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

kingboo
Sep 23, 2012 - 11:02pm

agNau..."Whitewater ahead"

now thats funny!.......a little scary, and true......but still that was a good one.

When i was a kid we went whitewater rafting on the Colorado River........and i will never forget the raft captain telling us to "hold on tight...because we're coming up on the Diner"........ i was maybe 10yrs old....... so i said "the Diner?...why do they call it the Diner?" and he said "because thats where everybody eats it kid! That's where everybody eats it!" The guy had a big creepy smile on his face..............yup, he enjoyed watching us get our asses kicked by the river...


Sep 23, 2012 - 11:03pm

update

I've updated this thread.

See you in the morning.

kingboo
Sep 23, 2012 - 11:05pm

how do you know?

the world could end before sunrise.............


Sep 23, 2012 - 11:14pm

As long as we are on the topic of counterfeit metal

I'm sure I can google it, but I'm guess someone here may already have the answer, or at least point me in the right direction.

What is a reliable way to non-destructively verify silver coins and bars?

I'm talking 1 oz rounds, ASEs and 10 oz bars. Up to this point I've had no reason to doubt mine. I don't think APMEX or JCS Gold would knowingly sell me fakes but at some point it may be necessary to prove it to others, especially with the news floating around today. I would have thought a decent set of calipers and a good scale would be enough, but now I'm not so sure.

HeNateMe
Sep 23, 2012 - 11:17pm

The world can't end

There will never be a "time" when the world ends.

It will not end before or after anything.

HeNateMe

Zoltan
Sep 23, 2012 - 11:19pm

@Puck Finger/Wooden Spoon

Brother,

Balance 'em on your finger, whack 'em with a wooden spoon.

If you can't tell find someone who can still hear.

Z

WhyMeLord onealpha
Sep 23, 2012 - 11:19pm

@OneAlpha - Coffee

I luv roasting my own. Also the French Press. Plus Eithiopian. Starting to go for Sumatran now.

Been doing it for 10 yrs, using an iRoast.

Get my green beans from Sweet Marias.

What kind of roaster do you use?

Lumpy
Sep 23, 2012 - 11:20pm

Fake gold bars.

Boy am I glad I don't have to worry about having a load of fake gold bars.

Being broke does have some advantages.

HeNateMe
Sep 23, 2012 - 11:21pm

Thanks Turd!

For the update. I appreciate the time you put into this website!

HeNateMe

agNau
Sep 23, 2012 - 11:21pm

@Kingboo,

I think it fits this market better than "waterfall", though the image of waterfall fits the charts.

tmosley
Sep 23, 2012 - 11:28pm

Puck, Get yourself an

Puck,

Get yourself an ultrasonic thickness gauge. You can look up the rate of sound propagation in various metals and input them, and it will tell you how thick would be based on the metal content. If the ultrasonic depth doesn't match the actual depth (measure with calipers or get out of a book), then you have a problem. Combined with the Archemedes test, it can not be defeated by any known method (ie any alloy that would have the same sonic properties, of which I don't think there are any, would almost certainly have a different density).

treefrog
Sep 23, 2012 - 11:28pm

hi-yo-silver

i've always been more of a fan of silver than of gold. i can't wait until we start hearing about counterfeit ten ounce silver bars. think for a moment how much more valuable silver would have to be before the no-goodniks figured it was worthwhile to make a fake ten ounce silver bar.

it it ever comes to that, it will be a high quality problem for me.

Kcap
Sep 23, 2012 - 11:30pm

@Turd

Sadly, your site is infested with rats. Its going the way of the Yahoo boards.

Time to bring in Terminix.

Kcap

WhyMeLord kingboo
Sep 23, 2012 - 11:36pm

@kingboo Whitewater

I've done rapids with 10 ft rooster tails in 2 man aluminum canoes.

Ain't no air in between you and the rocks except for what you inhaled before going under.

Kinda puts everything in perspective...

Zoltan
Sep 23, 2012 - 11:42pm

@Zoltan: If you can't tell find someone who can still hear.

I'm actually pretty good at that. I'm able to tell a 1982 copper penny from a zinc one by bouncing it on a hard surface. The first time I did it was an almost Zen-like experience.

As I said, though, I'm concerned about proving it to others. I did a little searching and found this

https://columbiaisa.50webs.com/silver_coins_fake.htm

My thoughts about calipers and a scale seem to be right. An ultrasonic thickness gage is kind of pricey, but I could see it being a worthwhile investment as silver goes up. If one had an entrepreneurial bent one might see an opportunity in going into the silver testing business, especially since ASNDT has a certification program.

Hmmmm....

WhyMeLord
Sep 23, 2012 - 11:59pm

Fraudulent PM's - Certification - A New Business

Hey Kidz!

Want to make some $$ from the fake PM's scandal??

Well, just get a UTG (Ultrasonic Thickness Gauge) and start certifying all those "questionable" hunks of metal your LCS has in inventory.

Better yet, get some venture capital and start a grading/testing service (like PCGS or NGC) to verify this stuff.

Just be sure your liability insurance is up to date.

You heard it here first.

ivars
Sep 24, 2012 - 12:07am

Quite positive smackdown it was

Because on 2 hour chart it completed the long log-periodic wave ( Aug15-today) in a fashion it should have, reaching bottom below previous top (33,9) . Time wise , everything is fine. Again, I did not want it to happen, but once it has happened, silver is ready for upshot already today.

maravich44 Kcap
Sep 24, 2012 - 12:09am
tmosley
Sep 24, 2012 - 12:10am

Puck, If you sort by price,

Puck,

If you sort by price, low to high, you will find no frills models for about $100. The only people who should be getting the $1000 models are LCS owners.

Dr G
Sep 24, 2012 - 12:14am

I am HIGHLY dubious of the

I am HIGHLY dubious of the volume data that has been posted in the silver doctors article. It is nearly impossible to gather that data in a correct manner. Many use Netdania volume, but that does NOT relate to precise market volumes (trends may work though). Everybody must remember that the spot price and the futures price are not the same thing. The "volume" on Netdania is not the number of contracts being traded.

I don't think it takes 3,000+ contracts to be dumped on Sunday Globex to drop the price like this. I'm sure it actually only takes a fraction of that. Nobody is using Globex on Sunday evening unless there are major news headlines. That means that minor buying/selling moves prices.

Dr G
Sep 24, 2012 - 12:18am

I'm also going to disagree

I'm also going to disagree with some here and say that I see a great possibility of continued weakness in London and Crimex. After these Sunday evening drops, it seems that it always takes a full trading cycle for the metals to regroup. I'd love to be wrong about that but...I think the best case scenario for the next 18 hours could simply be some sideways movement.

The other alternative is a move up that only takes the metals to where they opened this evening.

Teach
Sep 24, 2012 - 12:45am

I'm no expert...

but stories like this are... effing alarming. Based on the American record of being willing to kill to maintain petro dollar privilege, I'd conclude we may be in for some very rough times ahead. If they lose it, their economy collapses under the weight of debt, out sourced industry, and a whole bunch of soon to be pointless conflicts. If tptb try to fight and maintain (the fix) control of everything, they end up in a new world war. Either way, gold goes up...and either way the "little people" get very, very screwed...or dead. Of course, this cloud has a golden / silver lining...but I would choose peace over a higher value stack. https://www.truthistreason.net/death-of-the-us-dollar-hegemony-military-intervention-oil-sales-and-the-inevitable-collapse

Mickey
Sep 24, 2012 - 12:46am

Eight years I have been in PM

This all feels like Groundhog Day.

the beat downs, the volatility, the moves up.

The discussions about paper , tungsten, JPM, tocom, comex, London, physical,, fear, greed.

As long as the printing continues, as long as the deficits continue, as long as the debt grows, as long at the fed is around, as long as the banksters are around, pm will be in an upward trend, I guess as long as the dollar is around too (it's not over till its over).

when I see our leaders getting economic, financial, monetary, fiscal responsibility, then I sell.

stll waiting for someone, anyone, (Buhler) to elaborate on how this mess gets fixed without a depression worse than the 30's.

it's payback time and it's a bitch.

Hi-Ho Silver
Sep 24, 2012 - 12:54am

Cycles Investing, Gann Theory and Autumnal Equinox-Goblin Season

https://wealthcycles.com/blog/2012/09/21/cycles-investing-gann-theory-an...

A recent ZeroHedge post will help put this phenomenon into context:

Revisiting Wall Street Folklore and The Autumnal Equinox – In past years at this time, I have quoted my pal Dennis Gartman’s citation of a piece on seasonality and late September by his good friend, Paul Macrea Montgomery. (Paul has become a bit of a legend over the years for his ability to dig out arcane or overlooked clues to the market – wish I could do that.) Anyway, here’s a bit of what I quoted last year: “The legendary trader W.D. Gann reportedly claimed that capital and commodity markets tend to top on or around September 22nd more oft than on any other day of the year. There is not apparent economic logic behind this reported observation, but the notion might very well have a certain appeal to astrologers, in as much as September 22nd happens to be the usual date of the Autumnal Equinox…the day that the earth crosses the Sun’s equator going south, and one of the two dates each year that the days and nights are of equal duration. This is the day which, according to ancient lore, the Sun enters its “Fall,” thereby reversing for a time the rising animal spirits and other good things associated with Spring and Summer, and setting the stage for untoward events to unfold. Apparently this concept is so ancient it pre-dates even the oldest Mesopotamian culture.
Mickey
Sep 24, 2012 - 12:56am

Eight years I have been in PM

PS

since about 1999, investors have wanted immediate gratification. Probably based on dot com and Y2K. That's nice but not realistic. The boomers consumerism years are over, Clinton's adm was the beneficiary of this,

we are on the downslope now. The population has changes, we do have more takers in the population,

indosil
Sep 24, 2012 - 1:00am

@ Ivars

Thanks.Looking forward to it.London open & Comex open should be interesting.

Silver Alert Puck Smith
Sep 24, 2012 - 1:00am

Puck

If you have doubts about authenticity or even a seller's honesty, would you trust their measuring system? Would you expect everyone to trust yours? In the future, everyone will either have then own gear, use a metals broker, or just hope they don't get screwed.

PMBull
Sep 24, 2012 - 1:06am

Dr. G

It seems Sunday Globex smackdowns would be a nice way to set the market up for covering shorts, no? It doesn't require as much to start things off at a lower level in the morning. I too wonder how SD came up with the volume numbers in tonight's "50% of production" report. I'm open.

justin99975
Sep 24, 2012 - 1:10am

@ Green Lantern

the hollow coin info was so cool. Gonna have to search one of those out. Would be a great gift for the wife, complete with a pic of the kids inside. But something tells me they would probly set me back a few ozs.

BTW, ya like my avatar? If you're not reading all four GL books being published right now, you're missing out.

Monedas
Sep 24, 2012 - 1:28am

Counter Fit ?

Rule # 9 : 100% cure to prevent embarrasment at your LCS .... be fully hoarded ten years ago ! Monedas 1929 Comedy Jihad Top 10 Reasons Why Hoarders Have More Fun Tour

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