Gold and Silver Fun and Games

234
Wed, May 23, 2012 - 4:00pm

This is just getting to be far too predictable.

Let's see, first it was the April12 gold. Then it was the May12 silver. Today it was the June12 gold. What do I mean? Today was, once again, one day prior to option expiration and today, once again, we get a round trip in the metal as the poor losers who are left trading and hedging get their arses handed to them by the controlling powers of The Cartel.

As a refresher, what we saw in March and April, we saw again today. Namely, the handful of poor saps who had sold put options on the front month, thinking they had free money (Wouldn't you have thought that selling the June 1550 put looked like a safe bet back in February? Heck, maybe even late last week?) Lo and behold late yesterday, with just two days left before expiration, gold gets smoked on the Globex and is driven below its 10-day MA. WOPR selling ensues and before you know it, gold is near 1550 and headed lower. YOU, the poor sap that is short 100 June puts, have no other option but to sell short 100 June12 contracts, just to hedge yourself. Your selling (and everyone else caught in the same vise) sends gold even lower, toward 1535. All of this selling is gladly soaked up by The Cartel until...snap, boom, bang...they spring the latch on the trap and begin rallying gold back higher. Your new short hedge is suddenly squeezed and you eventually cover. This is particularly likely once price rallies back through and above that personally dangerous 1550 level. With gold back at 1560, you are now left with your original 100 naked puts that will expire worthless at 1:30 tomorrow as scheduled, however, you were just lightened of some considerable funds by the coercive, manipulative power of The Gold Cartel. Wash, rinse and repeat next month in July silver if prices continue down at these levels.

The selling of yesterday and today has established the basing/trading ranges that we began to discuss here yesterday. See this for a refresher: https://www.tfmetalsreport.com/blog/3818/not-so-happy-tuesday Of that post, this line in particular is the most relevant:

"Now, please don't misunderstand what I'm telling you here. I'm still extremely excited about where the metals are headed, particularly silver. The ranges I've described above are for the short term, maybe the next week or two and into early June."

Here are your charts that show these new ranges:

Here are some other nuggets that I've picked up as I've gone through the day. First, Jesse had this little ditty about KosherDakota who, as you know, is one my favorite Fed douchebags. This guy is a complete clown. Anyway, the speech Jesse references is not the first time KD has muttered this current bit of nonsense. I actually saw a headline on ZH about a week ago where this buffoon said the same thing that he said today. I was going to write about it at the time but by the time I doubled back to C&P it, the ticker had moved on. At any rate, enjoy the nonsense. https://jessescrossroadscafe.blogspot.com/2012/05/feds-kocherlakota-i-reject-your-reality.html

Trader Dan has a good comment today on commodities, in general. He also made an appearance on KWN. I highly recommend both: https://www.traderdannorcini.blogspot.com/2012/05/continuous-commodity-index-fed.html & https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/23_Norcini_-_Central_Bank_Gold_Buyers_Battling_Hedge_Funds_Today.html

If you haven't yet, you should speed through this. I often listen to Coast-to-Coast as I'm shuttling LT#1 back and forth to ballet class. I caught part of this episode the other night. The stuff with Peter Schiff is definitely pertinent and well worth your time.

Video unavailable

And this is interesting. With the FB/silver spread now at just $4 or so, can the closure of the latest Hat Contest be very far away? https://www.marketwatch.com/story/how-facebook-could-destroy-the-us-economy-2012-05-22?pagenumber=1

Have a great evening! TF

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  234 Comments

The Green Manalishi
May 23, 2012 - 5:21pm

Copper ETF plan would ‘wreak havoc’

US manufacturers have attacked plans by JPMorgan Chase to launch an exchange-traded fund backed by physical copper, arguing that the product would “grossly and artificially inflate prices” and “wreak havoc on the US and global economy”.

https://www.ft.com/cms/s/0/a7d32d4c-a4fb-11e1-b421-00144feabdc0.html

thesandbox
May 23, 2012 - 5:23pm

Re: Buffet and BNI...

https://www.theglobeandmail.com/globe-investor/markets/markets-blog/are-... hmmmmm.....did someone know Obummers answer to the oil pipeline all along?

May 23, 2012 - 5:27pm

"a disaster that would leave the door open to other disasters"

Greece exit would trigger wave of disasters for Europe’s banks

Elena Logutenkova, Liam Vaughan and Gavin Finch, Bloomberg News May 23, 2012 – 11:11 AM ET |Last Updated: May 23, 2012 2:29 PM ET

A pedestrian passes the headquarters of Greece's central bank in Athens, Greece

Europe’s banks, sitting on US$1.19-trillion of debt to Spain, Portugal, Italy and Ireland, are facing a wave of losses if Greece abandons the euro.

‘[A Greece exit is] a disaster that would leave the door open to other disasters’

While lenders have increased capital buffers, written down Greek bonds and used central-bank loans to help refinance units in southern Europe, they remain vulnerable to the contagion that might follow a withdrawal, investors say. Even with more than two years of preparation, banks still are at risk of deposit flight and rising defaults in other indebted euro nations.

“A Greek exit would be a Pandora’s box,” said Jacques- Pascal Porta, who helps manage US$570-million at Ofi Gestion Privee in Paris, including shares in Deutsche Bank AG and BNP Paribas SA. “It’s a disaster that would leave the door open to other disasters. The euro’s credibility will be weakened, and it would set a precedent: Why couldn’t an exit happen for Spain, for Italy, and even for France?”

...

https://business.financialpost.com/2012/05/23/greece-exit-would-trigger-...

HeNateMe
May 23, 2012 - 5:30pm

Numbers

Dow closed down 6.66 points. Hmmm....

HeNateMe

May 23, 2012 - 5:33pm

700 million euros taken out of Greek banks on Monday alone!

Rattled Greeks not alone in massive bank savings exodus

People withdraw money from a branch of National bank of Greece in central Athens on May 17, 2012. Greeks are afraid they could be hit by rapid devaluation if the country leaves the European single currency.

LONDON/ATHENS — Greek savers may be gripped by a “great fear that could develop into panic” in the words of President Karolos Papoulias, but many Greeks shifted their money to safer havens in Britain, Switzerland, Germany and Nordic countries long ago.

Worries about a run on Greek banks has rattled Athens this week, after savers withdrew at least 700 million euros on Monday alone, according to minutes of Papoulias’s comments to political leaders posted on the presidency’s website.

It is not only Greeks who are worried about their savings. Data shows depositors have also taken flight from banks in Belgium, France and Italy. And on Thursday, Spain’s Bankia was reported to have seen more than 1 billion euros drained by its customers in the past week.

‘The entire Greek banking system is in danger: the banks are now facing the worst of all outcomes, deposit flight’

Greeks are afraid they could be hit by rapid devaluation if the country leaves the European single currency, while customers at Bankia have been rattled by the government’s takeover of the recently floated bank on May 9 and growing uncertainty about the final cost of Spain’s banking reforms....

https://business.financialpost.com/2012/05/17/rattled-greeks-not-alone-i...

GoldMania3000
May 23, 2012 - 5:36pm

What?

Turd you want the entire summer for what? buying? or explosive.

GoldMania3000
May 23, 2012 - 5:37pm

I wouldnt mind

If prices stayed here all summer so i could keep buying. This could be a once in a life time opportunity to buy your gold/silver related assets. I've been buying, but always want more for the big grand daddy prize of them all

Steinbacken
May 23, 2012 - 5:41pm

Can't lose, only can be cheated.

You know, during the last 3 months, the heaviest retail buying in a sub-3-day period,(determined by my methods,) was actually the period around February 29th. To be clear, I'm not referring to volume, but clear buying (inventory reduction.) That was our 3-month high! It also included an obvious, robust, small-retail purchaser component.

...So, price goes down - inventory gets depleted rapidly. Price goes up - inventory gets depleted rapidly. My long physical position can't lose! Right?

Only new cheating strategies by the overlords can trump this view.

boatman
May 23, 2012 - 5:47pm

this summer

nothing like last summer.....ELECTION....n europe HOTTER

and then another debt ceiling raise by a lame duck congress[and possibly a prez too]

SilverFocker
May 23, 2012 - 5:53pm

6.66 down

I was wondering if that would hit the forum..........looks like the rest of the stock week will.....well , be weak.

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