The Iron Dome, part 2

213
Tue, Nov 20, 2012 - 11:12am

The Cartel-built Iron Dome continues to hold but it may not last much longer.

Just like The Iron Dome in Israel, occasionally a missile (candle wick) sneaks through but almost every attempt to pierce the dome is rebuffed. This is a clear attempt to cap and control price, at least through option expiration next week. Will they fail before then? That is the most pressing question.

Time is short again this morning as I have much to do before Thanksgiving and I have a very important post to prepare for tomorrow. Perhaps an industrious Turdite can do us all a favor and add up the total open interest of the Dec12 call options at 1735 and above. I would suspect that we'll find beaucoup calls at 1750 and at nearly every $10 increment leading up to a gigantic wad of (currently) worthless $1800s. This is the most-likely reason for The Iron Dome. Those calls must be kept out of the money. Once, the Dec12 options expire at the close on Tuesday, The Iron Dome will likely begin to break down.

As an example, we saw this play out in corn yesterday. The Dec12 corn options expired last Friday (the 3rd Friday of the month preceding). After being pressured for a number of reasons from Labor Day on, lo and behold look what happened as soon as the Dec12 options expired:

Dec gold is, by far, the most active traded and delivered month of the year. With QE∞ being announced in mid-September, the open interest in the futures and the options has been even stronger than usual. The "Iron Dome" strategy is, no doubt, linked to a plan to suppress and cap price until option expiry and First Notice Day next week. If I'm right (and I'd like to think that I am), the Iron Dome will break next week, the month of December will see a significant continuation of the rally and we will have the metals set up for an extraordinary and huge 2013.

Silver is dealing with capping pressure, too, and it is certainly tied to option expiration, as well. However, silver is also being slowed by chart pressure, which we know from the CoTs is being openly and aggressively supplied by JPM. $33.20-33.25 is our current resistance mainly because the 50-day moving average for the Dec12 contract is at $33.24. A close above the 50-day would put silver above every single one of its MAs and this would undoubtedly lead to short-covering and momo-HFT buying. JPM is trying to forestall this but they are failing. Look for them to retreat to higher ground soon, somewhere near $33.60. That will be a critical line of defense for them as, once above there, silver will be set for a run back to critical resistance between $35 and $36.

And just a word here about crude and the MENA. The headlines would suggest that tensions have been slightly dialed back today and this is reflected in the current price of crude. However, if news reports/rumors turn out to be correct regarding Iranian missile replenishment shipments on the way, it would safe to assume that the conflict is far from over. Watch the price of crude very closely. It will be your "tell" as to whether the situation is cooling off or about to boil over. For today, it's neutral. Later this week...???

That's it for now. Have a great day!

TF

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  213 Comments

OrangeAlert
Nov 20, 2012 - 11:14am

Turd!

Oh yeah...break that dome with a sledge hammer.

legerde
Nov 20, 2012 - 11:15am

What is HEH?

Its not in the glossary and I see it mentioned from time to time.

Thanks in advance.

Colonel Angus
Nov 20, 2012 - 11:19am

Second

Turd's emotions and ideas. I've been stacking more PMs this week and got into UCO before the recent rise in crude. Take advantage of the EE. At Thanksgiving I am helping a relative get into the shiny stuff. He wants gold and some silver, and he had a problem buying from a snake oil salesman the last time. I've not been overly preachy with family, but they know what I've been doing, that I watch markets, and that I believe there are problems. This relative called me early the morning after the election and asked, "How do I get in? I want at least 5 ounces to start." Now knowing that neither of us are druggies helps this conversation to make more sense. Thanksgiving should be fun. Maybe another will hear us and want to join in on the fun....are there going to be Black Friday sales at the LCSs and the big online dealers. Of course not. Only depreciating crap gets put on ridiculous sales.

Stack. BTFD. Repeat.

mack
Nov 20, 2012 - 11:19am

top 10

5 maybe

Ccanuck
Nov 20, 2012 - 11:20am

Nice top ten? Keep up the

Nice top ten?

Keep up the great work Turd

Thanks for all you Do!

Silver Danny
Nov 20, 2012 - 11:20am

Ceasefire?

Gaza And Israel Agree To Ceasefire, Oil Plunges

Submitted by Tyler Durden on 11/20/2012 - 11:10Israel

Just following the motions here:

  • ISRAEL AND GAZA MILITANTS AGREE TO EGYPTIAN-BROKERED CEASEFIRE - HAMAS OFFICIAL AYMAN TAHA - RTRS
  • GAZA TRUCE TO BE ANNOUNCED IN CAIRO AT 9 P.M., CHANNEL 2 SAYS - BBG
  • GAZA TRUCE WILL BE DECLARED AT 1900 GMT AND GO INTO EFFECT AT 2200 GMT - HAMAS OFFICIAL SAYS

So who breaches the ceasefire first?

my mothers keeper
Nov 20, 2012 - 11:20am

the end

and so i wonder, will the end come in a huge crash that resembles the first days of the great depression, where people are walking around with their eyes glazed over in denial? or will we continue to experience this slow leak, like air from a balloon, gently and eventually settling into collapse?

i guess, more than anything there is to fear right now, i fear the collapse of the derivatives and their reach into my life from unseen directions....well, that and war.

Grublux
Nov 20, 2012 - 11:20am

fifth!!!

Is it true?

I guess I'll have to settle for top ten

Oh I've been wondering about HEH as well...

Mammoth
Nov 20, 2012 - 11:22am

QE3+++

Just a reminder that Bernanke is speaking today...

DayStar
Nov 20, 2012 - 11:25am

HEH?

It's an expression used by the hard of hearing? cheeky

DayStar

Mammoth
Nov 20, 2012 - 11:26am

Idea for The Turd

Hey Turd,

How about a special day-after-Thanksgiving thread, where we can all share what topics your loyal Turdites discussed around the dinner table with their families, friends and loved ones?

Just an idea...

-Mammoth

legerde DayStar
Nov 20, 2012 - 11:30am

What is HEH?

My impression was that it had something to do with the fully backed metals exchange. Whatever it was, I see mention in old comments that it might have been in place by thanksgiving..... Anyway.. If anyone can provide a morsel of help, I would appreciate it. Its not in the glossary.

comrade nooni
Nov 20, 2012 - 11:30am
DayStar
Nov 20, 2012 - 11:31am

Iranian Missile Shipments

TF, I also read the reports on the missile shipments, and I wondered how the Iranians were going to get them into Gaza. The Israelis intercept ships bound for Gaza, they bombed convoys in Lybia, and they keep close watch over the Sinai. I wonder if the missiles will go into Gaza through Egypt. That seems like the most vulnerable point at this juncture.

DayStar

treefrog
Nov 20, 2012 - 11:38am

mammoth,

nice pic of the paper roll. it brought back memories for me. i spent years as an industrial instrumentation technician (hooking up various industrial plants up to their control rooms). 

there is a mill an hour's drive from here where there are two such machines which produce paper (not that kind) at about 15/20 miles per hour - speed of product coming off the end and going on to the roll.

nice to be reminded by a pic, but if i never see the inside of a paper mill again, it will be soon enough for me.

stealthbear
Nov 20, 2012 - 11:40am

Legerde

Hot, Explosive, Historic.

Istack
Nov 20, 2012 - 11:42am

Happy?

or terrible?

or maybe just flat

time for silver to get up off the mat

and fly!

not like the turkey i bought

at 22 pound

that fat thing

has never been off the ground

more like an eagle

wild and free

unchained and liberated

to fly as high as it desires 

.

.

Dr G
Nov 20, 2012 - 11:42am

Yes, Bernank speaking at

Yes, Bernank speaking at 12:15 Eastern as I recall. Might be nothing. Could be something. Might be nothing and the Cartel will use it as cover for something. Ponder that one.

LifeIsPain comrade nooni
Nov 20, 2012 - 11:45am

RE: IRS closes in on Ann Barnhardt

She apparently thinks she's a martyr in the tradition of Catholic saints or something. But she's really just looking more like an idiot. Really, what is she thinking? Although I respect many of her writings on the financial system (some of her other writings are rather kooky and disturbing), her current actions appear distressed and poorly planned. I'm sure many of you will defend her...

PhyzEd
Nov 20, 2012 - 11:46am

Ann B.

Re:

IRS closes in on Ann Barnhardt

From one of the comments "but I do not agree with her stance of withholding taxes due our government." LoL, isn't it sad how the general public believes that government elected officials know best how to bail out the too big to fails with our the money that is "due" to it? They speak as though government is it's own entity, and not a government for the people by the people.

The brainwash over the last century, I'd say, has been a complete success. There's gonna be hell to pay.. no doubt.

Anonymous
Nov 20, 2012 - 11:54am

Removed comment

Removed comment.

StevenBHorse
Nov 20, 2012 - 11:57am

HEH- Hot Explosive Historic

Strike  OI Mon 11/19
   
 $ 1,735 761
 $ 1,740 3,119
 $ 1,745 1,567
 $ 1,750 9,235
 $ 1,755 282
 $ 1,760 1,457
 $ 1,765 615
 $ 1,770 2,291
 $ 1,775 4,148
 $ 1,780 3,412
 $ 1,785 344
 $ 1,790 1,494
 $ 1,795 261
 $ 1,800 32,537
   
Total 61,523
Colonel Angus
Nov 20, 2012 - 11:58am

@Revelation

Bullshit. Horsepucky. Nonsense.

You missed your chance. And Benny and the Inkjets will NOT allow even the specter of deflation. If you believe that silver is going back into the twenties, then you probably also believe that your grocery bill will go down. And then you are smoking something strong. I'll buy every ounce of your silver at $30 per so that you don't have to take the loss of fiat. You can reach me via personal message, and we'll set up the transaction. If I can't afford the amount you have, I have others who will go in with me on it. Please let me know.

Apples
Nov 20, 2012 - 12:03pm

Question of Tactics

I respect Ann's principals but question her tactics. Judging from a previous article, she intends to be thrown in jail as a martyr for her cause. I would submit that getting one's self locked up and silenced does no good for the cause she wishes to further. At least in going "off the grid", leaving the country, or underground she could continue to espouse her message and win over followers to her cause. What good does she do if her website is taken down and her message locked up.

Road_Scholar
Nov 20, 2012 - 12:05pm

Thanksgiving topic- which is harder to convince family:

1) Bigfoot

2) Loch Ness Monster

3) Precious metals manipulation

Mammoth
Nov 20, 2012 - 12:16pm

@treefrog - Paper Mill

Treefrog, I see (and smell) a paper mill five days a week. It is over 80 years old, and thanks to an amazing team of skilled workers, we keep this place running. But we are struggling! We do not set the price of paper; the World Market sets the price we can get for our product.

Although I am a tree-hugger at heart and agree we must not poison the environment we all live in, the fact is paper mills do pollute. Having said that, we comply with the myriad of environmental regulations required by law. We have a department full of employees who do nothing except enable us to run as cleanly as possible, and we have a lot of equipment, piping & aeration ponds to return the water the Mill uses to the environment almost as clean as when it entered the Mill. All of this is very expensive & necessary, yet adds no value to our product.

Yet there are paper mills all over the world - in countries which have less stringent (or none) environmental regulations - and thus have much lower costs of operation. THEY are the ones who set the market price for paper. Take Russia, for example, which pumps untreated effluent into formerly pristine Lake Baikal.

Add the increasing costs of input - wood chips, fuel oil, etc., to the cost of all the .govt.-mandated environmental compliance - and you can see we are barely staying in business. In addition to the 300+ people employed here in decent-paying jobs, there are hundreds of contractors and firms that we also do business with and thus support as well. If things continue to deteriorate and this paper mill shuts down - and the one in Everett, WA recently did, we would essentially be sending these jobs overseas.

As I have probably said here before, if Congress would require products manufactured in other countries to be made under the same environmental regulations which we require from our own domestic manufacturing, then many decent-paying jobs would return to Americans.

Thanks for reading!

-Mammoth

P.S. that is STEAM, not smoke that is rising from the stacks in the above photograph.

tobydaniel
Nov 20, 2012 - 12:17pm

Deja Vu times a thousand today?

Just waiting for the smack down......

Groaner tobydaniel
Nov 20, 2012 - 12:20pm

This gets old

no matter what he says, they always smack it. its tradition. people cant break traditions.

gatortrader
Nov 20, 2012 - 12:21pm

here we go again

how low does she go?

Chris P. Bacon
Nov 20, 2012 - 12:21pm

Everybody set your watch

Bernank prepared remarks released, smashdown commences. BTFD Baby!

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