack open either a Shiner Blonde or a Sam Adams Summer Ale. Tough choice, huh? Hang in there and keep the faith. Try to get some R&R this weekend as next week promises to be pretty volatile with the French elections, the continuing deterioration in Spain and the FOMC meeting.

See you Monday unless the beer helps to clarify the weird CoT and OI changes in silver, in which case I'll add an update to this post.

TF

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  221 Comments

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FriendOfTheDevil
Apr 25, 2012 - 2:41am

Thanks (Xty, Eric O)

Just wanted to say thanks for the response's and direction. Took your advice (Xty) and checked out over there and was blown away! Amazing amount of info I buried and I took the weekend to get acclamated to the 'system' of stocks and investing in miners. Not gonna dive in just yet but I'll slowly get my feet wet as I see the situation start turning in a positive light and after my knowledge base grows a fair amount ; ) . Take care!

- Friend

S Roche
Apr 23, 2012 - 6:28pm

Victor

I appreciate the rigor you bring to these discussions.

Looking at the silver chart for Feb 5 shows a price increase after the NFP announcement on Feb 5 2010, then three waves of heavy selling. It is hard to tell the exact price levels achieved given the way the Kitco charts are set up but it looks like the price went up 30c and then down 70c. As a regular trader in this time zone that looks to me as though the stops were run to the upside and then to the downside as the cascade selling began. With leverage, the money to be made with foreknowledge of these movements is substantial.

A greater price movement is evident the day before which shows a similar pattern. Maguire did not claim to overhear any trading plans for Feb 4. He claimed to have foreknowledge of JPM's trader for Feb 5.

The size and retail nature of Comex is the attraction, I believe, for these short-term manipulative raids. Have you ever heard of "stops" in any LBM OTC trades? Given the size, institutional knowledge and flow observation capability of the markets makers in PMs gunning for stops on Comex must be an irresistible attraction for their proprietary traders.

As to the class action, the Comex is regulated. Abusive practices are evident. It may well be tilting at windmills, but, the windmills are there.

I often see that the greatest disagreements are between people who almost agree, schisms within faiths. I sense your focus is the long term trends, the shifting of the tectonic plates of the financial world and gold's role. Others just wanna make a buck .

Edit: Great link, thank you. My wife speaks German (but finds gold boring)...I am going to have to lift my game.

tpbetaTabberto
Apr 23, 2012 - 8:22am

@Tabberto

Quite enjoying your exchanges. I'm glad it hasn't degenerated into 'You're a shill in the pay of JPM' "You're a dumb zealot stacker" kind of thing.

Apr 23, 2012 - 7:46am

I am taking his word, but ...

From: Andrew Maguire

To: Ramirez, Eliud [CFTC]

Cc: BChilton [CFTC]; GGensler [CFTC]

Sent: Friday, February 05, 2010 3:37 PM

Subject: Fw: Silver today

A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview? I have honored my commitment not to publicize our discussions.

I hope you took note of how and who added the short sales (I certainly have a copy) and I am certain you will find it is the same concentrated shorts who have been in full control since JPM took over the Bear Stearns position.

It is common knowledge here in London among the metals traders that it is JPM's intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC's allowing by your own definition an illegal concentrated and manipulative position to continue.

Bart, you made reference to it at the energy meeting. Even if the level is in dispute, what is not disputed is that it exists.

Surely some discussions should have taken place between the parties by now. Obviously they feel they can act with impunity.

If I can compile the data, then the CFTC should be able to too.

I would think this is an embarrassment to you as regulators.

Hoping to get your acknowledgement.

Kind regards,

Andrew T. Maguire

* * *

Tabberto
Apr 23, 2012 - 7:38am

No need for paranoia - although they ARE out to get you :)

It's just important to push back against unsubstantiated naysaying. The above stuff about the refreshed Class-Action lawsuit being BS is self-evidently inconsequential and ill-informed bluster. This lawsuit is purely about the COMEX manipulation because that is what falls under US law. To suggest somehow that this infers manipulation only takes place there or that this is somehow implied is frankly bizarre and the sheen of credibility is to my eye thus crumbling....

tpbeta
Apr 23, 2012 - 7:32am

Victor the Shill

Personally I'm glad what he's saying is being taken on its merits. I find this site is at its most useful when the paranoia level is at its lowest.

Tabberto
Apr 23, 2012 - 5:12am

duplicated

so I will just refresh myself and say - again you are giving me easy points here but not doing your reading and instead just jumping about like a parking warden wanting to spray tickets. If you havent read the class action lawsuit (and you clearly havent) then quit posturing.

Tabberto
Apr 23, 2012 - 5:08am

since when

was the manipulation restricted to COMEX Victor?! And to answer your question, COMEX is used EXACTLY BECAUSE its small - and full of leveraged specs - who can we shaken out of positions easily. That serves purpose very well, you seem to think they need cover for such activity but that is evidently not the case. You seem to be missing the point that COMEX regulators the CFTC are evidently paid for - see todays comedy show announcement on SWAPS and last years 'blackout' to help JPM and the small matter of the ongoing 'investigation' that was opened with a public hearing and we have heard zippo zilch nada rien bugger-all about since that day. No rebuttal, no comment, no prosecution, no attempt even to do a Victor and just be antsy about it.......

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Tabberto
Apr 23, 2012 - 5:03am

hahahaha

sounds like you havent read the document vic....

there are 200 examples of 'fake trades' on the non-collating saxobank platform (used by JPM) being used as nudge nudge messages - leading to exact drops to the number the fake trade was put in at - is that really BS?

I call your hand....

victorthecleanerTabberto
Apr 23, 2012 - 2:42am

class action?

I am sorry, but I have to call BS on the entire class action thing. If someone wants to manipulate the gold or silver price intra-day, it would be rather stupid to try this at the COMEX, simply because COMEX is tiny compared with the OTC market.

What these people call manipulation is apparently just the arbitrage that happens between the OTC market and the COMEX and which transmits the price changes from the OTC market to the COMEX.

(Note that I am not saying the OTC market is 'clean', but what people tell you was the manipulation, certainly isn't).

Victor

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