Weekend Review

481
Sat, Sep 22, 2012 - 12:16pm

What an interesting week. Instead of volatility, we got containment and flatlines. Something tells me next week won't be the same.

Ponder this for a moment, QE∞ is announced as official Fed policy last Thursday. That day gold, the only alternative currency to steadily-debasing fiat, responds with a $38 move. Frankly, I would have expected more but, given the Cartel propensity for containing daily moves at either the +1% or +2% levels, $38 seemed about right. However, over the next five days, would you have expected this?

  • Friday, 9/14: net change +$0.60
  • Monday, 9/17: -$2.10
  • Tuesday, 9/18: +$0.60
  • Wednesday 9/19: +$0.50
  • Thursday 9/20: -$1.50

So, cumulatively over the next five days trading in gold, immediately following the long-awaited announcement of QE∞, the total change was down $1.90. Huh?? And, again, it's not like we saw the +$20, -$22, +$31 kind of volatility you would have expected. Very strange and, once again, subtle evidence of the outright blatant and ongoing manipulation and "managed ascent" of the paper price by The Gold Bullion Banking Cartel.

To no one's surprise, this week's CoT continued the trend of Cartel naked short issuance to contain price. Again, I'm not really sure who wrote the mandate that JPM, DB et al have to act as market makers in the metals but, for some reason, that is the role they allege to play. Spec money comes into the pit and the banks issue the highly-leveraged paper. Not content to see price bid up as the spec bids search for willing sellers of existing contracts, The Cartel, instead, simply issues brand new contracts to satisfy demand.

In doing so, The Gold Cartel added another 18,196 short contracts this week and brought their net short ratio back up to an astonishingly dangerous (to them) 2.68:1. Why is this so dangerous, you ask? Because they are continuing to play this game as if none of the fundamentals have changed. This is no longer 2002 or 2008. It's not even 2011. We are near The End Game for fiat currency and the "creditor nations" around the globe recognize this. The are readily exchanging their rapidly-devaluing fiat for hard assets, gold in particular. This insatiable physical demand underpins the paper market and makes precipitous, short-covering drops, like we've seen The Cartel execute in the past, all but impossible. Oh sure, there will still be selloffs and beatdowns...Heck, we saw one yesterday...but incessant physical demand forces The Cartel to quickly turn tail and buy in order to cover and secure the metal required to meet the allocations sought at every London fix.

So, again, look to buy the dips. Not every $5 dip, mind you, but any substantial dip the pushes price back to obvious support points. Right now, the obvious area is around $1755-1760. IF a dip develops early next week, I'll be all over it. Gold looks certain to soon blast through $1780 and then $1800. From there, I expect a rapid move toward the old all-time highs of $1920. At that point, gold could, once again, get disorderly to the upside, similar to what we saw in August of 2011. It will likely break out and UP through the long-term channel again and head toward and through $2000.

And here is a long-term chart of gold priced in euros. Recall that we've been discussing for weeks how euro/gold was getting well ahead of dollar/gold and that dollar gold would eventually catch up. A month ago, euro/gold was showing that $1800 gold was coming. Now, euro gold makes it look like $1920 gold is only about a month away. (Chart courtesy Trader Dan: https://www.traderdannorcini.blogspot.com/2012/09/euro-gold-on-track-for-all-time-high.html)

And JPM and their pals continue to play games with silver, blissfully unaware that their dynasty has ended. Just last week, they added another 2,880 short contracts in a vain attempt to pin price below $35 and protect the vulnerable buy-stops near $35.50 that, if tripped, would send silver quickly toward $37.50. Oh well, screw 'em. So they "won" this week. Whatever. They're just going to lose eventually so what's another week of waiting. Now at a total gross short position of 82,358 contracts and a net short ratio of 2.58:1, The Silver Cartel is sitting on a powderkeg of their making. Boy is it ever going to be fun to watch it explode right under them.

As The Doc pointed out yesterday, The Forces of Darkness expended a lot of ammunition yesterday in a desperate attempt to start a cascade and keep price under $35. ( https://www.silverdoctors.com/cartel-dumped-2x-annual-us-silver-production-on-market-in-15-min-to-smash-silver-under-35/) They now find themselves in a bit of a jam as we head into Tuesday. They'll need to cover quite a few contracts before the 1:25 EDT close that day or they risk showing their footprints on next week's CoT. What will they do? Cover, of course! Now the question is, will they gamble by raiding first and hoping for a steep enough selloff that they can cover the raid "material" and more on the way back up? Maybe but I doubt it. Physical demand will easily blunt the dip again just as it did yesterday. Their only logical choice, after being thwarted yesterday, is to begin to cover yesterday's new shorts as early as Monday, otherwise they risk a significantly "Happy Tuesday" that blows out those $35.50-area buy stops and send price toward $37+. What to do, what to do. A whole lot of choices, all of them bad. HAHAHAHAHA! You did this to yourselves, you arrogant bastards, and now you're stuck. You'll get no sympathy around here.

And in case the action in crude this week left you feeling that global peace and harmony were right around the corner, I give you this to ponder: https://www.zerohedge.com/news/2012-09-22/head-irans-revolutionary-guards-war-israel-will-occur

In that same vein, I was contacted this week by a nice guy who asked me to link a few of his prepping articles. I certainly hope you are using this time to full consider these topics: https://destinysurvival.com/2012/09/03/food-storage-how-to-calculate-for-your-needs/ & https://www.emergencyfoodstorage101.com/2012/08/07/being-prepared-for-power-outages/. Of course (shameless plug coming), you can find many of these items by visiting the Turdmart, a link to which is conveniently placed at the top of each page but copied below for your convenience.

https://www.tfmetalsreport.com/preparation-store

I hope that everyone has a safe, fun and relaxing weekend. Come back on Monday and be prepared for a week that is considerably more volatile and interesting than this past one was.

TF

11:00 pm (23:00) EDT Sunday UPDATE:

So, what the hell happened at 20:58? Anyone have a guess? I do but, first, let's look at the charts:

At exactly the same time, the POSX began an uptrend that carried it 20 ticks higher over the next hour.

So, what we likely have here is another HFT algo (WOPR) run amok. True Cartel hit jobs rarely impact so many markets across the board. On a light volume Sunday night, a brainless computer "saw" the uptick in The Pig and began program selling.

Regardless of instigator or intention, it is going to be very difficult to break down paper price much further. Difficult but not impossible. That said, I will be very surprised to see the metals considerably lower in the morning as there is no reason to expect a buyers strike in London on Monday. As mentioned Friday, gold should have considerable support near $1750. Silver will continue to find bids, just as it did two hours ago, near $33.50.

Hang in there and try not to panic. If protracted selling does come in, consider it a blessing. Please consider any and all bouts of price weakness as opportunities to add to your stack.

TF

About the Author

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  481 Comments

145Bluesman
Sep 23, 2012 - 12:18am

Dissagree Totally

I call people dumbass some times.

But only if they are arguing like a dumbass and are dead wrong.

Way to handle the trolls, tmos.

SaratogaPrepper
Sep 23, 2012 - 12:29am

I guess

I guess that's up to you 145, I was always taught that if you need to use foul language you must have missed some portion of your education. But then again, they gave me a high school diploma just to get rid of my sorry behind. So What do I know?

Boswell
Sep 23, 2012 - 1:37am

The Classic Hat Curve?

Posted at the end an earlier thread, you must have missed it?

https://www.tfmetalsreport.com/comment/128315#comment-128315

Dagney Taggart
Sep 23, 2012 - 1:50am

@Saratoga, tmos, et al.

Here we go again. One more time: "1+1=2, you fucking assholes."

So 1+1 is obviously not 2 because I said fuck and ass?!? In my experience, those who redirect the conversation to these insignificant details are really the ones with no argument. In addition, this tends to expose underlying ego and arrogance as a defense against acknowledging embarrassing and simple facts.

What is said is more important than how it's said. "What" is the function. "How" is the form. Form ever follows function and don't you fucking forget it.

This mojito is yummy. One chime was enough. Night all.

SteveW
Sep 23, 2012 - 1:53am

@ Big Buffalo: Pollination of fruit trees

FYI in case its relevant.

Most varieties of fruit trees are self sterile and require pollination by a compatible donor. In isolated areas this can be a problem for single trees, unless a self-fertile variety is planted, since there is unlikely to be a compatible partner within bee flying distance.

tmosley
Sep 23, 2012 - 2:07am

@tmosley

I'm just thinking about the people whom I know who might get something out of the Main Street who I won't be inviting here because if this kind of discourse is what they run across the first time they show up I know they won't be back.

Dagny: "So 1+1 is obviously not 2 because I said fuck and ass?!?"

If you are trying to get someone to listen, that's not the best approach. If you are not trying to get them to listen, why are you saying it?

Patriot Family
Sep 23, 2012 - 2:21am

Profanity

I can't stand people who drop the f-bomb unless they've smacked their thumb with a hammer. I ignore them on web forums, since they clearly can't find other ways to articulate the point they want to get across. I've always enjoyed TF Metals Report because most people here don't use profanity.

It's a good thing you aren't speaking like that while in my presence. I do enjoy publicly embarrassing a potty mouth on occasion. Doing it in WalMart while standing in the checkout line is particularly fun.

maravich44 SaratogaPrepper
Sep 23, 2012 - 2:34am
ivars
Sep 23, 2012 - 3:27am

GSR picture remains

GSR picture remains unchanged- end of first log periodic wave -> small move up before further move down to 48. Target date- for 48 - early October, in line with September payrolls.

If that happens, collectively market is thinking September payrolls number will be weak, and so FED will step on with its QE3 program forcefully, having given itself now mandate to regulate also the employment numbers beside inflation, or rather, moving employment up. With this, it has taken another responsibility away from government, getting even more involved with politics. Wonder what will be next.

So right now its kind of wait and see. If there is upswing in GSR next week GSR should not exceed 52 ( silver about 33-33,5) .

Anyone knows when did FED get that dual mandate (unemployment) instead of just supporting the currency and being lender of the last resort which was its initial mandate?

gdog
Sep 23, 2012 - 3:31am

Random bit of information... [MSM]

In case you were wondering what the MSM has been talking about all week, I submit to you fellow Turdites...https://www.mediacloud.org

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