Sat, Nov 17, 2012 - 12:48pm

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:


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:

  • First and foremost, why is total silver OI at the highest level in 24 months?
  • Price is exactly the same as 3/30/12 but OI is UP 36,000 contracts.
  • For 2012, total OI is UP 40,000 contracts or nearly 40%. What percentage likelihood would you have given that type of liquidity growth given that MFG disappeared on 11/1/11?
  • Why did total OI decline by nearly 20% in early 2011 while price nearly doubled?
  • With OI back to late 2010 levels, will it continue to grow or are we on the verge of another, significant short-covering rally?
  • 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 the days and weeks ahead.

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    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.


    About the Author

    turd [at] tfmetalsreport [dot] com ()


    Nov 19, 2012 - 9:26am


    FWIW seeing as you are picking up on language.....I never said that GL did say that Farage was a bad egg. I am just making the point that I think Farage has no edge or angle, unlike Rickards who I do believe has an edge and a clear DoD angle. Nigel says things like Greece SHOULD leave the Euro, he doesnt predict it will happen....indeed he would recognise if you asked him that it isn't likely to happen until things get genuinely crazy out there.

    Btw GL and I have been over this before in some detail, just airing our differing but I would say complimentary views on main st, we have a v similar view of the world, this minor difference of opinion is but a mere pimple on the EE's back overall!

    Jim Rickards: Currency Wars Simulation

    Goldmania am interested in your comments once you've watched the above, maybe you will see it as just a random choice of simulation, I don't, but then maybe I read too much into things....

    Nov 19, 2012 - 9:08am
    Nov 19, 2012 - 9:06am


    two scenarios:

    greece .........then spain and italy leave the euro.

    this freaks the bond market[about time!] n then japan is toast.

    guess who's after japan.

    guess what everyone buys when bonds n dow are toast?


    they print n 'SAVE' everyone.


    bond market still toast but DOW isn't.......but only at first

    toast at last......... as profits evaporate because wages do not keep up with prices.

    guess what 'they' buy?

    Colonel Angus
    Nov 19, 2012 - 9:00am

    Any help out there?

    I've got someone finally looking at being a stacker. He wants to start with five ounces of gold, and he doesn't really care what the gold looks like. He is caught up on the premium to be paid over spot price. Anyone out there have a suggestion of who has the lowest prices for whatever? It seems he wants to go with coins, and I mentioned smaller vs. larger sizes for later liquidity, recognizability, etc. It's still about premium over spot for now...his next purchases will probably diversify him in size, nationality, etc.

    Colonel Angus
    Nov 19, 2012 - 8:43am

    Must cap silver at $33...

    ....cue the monkey pictures. Or the ZeroHedge deer. Maybe Blythe has taken the week off...

    Nov 19, 2012 - 8:39am


    GL never said Nigel was a bad egg. he said his analysis was off "Ranting about Greece leaving the EURO, etc" but it hasn't. Just like others have said. They have been wrong Please post the video where he says China is the enemy. I've watched every video of Rickards hand he never says "china is the enemy"--he says they are buying gold, they are building infrastructure. Romney has been the one to call China the enemy with their currency wars and manipulation and Rickards has said that the US is the biggest Manipulator.

    GL wasn't calling any one bad eggs. He was very clear about that

    Key Economic Events Week of 7/6

    7/6 9:45 ET Markit Service PMI
    7/6 10:00 ET ISM Service PMI
    7/7 10:00 ET Job openings
    7/9 8:30 ET Initial jobless claims
    7/9 10:00 ET Wholesale inventories
    7/10 8:30 ET PPI for June

    Nov 19, 2012 - 7:59am

    wave 2 DN in metals over?

    "IF the silver starts to move up today, watch the DI, MACD n pos vol indicator vs its 21 day average. If they start to turn positive, buy for a trade or snuggle up with your longs.

    Silver-----even though the chart shows a rise to the 38$ silver area, intermediate range target is near 45, with a longer range target above the 55 level.

    silver is closer to 'up' than gold. n most silver vs. gold stocks also."

    from someone i trust.

    Nov 19, 2012 - 7:39am

    Silver Free Solar

    Yes forget the silver demand from solar. This and other technologies in the pipeline will make silver solar redundant at today's price, let alone if it shoots.

    Silver demand has to stand on other legs other than solar.

    Let's not let our wishes lead to our thoughts.

    Nov 19, 2012 - 7:39am

    china is the wests biggest econ adversary/supplier/debt owner

    [tho japan is close on the debt]

    and they realize their share of the world's amenities will be obtained thru economic pressure of any kind they can apply and get away with.

    course there's a symbiotic relationship as they own [tho are net sellers of] our debt.....and we buy their junk.

    jim rickards just has his opinion, the fact that he is sometimes asked/paid to give it to the government just means everyonce in awhile the govmint isn't completely stupid.

    john mauldin routinely is called to speak to groups of congressmen to educate them on econ topics [the only side of the aisle that thinks it matters i might add]

    'power to the people'..............yeah, thats what they shouted in st petersburg in'd that work out.........between 85 mil and 100 mil people killed by their own govmint.

    i'll take the banksters............with TF's help i can beat them at their own game.

    Nov 19, 2012 - 6:33am

    Sorry GL

    but had to chime in. Farage is a good egg I have met him personally and discussed various items, he is just not a truly 'political' animal as he doesn't watch what he says, rather he just says it. Rickards on the other hand has emerged from inside the machine and delivers 'intel' without being interested in other perspectives. I do not deny his intel has been very accurate. The image of Nigel emerging from that shocking plane crash explains his true nature very well, thoroughly Quixotic and blessed....

    That video where Rickards makes out that China is the 'enemy' and that financial terrorism emanates from them via currency market interventions etc was off the charts, blatant DoD/Pentagon/EE propaganda that I am sure you don't buy into either.

    Just offering this up as rebalancing opinion!

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    Key Economic Events Week of 7/6

    7/6 9:45 ET Markit Service PMI
    7/6 10:00 ET ISM Service PMI
    7/7 10:00 ET Job openings
    7/9 8:30 ET Initial jobless claims
    7/9 10:00 ET Wholesale inventories
    7/10 8:30 ET PPI for June

    Key Economic Events Week of 6/29

    6/30 9:00 ET Case-Shiller home prices
    6/30 9:45 ET Chicago PMI
    6/30 10:00 ET Consumer Confidence
    6/30 12:30 ET CGP and SSHW to Capitol Hill
    7/1 8:15 ET ADP Employment
    7/1 9:45 ET Markit Manu PMI
    7/1 10:00 ET ISM Manu PMI
    7/1 2:00 ET June FOMC minutes
    7/2 8:30 ET BLSBS
    7/2 10:00 ET Factory Orders

    Key Economic Events Week of 6/22

    6/22 8:30 ET Chicago Fed
    6/22 10:00 ET Existing home sales
    6/23 9:45 ET Markit flash PMIs for June
    6/23 10:00 ET New home sales
    6/25 8:30 ET Q1 GDP final guess
    6/25 8:30 ET Durable Goods
    6/26 8:30 ET Pers Inc and Spending
    6/26 8:30 ET Core inflation

    Key Economic Events Week of 6/15

    6/16 8:30 ET Retail Sales
    6/16 8:30 ET Cap Ute and Ind Prod
    6/16 10:00 ET Chief Goon Powell US Senate
    6/16 4:00 pm ET Goon Chlamydia speech
    6/17 8:30 ET Housing Starts
    6/17 12:00 ET Chief Goon Powell US House
    6/18 8:30 ET Initial Jobless Claims
    6/18 8:30 ET Philly Fed
    6/19 8:30 ET Current Account Deficit
    6/19 1:00 pm ET CGP and Mester conference

    Key Economic Events Week of 6/8

    6/9 10:00 ET Job openings
    6/9 10:00 ET Wholesale inventories
    6/10 8:30 ET CPI for May
    6/10 2:00 ET FOMC Fedlines
    6/10 2:30 ET CGP presser
    6/11 8:30 ET Initial jobless claims
    6/11 8:30 ET PPI for May
    6/12 8:30 ET Import price index
    6/12 10:00 ET Consumer sentiment

    Key Economic Events Week of 5/25

    5/26 8:30 ET Chicago Fed
    5/26 10:00 ET Consumer Confidence
    5/27 2:00 ET Fed Beige Book
    5/28 8:30 ET Q2 GDP 2nd guess
    5/28 8:30 ET Durable Goods
    5/29 8:30 ET Pers Inc and Cons Spend
    5/29 8:30 ET Core Inflation
    5/29 9:45 ET Chicago PMI

    Key Economic Events Week of 5/18

    5/18 2:00 ET Goon Bostic speech
    5/19 8:30 ET Housing starts
    5/19 10:00 ET CGP and Mnuchin US Senate
    5/20 10:00 ET Goon Bullard speech
    5/20 2:00 ET April FOMC minutes
    5/21 8:30 ET Philly Fed
    5/21 9:45 ET Markit flash PMIs for May
    5/21 10:00 ET Goon Williams speech
    5/21 1:00 ET Goon Chlamydia speech
    5/21 2:30 ET Chief Goon Powell speech

    Key Economic Events Week of 5/11

    5/11 12:00 ET Goon Bostic speech
    5/11 12:30 ET Goon Evans speech
    5/12 8:30 ET CPI
    5/12 9:00 ET Goon Kashnkari speech
    5/12 10:00 ET Goon Quarles speech
    5/12 10:00 ET Goon Harker speech
    5/12 5:00 ET Goon Mester speech
    5/13 8:30 ET PPI
    5/13 9:00 ET Chief Goon Powell speech
    5/14 8:30 ET Initial jobless claims and import prices
    5/14 1:00 ET Another Goon Kashnkari speech
    5/14 6:00 ET Goon Kaplan speech
    5/15 8:30 ET Retail Sales and Empire State index
    5/15 9:15 ET Cap Ute and Ind Prod
    5/15 10:00 ET Business Inventories

    Key Economic Events Week of 5/4

    5/4 10:00 ET Factory Orders
    5/5 8:30 ET US Trade Deficit
    5/5 9:45 ET Markit Service PMI
    5/5 10:00 ET ISM Sevrice PMI
    5/6 8:15 ET ADP jobs report
    5/7 8:30 ET Productivity
    5/8 8:30 ET BLSBS
    5/8 10:00 ET Wholesale Inventories

    Key Economic Events Week of 4/27

    4/28 8:30 ET Advance trade in goods
    4/28 9:00 ET Case-Shiller home prices
    4/29 8:30 ET Q1 GDP first guess
    4/29 2:00 ET FOMC Fedlines
    4/29 2:30 ET CGP presser
    4/30 8:30 ET Pers Inc and Cons Spend
    4/30 9:45 ET Chicago PMI
    5/1 9:45 ET Markit Manu PMI
    5/1 10:00 ET ISM Manu PMI

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