Though Christmas isn't until next Tuesday, this week seems like Holiday Week in that we will see less and less volume and activity as the week progresses. It will also seem like Holiday Week as each day I will post one of my favorite holiday classics. Here's the first one, you hoser:
And now onto today's post.
Blah, blah, blah, metals down overnight, blah, blah, stocks up, blah, blah, chart lousy, blah, blah, blah, Cartel, blah, blah, evil, blah, blah, blah, manipulate, blah, blah, support, blah, blah, blah, rally, blah, blah, blah, vindication.
OK, now that you're caught up and ready to take on the week, here are two charts for you to review. The basic thesis is this: A couple of months ago, many pundits/analysts were quick to point out the massive, cup-and-handle formations on the longer-term charts. Now, since the "handles" are taking a bit longer to form than the collective attention span permits, it seems this very important technical feature has been forgotten. Well, not here at TFMR. As with anything, patience is required and we must give this stuff time to play out.
A few other things that are driving me bananas:
- This notion that the metals are selling off in waves and cascades due to "end of year selling and book-squaring". This is complete BS being postulated by an ignorant MSM that is reaching for easy answers. Again, a money manager who is paid to make money for himself and his clients does not sell/dump a position into a thinly-traded market. Never. Ever. The execution is lousy and horribly inefficient. A human being scales out of a position over time, not all at once at 9:00 pm.
- Many are claiming that, based solely off of last week's blatantly manipulative action, the metals are poised to fall back toward $1600 or even lower. This is BS, too. Note that the charts above include the daily RSIs. Major selloffs and bear markets do not begin from RSIs in the low 40s.
- There are also those that suggest gold is about to get washed out because the open interest is too high. To this I ask: HUH?? This suggestion is lunacy simply because it only takes a simple review of the data to prove it wrong. The current OI in gold is around 432,000, which is nearly the same level as late August (2 weeks prior to QE∞) and already down about 15% from the recent peak of 493,000 on 11/23/12. In fact, gold is closer to the OI lows of the year (395,000 in late April) than it is to the highs. And, like the RSIs, since when does gold begin a major correction from an OI level at 432,000? Instead, it is highly likely that those who are going to sell have already sold.
- Silver traders, though, need to be mindful of raids. Even though the physical and "other" fundamentals remain positive, the fact remains that JPM et al have continued to build up a massive naked short position. Instead of covering over the past 10 weeks, the EE has actually added shorts. An extraordinary short squeeze is possible but it needs a trigger. In lieu of the trigger, expect much volatility as we finish the year.
Finally, I gave everyone the previous thread to argue about "gun control". I hope the arguers had fun because the party stops here. Why, you ask? Because first of all this is a precious metals forum. Folks from all over the world visit this site to read about precious metals, not gun control arguments. And, second...and this is probably more important...nothing anyone posts here is going to change any minds or make a rat's ass bit of difference. Events happen and politicians react, regardless of your personal beliefs. No amount of name-calling and bickering on this site is going to change/affect anything. So, the gun control debate here on the main thread is officially closed and all derisive/abusive comments posted here will be deleted. If you want to continue discussing this issue, I invite you to visit the new thread I've created in the "Current Events" forum specifically for this purpose. https://www.tfmetalsreport.com/forum/4385/gun-control-post-ct-massacre
And if you haven't yet listened to the podcast posted from back on Friday, I urge you to do so. Of all the recent interviews, this latest one with Alasdair Macleod has received the consistently best reviews.
Have a great day.