Unfortunately, all the White-Out in the world wouldn't have been enough to hold back the BS of the BLS. So, after failing to get our breakout yesterday, we must regroup and reassess.
On the bright side the charts still look pretty clear and we'll get to them in a minute. First, we have to address the outrageous CoTs from yesterday.
Outrageous, disgusting and pathetic. These are just a few of the terms that could be used to describe the latest actions of The Cartels as well as the inaction of the CFTC. Despite all of the "good cop" bluster of "Thunderlips and Baldy", the remain collusive partners in crime and enablers of The Cartels. Here is the conclusive data:
Tuesday, 8/14: Price closed $1602. Total Gold Cartel gross short position 291,358. Net short ratio 1.98:1.
Tuesday, 9/11: This is the Tuesday before the surprise announcement of QE∞. Price closed $1735. Total Cartel gross short position 380,239 (+30%). Net short ratio 2.66:1.
Tuesday, 10/2: Price closed $1775. Total Cartel gross short position 405,520 (+7% from pre QE∞ level). Net short ratio 2.98:1.
Tuesday, 8/14: Price closed $27.85. Total EE gross short position 71,199. Net short ratio 1.49:1.
Tuesday, 9/11: Price closed $33.57. Total EE gross short position 79,478 (+11.6%). Net short ratio 2.47:1.
Tuesday, 10/2: Price closed $34.67. Total EE gross short position 93,628 (+17.8% from pre QE∞ level). Net short ratio 2.62:1.
Again, this is grotesque. In gold, The Cartel has doubled their net short ratio in this 6-week rally from $1602 to $1775, from roughly 2:1 to the current 3:1.
Silver is where the real outrage should lay. That the comically-ineffective CFTC has yet to conclude that manipulation exists is beyond belief. Not only did The Evil Empire (namely JPM) increase their gross short position by almost 12% during the initial rally pre-QE∞, they have sped up the issuance of unbacked paper by 50% in the days since! Note that, in the past three weeks alone, The EE has increased their gross short position by almost 18% to an unbelievably disgraceful 93,628 contracts. And, since the beginning of this rally, they have now increased their total net short position by 34,438 contracts for a change of +148%!!
Again, this is outrageous! In attempting to cap price and protect the buy-stops above $35.50, the EE has added 14,150 brand new paper short contracts in just the past three weeks. If forced to deliver and supply actual metal, this is the equivalent of 71,000,000 ounces of silver! Even using the worthless GFMS numbers, that's 10% of all silver to be mined in 2012! Again, the only word that comes to mind is outrageous.
<deep, calming breath>
OK, please don't get discouraged, however. What these arrogant fools seemingly fail to understand is that their era has ended. Like a dinosaur across the planet from the Yucatan when the asteroid hit, they are continuing upon their merry way, unaware that the seeds of their destruction have already been sown. Physical demand plus other, pending extraordinary events will soon crush them. Patience, grasshoppah. You should be utilizing this time to continue padding your stack. You might also consider buying popcorn and other refreshments because, when this Cartel scheme finally collapses...and it soon will..the resulting fireworks show is going to spectacular.
Here are your charts for the week ahead. From the looks of it, we should probably expect 5 to 7 more trading days under this lousy cap. Time, however, is rapidly passing through The Witch's hourglass. Again, just be patient and you will be rewarded.
First, the clear technical rationale for the against-all-odds, desperate capping effort:
These 8-hour charts show the closing of longer-term "triangles":
And these RSI charts show that just a little more time may be needed to work off any remaining "over-bought" conditions:
So, that's all for now. I've nearly blown my entire Saturday morning putting this post together and I think it's time to go watch some football. I hope that you have a relaxing and fun weekend. More on Monday!!