Simply unbelievable and amazing in so many ways.
Not really sure where to start this morning. It's a Saturday and I don't really feel like taking two or three hours to type up a long and detailed post but I have to do it anyway. I have some significant issues/ideas for you to ponder.
First up, let's review again the weekly charts. The Outside Reversal Weeks of last week were followed this week by slightly down, red candles. This is no big deal so I don't want you to be concerned. The ORW is simply a sign of overall strength and sentiment and likely shows a general shift in momentum. That shift may have seemed hidden or inconsequential this week but, trust me, you'll notice it with the full benefit of hindsight in the weeks and months to come.
Note the powerful, long-term trends on these charts. The black lines are the primary long and intermediate term trends. The red lines are the BS, nonsense Cartel-induced corrective counter-trends and resistance levels. I am NOT fearful or the least bit nervous here. Any further weakness should be considered a Cartel gift, wrapped up in a big, fat bow, just in time for your holidays. In other words, buy the dips.
And we simply must take some time today to discuss the latest CoT and Open Interest numbers. First, let's talk about gold. This week's CoT period (Tue-Tue) saw gold rise about $10 while total open interest climbed by 12,607. So, what do you think happened? I'll pause here while you contemplate the obvious...
I'm sure these numbers will come as a great shock to virtually everyone:
Large Spec Net Long = +11,400 Evil Cartel Gross Long = -300
Small Spec Net Long = +5,600 Evil Cartel Gross Short = +16,700
TOTAL Spec Net Long Change = +17,000 TOTAL Evil Cartel Net Short Change = +17,000
Isn't that just freaking sickening? What an absolute joke. Managed money, hedge funds and small investors dramatically increased their exposure to gold after the re-election of President O'Bottom. In order to tamp down what should have been a dramatic increase in price, The Forces of Darkness took the sell side of nearly every trade and increased the outstanding inventory of unbacked, leveraged paper gold by 12,000 contracts or, stated another way, 1.2MM ounces or about 37 metric tonnes, roughly the equivalent of the entire alleged physical holdings of South Korea. Just another example of ongoing manipulation and price "management" that continues to be overlooked/endorsed by Cueball and Thunderlips. Way to go, boys!
But the intriguing story continues to emanate from the silver pit where things look quite a bit different from gold. The CoT saw spec positions that were nearly unchanged for the reporting week. While silver rose 46¢, the total Large Spec net long position only grew by 300 and the Small Spec net long position only grew by 100. So, what's the deal??
Do you recall back in mid-August I got all worked up over what I thought was a coming "Civil War" within the Silver Cartel? At the final bottom of the March-August "correction", suddenly the gross long position of The Silver Cartel began to surge. At the same time, the gross short position (JPM) was forced to also grow in order to suppress price and swallow this demand. What happened next did not play out as a "Civil War" (at least not that time) but the huge jump in Cartel gross longs did precede the dramatic, 6-week rally that took silver from $27.50 to $35.50.
On the Tuesday 8/14 CoT survey, the Silver Cartel gross long position surged 3,202 to 47,797 while the gross short position grew 4,752 to 71,199. Now, compare this to the numbers on this week's CoT:
Total Evil Empire Gross Long = +3,071 to 41,797
Total Evil Empire Gross Short = +4,354 to 92,758
Whether or not this is finally the start of my long-awaited Civil War matters little. What does matter is that we are seeing the exact same CoT structure and positioning that we saw in mid-August, right before a 6-week, 30% rally in price. Hmmmm........
And I'll give you a few more nuggets to chew on. Back on Thursday, the price of silver fell about 20¢ on the Comex. Regardless, the total OI continued to grow that day, adding another 1,200 contracts to 145,883. This is extraordinary and astounding! For perspective, take a look at these dates, prices and OI numbers:
DATE OI LEVEL PRICE
11/12/10 147,801 $25.94 QE2
12/31/10 136,275 30.91
2/25/11 136,560 32.90
4/1/11 137,580 37.74
4/29/11 129,712 48.58 Price Peak
8/5/11 119,241 38.20 U.S. Debt Downgrade
10/28/11 110,911 35.28 Demise/Theft of MFG
12/30/11 105,982 27.88
1/27/12 101,885 33.75
2/24/12 118,204 35.33 Price Peak
3/30/12 109,693 32.47
6/1/12 115,991 28.50
8/17/12 125,817 27.99 March-August correction ends
11/16/12 145,833 32.50
So, here are your tasty nuggets:
Though there are many, possible answers to those bullets above, one thing is certain...The multi-year high in total open interest that we are currently seeing in silver guarantees that some extreme price action and volatility is just around the bend. Consider this your warning. Be prepared for a lot of fun...and angst...in the days and weeks ahead.
Finally, I want to spend a few minutes giving thanks to our advertisers here at TFMR. It takes a lot of effort and money to run the 4th-busiest gold-themed site on the internet and I couldn't do it without their financial support and your voluntary, non-tax deductible donations. Please support our sponsors so that they continue to see the benefit of advertising here. The ads only appear on the right side of the homepage and, in order from top to bottom, they are:
- Coghlan Capital. Of course, this is our exclusive "trading service" with Andrew Maguire. Subscribers get real-time access to Andy's trades so that they can follow along if they wish. It's an extremely cool service which also comes with Andy's exclusive weekly commentary each Sunday which, alone, is worth the cost of the service!
- MiningStockValuator.com. This is a very cool, new service. The owners are Turdites and here is how they describe their site:
There are countless reasons why you should try MSV - Mining Stock Valuator for free. Here are just a few:
-Access to the latest operational and financial data for over 200 gold and silver stocks (market cap, cash, debt, production, cash costs, reserves & resources, jurisdiction ratings + much more). No data is older than 3 months, guaranteed!
-Key metrics such as such as P/CF and P/Assets ($/oz) automatically calculated and displayed
-A user-friendly interface that lets you sort, compare and truly analyze your stocks
-Tracking of the share prices and their performances
The Gold Membership costs only $66.75 per year (use discount code: turdite). This is for investors who are looking for some serious objective stock-picking help. Extra tools and features are available plus a Live Top Picks section where MSV hands you the fundamentally most undervalued stocks at any given point in time. It does so by constantly sifting through and comparing all the data for every company in the entire database.
For those who just want to use MSV casually, the free basic membership gives users access to most features on the site.
- Tanzanian Royalty Explration. Santa decided a few months back to support a handful of sites that he felt were helpful and constructive to the gold community at large. I am honored that he considers TFMR to be of this caliber and I am grateful for his ongoing support of this site as an advertiser. Do you own any TRX?
- JM Bullion. This is a new advertiser for us and I was happy to add them. FYI, I recently made an anonymous purchase from them of 20 ASEs. The process went smoothly and the coins arrived on time and in perfect condition. Please consider JMB the next time you add to your stack.
- Provident Metals. Many of you are familiar with Provident and, like me, have ordered from them in the past. They consistently offer competitive prices and outstanding customer service. Like JMB, you should consider Provident when making your next physical purchase.
- Of course, there are Google ads, too, for you to consider and you'll also find ads for our only, current, bullion affiliation, the Hard Assets Alliance. Please remember that HAA is the "retail face" of Gold Bullion International and the GBI platform is an outstanding way to own, hold and even trade 100% physical metal. If you haven't already checked it out, here's a link: https://www.hardassetsalliance.com/cm/precious-metals-breakthrough
OK, time for me to sign off. I need to get out and cut the grass, put the snowblade on the John Deere, string some outdoor Christmas lights and watch some football. I hope you have a great weekend and then return on Monday, ready for volatility and fun.