Thursday Gold Charts

178
Thu, May 24, 2012 - 1:24pm

With today being sort of a non-event because of gold option expiration, I've spent nearly the entire morning on the phone. All of a sudden it's 1:00 EDT and I realize that you need a new thread!

So, here you go. Again, though today looked promising for a while, it instead devolved into simple, algorithmic nonsense as the HFT trolled for stops and The Cartel painted the tape for minimum option pain. Let's see what tomorrow brings.

Speaking of boring, you've read here incessantly about the lack of volume and trading interest on the Comex post-MFG, particularly in silver. Well, check this out. Below is the change in price and change on total OI for silver for the past two weeks. Boring and strange at the same time. Instead of giving you my own interpretation of the data, I encourage you to place your own hypothesis in the comments.

Date Price Change Total OI

5/8/12 -0.66 to 29.46 113,549

5/9/12 -0.22 113,479

5/10/12 -0.06 112,558

5/11/12 -0.29 112,393

5/14/12 -0.54 113,546

5/15/12 -0.27 114,208

5/16/12 -0.88 113,663

5/17/12 +0.83 113,766

5/18/12 +0.69 112,914

5/21/12 -0.39 113,893

5/22/12 -0.14 to 28.18 113,647

Here are some charts. First up, look at gold. In the short term, the area around 1565 and the 10-day moving average is your center line of the range. Above there, and you've got a shot at 1600-1605 and a breakout. Below there, we must defend 1525-1530.

And these longer-term charts show you why I'm so confident that the low for gold is in.

In silver, though I'm confident that $26.50 will continue to function as support and a low, time still remains before we can get excited for a true breakout. In the words of Axl Rose, we need a little more patience.

Lastly, ZH has been emphatically recommending that we watch this "Frontline" video on MFingGlobal. I give it a big thumbs-up, too. It's about 20 minutes and it will piss you off. At the end, I found myself screaming at and cursing The Mullet for his inaction and his doofus-like, aw shucks attitude toward the whole affair. Ted Butler openly called for him, Gensler and all the rest to be fired yesterday. I wish I had the power to make it happen.

https://www.pbs.org/wgbh/pages/frontline/mf-global-six-billion-dollar-bet/

Watch Six Billion Dollar Bet on PBS. See more from FRONTLINE.

Watch Six Billion Dollar Bet on PBS. See more from FRONTLINE.

That's all for now. TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  178 Comments

BUDDHA PRINCESS
May 24, 2012 - 11:56pm
silverstax
May 24, 2012 - 11:57pm

@Hammer

Wow, I've been so busy stacking and prepping, I didn't even know they made an On the Road movie

That's awesome though... I'm sure it will pale in comparison to the book but a definite must watch! Thanks for the head's up!

Robonz
May 25, 2012 - 12:02am

Weekly chart says silver is in the buy low area

I am not picking a bottom here as we know that can give you stinky fingers. I am just posting weekly silver chart with a slow stochastic to show that over the longer term silver is in what I would call a buying area. It has not been in this area for a long time.

I hope the image comes out ok. It didn't show in the preview. Use this link to view the chart if it didn't work

https://stockcharts.com/h-sc/ui?s=$SILVER&p=W&yr=3&mn=0&dy=0&

SRSrocco
May 25, 2012 - 12:52am
TechTrade TF
May 25, 2012 - 2:08am

Eediot?

These are marvelous markets for day trading. The signals are easy to see and take. Sell R1 today at 1574.6 ( a $3 overshoot, no big deal). Cover and reverse at the pivot, $1553 (a $2 or 3 overshoot there). That's $21 down, and then a quick $7 up. Let's see, on 3 lots of the YG (or 1 GC contract), that's $2100 & $700. As long as you're not stubbornly fighting the trend by only being long, and basically following the market cues (no matter what causes the prices to do what they're doing), there are fabulous opportunities for trading here. For long only trades, position trades and stacking - meh, not so much. Not to mention the timed predictability of it all. You can just about set your clock by the moves.

It has become virtually impossible to hold position trades, I"ll grant that. I don't hold anything overnight anymore, and only set blind orders out at the farthest reaches of possibility, if at all. Take a look at a 20 Range chart in GC, with a 4 & 20 Keltner channel (something like that, am trying to recall the parameters from memory) and a D3 Divergence indicator, and the buy and sell points virtually sit there in neon waiting to be taken. Use a 60M Stochastic as a filter for which side of the market you want to try to be on, and there you go.

The top and bottom predictions that all make seem so qualified that they're worthless. "If $1580 is taken out, then it will go to $1600. If $1600 is taken out, we'll go to $1630". Well, that doesn't help you much when you're yo-yo-ing around between 1530 and 1575. If 1527 is taken out, there could be a very fast drop to 1500-1510 and a quick reversal back to 1530. Or it could just keep going down to 1450-1465. That doesn't help anyone who's stuck long at 1550, does it? Even as good an analyst as Dan Norcini does this to some extent (and Franklin Sanders is notorious for it). It does make it easy to take a short at 1598 or so, because if it goes through 1601, it's likely to keep going. So, a low risk short, and my it worked out nicely, a run from 1598 to 1533. Same with today - line in the sand, now that 1600 was rejected was pretty much 1580. Got to 1577, then tanked $27. Of course, after the fast move from 1533 straight to 1577, not unexpected, particularly with the options shenanigans going on (and nice commentary on that, TF).

Still, as Dr G points out (and Dan Norcini backs up with his commentary on the CCI), the daily and weekly charts and indicators don't show a lot of good things for those committed to the long side. The rejection of 1600 caused the daily stochastics to authoritatively cross over and are heading down sharply. There's still a good chance of taking a run at 1527 area again, and as this is would be the 4th shot at it, there's a good chance it won't hold, and we'll see 1450-1500 before the next rally. Weekly chart shows the first sign of a bottom at 1527 - bad news is, it will take a lower low to get divergence on the weekly chart and get a big rally going again. That could be at 1450, or it could be at 1290 to 1330 (1290 is the 38% Fib retracement from 250 to 1925, and 1330 is the 200 week EMA). That would certainly push out a lot of weak hands, usually necessary for markets to make a turn-around and start a new trend.

The decent action in the miners is the only bright spot to offset that, so not quite sure what that's telling us yet. Like Dr G and Norcini, think there's still some challenging times coming, especially with the resolution of the Greek crisis. If there's a lot of turmoil (and it seems virtually unavoidable), then there will probably be even more of a flight (however irrational in the long view of things) to the USD and the Treasuries. If the USD keeps going to 85, or 88-90 as some as thinking it might, there's no way that gold will hold 1500, or silver hold 27. All currencies, commodities and the stock market will take the hit as the USD and TBonds soar in the short term. With Greece out of the Eurozone, the Euro could regain strength and things could start to focus again on the US problems.

As long as gold and silver seem to be joined at the hip with the S&P, I don't think we'll be seeing any new highs. They'll need to decouple, and gold and silver will need to be seen again as the store of safety and value in troubled times, rather than the USD. Without a fundamentally changing news event, and/or stimulus, or getting past the elections - it could take a while yet.

ivars
May 25, 2012 - 2:10am

GSR yesterday goes down again to 55,34

Lowest since peak on May 16th last Wednesday. Since then , 6 days in the peak area, below max. Silver went up yesterday at NY close 1,7%. . It seems more and more May 16th GSR will hold as maximum for GSR. Once again support for silver being right now (since May 14th, Last Tuesday) in rather flat protracted bottom ( flat mostly due to fast rising USDx-this morning max already 82,41). That is bullish for silver. Let's see what happens further.

The Vet
May 25, 2012 - 2:53am

The paper metal markets....

While many here have predicted the elimination of the paper markets for metals, predominately COMEX and the LBMA, the reality of a crash in these markets is still quite remote.

We all know that the paper being sold cannot be backed by real metal if the longs demanded delivery, but the reality is that they never will demand it.

No real purchaser of gold or silver in quantity would risk demanding delivery on COMEX and then running into the brick wall of regulation and delay that would result from that demand. It's far simpler to buy the metal at the same price from a real dealer than it is to try to force the short sellers to cough up what they don't own and can't deliver.

Despite what we would like to happen the regulators are not going to allow these paper markets to fail. They will do what they did to the Hunts and change the rules as they need to protect the shorts and salvage the exchange; and we will accept it without protest, accepting the argument they they were attempting to "corner the market" as we did then. Not a word about the short sellers who have effectively "cornered the market" without risking a cent of their own money for years.

Our best hope is to try to get another real market where actual metal is traded to be quoted worldwide as the price setter, rather than the markets which only trade paper which ignores the normal rules of supply and demand. No such market exists at the present time but hopefully one will eventually be established.

Gold may be nobody's liability, but it is nobody's responsibility either and so has no central bank working actively to maintain its value and distribution..........

koan
May 25, 2012 - 3:24am

Come on PM's...

break on through to the other side...

The Doors - Break On Through (To the Other Side)
Stardust
May 25, 2012 - 3:33am

Amboy Dukes

Terrible Ted Nugent (before he was terrible) out of Detroit, Mi at age 17.

Yes, I've 'seen at lot of things' and been so glad I did.

https://www.youtube.com/watch?feature=player_detailpage&v=UN2VNFpiGWo

Thanks for the suggested reading material Xty !

ClinkinKY
May 25, 2012 - 4:42am
ClinkinKY
May 25, 2012 - 4:44am
ClinkinKY
May 25, 2012 - 4:46am
ClinkinKY
May 25, 2012 - 4:47am

And finally...

The Drunk: Joe Biden drunk singing gaffe Obama vice president
S Roche
May 25, 2012 - 4:52am

Idiots?

Wha' happen' to the peace & love?

koan
May 25, 2012 - 5:22am
ivars
May 25, 2012 - 6:02am

How silver gains on its ratio vs USDx

In short, as a general trend change, silver /gold is slowly gaining on USDx ( as their value increase in all currencies) since late 2007 ( average USDx since than is almost flat around 78, while e.g silver prices have increased from 15 to around 30- 2 times. So silver has gained vs . USDx 2 times during last 5 years. The same rate approximately applies for period from 2001-2005. So it will continue to do it in future, I personally think even accelerate vs USDx.

So there is no equivalency between changes in USDx and silver. Silver has been winning long time, and will continue in accelerating fashion.

However, it does not do it in obvious constant fashion, as usually USDx and silver moves in opposite directions, but when getting out of bottoms, - when both USDx and silver move up as silver gets out of bottom, silver accumulates (realizes so to say) delayed gains vs. USDx. This is visible from the chart I already posted (regarding period after December 29 bottom) :

Silver trends vs USDx trends near bottom




This is happening also right now during last 8 days since May 16 bottom (not visible in this daily May 23th chart yet-if confirmed today,i will make a new 2 hour chart) , and further indicate that silver may be climbing out of overall protracted bottom and again realizing its gains , solidifying its gains over USDx, as they both move in same direction. The fact that its not so obvious, and too big focus on USD failing fast first of all currencies ( which is wrong) , make people think USDx and silver always move in opposite directions - but that is not the case if You study longer term ( obviously, PMs has gained vs. any currency) and the way silver exits from its bottoms.

At least , this is what I see.

Ivars

S Roche
May 25, 2012 - 6:17am
ivars
May 25, 2012 - 6:25am

CME cuts gold future margins by 10%

HONG KONG (MarketWatch) -- Commodity trading exchange CME Group said Thursday it had lowered its margin requirements for gold contracts by 10%, marking the second reduction this year, saying the move was part of its normal review of trading conditions and market volatility. In an announcement after the close of the regular session Thursday, CME said the initial margin for the 100-ounce gold contract from one to four months will drop to $9,113 from $10,125. The new rates will be in effect from the close of market trading May 29


May 25, 2012 - 6:40am

Good Morning

Monty Python How Sweet to be an Idiot

May 25, 2012 - 6:55am

re Bonfire of the Vanities

A much better book than movie, as Hollywood was totally incapable of understanding Wolfe's understanding. Not a spoiler, as the book is a page-turner, but here is the beginning of the plot summary from Wikipedia:

Plot summary

The story centers on Sherman McCoy, a white, millionaire, New York City bond trader with a wife and young daughter. His life as a self-regarded "Master of The Universe" on Wall Street is destroyed when he and his mistress, Maria Ruskin, accidentally enter the Bronx at night while they are driving to Manhattan from Kennedy Airport. Finding the ramp back to the highway blocked by trash cans and a tire, McCoy exits the car to clear the way. Approached by two black men whom they perceive—uncertainly, in Sherman's case—as predators, McCoy and Ruskin flee. Having taken the wheel of the car, which fishtails as they race away, Ruskin apparently strikes one of the two—a "skinny boy".

Peter Fallow, a has-been, alcoholic journalist for the (fictional) tabloid City Light, is soon given the opportunity of a lifetime when he is persuaded to write a series of articles about Henry Lamb, a black youth who has allegedly been the victim of a hit and run by a wealthy white driver. Fallow cynically tolerates the manipulations of the Reverend Bacon, a Harlem religious and political leader who sees the hospitalized boy as a projects success story done wrong. Fallow's series of articles on the matter ignites a series of protests and media coverage of the Lamb case.

Up for re-election and accused of foot-dragging in the Lamb case, the media-obsessed Bronx District Attorney Abe Weiss pushes for McCoy's arrest. The evidence consists of McCoy's damaged car, which matches the description of the vehicle involved in the alleged hit and run, plus McCoy's evasive response to police questioning. The arrest humiliates McCoy and engenders in him thoughts of suicide.

Hoping to impress his boss as well as an attractive woman, Shelly Thomas, Assistant District Attorney Larry Kramer aggressively prosecutes the case, opening with an unsuccessful bid to set McCoy's bail at $250,000. Released on bail, McCoy is besieged by demonstrators who are protesting outside his $3 million Park Avenue co-op....

Wolfe isn't so much an author as a journalist - but one with such a wickedly penetrating eye that he is able to boil a bunch of people into one character - the names have been changed to protect the guilty seems about right here.

May 25, 2012 - 7:17am

re Top Ten list

Why are we celebrating those charlatans? And isn't that too many gurus for one cult? Or are there regional chapters that I missed? And also, they all seem rich. Highly suspicious.

Perhaps the all-mighty TF keeps his identity secret, like Batman, and thus cannot be counted. The very public website not-withstanding.


May 25, 2012 - 7:21am

Tradiing in shares of Spain's Bankia suspended in Madrid

25 May 2012 Last updated at 07:10 ET

Trading in shares in Spain's Bankia has been suspended in Madrid.

It asked them to be suspended ahead of a board meeting this afternoon to reformulate its accounts for 2011 and submit a plan to shore up its finances.

The bank is reported to be due to ask the government for a bailout of more than 15bn euros ($19bn; £12bn).

Bankia, which is Spain's fourth-largest bank, was part-nationalised two weeks ago because of its problems with bad property debt.

Any extra government money would be on top of the 4.5bn euros in state loans that the government converted into shares in the group in the part-nationalisation process.

Shares in Bankia's parent company Banco Financiero y de Ahorros (BFA) have also been suspended....

https://www.bbc.co.uk/news/business-18202671

recaptureamerica
May 25, 2012 - 7:24am
recaptureamerica
May 25, 2012 - 7:25am
recaptureamerica
May 25, 2012 - 7:28am

SEC Staff Ends Probe Of

SEC Staff Ends Probe Of Lehman Without Finding Fraud https://www.bloomberg.com/news/2012-05-24/sec-staff-said-to-end-lehman-p... Corrupt SOBs...


May 25, 2012 - 7:28am

And can we all send some good karma to Montreal?

EDITORIAL

Riot culture firmly established

Thousands of demonstrators march against student tuition hikes in downtown Montreal, Quebec, May 22, 2012.

REUTERS/Olivier Jean

https://www.torontosun.com/2012/05/23/riot-culture-firmly-established

​I am not sympathetic to the editorial point of view. The Quebec government has now suspended civil liberties, and they have a corrupt police force. Luckily son #1 was home, and we are keeping him. But his friends are there.

murphy
May 25, 2012 - 7:31am

The Judge

shout out to TF

What If We Have Only Memories of Freedom?

by Andrew P. Napolitano

Recently by Andrew P. Napolitano: Is There a Drone in Your Backyard?

What if Memorial Day reminds us of times when we had more freedom? What if freedom is dying right under our eyes? What if the memory of the past is more fulfilling than the reality of the present?

What if the federal government could write any law, regulate any behavior and tax any event, no matter what the Constitution authorized? What if the majority in Congress rejects the idea of limited government and views the Constitution as granting it blanket power to do whatever it can get away with? What if the constitutional prohibition on the government’s taking of life, liberty or property without due process of law is only for show and is not for real?..........

https://www.theburningplatform.com/?p=34997

.........

What if, on Memorial Day, we remember times that were more free than today? What if, on Memorial Day, when we think of those who died for our freedom, we end up recognizing that the freedom they died for is dying? What if it becomes fashionable for the government to ignore the Constitution? What if the Constitution dies because the government stops following it? What if, next Memorial Day, freedom is just a memory?

What do we do about it?

murphy
May 25, 2012 - 7:39am

Roh roh

Wall Street Journal says Comex has been classified as 'too big to fail'

Submitted by cpowell on Fri, 2012-05-25 06:09. Section: Daily Dispatches

A Mess the 45th President Will Inherit

Taxpayers Now Stand Behind Derivatives Clearinghouses

From the Wall Street Journal
Thursday, May 24, 2012

https://online.wsj.com/article/SB1000142405270230484090457742239316410627...

President Obama's standard gripe is that the economy has performed so poorly during his term because of the financial crisis he inherited from George W. Bush. But this week it is Mr. Obama who has bequeathed to his successors a landmark in financial regulation. It is bound to haunt them, though not as much as it will haunt taxpayers.

J.P. Morgan's recent trading loss and the resulting Washington blather about tighter regulation have grabbed headlines.

Little noticed is that on Tuesday Team Obama took its first formal steps toward putting taxpayers behind Wall Street derivatives trading -- not behind banks that might make mistakes in derivatives markets, but behind the trading itself. Yes, the same crew that rails against the dangers of derivatives is quietly positioning these financial instruments directly above the taxpayer safety net.

As we noted in May 2010, the authority for this regulatory achievement was inserted into Congress's pending financial reform bill by then-Senator Chris Dodd. Two months later, the legislation was re-named Dodd-Frank and signed into law by Mr. Obama. One part of the law forces much of the derivatives market into clearinghouses that stand behind every trade. Mr. Dodd's pet provision creates a mechanism for bailing out these clearinghouses when they run into trouble.


Specifically, the law authorizes the Federal Reserve to provide "discount and borrowing privileges" to clearinghouses in emergencies. Traditionally the ability to borrow from the Fed's discount window was reserved for banks, but the new law made clear that a clearinghouse receiving assistance was not required to "be or become a bank or bank holding company." To get help, they only needed to be deemed "systemically important" by the new Financial Stability Oversight Council chaired by the Treasury Secretary.

Last year regulators finalized rules for how they would use this new power. On Tuesday, they began using it. The Financial Stability Oversight Council secretly voted to proceed toward inducting several derivatives clearinghouses into the too-big-to-fail club. After further review, regulators will make final designations, probably later this year, and will announce publicly the names of institutions deemed systemically important.

We're told that the clearinghouses of Chicago's CME Group and Atlanta-based Intercontinental Exchange were voted systemic this week, and rumor has it that the council may even designate London-based LCH.Clearnet as critical to the U.S. financial system.

U.S. taxpayers thinking that they couldn't possibly be forced to stand behind overseas derivatives trading will not be comforted by remarks from Commodity Futures Trading Commission Chairman Gary Gensler. On Monday he emphasized his determination to extend Dodd-Frank derivatives regulation to overseas markets when subsidiaries of U.S. firms are involved.

Readers know Mr. Gensler as the chief regulator of MF Global, which was run into bankruptcy by his old Beltway and Goldman Sachs pal Jon Corzine. An estimated $1.6 billion is still missing from MF Global customer accounts. What an amazing feat Mr. Gensler will have performed if, through his agency's oversight, he can manage to have U.S. customers eat the cost of Mr. Corzine's bets on foreign debt and have U.S. taxpayers underwrite bets in foreign derivatives trading.

If there's one truth we've learned about government financial backstops, it's that sooner or later they will be used. So eventually taxpayers will have to bail out one derivatives clearinghouse or another. It promises to be quite a mess. And if the 45th president spends his first term whining about his predecessor's mistakes, he'll have a point.

https://www.gata.org/node/11412


May 25, 2012 - 7:55am

Wow - the denial that proves the opposite comes fast!

Buffett says his firm likely to buy newspapers

OMAHA, Neb. (AP) — Warren Buffett says his company is likely to buy more newspapers in the next few years, and Berkshire Hathaway will not try to influence the editorial policies of any of them.

...

https://www.google.com/hostednews/ap/article/ALeqM5iFQPoTl-0cwQDfEiMtGvD...

They won't need to try, they will just succeed.

Wait - he just did buy 63 newspapers. And check out this quote, in terms of influencing content - he looks for papers without local competition. And old relic buys an old relic. But check out the deal he got in return - the good old loan with a 10.5% interest rate - can you buy a company, lend it money like that, drive it into bankruptcy and somehow profit? Maybe - I am really glad I am not this rat-bastard:

While circulation may slip, papers only fail when there are dailies competing in the same town, a publication forfeits its position as the primary source of locally important information or the market does not have a sense of identity, he said.

"We don't face those problems," Mr Buffett, 81, wrote in the letter dated yesterday and posted on the website of Berkshire's Omaha World-Herald, which is in the Nebraska town where Mr Buffett's company is based.

"Berkshire will probably purchase more papers in the next few years. We will favour towns and cities with a strong sense of community."

Berkshire is the largest shareholder of the Washington Post and purchased the World-Herald last year. Mr Buffett said the company's newspapers would not "move the needle in terms of Berkshire's economic value" in yesterday's letter.

In the Media General deal, Berkshire also gave the Richmond-based company a $US400 million term loan with an interest rate of 10.5 per cent and received warrants for about 4.6 million Class A shares. Media General retained its television stations and said it was selling the Tampa, Florida, group separately.



Read more: https://www.smh.com.au/business/world-business/free-news-is-unsustainable-buffett-20120525-1z944.html#ixzz1vsirLrEM

Groaner murphy
May 25, 2012 - 8:00am

when the sheeple finally wake up that they have been scammed

all these years it will be too late. Then they will have figured out that their Kings only liked to use them for target practice. Why because they are Revolting to them.... They stink on ice.

Drifting to the Left! (History of the World Part 1)

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