Saturday Stuff

300
Sat, Feb 23, 2013 - 12:28pm

Just a quick wrap up of some assorted stuff as we prepare for what will be an eventful week ahead.

First of all, the big news from late yesterday...Moody's downgraded Her Majesty's debt. Though this is once again a fundamentally gold-positive event, I wouldn't expect an immediate jump in price because of it. Remember that in the fiat world, Pound weakness inversely means Pig strength. https://www.telegraph.co.uk/finance/economics/9889485/Downgrade-to-pile-pressure-on-pound.html

In the absence of a podcast here at TFMR, please take the time to listen through all three segments of Andy's visit with Eric King yesterday (once they're finally posted). When we spoke yesterday, Andy told me not to expect anything too earth-shattering but I'm confident that it's worth your time, nonetheless. He and I plan hope to record something either Monday or Tuesday so look for that early next week. In the meantime, here are the KWN links:

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/22_Maguire_-_Stunning_225_Tons_of_Physical_Gold_Bought_By_CBs.html

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/22_Whistleblower_-_Gold_%26_Silver_Smash_Orchestrated_By_The_BIS.html

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/23_Maguire_-_Stunning_%2424_Premiums_For_Gold_In_Shanghai.html

If you haven't already, you're going to be reading a lot this weekend about yesterday's Commitment of Traders report. As you know, I like to review it right when it comes out and then post a sort of "instant analysis". Here's a c&p of my thoughts from yesterday, in case you missed them:

GOLD: For the week, price fell about $45. While this was taking place, the LargeSpecs added 1900 longs and a jaw-dropping 25,000 shorts! The LS net long ratio falls to an very bullish 2.12:1. The SmallSpecs got in on the act, too. They dumped 400 longs and added nearly 5,000 new shorts. This is an extremely bullish, contrary signal.
But the real action was by The Cartel. They added 4,300 new longs and covered an incredible 24,200 shorts. Again, who was buying while the specs were busy shorting? And who do you think will, ultimately, profit??
The Cartel net short ratio now stands at an extremely bullish 1.83:1.


SILVER: Almost identical to gold. Simply astounding, amazing and incredible.
For the reporting week, the price of silver fell about $1.60. Look what was happening internally:
The LargeSpecs dumped 1,150 longs and added 4,450 shorts. After reaching an unheard of extreme of 6.5:1 just two week ago, the LSpec net long ratio is all the way back to a mildly bullish 3.1:1
The SmallSpecs added 500 longs and 3700 shorts. Again, as in gold, the specs are racing to get short.
The "commercials"...pretty much all big firms except JPM and their con-conspirators...added another 2,026 longs, bringing their total gross long position to a never-before-seen 54,208. Simply incredible! They've continued to add longs all the way down. What do they know? What are they expecting??
The Silver Cartel...namely JPM and their two or three pals...were finally able to cover 6,800 of their disgustingly large short position. It's still disturbingly high at 92,164 but the total commercial net short ratio, which last peaked in September of last year at 2.6:1 has now declined to a quite bullish 1.7:1 Nearly every drop in The Cartel net short ratio to near 1.5:1 has preceded a substantial rally. We are very close!
All in all, both CoTs are extraordinarily bullish and indicative of a bottom very soon. Hang in there, now. Your patience will soon be rewarded!

Now, let me just add a couple of things:

  1. Getting the Gold Cartel net short ratio all the way down to 1.83:1 is a very good sign. For perspective, at the lows of late December 2011 and summer 2012, the Cartel net short ratios were 1.98:1 and 2.01:1, respectively. And this week's data was surveyed on Tuesday, before the big drop on Wednesday. All in all, the gold CoT is very bullish.
  2. Please also consider the net short ratio of The Silver Cartel. After the last four price washouts, here are your net short ratios at the bottom: On 8/14/12 it was 1.49:1. On 12/27/11 it was 1.34:1. On 10/4/11 it was 1.48:1 and on 6/28/11 it was 1.79:1. As of last Tuesday, it had fallen 1.7:1.
  3. And, finally, this theory....note the emphasis on theory. Regular readers know how perplexed I am by the silver OI situation. The primary outlier is the Commercial Long position. It "should be" somewhere near 30,000-35,000 contracts by this point in the price cycle. Instead, it grew again last week to 54,208. Chew on this: What if the 20,000 contract difference is, in fact, JPM trying to square away their naked short position that Uncle Ted estimates to be around 30,000. Now, stick with me on this... They tried to lessen it by covering back in April 2011 and the result was a near-cataclysmic event for them that was only rectified by the Sunday Night Massacre and the collusive CME margin hikes. Since then, they've maintained their position as The Big Short but, beginning late last summer, they began to build an equally-large long position. Again, stay with me here... They've added shorts through the fall to keep a lid on prices until they're ready to let it go, either voluntarily or involuntarily. If this is the case...and that's a very big IF...JPM could be approaching the point where they would be short 25,000-30,000 contracts AND long 25,000-30,000 contracts. At that point, if forced to exit the shorts, they'd be fully hedged and even profiting on the UPside.

Anyway, just chew on the 3rd point over the weekend. The more I think about it, the more it explains the "commercial long anomaly" and it provides JPM an exit strategy should the toothless CFTC ever choose to call them out.

Here are your updated charts. Given the CoT structure, I feel very comfortable declaring that a bottom is near. (And obviously hope that, by doing so, my Google ad revenue will increase.)

And just a couple of other items that have found their way into my inbox. First, this interview from last fall that details the whys and hows of gold manipulation:

Gold Market Manipulation Explained

This fun article discusses the effects of the gold repatriation movement: https://wealthcycles.com/features/15-ton-gold-repatriation-hits-jp-morga...

If you haven't read up on this subject yet, I strongly urge you to do so. Just like the German gold repatriation, we may look back on these events and recall them as clear warning signs of imminent events: https://www.sovereignman.com/important-information/red-alert-worlds-biggest-gold-storage-company-dumps-us-citizens-10958/

And our friends at Gold Bullion International do some excellent analytical work. Their latest was posted to ZH and you should definitely take the time to read it: https://www.zerohedge.com/news/2013-02-22/gold-and-potential-dollar-endgame-part-3-backwardation-and-gold

Speaking of GBI, for now they are still the only bullion and storage affiliation that this site has. Many of you have purchased from them and I am very grateful for their support. If you are buying coins and bullion, please be sure to check them out. You can link to them trough the ad on the right side of the page. I'll soon be adding affiliations with GoldMoney, SilverDoctors, Provident and JMBullion, too, so please be sure to always consider them when looking the BTFD. (Which I would strongly encourage you to consider doing this weekend.)

OK, I think I'll stop there. I hope that you have a safe and relaxing weekend. You certainly deserve some serenity after the madness of the past two weeks. But keep the faith as this, too, shall pass. The metals have simply been forced back to the bottom of their 18-month price ranges and will soon begin to rebound as physical demand and the glaringly obvious fundamentals begin to take over.

TF

p.s. You've got to check this out. The trollololo song is going mainstream!! I sure hope that the dead Russian guy's estate is getting a little skin out of it...(Thanks to my pal, DocD, for passing it along!)

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About the Author

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turd [at] tfmetalsreport [dot] com ()

  300 Comments

rambo
Feb 23, 2013 - 12:32pm

Say it aint so!

Say it aint so!

pickaxe
Feb 23, 2013 - 12:33pm

Stock Pains

All this talk about declines in bullion (paper) price seems fairly trivial compared to declines (massacre) experienced by holders of PM shares.

El Gordo
Feb 23, 2013 - 12:33pm

Trying again for a

first. Oh well, I'll proudly claim "Turd."

PeterLemonJello
Feb 23, 2013 - 12:39pm

Patience

Patience....we all know the end will come.

pickaxe
Feb 23, 2013 - 12:42pm

I tried to help with that

I tried to help with that about 6 weeks ago. Hang in there. Their time is coming, too.

https://www.tfmetalsreport.com/blog/4424/miner-case-depression

Colonel Angus
Feb 23, 2013 - 12:46pm

#2

Does that make me a turd too? Or does that mean that I'm the shit?

I could certainly believe Turd's thesis here. JPM could be trying to get flat. Heck, they might even want a long position because of the way that prices seem to be heading. I've been waiting for the Mississippi leg hound to finish off before jumping in more. I've been stacking base metal delivery devices this week instead. I highly recommend the mini-14, which has been coming down in price. You can also get 10/22s cheap if you want something fun. Stay away from the AR-15s. They are still overinflated. (And the problem with the mini-14 is that is also shoots .223. You also can't find 22LR for a reasonable price anywhere. Luckily I had been stacking both base and precious metals.) I think it is about time to stack some more of the precious, but given the pound's likely decline early this week, the DXY going up, I'll wait a few days before taking another position. Someone let me know if I'm an idiot to wait, but I've found high premiums this week. I need some ultimate capitulation.

Caveat- I would already have a sizable position in PMs (percentagewise) if I stopped taking them for boat rides.

erewenguy
Feb 23, 2013 - 12:57pm

near the top

near the top

dropout
Feb 23, 2013 - 1:15pm

The End Game...

The beginning of the end? Or the end of the beginning?

I any of you have read Chris Hedges book 'The Death of the Liberal Class' you will know that a film based on this book was in production. Well it has been released and is titled simply, "Obey." You may watch it by following the link (truthdig.com) - its free. I must say that it is disturbing. Please watch it and comment. The end of this Keynesian experiment and the beginning, or the ending of...

https://www.truthdig.com/avbooth/item/watch_obey_film_based_on_chris_hed...

The 70's were the hangover from the decade of excess and anti-establishment fervor that was the 60's. We (I say 'we' because I'm a 'first wave' baby boomer, 1946) overturned much of the social stability of the nation without having anything comparable with which to replace the old order.

It largely proved to be a disaster; drugs, divorce, violence, out of wedlock births, rejection of the work ethic, rejection of marriage, and the birth cry of the "ME" generation. Well, 'we' have made a real cockup of the world 'we' and you now live in. The reverberations of this generations early actions will carry on long after its gone. Little wonder our grandkids are the way they are.

What a clusterfuck!

Northern Border
Feb 23, 2013 - 1:44pm

Ignore the noise

Stay true to your convictions aka grow some balls.

Use this "sale price" to grow your stack. We are winning. Heck, just in my very small circle of stacker influence, collectively we exchanged 50K of Benny Bucks for real money with this sale price on physical metals.

I know in the grand scheme of things, every oz counts. Multiple that by other members of Turd's Army across this country and world, then it becomes a force to recon with.

We are on the edge of very historical times, we are here for a reason.

NB

benny_bomb_boom
Feb 23, 2013 - 1:54pm

top 10

i'll take that for good luck on my way to the LCS today...90% still still sits @ 2 dimes a gallon. gotta scrape at it every chance we get. they aint making anymore of this sheet. hope to find some bennys w/ some shine on them. at this point it is a no brainer. though all the noise i give it to you mrF. your place is the best. with this GLD drain, lets see how many stand on monday. yet another chance to drop a bomb_boom on the crimex.

wife asked me the other day why i get all shibby when she dips under 30 and i just smile and tell her not to think about this precious for 10-20 years. i enjoy everyday we get a chance to do what we love to do. peace

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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