Cutting Vacation Short

548
Wed, Feb 20, 2013 - 10:04am

This is relentless and unforgiving...and I'm not talking about MrsF.

So bad that I'm cutting my mini-vacation short. I still don't have time for a full post so here are two items for you to read this morning.

ZH has been doing an excellent job chronicling the consistent, daily destruction. Here's the latest: https://www.zerohedge.com/news/2013-02-20/precious-metals-morning-slam-right-schedule

And here's someone who has noticed some of the same "anomolies" that I have: https://www.zerohedge.com/contributed/2013-02-20/curious-case-falling-gold-and-silver-prices

The charts, of course, look terrible. Having failed at hoped-for support, silver looks like $28 and gold, if $1580 fails, looks headed all the way back to the bottom of the 18-month range, near $1550.

This is all highly unusual and indicative of extreme manipulation and panic-level positioning. At the risk of sounding trite and reading like another KWN pumper, I must say it: THIS WILL PASS. THESE EXTREMES WILL BE RESOLVED SOON AND NEW UPLEGS WILL BEGIN. PLEASE BE PATIENT. THE FUNDAMENTALS ARE STRONGER THAN EVER AND PHYSICAL REALITIES WILL SOON REPLACE PAPER SHENANIGANS AS THE DRIVING FORCE BEHIND PRICE.

More later if possible.

TF

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  548 Comments

Ilya Repin Byzantium
Feb 20, 2013 - 5:29pm

There is nothing to tell. Do

There is nothing to tell. Do you look at the charts?.. Epic close i would say..

8HR doji printed with a range of 1.85% on massive volume at the bottom of a multi month downtrend

good price support here at 28

record short positions

climbing SHFE open interest

biggest volume day yet this year

and here is the gem to indicate the growing strenght of Silver... GSR behaving like this on huge downday is unprecedented



you should also look at this

this

https://quickpic.us/img/8/Picture+34.png

and this... as CPI s about to move up https://www.pricestats.com/us-series

and i have no idea how netdania volume is calculated.. (of course silverdoctors would say its in ounces but thats total BS) but this chart is noteworthy

Volume between SIH3 and SIK3 was 121,396 contracts. thats big

kingboo
Feb 20, 2013 - 5:29pm

In through the nose......out through the mouth... deep breaths

forget the charts........this is the only chart i'm watching.... wouldn't you love to hear an economist explain how this monetary policy creates "stability" and builds "confidence"? Me too....... some people watch the Comedy Channel.... i watch CNBC....... They say laughter is the best medicine........

Graph of St. Louis Adjusted Monetary Base

The Springbok
Feb 20, 2013 - 5:29pm

OI in silver

this is what I don't understand....

Yesterdays OI in March silver was 50588.

after today's raid it is now at 47473. So we have lost just over 3000 from the March month in one day. Harvey Organ reckons we are losing small amounts on a daily basis.

However total OI has risen to 155353 in silver? 

So more people are coming into the silver market?? Is that right....

Byzantium
Feb 20, 2013 - 5:31pm

@ Ilya Repin

In a nutshell, what you are saying is that silver was hit with a nuclear bomb today, and it only staggered back a couple of paces and is still standing, is that correct?

ancientmoney The Springbok
Feb 20, 2013 - 5:35pm

@The Springbok re: silver OI . . .

"So more people are coming into the silver market?? Is that right...."

-------------------------------------------------------------------------

Yes, that is right. Some people moved out of the Mar13 and some /same went into later months. Overall, more moved into later mos. than left March.

lickspitler
Feb 20, 2013 - 5:43pm

china

These must be great levels for china to double up , they have been the big buyer over the last 2 years. Common you commies STACK

tpbeta
Feb 20, 2013 - 5:44pm

Silver will be back

I don't really think otherwise, although the assumption that fraud and manipulation will in the end fail is one that remains to be tested. But right now they're winning and PM prices are still heading south. No-one knows where it will end. All this talk of bottoms is interesting but I would like to see some rigour and reason behind folks thinking.

For the benefit of Tiberious if no-one else, I'll continue to update my silver monitor from time to time. FWIW, it's moving into better terrritory I think. Will go long again when it gets closer to zero

Factor Commentary rating Total
       
Technical $ Breaches of gold technical and HUI technical chart. Silver breach at hand. Momentum.  -60 -65
Sentiment In the toilet outside the hard core bugs. No official sign of inflation. -75  
Fundamentals QE and US debt. recovery implausible. China, India weakening? 70  
Manipulation Don't think JPM can push much more without diminishing returns. Damage already done in the main and they need to cover shorts soon after today. Fed minutes damage now in the price. 40  
Opportunism Hedge funds selling and naked shorting. -40  
lostinspace
Feb 20, 2013 - 5:46pm

This raid hurt my butt

Joe Biden - Goys Don't Need Rifles
Pisqualee
Feb 20, 2013 - 5:48pm

Notice the front month contract on CNBC

is trading at 1578.00 Up from the close

ancientmoney tpbeta
Feb 20, 2013 - 5:49pm

@tpbeta re: winning in silver . . .

"But right now they're winning and PM prices are still heading south."

------------------------------------------------------------------------------

You are half right. What you said about them winning in price battle is correct. 

However, to the extent they lose more physical, it hurts them 100x as much, as they are levered by 100-150x the amount of silver they own. They lose whenever physical is taken from them.

Bollocks
Feb 20, 2013 - 5:50pm

@tyberious - re: pansies

Very interesting chart. Thanks for posting that up. Where did you get it from?

Patrancus
Feb 20, 2013 - 5:52pm

Nice! Chart

 That LTD chart ought to ease alot of pain on this board. 

tyberious
Feb 20, 2013 - 5:58pm

@Bullocks

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/20_T...

I would love to know how they figured that out. My guess is astrology!

Robespierre
Feb 20, 2013 - 6:00pm

Hedge Funds Staring ToLoad Up....

Hedge Funds Loading Up on Gold, Silver, and Mining Shares By Tekoa Da Silva of Bull Market Thinking While the mainstream media continues to spew out bearish news and headlines on precious metals and (especially) mining shares, SAC Capital Partners LP, a $20 billion dollar group of hedge funds founded by Stephen A. Cohen, quietly positioned itself in over $240 million dollars worth of gold, silver, and mining share investments during Q4 2012.
Of great interest is the structure of those positions. They are indicating, that the firm is expecting a massive spike in both gold and silver, as well as a staggering move higher in the mining shares. Starting out, the firm increased its holdings in gold and silver mining shares from roughly $54.9 million, to $122.2 million, a total increase of over $65 million. Companies included many of the major producers such as AngloGold, Barrick, Goldcorp, and surprisingly, included junior producers, such as Fortuna Silver Mines Inc and Timmins Gold Corp.
-The firm took an over $20 million dollar “straddle” position on the SLV ETF, which indicates the firm believes we will see a massive and volatile spike coming in the price of silver—either up or down.
-The firm took an over $61 million dollar “straddle” position on the GLD, which similar to the SLV position, indicates the firm believes we will see a massive and volatile spike coming in the price of gold—either up or down.
(For reference, an option “straddle” position entails buying both a call and a put option against an underlying security, for a specified date and strike price. To become profitable, the underlying security must spike up or down far enough to offset the premium cost of both the call and put options. This strategy can be thought of as “betting on volatility”)
-Lastly, the firm purchased over $36 million dollars worth of call options on various gold and silver mining companies—indicating the firm is expecting a staggering move higher in mining shares sometime in the next two years or less.
Bottom Line: While some funds may be experiencing redemptions and forced selling of metals and mining shares, this firm is taking monstrously large positions—many of them being in call options—with the expectation of staggering moves higher in the months and years ahead.
To view the entire 13-f filing as reported by S.A.C. Capital Advisors, L.P., visit this page link at: SEC.gov

SilverTree
Feb 20, 2013 - 6:06pm

good find @What If

Tulving is out!surprise

foggyroad
Feb 20, 2013 - 6:09pm

Well this explains it

The Avalanches - 'Frontier Psychiatrist'

#23620

is it just me or did that singer on the left...

just buy Heinze..

naaww..(polishing glasses)

Xeno
Feb 20, 2013 - 6:10pm

Heck Of A Day To Come Back

The thread, and the market today feels like this guy from a few years ago

Video unavailable

Can't help but wonder how many ?? made a ton of money since Fri. going short only to get margin calls or lost so much on the long side that they can't cover the bonanza short.

Bollocks
Feb 20, 2013 - 6:10pm

@tyberious

Are the time-frames accurate, do you know? Or has there been a bit of, ahem "creativity" involved in putting it together?

I'm not a trader, I wouldn't know. It does seem to be interesting. Repetitive patterns, and all, show there quite nicely.

If it is accurate it would say quite a lot. Short-term TA I have found to be a joke. Long-term, much less-so.

victorthecleaner
Feb 20, 2013 - 6:13pm

GLD Puke

GLD pukes up 20.77 tonnes or about 1.57% of its inventory today. If May 2012 is any guide, the London price will surge by $80 or more on Friday, 1 March 2013, or on Monday, 4 March, to about $1650/oz. Of course, you would be foolish to trade on some guess by an anonymous writer on the internet.

In the Financial Times, you may also see rumours that the BIS is purchasing gold at these levels for some unidentified client(s).

Victor

tpbeta
Feb 20, 2013 - 6:15pm

@ancientmoney

True enough about the physical, but we don't really know enough about the cartel operations to know where their breaking point might be, or if they even have one.

Silver is a small market. JP Morgan are richer than the Hunt Brothers or Bear Sterns ever dreamed of. There is no regulator. If pressed, JPM might be able to cash settle the entire Silver market out of their petty cash for all we know - and the only purpose of the short is to lever gold.

For all we know, they have been making lots of money by shorting silver.

What I'm saying is we know very little.

zman
Feb 20, 2013 - 6:15pm

Fed to end QE in March

Fed to end QE in March meeting? And just hold on to what they already own. Sounds like a bunch of BS, but maybe they will give it try for a while.?

Maybe holders of US bonds (China) want QE to end, or they will sell what they own, and the Fed has no other choice?

We really don't know what they will do next? Staying opened minded is the key. 

What happens to gold and silver if QE stops for a while? Not good would be my guess, it's all a big game, they make the rules.

Ilya Repin Byzantium
Feb 20, 2013 - 6:16pm

To get hit with a nuclear @Byzantium

To get hit with a nuclear bomb would kill most!

A year or so ago when Gold was down 2% you would see Silver down 5/6%

now not so much..

I think by next week you will have realised the significance of today..

Silver is becoming very resilient.. and what is it with everyone around here... Silver just got whacked and printed a bullish doji on huge volume.. but even if it didn’t then its a steal here.. China will buy Fu*k out of this wait and see

Buy low sell high remember.. can we go lower? yes.. maybe.. but not much.. getting hot in here i quite enjoy it..

FIRE SALE BUY ALL YOU CAN.

GREAT MINERS ON SALE TOO

ADD SMALL AND DONT OVER EXTEND YOURSELF

FFING EASY

HiHoSilver
Feb 20, 2013 - 6:24pm

4 Gallons of Gas For A Dollar

When I was a kid in the 60's four silver quarters and a dollar bill would both purchase 4 gallons of gasoline. Now the 4 silver quarters will buy 6 gallons and a dollar bill will buy a little more than a 1/4 gallon of gas. Nuff said. 

So why even acknowledge the naysayers coming out of the woodwork? Just ignore them. Don't legitimatize them or their babblings. (Shrug) 

Xeno
Feb 20, 2013 - 6:26pm

Slope Of Hope

Inverted, it looks like we all should just join the short (long) side. At least the slide down the slope is not as painful as hitting the wall of worry .

From;

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/20_D...

Stock_Canines
Feb 20, 2013 - 6:28pm

zman - Don't Worry

This board has told us (a hundred times) QE will never end, it can't. Impossible.

Mr. Fix
Feb 20, 2013 - 6:29pm

The Fed is just propagandizing.

 The Fed cannot, and will not end quantitative easing.

 There is nobody else on the planet willing to buy that much debt,

 and the politicians have no intention on curtailing their spending.

 QE to infinity is here to stay.

 Just keep stacking,

 there really are no other options in the long run.

Byzantium
Feb 20, 2013 - 6:31pm

@ Ilya Repin

My main concern is that the bears went primarily after gold today, which helped to soften up silver, and will now turn their full attention to silver. (The bulls in gold have been less stubborn than the longs in silver recently).

As I have said many times on this blog, I think they are going to attack that $26 resistance one more time. I do hope that the silver bulls are stronger, but we will see.


Feb 20, 2013 - 6:39pm

Now check this out.   British

Now check this out. British supermarket chain now using the Yuan to buy groceries. And San Francisco to become the center trading Chinese Yuan. Can you say Ni Hao Ma?

TESCO, a supermarket chain, has changed the way people shop in Britain and a dozen other countries. It is also planning a change in its own shopping habits. Like many multinationals, it buys a lot of stuff from China, and, like most foreign firms, it pays its Chinese suppliers in hard currency. But now it wants to pay them in China’s own coin, the yuan.

https://www.economist.com/news/leaders/21571442-rise-chinas-currency-wil...

And across the Pond in San Fran....

I'm told the city is working on a proposal to become a center for offshore trading in Chinese yuan, allowing the currency to be used more widely beyond China's borders.

Mayor Ed Lee's office could not be reached for comment before press time Friday, but city officials are said to have lined up a "who's who in the San Francisco financial industry" to assist in the proposal.

Should the idea bear fruit, San Francisco would join Hong Kong, London and Singapore as places where offshore trading in yuan (a.k.a. renminbi or RMB) is growing, as China slowly moves to open up its financial system.


It also makes sense for the Chinese government, which would like to lessen the influence of U.S. dollars, the primary mechanism of international trade, and increase the influence of the yuan. At the same time, Chinese and U.S. companies doing business with one another can save costs incurred by going through the process of currency exchange and conversion, and will have more "redbacks" on hand to invest in China.

https://www.sfgate.com/business/bottomline/article/SF-seeks-to-be-hub-fo...

________________________________________________________________________________

Our institutions are being hacked by Chinese military. Our cities using Chinese money. Mr. Obama what should we do about it? How about we send a delegation in the middle of the night to Japan, and get them to fight this battle for us?

https://original.antiwar.com/john-v-walsh/2013/02/03/us-goading-japan-in...

BTW, Japan wants our flying machine's and exploding bombs off their island, specifically Okinawa. They don't like American soldiers raping their women. And we don't like being told what to do, so we flew Robert Gates to Japan and we told those Japanese how it works. Us crazy American's. We think we can rule the world. What goes around, is coming around. 

Of course, the MSM makes it seem like we just Po victims and those bad chinese are just an evil empire just picking PO little us with Purple Mountains Majesty, Fruited Plains with GMO's.

ancientmoney tpbeta
Feb 20, 2013 - 6:40pm

@tpbeta re winning in silver . . .

"True enough about the physical, but we don't really know enough about the cartel operations to know where their breaking point might be, or if they even have one.

Silver is a small market. JP Morgan are richer than the Hunt Brothers or Bear Sterns ever dreamed of. There is no regulator. If pressed, JPM might be able to cash settle the entire Silver market out of their petty cash for all we know - and the only purpose of the short is to lever gold.

For all we know, they have been making lots of money by shorting silver."

--------------------------------------------------------------------------

Yes, JPM is richer than Midas, at least in FRNs. FRNs are infinite in availability. Physical silver is not--it is quite finite.

While it is true we do not know their breaking point, the fact that silver is finite means there is one. The massive OI in silver in the face of the concentrated shorting indicates someone knows their limit is approaching.

The endgame will be the halt of COMEX/SLV trading. That's when we will learn what the real silver is worth.

S Roche
Feb 20, 2013 - 6:41pm

GLD Puke Triggered...

Let's watch the shorts cover overnight...see how strong it gets.

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