Friday Gold Theatrics

729
Fri, Apr 12, 2013 - 10:52am

A concerted effort was made this morning to smash gold through the bottom of its 18-month range. It failed. However, you can be certain that they will try again so you need to keep a few things in perspective.

First of all, perhaps you need a reminder that we've been discussing this possibility for weeks. If you missed any of these posts, perhaps today would be a good day to go back and review them.

https://www.tfmetalsreport.com/podcast/4619/turd-talks-metals

https://www.tfmetalsreport.com/blog/4618/increasing-likelihood

https://www.tfmetalsreport.com/blog/4551/forewarned-forearmed

So, at 5:00 a.m. EDT this morning, the attack commenced. The plan was to drive prices down enough in the pre-market that, when the Comex opened at 8:20 a.m. enough sell-stops would be triggered that would break gold down through $1525 and then the thing would take on a life of its own. Below $1525 undoubtedly lay a veritable cornucopia of sellstops that, if/when triggered, will send price momentarily plunging. Earlier today, they failed. Price in the June13 gold bottomed at $1525.60. But don't worry, they'll be back. Maybe as soon as later today (after the PM fix?) or Monday. Will they fail again or will we get The Final Washout as we've been mentioning? We'll see...

Here's the 5-minute chart from earlier today where you can see the action in all its glory. Again, note the selling in the final 10 minutes before the open that lowered price from $1544 to $1536. This was the final attempt at mustering enough selling to prompt a washout at 8:20. It didn't work. Yes, price immediately fell $10 at the open but, again and significantly, it stopped at turned at $1525.60.

OK, so where are we on the long-term charts? I apologize for having to use these FTC charts but they're the only ones that I can access that show the "continuous" price. You should be able to click on them to expand them. NOTE THE LOWS IN RED.

Look, as stated above, I can't imagine that they're not going to try again soon. The Spec Momos might even get a little help from The Forces of Darkness. I mean, shoot, why not? All of the selling that will materialize below $1525 will allow The Cartels to cover all kinds of additional shorts. Again, we'll see. But you have to be prepared, both mentally and financially, for this to happen. Both gold and silver are historically oversold from a CoT perspective. To remind you of this and to prepare you for today's CoT, let's go back and look at the CoT structures from the lows on the charts above.

On 12/27/11, as gold was bottoming at $1525, the weekly Commitment of Traders Report looked like this:

  • LargeSpec longs 167,413. LargeSpec shorts 36,625. Net long ratio 4.57:1
  • SmallSpec longs 57,327. SmallSpec shorts 24,183. Net long ratio 2.37:1
  • Gold Cartel longs 162,522. Cartel shorts 326,454. Net short ratio 2.01:1
  • Total open interest 418,945
  • On 5/29/12, the Commitment of Traders Report looked like this:

    • LargeSpec longs 167,439. LargeSpec shorts 56,727. Net long ratio 2.95:1
    • SmallSpec longs 49,856. SmallSpec shorts 29,859. Net long ratio 1.67:1
    • Gold Cartel longs 170,208. Cartel shorts 300,917. Net short ratio 1.77:1
    • Total open interest 419,991

    Last week (and today's will be even more dramatic), the CoT looked like this:

    • LargeSpec longs 202,634. LargeSpec shorts 82,428. Net long ratio 2.46:1
    • SmallSpec longs 52,253. SmallSpec shorts 29,937. Net long ratio 1.75:1
    • Gold Cartel longs 137,205. Gold Cartel shorts 279,727. Net short ratio 2.04:1
    • Total open interest 417,176

    So I ask you: What is different this time? Nothing! No, I take that back. The only real difference is the amount of disinformation and SPIN trying to convince you to sell your metal and convert it back to fiat. Other than that, NOTHING! And wait until we get the updated report today! I'll be sure to update this post and show the numbers in an identical format so that you can make an easy comparison over the weekend.

    Let's move on to silver. On 12/27/11, the silver CoT looked like this:

    • LargeSpec longs 24,026. LargeSpec shorts 17,171. Net long ratio 1.40:1
    • SmallSpec longs 20,294. SmallSpec shorts 13,017. Net long ratio 1.56:1
    • Silver Cartel longs 41,224. Silver Cartel shorts 55,356. Net short ratio 1.34:1
    • Total open interest 103,993

    Then, on 6/19/12, the CoT looked like this:

    • LargeSpec longs 27,767. LargeSpec shorts 17,665. Net long ratio 1.57:1
    • SmallSpec longs 21,704. SmallSpec shorts 14,852. Net long ratio 1.46:1
    • Silver Cartel longs 47,447. Silver Cartel shorts 64,401. Net short ratio 1.36:1
    • Total open interest 122,508

    And last week (7 trading days ago and with OI 11,000 lower) look like this:

    • LargeSpec longs 38,201. LargeSpec shorts 30,055. Net long ratio 1.27:1
    • SmallSpec longs 27,211. SmallSpec shorts 16,854. Net long ratio 1.61:1
    • Silver Cartel longs 57,847. Silver Cartel shorts 76,350. Net short ratio 1.32:1
    • Total open interest 155,755

    So, what's different in silver? A LOT! Well...not really that much. The net ratios are almost identical to where they were at bottoms in the past. But look at the size! The Specs are gross short 50% more contracts than at past lows and the Commercials are long more contracts than ever before. And this was last week! When open interest was 155,755! As of this Wednesday (2 days ago), the total OI had grown to 166,621! How do you suppose the ratios and the total look at this moment?? Perhaps more bullish than I ever conceived possible?!?! Again, we'll at least get an update through Tuesday later this afternoon and I'll post it into this thread once it's released.

    As I go to hit "SEND" I see that "they" have finally succeeded in dropping price through $1525. Funny how this has happened immediately following the London PM fix. So, there you go. Look for a "V" bottom very soon and a sharp rebound by later today or Monday. This is it! This is what we've been waiting for...A final, capitulative, sell-stop running Washout. Let it run its course and then let's see what happens next.

    TF

    4:10 p.m. EDT UPDATE:

    Well, I suppose I could go on all afternoon about what transpired today but much of that has been covered in the comments of this thread. Therefore, I'll just stick to two things. This afternoon's Globex action and your CoT update.

    Here's a 1-minute chart of the sharp selloff this afternoon on the Globex. This looks like a margin liquidation to me. Why on earth would an actual person wait until 3:20 in the afternoon to sell into the low-liquidity Globex? Either way, it doesn't make anyone any more confident heading into Monday.

    This week's CoT is out and it wasn't quite as interesting as I'd hoped. In gold, where price rose $11 on an OI change of just 663 contracts, I didn't expect much...and I received little in return. The LargeSpecs reduced their net long by 800 contracts. The SmallSpecs added 2100 net longs and The Cartel added 1300 net short.

    The silver report was surprising, though, in that hardly any changes took place in the Spec category, even though price rose 63¢ for the week and OI rose by 6,486.

    The silver LargeSpecs added 300 longs and also added 500 shorts. The SmallSpecs sold 1400 longs and covered 1100 shorts. THE REAL ACTION and, once again perhaps the brewing Civil War, was in the Commercial space. JPM and their two pals added 2,634 new shorts, bringing their total back up to 78,984. Why did they do that? Because the other commercials added 3,213 new longs, bringing their total to an astonishing 61,060! All of this buying and selling drops the Silver Cartel net short ratio back to 1.29:1.

    Here's how silver looks when presented as it was earlier in this post:

    • LargeSpec longs 38,492. LargeSpec shorts 30,577. Net long ratio 1.26:1
    • SmallSpec longs 25,754. SmallSpec shorts 15,745. Net long ratio 1.64:1
    • Silver Cartel longs 61,060. Silver Cartel shorts 78,984. Net short ratio 1.29:1
    • Total open interest 162,241

    Keep in mind that, as of Wednesday night, silver OI had surged to 166,621 before falling back yesterday to 164,393. Since it appears that The Specs were not adding additional shorts this week, it is unlikely that they became net short as a category. It is also not true that the silver commercials have moved net long. At least not yet.

    However, DO NOT DISMISS the significance of the action pitting nearly everyone in the commercial space against JPM. The action since Tuesday is almost certainly related to the anger JPM must feel at the audacity shown by those who are seemingly attempting to challenge them.

    If we survive the weekend, Monday and the rest of next week are certainly going to be...uhh...interesting. Get some rest and relaxation this weekend. You're going to need it.

    TF

    About the Author

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

      729 Comments

    Orange
    Apr 12, 2013 - 10:52am

    First

    To say FUBM

    Stock_Canines
    Apr 12, 2013 - 10:54am

    Third

    And on a day in which I have never felt such uncertainty in what I am doing

    silver66
    Apr 12, 2013 - 10:54am

    I really should get to work

    First???

    Silver66

    P.S. only thing to do on a day like this is visit LCS at lunch and pick up some stackin material

    Just A Regular Guy
    Apr 12, 2013 - 10:55am

    Down 3% almost

    Holy crap batman!

    BTFD!@!@@@@

    GoldMania3000
    Apr 12, 2013 - 10:55am

    bart c

    I emailed bart this am and actually asked him if they were looking at the trades. he said we are looking and i responded by saying "ok but why are you never doing anything"..see he's reponses

    Chilton, Bart

    <BChilton[at]cftc[dot]gov>
    Fri, Apr 12, 2013 at 9:53 AM
    To:
    Reply | Reply to all | Forward | Print | Delete | Show original
    Well, if we find something we do something, although of we are investigating, we aren't allowed to discuss it. But we do look, in detail at trades--particularly large positions. Many times, however, what we see isn't "right" in my book, but not against the law. We see a lot of HFT cheetah traders in the pm markets, for example. Without saying anything I'm prohibited from saying: what we have seen ain't what some in the pm community suggest. There isn't currently one large firm with huge short positions trading to keep prices down.
    Finally, when prices rise, we never hear a peep. When they go down, my mailbox fills. I understand that, and I know it is frustrating to folks. I wish we would explain some of this in a public conference call--perhaps regularized. Even take questions from folks. Again, we'd have to be careful about not giving out trader info, but it could be done.

    ******************
    NOTE: "Ponzimonium: How Scam Artists Are Ripping Off America" is now in its second printing and available for Nook at barnesandnoble.com, and for Kindle at amazon.com. Hard copies may be ordered at either site, or at gpo.gov. Neither the CFTC nor Commissioner Chilton receive any proceeds from the sale.
    ******************


    ----- Original Message -----
    From:
    Sent: Friday, April 12, 2013 09:33 AM Eastern Standard Time
    To: Chilton, Bart
    - Show quoted text -
    Reply | Reply to all | Forward | Print | Delete | Show original

    Chilton, Bart

    <BChilton[at]cftc[dot]gov>
    Fri, Apr 12, 2013 at 9:57 AM
    To:
    Reply | Reply to all | Forward | Print | Delete | Show original
    And FYI if you don't know, looking at it, gold and silver weakened most between around 7:40am and 8:20am this morning, before stabilizing after poor U.S. retail sales data was released at 8:30am. There were some comments from the European Central Bank and Cyprus this morning about potential Cypriot gold sales as part of its bailout, although this development has been in the market for a couple of days. Goldman Sachs, Citibank, Deutsche Bank and Saxo Bank all lowered their gold price expectations this week.
    Mr. Fix
    Apr 12, 2013 - 10:55am

    Fifth Again?

    Fifth it is fine, but it's starting to set a trend here.

    Apr 12, 2013 - 10:56am
    Headswim
    Apr 12, 2013 - 10:56am

    2nd

    A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.

    Time to go buy some gold, silver, and bitcoins!

    tpbeta
    Apr 12, 2013 - 10:56am

    Damn I'm tempted

    That silver price looks awfully cheap.

    rocoach
    Apr 12, 2013 - 10:58am

    Me too

    But no cash left

    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

    Subscribe or login to read all comments.

    Contribute

    Donate Shop

    Get Your Subscriber Benefits

    Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

    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

    Recent Comments

    Forum Discussion

    by NW VIEW, 2 hours 25 min ago
    by Trail Trekker, 3 hours 3 min ago
    by Trail Trekker, 3 hours 7 min ago
    by NW VIEW, 3 hours 33 min ago
    randomness