Looking Back and Looking Ahead

582
Fri, May 3, 2013 - 4:38pm

As we wrap this week and prepare for the next, let's review the charts and the CoT.

First, the Commitment of Traders report. It just came out ten minutes ago and here are my initial thoughts. Keep in mind a couple of things:

  1. For the reporting week, gold was UP $62 and its OI was also higher by 6,000 contracts
  2. Silver was also UP. It rose $1.36 but its OI fell by 15,500 or nearly 10%
  3. The silver OI drop was almost entirely due to May contract expiration and First Notice Day, which happened at the exact same time as the CoT survey, at the Comex close back on Tuesday
  4. After the survey, open interest rebounded on Wednesday and Thursday. Gold was down a 2-day total of $4.50 yet its OI rose by 8,000 contracts and silver 35¢ on an OI rise of 1,400.

GOLD

Continuing the trend, The Specs sold and The Cartel bought. For the week, the Large Specs dumped 3,900 longs and added 3,300 new shorts and the Small Specs are now NET SHORT by nearly 1,500 contracts after they dumped 2,400 longs while covering 800 shorts. Think about that for a moment....the most out-of-touch, ultimate-outsider group the Small Specs, are now NET SHORT. At $1450. For perspective, near the price peak on 8/16/11 the Small Specs were long 70,510 and short 21,749 for a net long ratio of 3.24:1. As of three days ago, they were long just 37,451 and short 38,940 for a net long ratio of 0.96:1. (As an aside, you should really go back and look at that entire CoT report from Harvey's archives. Marvel at the difference in positioning between then and now. https://harveyorgan.blogspot.com/2011_08_14_archive.html

To no surprise, The Gold Cartel utilized all of this Spec selling to reduce their net short position by 8,800 contracts. Last week, though they added 5,255 new shorts, they also added 14,080 longs. This brings their net short ratio all the way down to just 1.56:1. Again, for the sake of comparison, look at that CoT from 8/16/11. At $1900 gold, The Cartel was long just 160,562 and short 409,409 for a net short ratio of 2.55:1.

Digging deeper, what's the big difference between then and now? On 8/16/11, The Gold Cartel was long 160,562. Back on Tuesday, they were long 170,211. However, back in August of 2011 they were short 409,409 and as of last Tuesday they were short just 265,774. Instead of letting gold get away from them when it suddenly became the only currency alternative to fiat, The Cartel moved to aggressively smash price, an operation that continues to this day. In doing so, they've been able to reduce their net short position by 153,284 contracts or 61.6%! Or looked at another way, they've been able to reduce their paper-physical liability by 15,328,400 ounces or 477 metric tonnes!

SILVER

Again, May13 contract expiration has distorted this report, regardless it's still quite interesting. Last week, the Large Specs dumped another 3,100 longs while covering just 300 shorts. This brings their net long ratio back down to just 1.52:1. The silver Small Specs were net neutral for the week are are still just barely net long.

The commercials in silver who have been taking on JPM in The Civil War actually dumped some longs last week into expiration. Their gross long position fell by 2,573 to 65,685. JPM et al seized upon the Large Spec and Comm selling and covered 5,507 shorts, down to 79,915. This lowers The Silver Cartel net short ratio all the way down to an incredible 1.22:1.

For perspective, let's once again review the CoT from 8/16/11, when silver was trading near $41.

  • Large Spec longs 8/16/11 = 32,697. Last Tuesday = 35,720
  • Large Spec shorts 8/16/11 = 10,769. Last Tuesday = 23,530
  • Large Spec net long ratio 8/16/11 = 3.06:1. Last Tuesday 1.52.1.
  • Comm Longs 8/16/11 = 34,555. Last Tuesday = 65,685
  • Comm Shorts 8/16/11 = 75,236. Last Tuesday = 79,915
  • Cartel net short ratio 8/16/11 = 2.18:1. Last Tuesday = 1.22:1.

Well, what stands out at you? Note that the Large Spec long and Cartel short positions are nearly unchanged over 20 months and a $17 drop in price. Then note the HUGE change in the Large Spec short and Commercial long positions. Also notice the difference between the commercial silver activity and the commercial gold activity. In gold over the exact same time period, the Comm long position is nearly unchanged. However, the silver Comm long position has nearly doubled!

Now I suppose we could really drill down into this and try to discern, by firm, how positions have changed. That's a topic for another day. For today, just think of this:

I laid out for you yesterday all of the many events that have occurred while gold has declined by $500. In summary, I concluded that late August of 2011 was a seminal period of time for the Forces of Darkness. They saw the collapse of confidence in every single fiat currency and the decision was made to attack gold and silver as they had become the only, true alternative to paper. This plan of action continues to this day. By containing gold and silver for the past 20 months, The Cartels have:

  • Reduced their net short position in gold by 153,284 contracts. This equates to 15,328,400 troy ounces of gold or roughly 477 metric tonnes.
  • Reduced their net short exposure in silver by 26,449 contracts or 132,245,000 ounces of silver or 4,113 metric tonnes.

As we head into next week, we should all feel pretty good about surviving this past one. Things looked pretty lousy back on Wednesday but we've since recovered and the charts don't look too bad. Now if we can just get a shove...and burst through resistance at $1485 and $24.80, we could quickly move right back to $1525 and $26 and be poised for an epic battle, fighting to move back into the 1525-1800 and 26-36 price ranges that had contained the metals since the August 2011 attack plan began.

OK, time to call it a week. Ole Turd's got a frosty beer waiting for him and I'm not sure if I can wait much longer. If I wrap up now, I might also be able to catch the Kentucky Oaks. By the way, I haven't studied the form yet but, from what I've seen, I like Normandy Invasion in The Derby tomorrow.

Have a great weekend!

TF

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  582 Comments

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Karankawa
May 5, 2013 - 9:52pm

While we watch this fasciast takover.

Lets all remember that we supported it, and when your doorbell is rung, remember you came to this board because you believed in honesty.

Video unavailable

Larken is a founding father of Liberty I think.

Trolls, bring it on!

Zoltan
May 5, 2013 - 9:43pm

Sunday Night Opens and Hitting all the Bids

While the evidence is still on the ND chart and fresh in everyone's mind I'd like to share a few thoughts. Bohemian has an excellent analogy with his whack a mole story. If every bid is hit price goes no where. Even disregarding the mystery first few minutes of the open the 13K volume on the two minutes that show up was enough to eat through all the existing bids (it dwarfs all the volume since then). This unlimited selling (no doubt without backing ie. naked short) is highly manipulative. Any legitimate seller desires a profit and would rather sell into higher prices, not just hit every bid from the open.

Decent volume is only occurring again (at 38 minutes into the open) to keep a price rise in check. This is BS. Do not trade this crap. It is like the old saying, if you are at a poker game and don't know who the pigeon is, it is most likely you.

The regulators are bought and paid for and will NEVER do anything about it. This game ends when the physical is gone and the users panic. The CFTC has "investigated" this for years, do you really think they will do anything?

Same old same old I'm afraid. It is like Gold Dog's five seconds of Rock'n Roll History. Don't (Won't) Get Fooled Again.

Z

Edit: PS @Watchman Is it just me or does Voltaire look a lot like Ron Paul?
Bsong
May 5, 2013 - 9:43pm

#HailKansas

#HailKansas

agNau
May 5, 2013 - 9:32pm

Interesting.......

" Are you capable of producing large quantity orders of any training caliber specified with a short turnaround time of 30-60 days?" https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=bfd4278417... "- What would your lead time be for an order of 2 million rounds of a single type listed above?" "- If you were awarded a contract for some of the calibers listed above, submitted a production lot of one million rounds and that lot or portion of the lot was not accepted, would you be able to replace that order with an additional one million rounds within 60 days?" * We must be getting close.

DayStar
May 5, 2013 - 9:27pm

Harvey's Up!

The FDIC did not seize any banks this weekend. Gene Arensberg: To "nutshell" the COT what we have is a situation of the largest, best funded and presumably the best informed commercial hedgers using the gold smash to get really, really small in their net short positioning at the same time the trend following Funds and smaller traders are still selling into the nascent gold recovery (albeit at a smaller pace than last week). The Funds are therefore positioning for a gold recovery failure and lower gold prices and the hedgers positioning for the opposite, which is a reversal of their normal roles. Harvey: Today, we lost another 3.6 tonnes of gold. On Thursday we lost 6.02 tonnes. Wednesday, 3.31 tonnes was lost which followed 2.14 tonnes of gold lost Tuesday. As you can see, the bleeding of physical gold from this locale continues unabated. GoldCore: Physical demand for coins and bars internationally continues and is the strongest since the immediate aftermath of the Lehman Brothers collapse. Beijing Caishikou Department Store, the biggest gold retailer in Beijing, has been seeing daily sales worth up to 100 million yuan since late April, several times their usual sales. Demand for gold in India, the world's biggest consumer, is double the level for this time of year. Jeff Nielson (Bullion Bulls of Canada): China has probably raised its gold reserves to as much as 4,000 tonnes, far beyond the 1,054 announced in 2008 and reported officially today, and that it is probably talking gold down so it can get more metal inexpensively. DS: Police are warning that fake U.S silver eagle dollar coins have been circulating in the city of Hamilton, Ontario and have been sold to various establishments over the past few months. All this and more on...

The Harvey Report!

https://www.tfmetalsreport.com/comment/596762#comment-596762

DayStar

Serapis
May 5, 2013 - 9:26pm

GPS Errors

Although other problems are possible, an inaccurate GPS signal could be the result of the return of or a test of Selective Availability. SA was an intentional error introduced that was meant to give civilian GPS systems a substandard fix, allowing supremacy of military units, etc. SA was deactivated in 2000. It was this deactivation that allowed an entire industry to develop. Without it, we could never sit in our cars and have British people tell us which way to turn at the next stoplight.

Old article about it:

https://geography.about.com/library/weekly/aa050400a.htm

Texas Sandman
May 5, 2013 - 9:11pm

The answer

>The regulators are bought and paid for and will NEVER do anything about it. This game ends when the physical is gone and the users panic. The CFTC has "investigated" this for years, do you really think they will do anything?<

Go buy lots of physical. Hide it some place other than the banking system.

We're going to need lots & lots of silver to fight a war. They don't have very much.

And the sequence will be the same as in the other great depression:

Financial Collapse -> Trade Protectionism -> Currency War -> Shooting War

(Right now we're firmly in stage 3 & lurching toward stage 4).

Pegasus
May 5, 2013 - 9:07pm

GPS Outages

Could be the result of CME/solar flares messing with satellite transmission. There were some radio blackouts today in the far northern hemisphere:

SPACE WEATHER ADVISORY OUTLOOK #13-18 2013 May 5 at 6:29 p.m. MDT (2013 May 6 0029 UTC) **** SPACE WEATHER OUTLOOK **** Summary For April 29-May 5 Radio blackouts reaching the R2 level occurred on 03 May because of a flare from Region 1739. R1 levels were reached on 02 May (Region 1731) and again on 05 May Region (1739). Outlook For May 6-12 There is a chance for radio blackouts equal to or greater than the R1 level through the forecast period. Data used to provide space weather services are contributed by NOAA, USAF, NASA, NSF, USGS, the International Space Environment Services and other observatories, universities, and institutions. More information is available at SWPC's Web site https://swpc.noaa.gov
opticsguy
May 5, 2013 - 8:57pm

GPS

could this be a test of a GPS jamming system? The satellites themselves are pretty secure, but spoofing their signals would be a defense against any sort of GPS guided bomb or missile.

Magpie
May 5, 2013 - 8:47pm

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