Come Tuesday

454
Sun, Sep 2, 2012 - 12:52pm

Summer's almost over. I hope you're enjoying your weekend but get ready. Come Tuesday, it's game on.

Jimmy Buffett "Come Monday/Changes In Latitudes/Why Don't We Get Drunk" Live

We stand at the edge. Prices have broken out but Cartel resistance is steep. The latest CoT shows their malicious intent. In gold, The Cartel net short position grew by over 32,000 contracts last week with the gross short position growing by over 10%! A huge, desperate move which has brought The Cartel net short position to its "worst" level since 2/28/12. Yikes! In fact, over the 8/14/12 - 8/28/12 time period, the price of paper gold rallied $68 and the total Gold Cartel net short position grew by 59,000 contracts. It looks like someone would very much prefer that gold not rise much further.

Though the Cartel selling in silver is just as prevalent, it is of a different stripe. For the reporting week, to supply the paper necessary to keep price in check, instead of adding shorts The Silver Cartel dumped longs. Of course the question is: Why? Are they selling into strength and booking profits? I suppose. But are they also remiss to add new shorts? Of course, it's impossible to say. What is possible to say though is that the CoT situation has only "deteriorated" in the days since, particularly Friday.

Finally, it is curious to see so much of the fresh shorting and selling that is coming from the smaller banks. Uncle Ted calls these banks the "raptors". The raptors treat the paper markets as their virtual jungle where they prey upon the specs by collusively following the moves of the bigger banks. In gold, the selling last week was almost evenly split between the big banks and the smaller banks. In silver, though, 90% of the selling came from the smaller banks, not JPM. Again, why? Is this just a one-week trend?

So next week is set up for some significant volatility.

  • All market participants are back from holiday.
  • The charts are undeniably bullish, meaning spec money should continue to roll in.
  • Prices are reaching into areas where I would expect some major Cartel short selling/resistance, i.e. $1725 and $33
  • After a week of rising prices, we get the August BLSBS on Friday. It's hard to imagine anything but a negative print being met with a major attempt to rig prices lower.

For now, here's where we sit.

And do you recall this chart from last week? Notice that gold spent 17 weeks above the range in 2011 and now it has completed 17 weeks below the range in 2012. Next week, does gold finally move back within the range?

Silver is at a similar crossroads.

So, get ready for a crazy and wild week. Though I certainly wouldn't fault a trader for booking a few profits, everyone else just needs to prepare for some volatility. Prices are truly headed much, much higher but not without the usual shenanigans.

See you Tuesday.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  454 Comments

Hillsie
Sep 2, 2012 - 12:57pm

Número deux

Sweet work.

Bollocks
Sep 2, 2012 - 12:59pm

thurd

Thurd!

edit: bollocks!

ReachWest
Sep 2, 2012 - 1:02pm

Tiga?

Tiga - Trois - Drei - Three ---- THURD!

Ready to go come Monday (or Tuesday) - I got my hush-puppies on!

Mr. Fix
Sep 2, 2012 - 1:04pm

First Again!!!

This makes my day, in a major way!

Happy days are coming soon,

our metals are finally, finally breaking out!

Got my popcorn, here to enjoy the show.

It's going be nice to be on the right side of this trade.

Best wishes to everyone, have a nice day.

Dagney Taggart
Sep 2, 2012 - 1:09pm

I think the healthiest thing right now

is for gold to retest the breakout at 1630 and hold it for a week.

Dagney Taggart
Sep 2, 2012 - 1:19pm

@Fix

We would get a big fat explosion followed by a bigger implosion. We need to give an entry point to the idiot widow and trust fund baby crowd in the Hamptons returning from summer.

Mr. Fix
Sep 2, 2012 - 1:23pm

@ Dag,

Just dreaming...............

Eric Original
Sep 2, 2012 - 1:23pm

Doomsday Preppers marathon on

Doomsday Preppers marathon on NatGeo today.

top ten!

Mr. Fix
Sep 2, 2012 - 1:27pm

Dag,

Yes, that would be healthy,

but I don't care about health anymore,

I just want the wildest most spectacular explosion in the price imaginable, and

in fact, an unimaginably big fat explosion in price.

It's been too long,

although, you're probably right

will just sit through another pullback.

Paladex
Sep 2, 2012 - 1:31pm

Federal Debt priced in gold

Trading in the metals markets is like playing chess against a grand master ... Any move you make winds up being the wrong one. You might think that higher prices are a blow against TPTB, but look at it another way: over the last decade, the dollar has lost so much value vs. gold that the U.S. debt - measured in gold - is actually back to 1960s levels. Sir Charles at pricedingold.com created a great chart that illustrates this.

Impressive, no?

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Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
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