The Games Continue - 1630 & 29

334
Fri, Jun 15, 2012 - 11:21am

As we await what could be an historic weekend, we might as well take some time to look at the current state of the paper metal markets. In a stunning development, prices appear to be capped.

First of all, we have to address what happened this morning. Even ZeroHedge, which for whatever reason attempts to completely ignore metal price manipulation, got in on the act this morning. (https://www.zerohedge.com/news/gold-stop-hunt-goes-full-retard). In this instance, they are correct about the "stop hunt" but the bigger news (which isn't mentioned) is "whom" is doing the hunting and, even more suspiciously, the timing of it all.

Take a look at the chart below. Note that the $10 spike UP occurred at 8:26 EDT. At exactly 8:30 EDT, the NY Fed released a completely dreadful "Empire State Manufacturing Index" update. ( https://www.zerohedge.com/news/plunging-empire-manufacturing-index-confirms-ongoing-economic-slide-imminent-central-planner-in). If we were to assign rationale for a $10 spike to the "disappointing" economic number, shouldn't the spike have occurred at 8:30 or 8:31? Hmmm? Nope, As you can plainly see, the spike occurred at 8:26.

Now, we could probably spend all day asking questions like:

  • Was the data "news" leaked?
  • Were the trades executed by a stop-trolling spec algo or a stop-trolling Cartel algo?
  • Was it all pre-designed to act exactly at 8:30, using the headlines as "cover"? And did someone just get antsy and/or program the trade to begin prematurely?

Of course, well never know. The CFTC couldn't give a rat's ass about things like this. They're too busy planning parties where they spend the money saved by Gensler and Chilton never seeing a barber. Regardless, all of this is simply today's "Exhibit A" of the total farce which the paper metal markets have become.

So, anyway, back to 1630 and 29. Take a look at the chart above and you'll see something else: Another foray above $1630 that was quickly beaten back. Why is $1630 so special. Well, I could cite a number of reasons but let's stick to the charts. First, I lifted the chart below from Trader Dan. (Dan doesn't get to post much but that doesn't mean you shouldn't still be checking his site daily https://www.traderdannorcini.blogspot.com/

Note the horizontal and diagonal resistance around 1630. You can also see The Cartel capping action on this chart:

The effort to keep silver below $29 is even more obvious and...odd. Seriously, why $29? What makes $29 so important to JPM? (Since we know from the latest CFTC data that JPM is the only firm shorting at this point, it is logical to deduce that JPM is the party capping price at $29.) July12 silver options expire on June 26. That's still 7 trading days away and $29 is an odd number to defend for that sake. There's far more known option open interest at $30 than there is at $29. Maybe you think I'm crazy. Maybe you think I'm seeing things. Maybe you should have a look for yourself.

At any rate, price is clearly being held below $1630 and $29 and I sure don't expect that to change over the remainder of the day. There might be some fluctuation but why on earth would anyone be willing to gamble by taking a large position at this point. It's much safer to lay low, watch the headlines and get ready for Monday.

As you all know, the Greek elections are Sunday. Regardless of the outcome, we can expect fireworks when everything re-opens Sunday night. And do not overlook the Egyptian elections which are also this weekend. Boyohboy, if you want to talk about long-term, Middle Eastern geo-political ramifications, look no farther than the Egyptian elections.

In the time it has taken me to type this, I see that another foray above $1630 has been beaten back. That's pretty funny. Again....what a complete joke the paper metal markets are. However, that should not stop you from buying even more physical metal. I am still expecting a hot, explosive summer for gold and silver prices. Physical demand is extraordinarily strong and events are swirling that will change forever the dynamic of how gold and silver are priced. Be patient and continue stacking.

Have a great weekend but be prepared for a very wild and volatile week ahead.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  334 Comments

Jun 15, 2012 - 3:38pm

more MFG - quite detailed (my eyes glazed over)

Uncontrolled Risk Taking, Not Bad Accounting, Did MF Global In Jon Corzine got the chief executive job at MF Global in early 2010 for one reason: Chris Flowers bailed the firm out in 2008 after a wheat trader’s shenanigans cost it $140 million. Flowers was growing impatient with constant losses and Corzine was brought in to return the firm to profitability. MF Global’s core business was losing money, squeezed by a low interest rate environment and declining trading volumes for futures customers. Corzine could return the firm to profitability by shrinking it, expanding it, or choosing Door No. 3 – betting the firm on risky trades in European sovereign debt. Trades that required lots of liquidity. And careful risk management. Rather than a reasoned strategy to turn the firm around, Corzine chose chutzpah. He put a perverse twist on the repurchase trade, routinely used in the past to squeeze some additional income out of the Treasury securities that are traditionally on hand as part of normal business operations. Corzine used the repo trade to finance purchases of billions of dollars of volatile European sovereign debt instead, thereby multiplying the liquidity and risk management needed to come out ahead. It’s not every day the way a trade is accounted for makes such a difference in how investors, and the market in general, eventually view its success or failure. Buried on page 65 of the 180-page report issued by the trustee on June 4 are new details about MF Global’s fatal high-risk repo-to-maturity trades. ... https://www.forbes.com/sites/francinemckenna/2012/06/14/uncontrolled-ris...

Be Prepared
Jun 15, 2012 - 3:39pm

Where your food comes from...

It's hard for people to understand that this...

comes from this...

recaptureamerica
Jun 15, 2012 - 3:43pm

Be prepared, now if the

Be prepared, now if the cuddly lamb had some mint, potatoes, onions, carrots, thyme, etc next to it, it would be a dead give away.

Jun 15, 2012 - 3:45pm

This week's CoT

As expected, it's a non-deal. Played out almost exactly as I would have thought.

One exception. In silver, the EE short position (which, as we learned in last week's Bank Participation Report is growing almost entirely due to JPM), grew by 3,168. That's 3,000 new shorts added by JPM, this week alone! The rest of the "commercials" added 1,774 longs. ​This is a real tog-of-war. Outside of JPM, the banks are buying. JPM (and JPM only) is actively selling to contain price.

Again, from Uncle Ted's update from last Saturday:

"As confirmed in the June Bank Participation Report, also as of Tuesday, JPMorgan’s silver short position has increased by at least 5000 contracts (and maybe 6000 contracts) in the past two weeks on the small price rally. That is the equivalent of 25 to 30 million oz of silver, truly an enormous amount in a two week period of time and about equal all the silver produced and consumed in the world in the same period of time. I would calculate JPMorgan’s net short position in COMEX silver futures to be between 16,000 and 17,000 contracts. JPMorgan has been the sole net commercial silver short seller over the past two weeks, according to COT and Bank Participation Report data. It is not possible for that not to be the clearest proof yet of manipulation, as a market dominated by one buyer or seller is the ultimate definition of manipulation."
recaptureamerica
Jun 15, 2012 - 3:47pm

From 2003, an important read.

"Rebuilding America's Defenses" – A Summary Blueprint of the PNAC Plan for U.S. Global Hegemony https://www.informationclearinghouse.info/article3249. They never swayed from their agenda...timeline maybe, goal? No.. We are friggin doomed

recaptureamerica
Jun 15, 2012 - 3:49pm

Be prepared, what happened to

Be prepared, what happened to your Señor O pic? Maybe upset a moderator for TOS policy?

Be Prepared
Jun 15, 2012 - 3:50pm

Thank, Turd...

I think JPM is quite happy doing their Master's bidding...

recaptureamerica
Jun 15, 2012 - 3:53pm

g-d help us! Biden Says the

g-d help us! Biden Says the 'Great' Cities Are in China, Not America https://www.weeklystandard.com/blogs/biden-says-great-cities-are-china-n... He's correct , you know if he's referring to D.C. Of course

Big Buffalo
Jun 15, 2012 - 3:58pm

Confused

This freakin' market makes absolutely no frick'in sense to me. Dang it!!

Common Sense sure doesn't get you through it.

Someone going to get beat with a tomato plant.

recaptureamerica
Jun 15, 2012 - 4:00pm

Sheesh...

Biden Says He's Not Blue Collar: "No One In My Family Worked In A Factory" https://www.realclearpolitics.com/video/2012/06/15/biden_says_hes_not_bl... Is it too late for a recount? Heck they revise all other government stats...

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10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
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10/2 8:15 ET ADP jobs report
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10/4 8:30 ET BLSBS
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