What A Week!

375
Sat, Dec 1, 2012 - 11:34am

First, I thought it'd be crazy. Then, by Tuesday, I thought it'd be dull. It turned out crazy. Just another week in the life of a Turd.

What did we see:

  • After the price surge of Black Friday, prices were pinned below $1750 in gold through option expiration on Tuesday.
  • Significant raids related to First Notice Day on both Wednesday and Friday.
  • Robust support appeared where we'd like to see it, namely $1705 in gold and $33.20 in silver.
  • On a personal note, I had a very successful week, after being notified that I was at once "retarded" and "dangerous". This comes just a few weeks after finding out that I am "morally bankrupt". Winner, winner, chicken dinner! That's the trifecta!

Before we look at the setup for next week, let's look back at yesterday so that we all can get on the same page regarding the mechanics of the selloff. Without doubt, the action of Wednesday and Friday was directly related to First Notice Day and contract expiration of the Dec12 gold and Dec12 silver. An overly-simplified way to explain this is:

  1. Bad Guy Bullion Bank builds up a very large position in the Dec12. BGBB is both long and short the Dec12 because the BGBB has taken turns, alternately buying and selling, in its attempt to pin price at a certain level for a minimally-damaging option expiration.
  2. Once Dec12 options expired at the close on Tuesday, BGBB needs to close all of its long and short futures positions in the Dec12.
  3. An entity without nefarious intent would simply liquidate both sides simultaneously and close the positions.
  4. Instead, the BGBB manipulates price for its own benefit by completely dumping the long side onto the market.
  5. This drives price sharply lower and initiates HFT-momo algo selling which drives price even lower.
  6. Into this HFT selling, the BGBB gradually covers the short side of its Dec12 position.

As it was happening yesterday, I printed these five charts. Note that the downward action was entirely contained within the metals. Other "risk" assets like crude or stocks or the euro were relatively stable and unchanged. Below are mid-day, five minute charts:

The resulting effect accomplished three, critical objectives for the BGBB.

  1. After all the selling, price is reset $20-30 lower and the chart looks unfriendly.
  2. Crushing price allows the BGBB to exit its entire position in a more profitable manner than if they had simply covered the thing at the market.
  3. All of the downside volatility frightens and coerces the longs, who might have considered delivery, into dumping, instead. This selling is also used as prey for the BGBB to cover the short side of its spread.

So, here we are. All of that nasty expiration and FND stuff is finally behind us and we're ready to roll into December. In the end, I expect this to be a very nice and positive month that will set us up for a big, exciting and explosive 2013. Getting there, though, will likely be volatile and challenging. To begin with, though the silver charts still look pretty good and silver remains above all of its moving averages, we'd be kidding ourselves if we thought the gold chart looked equally fine. It doesn't. So, first and foremost, we need to hold support early next week and begin a move back toward $34.20 and $1740.

Just a couple of "housekeeping" items before I knock off for the weekend.

First, yesterday's CoT was unremarkable as it once again showed that all the specs were buying and all of their buying was absorbed by the Cartels. Just once I'd like to see a nice, fair and even mix. Here's reprint of the comment I posted into yesterday's thread:

This week's CoT is just another sickening example of bullion bank control. Wait until you see the math.
GOLD
For the Tue-Tue reporting week, price rose by $19 and total OI expanded by 5,244.
Large Spec Net Long change = +12,927
Small Spec Net Long change = +3,056
Total Spec Net Long change = + +15,983
Cartel Net Short change = +15,983
Enough said.


SILVER
For the reporting week, price rose by $1.05 and total OI rose by just 392.
Same shit, different shiny metal.
Large Spec Net Long change = +772
Small Spec Net Long change = + 834
Total Spec Net Long change = +1,606
Cartel Net Short change = +1,606


The Cartel net short change was almost equally divided between covering longs and adding new shorts. The total Cartel gross short position is now 99,317. This is the highest level I can ever recall seeing. The last time total OI was this high on October 2010, the Cartel gross short position was 92,150.
And this is interesting...Back in October of 2010, the net short ratio of The Silver Cartel was 3.07:1, with price near $26. The Cartel was short 92,150 and long 30,023. As of last Tuesday, with price near $34, the gross Cartel short position was 99,317 but the long position was 40% higher at 42,525 for a ratio of 2.33:1. The only real difference, besdies price, between October of 2010 and today is this:
The Cartel gross short (+7000) and the Small Spec gross short (+4000) is nearly equal to the rise in Cartel gross longs (+12,000).

Next, if you haven't yet signed up for the free webinar on Wednesday, you really should do so. It's scheduled for Noon EST and will be recorded for replay if you can't make it at Noon. Not only will Paul Coghlan be speaking and demonstrating his technical analysis, but our pal Andrew Maguire has promised to make an appearance, as well. Just click this link to register: https://www1.gotomeeting.com/register/240678176

And here's something on which I need your feedback. We have the opportunity to construct our own, "private label" bullion and coin store. It would be directly linked here but the guts of it (the infrastructure) would be an already-existing bullion and coin service. Call it the "TFMetalsMart" or something. My questions are: Is this a good idea? If the pricing was fair, would you buy from it? Would this seem a conflict of interest in that I'm such an active promoter of stacking physical metal? Please use the comments section of this thread to share your feedback.

Lastly, if you consider yourself an outstanding "prepper" or a "survivalist"....if you are prepared for anything, willing and capable of living off the land...and if you are competitive by nature, please send me an email at turdistheman at gmail dot com. I may have something for you to consider. Serious inquiries only please.

OK, that's it. We survived last week and, though we're damaged, we're still battling and expecting big things ahead. Go now and relax but return on Monday, ready to continue the fight.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  375 Comments

R man J
Dec 1, 2012 - 12:32pm

Stacking is the easy part, turning off KWN...

...just. can't. do.it.

Stack-wise, I need prices to average No more than $2200 / $44 over the next 16 months (to meet my personal goals). But I still like KWN and look forward to their tweets, click them as soon as I get them. It does not bother me that their timing is sometimes a little shall we say "optimistic". They are right about everything else. So while I am "sitting tight" I will continue to enjoy the like-minded people that SHARE THEIR KNOWLEDGE (though their knowledge does not include timing) on KWN.

Dec 1, 2012 - 12:39pm

re Mr Fix and TF's email

I think it is just

turdistheman[at]gmail[dot]com

bucktooth
Dec 1, 2012 - 12:58pm
Nana
Dec 1, 2012 - 1:02pm

Welcome To The New Norm

Where nothing is what it seems.

Twilight Zone Opening THEME MUSIC 1962 Rod Serling
Bollocks
Dec 1, 2012 - 1:05pm

Is this true? Can anyone in the US confirm this?

Lock your doors and load your guns: San Bernardino warned of uncontrollable crime as police squad shrinks

A San Bernardino city attorney told residents this week to gather arms and prepare to defend themselves since the bankrupt town can no longer afford the law enforcement it needs.

During a city council meeting Wednesday, City Attorney Jim Penman urged residents of the bankrupt Californian city to “lock their doors and load their guns” to protect themselves.

City officials prepared a budget plan earlier this month that would attempt to tackle the $45.8 million deficit partially by cutting benefits for city workers like firefighters and police officers, as well as eliminating 80 cops from the force altogether.

“Let’s be honest, we don’t have enough police officers. We have too many criminals living in this city. We have had 45 murders this year… that’s far too high for a city of this size,” Penman said.

The cuts will leave the city with just over 200 sworn officers – a small number in a city of 213,012 that is plagued with crime. The city’s police department has also cut down on the number of people answering its emergency phone lines: problematic in a city that was ranked America’s sixteenth most dangerous in 2004. San Bernardino has also seen a 50 percent increase in murders this year compared to 2011, and this week’s council meeting was actually called in response to the brutal murder of a 76-year-old woman in a neighborhood that is usually quiet.

During the meeting, Police Chief Robert Handy also emphasized the need to reduce the city’s drug problems and theft. But in a region where prisons are already overcrowded and the streets are overwhelmed with gang violence, San Bernardino faces heavy obstacles.

“We are trying to refocus and pay a little more attention to those (types of crimes) because honestly, those are the ones we get complaints on,” Handy said, reports the local Sun newspaper. “We may not come out immediately, but many of those transients have been arrested more than 50 times. There’s no room for them in jail.”

With an inadequate police force, no room in prison, and no money to gather resources, Penman believes city residents must fend for themselves.

“People have asked me what should we do? Go home, lock your doors, and load your gun,” he told the crowd of nearly 150 people at the city council meeting.

San Bernardino filed for bankruptcy on Aug. 1 after acquiring more than $1 billion in debt. The city was the third in California to go bankrupt in just over a month.

More: https://rt.com/usa/news/san-bernardino-bankrupt-crime-003/

القراع عصفور
Dec 1, 2012 - 1:17pm

i prefer the old Norm :-)

Favorite Normisms
Mr. FixGeorge Clooney
Dec 1, 2012 - 1:22pm

re Mr Fix and TF's email Submitted by Xty

Thanks Xty,

I think I got through.

Anonymous
Dec 1, 2012 - 1:38pm

Removed comment

Removed comment.

I Run Bartertown
Dec 1, 2012 - 1:48pm

Bollocks

They often spout that when threatened with funding cuts. Just like local governments always cry about the need to cut police and fire service rather than cut bureaucrats.

The problem is not the inability to deal with criminals, per se, but simply the fact that the police would interfere with anyone doing it.

"but many of those transients have been arrested more than 50 times. There’s no room for them in jail.”

I'd propose that any system plagued by this problem does not lack police, but simply lacks will.

boatman
Dec 1, 2012 - 2:00pm

ber-----do

yeah, thats the first thing the citys always scream...........POLICE.....then its TEACHERS[you should SEE the stuff in the board of education dumpster here]

doesn't matter their firemen make $125,000 and after 20 years they retire at 80% with full bennies.....RIDICULOUS.

there are 6 lifeguards in orange county that make OVER .5mil$/yr.

government workers-> privileged class

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