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

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

  481 Comments

Swineflogger
Sep 22, 2012 - 2:12pm
reefman
Sep 22, 2012 - 2:17pm

@Turd,> Ponder this for a

@Turd,

> 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

Why the long face?

August 14, Gold was $1,590

September 12, Gold was at $1,770

That's nearly a $200 move in less than a month! (Don't even get me started on the mega-bubble called Platinum!)

Gold already PRICED IN the QEternity move, starting in August.

Gold and Silver especially need to take a rest after this huge sprint up. Both metals are seriously overbought at this point and a correction back down to something much more reasonable, like $1,620 and $31.40 is in order I think. They took off too fast, too soon, too far, and with too much exuberance.

Like Marc Faber says, I hope the metals don't run too far, too fast or they are going to make it illegal to own gold. Same here.... let's have a 4 month consolidation, followed by a slower move up, or else let's have a week of smashes like what happened last year and get the pain over with sooner.

I expect a rush to the SAFE HAVEN of the US Dollar and Bonds - again. The USDX is OVERSOLD imho. It is going to BOUNCE UP, and the metals are going to be pushed down.

Keep in mind this is all SHORT TERM.

Long term, I expect silver to take out it's high some time.... but not just now.

Swineflogger
Sep 22, 2012 - 2:24pm

Anyone know WTF this is?

Found this in the garden. Don't remember planting it. Did not know whether to net it, trap it or shoot it.

Sep 22, 2012 - 2:27pm

COT Harvey is bearish and expecting a raid in silver next week

I am reading Turd's tone on the COT as bullish, in contrast to Harvey who is bearish. Is Turd just takaing the longer view. The week to come should be interesting.

Harvey Organ's comments on the COT https://harveyorgan.blogspot.com/
Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
43,205 10,650 23,977 31,884 82,358
1,834 761 1,765 -322 2,880
Traders
80 39 42 34 40
Small Speculators Open Interest Total
Long Short 127,032 Long Short
27,966 10,047 99,066 116,985
2,705 576 5,982 3,277 5,406
non reportable positions Positions as of: 136 104
Tuesday, September 18, 2012 © SilverSeek.com
First let us have a look at our large speculators: Our large specs that have been long in silver realized that silver was about to pierce the 32.00 level and thus they added another 1834 contracts to their long side. Those small specs that have been short in silver thought that silver was advancing too fast so they added another 761 contracts to their short side and these guys are not happy campers this weekend. Our commercials; Those commercials that are long in silver and are close to the physical scene pitched a small 322 contracts from their long side. And now for our famous commercials shorts i.e. JPMorgan et al:

These guys reluctantly added another 2880 contracts to their already burgeoning short position.
They have decided to regroup and call for one of those weekend meetings trying to stop silver's advance.

Our small specs;


Our small specs that have been long in silver liked what they saw and they added a rather large 2705 contracts to their long side.


Our small specs that have been short in silver, added another 576 contracts to their short side and they too are not happy this weekend.

Conclusion: Only with respect to the commercials who basically decide where the price of silver will be heading, went net short another 3202 contracts and you must say that this is terribly bearish.
You can count on a gold and silver raid sometime next week.

Sep 22, 2012 - 2:34pm

No, Doc

I am NOT reading the CoT as bullish. By any traditional measurement, the CoT is decidedly bearish. Maybe even scary. Anyone that thinks I'm full of crap should be unloading and selling paper before the inevitable smash.

However, this time around, the CoT doesn't scare me. I know what they are up against and I know what is in store for them. So, adding shorts like they are only digs their hole deeper.

Btw, this is an interesting read: https://www.debka.com/article/22376/Washington’s-Iran-war-game-vs-real-Iranian-Israeli-war-preparations

treefrog
Sep 22, 2012 - 2:34pm

@swineflogger

looks like a horned melon seed got mixed in with one of your other seed packets.

https://www.google.com/search?q=horned+melon&hl=en&client=firefox-a&hs=z...

looks like yours isn't ripe yet.

Horned Melon Seeds Now Available!
Cucumis metuliferus
a.k.a. Kiwano (trademarked name by New Zealand growers), African Horned Cucumber

Bright orange, ovaloid fruit to 6-9", with numerous prominent spines. Flesh is bright green, watery, and with a slight sweetness.

Swineflogger treefrog
Sep 22, 2012 - 2:36pm

@treefrog

Thank you for the edification. Wonder how it got in my garden?

SilverWealth
Sep 22, 2012 - 2:37pm

questions

Turd, I don't understand why these criminals care about what is posted on the COT. Since they have the power why should they care what their short position reveals?

Secondly the taxpayer is the one at risk it seems to me, never a bank like JPM. If they do get in actual trouble with their short position in Silver any historian knows they will be fully made right by the FED. So why place so much emphasis on the forensic drama of these various levels? It assumes that a fully criminal enterprise will suddenly abide by rules of the market place. Even if physical buyers call in their silver which so many believes will mark the end game, why can't they just default on payment and make random claims and excuses? All the precedents are there. John Corzine is clear precedent for grand larceny of the most obvious kind.

Nothing short of plebs marching down to JPM with pitchforks will put actual pressure on them and since they own the NYPD how would that work anyway. Silver can go to 100 and I can't see but that JPM will simply off load their liabilities onto innocent parties, control the financial media propaganda around the event and end up bearing zero responsibility in the end.

treefrog Swineflogger
Sep 22, 2012 - 2:42pm

swineflogger

did you plant some other melon/cucumber or such near there? did somebody who furnished your seeds get a wild card in the wrong envelope?

kingboo
Sep 22, 2012 - 2:43pm

@Swineflogger

ofcourse i know what it is! It's a waterpinemelonapple...... jees! everybody knows that ...

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

Key Economic Events Week of 8/5

8/5 9:45 ET Markit services PMI
8/5 10:00 ET ISM services PMI
8/6 10:00 ET Job Openings
8/8 10:00 ET Wholesale Inventories
8/9 8:30 ET Producer Price Index

Key Economic Events Week of 7/29

7/30 8:30 ET Personal Inc/Spending & Core Inflation
7/30 10:00 ET Consumer Confidence
7/31 8:15 ET ADP employment
7/31 2:00 pm ET FOMC Fedlines
7/31 2:30 pm ET CGP presser
8/1 9:45 ET Markit Manu PMI
8/1 10:00 ET ISM Manu PMI
8/2 8:30 ET BLSBS
8/2 10:00 ET Factory Orders

Key Economic Events Week of 7/22

7/23 10:00 ET Existing home sales
7/23 10:00 ET Richmond Fed Manu Idx
7/24 9:45 ET flash Markit PMIs
7/25 8:00 ET Count Draghi/ECB policy meeting
7/25 8:30 ET Durable Goods
7/25 8:30 ET Wholesale Inventories
7/26 8:30 ET Q2 GDP first guess

Key Economic Events Week of 7/15

7/15 8:30 ET Empire State Fed Index
7/16 8:30 ET Retail Sales and Import Price Index
7/16 9:15 ET Cap Ute and Ind Prod
7/16 10:00 ET Business Inventories
7/17 8:30 ET Housing Starts and Building Permits
7/18 8:30 ET Philly Fed
7/19 10:00 ET Consumer Sentiment

Key Economic Events Week of 7/8

7/9 8:45 ET Fed Stress Conference, three Goon speeches
7/10 8:30 ET CGP Hump-Hawk prepared remarks
7/10 10:00 ET CGP Hump-Hawk House
7/10 10:00 ET Wholesale Inventories
7/10 2:00 ET June FOMC minutes
7/11 8:30 ET CPI
7/11 10:00 ET CGP Hump-Hawk Senate
7/11 12:30 ET Goon Williams
7/12 8:30 ET PPI

Key Economic Events Week of 7/1

7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 10:00 ET Construction Spending
7/2 6:35 ET Goon Williams
7/3 8:15 ET ADP June employment
7/3 8:30 ET Trade Deficit
7/3 9:45 ET Markit Services PMI
7/3 10:00 ET ISM Services PMI
7/3 10:00 ET Factory Orders
7/4 US Market Holiday
7/5 8:30 ET BLSBS

Key Economic Events Week of 6/24

6/25 10:00 ET New Home Sales
6/25 1:00 pm ET Chief Goon Powell
6/25 5:30 pm ET Goon Bullard
6/26 8:30 ET Durable Goods
6/27 8:30 ET Q1 GDP final guess
6/28 8:30 ET Personal Income and Consumer Spending
6/28 8:30 ET Core Inflation
6/28 9:45 ET Chicago PMI

Key Economic Events Week of 6/17

6/18 8:30 ET Housing Starts and Building Permits
6/19 2:00 ET FOMC Fedlines
6/19 2:30 ET CGP presser
6/20 8:30 ET Philly Fed
6/21 9:45 ET Markit flash June PMIs

Recent Comments

Forum Discussion

by Boggs, Aug 25, 2019 - 11:32pm
by Boggs, Aug 25, 2019 - 9:46pm
by SilverSpec, Aug 25, 2019 - 8:59pm
by SilverSpec, Aug 25, 2019 - 8:39pm
by SilverSpec, Aug 25, 2019 - 8:35pm
by Solsson, Aug 25, 2019 - 3:19am
randomness