Friday Open Thread

289
Fri, Nov 16, 2012 - 9:08am

I'm going to be out and unavailable for most of the day. Here's an open thread for you but, as usual, please try to keep the conversation civil and productive.

Just a couple of things...

In case you missed it, here's a reprint of the "update" I posted to the previous thread. Nothing earth-shattering and certainly not meant to scare you, just a heads up:

5:00 pm EST 11/15/12 UPDATE:

The metals have continued to slowly improve this afternoon from the savage beating they took this morning. This is quite positive for us Good Guys. However, I feel obligated to draw your attention to something that has me concerned.

Did you see this ZH article earlier today? https://www.zerohedge.com/news/2012-11-15/gold-tumbles-same-dedicated-seller-reemerges. This "dedicated seller" thing set off some alarm bells for me as it reminded me of the period back in late September and early October when we were all similarly flummoxed by a Cartel "Iron Dome" near $1780 in gold and $35 in silver. I wrote about in several posts but summarized the problem on this post from Thursday, October 4: https://www.tfmetalsreport.com/blog/4239/deja-vuall-over-again.

Here's the problem...That week of desperate, regular Cartel capping culminated with things breaking down on October 5 and the metals have been under consistent pressure ever since. Of course, past isn't always prologue and history doesn't always repeat, but I'm the one who is paid to recognize patterns and this is clearly one we must keep watching. The main level on which to concentrate would seem to be $1705 in gold. A break there and it will become likely that gold sees at least a re-test of the lows of 11/5, near $1670-1680.

This is no reason to be scared, just cautious. Let's see what happens tomorrow.

And you have missed this, too. I certainly did. The Comex has decided to lower initial gold and silver margins again, effective at the close next Tuesday. It's a pretty significant drop, too, with the gold initial margin declining from $9,113 to $7,425 or 18.5%. The silver initial margin was reset to $12,100 from $16,875 for a drop of over 28%. Very interesting move given the recent volatility and high open interest, especially in silver. Here are the rest of the details: https://www.reuters.com/article/2012/11/15/cme-margins-idUSL3E8MF6LY20121115

OK, that's all the time I have for now. I'll type up and post a full weekly recap tomorrow morning so please be sure to check back over the weekend. As for today, hang in there, keep the faith and buy some physical.

TF

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  289 Comments

worldend666
Nov 16, 2012 - 9:26am

Margins

>>It looks like they needed to lower silver margins to lure in weaker hands since they've been so unsuccessful in getting the current longs to capitulate. Preliminary open interest figures are showing silver open interest at another ytd high.

Remember margins are available to shorts and longs. What it does ensure is that bets will be raised on both sides and OI will increase. This is great for the bullion banks when volatility ramps up and they can close all the suckers out on both sides of the trade.

Silver Alert
Nov 16, 2012 - 9:29am

I bet the all the unionists

I bet the all the unionists are dumb enough to be happily congratulating each other for beating the evil Twinkie corporation. After all, they've been promised they would be taken care of.

boatman
Nov 16, 2012 - 9:31am

denny's n hurricane wings

to add surcharge for obozocare.................and replace 1 fulltime employee with 2 partime. yeah, this pencils out. whole nation going bankrupt and we got money for little johnny to see the doc everytime he sneezes. afterall, throwing billions at public education has worked out SOOO well.

Hawk
Nov 16, 2012 - 9:34am

Posting this again to this thread as it seem relevant,

Ok this is really frustrating for me as there are a lot of people with questions above and I have answers to them but probably not the time to respond to all of them, unfortunately just too busy, its why I haven't posted here recently.

Anyway Ill start with the price smash yesterday from $1723 and 25,000 contracts traded, This could have been orchestrated to buy physical, however another factor is the setting of the algorithms, you see a sequence of lower closes fix to fix causes neutral algo's to seek more stops below the market rather than above, additionally the price difference between fixes is another factor, if a significant amount, as it was ($10+) then you will see further selling or buying pressure from the neutrals depending on whether it was higher or lower than the previous fix, if like we saw before the rally in the summer you get multiple lower fixes in a row then the neutral algo's will keep selling rallies, this has the effect of doing the work for any entity short, this is why you see sudden large dumps of contracts, it is designed to set the tone and divide the division of labor to the algorithms and the momentum guys, rather than the cots themselves.

Therefore the 25,000 contract sale in min's after what should have been very bullish jobs data was designed to set the tone and more likely algo related then physical related. This from a correspondence I had with Bart Chilton this morning "regarding trading this week, or Thursday, I can tell you that there did appear to be some anomalous activity and that we are looking at these trades specifically. However, we don't circle back with people and tell them what took place. We look at the law and what was going on. It there is a potential that the law was violated, our enforcement division get involved. We are prohibited (by law) from saying which traders did what or disclosing individual trader names and positions.

read into this what you will, I take it to mean they saw it, gave the entity who did it a slap on the wrist and said you best not do that for a week or two. Anyway It really doesn't matter, as I've said before you can trade around these manipulations, you just have to reevaluate your trading style to encompass every what if scenario and use the appropriate leverage.

As to the above post regarding Margins, I am not surprised by the reduction. As mentioned previously on here many do not understand how they are generated (read Ernie Pantussu) and where calling for increases on price drops. This is not likely as volatility has really declined and the price of the underlying is also declining, as both of these are the primary factor in determing margins this is why we get the decline, furthermore this is designed to bring more dumb money into the market so it can be fleeced by price declines like yesterday, is has the effect of enticing traders to leverage themselves further which isn't smart.

Finally in response to:

was someone buying 77 metric tons of physical when this was being sold on the comex ? In short no. In long yes they were buying futures contracts long on the comex (more likely covering of shorts into long stops, as evidenced by the reversal to $1718 shortly after) However spot indexing and physical purchases would have occurred in size on the dip, what size would be a guess but it would not be insignificant, hopefully in the next month or so I should have a contact with actual detailed physical size information.

Good luck and Good Trading,

HAWK

rpboxster
Nov 16, 2012 - 9:36am

shipping--tulving and others

[carried into the open thread]

I started the panic, but it ended well for me. My order was with TX Precious Metals. I absolutely love their service. I've heard enough stories about UPS/FedEx/USPS that I can't say one is better than the other. So, I won't fault TPM for using UPS. I moved my business to TPM from Tulving for the same reasons others have mentioned. I could not be under 'house arrest' waiting for a package to show sometime in the next 3 or more weeks because I had no ship notice or tracking info. Great prices, horrible service. TPM has very good prices and really the best service I have experienced from any web retailer of any kind.

Just to close the loop, this morning I confronted my suite 'neighbors'. The receptionist said she signed for the package. I asked her why she didn't have the courtesy of walking my delivery 100' or calling. She said she called. It was my cell number and I didn't miss a call. I told her that. So, she then said, "I'm not allowed to leave my desk". My expression said "lie", again. So, she said she was told to leave it for UPS to redeliver. Right. I told her that it reflected poorly on her and her firm, and that she wouldn't be working at my firm. Sadly, this insight into common courtesy and decency in America accurately reflects too many daily experiences at the stores, on the road, and on the streets. Wtf happened?

I'm going to get a Ding Dong.

Patrancus
Nov 16, 2012 - 9:39am

Obama latest EO

Obamy latest EO fast track to tyranny handing over to DHS and its Fusion Centers taking control of Internet. Sound familiar? has Sky net become reality? Angie "ain't it great to be alive" Secession is an purely American principle and began as a "voluntary compact" among states. Not being talked much about is that Republican Governors hold the executive office in 33 states, constitutes very powerful leverage on a runaway Federal gooberment. Time to go to work fella's

https://www.thenewamerican.com/usnews/politics/item/13600-is-obama’s-cybersecurity-executive-order-imminent

The man who stole a leopard
Nov 16, 2012 - 9:41am

RE: Walmart, Target and Sam's Too

Why would they want to strike? They'll miss all the fun...

Black Friday Madness Musical Mob Montage

(with some pleasant music to get you in the holiday mood)

¤
Nov 16, 2012 - 9:44am

Thanks Hawk

Appreciate the effort and the content of your post trying to clarify what happened yesterday

ancientmoney
Nov 16, 2012 - 9:46am

Financial repression via full-court press

As we know, the government and Fed have implemented financial repression. This has required the compliance and complicity of the CFTC, and SROs in the industry. The regulators must look the other way as the BBs like HSBC and JPM use every trick in the book to keep them cooked.

It has occurred to me that not only are they using manipulative, concentrated, fraudulant and illegal naked shorts to quash silver and gold, but they are also likely raiding the ETFs, SLV and GLD to meet demand for physical, as Turd mentioned last night. We've seen them steal silver from customers of MF Global, and the gold from various countries, most lately Libya.

What would prevent them from providing false trading information, using fraudulent and contrived computer-generated price signals, etc.? I do not believe they stop anywhere in their attempt to maintain power and control. If they lose control of the markets, especially FOREX and PMs, it is game-over. So, they will not lose control if they can help it. Until they do.

It will take 3-6 months for real, true gold and silver pricing to be re-established once the system implodes on them. And there will be no such thing, at that point, as the ETFs, futures trading, or options on gold and silver. Those derivatives will fall away so that true physical pricing can be done, and all the false wealth swept away.

porkydawky
Nov 16, 2012 - 9:46am

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