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

About the Author

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

  582 Comments

Kcap
May 6, 2013 - 9:36am

Physical Pricing Mechanism

Why doesn't Sprott get off his ass to introduce a physical pricing mechanism?

Because he's too much of a gentleman to interfere with the PTB? Good grief.

Kcap

Gold Dog
May 6, 2013 - 9:40am

Wilshire Coins

Are the guys that own Goldencents. I have friends in Santa Monica and used to eat breakfast just down the road from that joint. Never went inside.

There must be some pretty good money in the PM business....I wonder how much capital you would need to buy APMEX next time they go tapioca.

Dog


May 6, 2013 - 9:42am

Just to wade in where I (a fool) should fear to tread

TF:

Submitted by Turd Ferguson on May 6, 2013 - 8:25am.MODERATOR They'll likely be coming with at least a mini-raid sometime soon.

I think technical analysis works in the very short term and the very long term ... but not so much in between. It is possible that we are just throwing a narrative on random facts, as so much of the time we tend to do, trying to make sense of things ... but those facts are not necessarily random and pattern seeking is the way to determine trend, one hopes.

Kerbouchard
May 6, 2013 - 9:52am

@Kerbouchard

This suggestion was emailed to me over the weekend:

I recommend
Hopefully this follower will make the plunge and buy some physical.
luv2stak
May 6, 2013 - 9:54am

Dr. Jerome -- Underestimation of TRUE Silver 'Junque' Premiums?

You wrote:

https://www.tfmetalsreport.com/comment/195265#comment-195265

<< The average price of US half dollar sales yesterday on ebay from a random sample is $7 over spot. That is a 22% premium. Provident's price for "our choice" half dollar coins is $8.10 over spot. >>

Correct me if I'm wrong, but aren't pre-1965 half-dollars only 90% silver, and post-1964 half-dollars only 40%?

That should give an even higher true 'premium.'

Gold Dog
May 6, 2013 - 9:56am

Any ornothologists out there?

We have a finch sized bird, mostly grey and black. Black head with white "cheeks" that has been pounding on our windows the last ten days.

It even attacks the Webber.

As near as we can guess is that it's a male protecting it's territory and is have a major war with it's own reflection. It flies into the windows on the back of the house hundreds of times a day. Pretty hilarious actually.

Thanks in advance for your help

"A Perfect Year" Dog

EDIT- It feeds from the Finch feeder and the big one too. Just another clue.
Texas Sandman
May 6, 2013 - 10:03am

Oh so predictable

Mini-raid. Nice. Will let me reposition for a long trade in a few days.

ancientmoney
May 6, 2013 - 10:04am

In case you wonder if gold and silver should be owned . . .

https://edgetraderplus.com/market-commentaries/gold-and-silver-are-you-a-lion-or-a-gazelle-you-had-better-know

A snippet:

"We see the lions as issuers of fiat, Gazelles as owners of gold, and if you are uncertain as to
which you are, the issuers of fiat will financially eat you alive. Cyprus was an overt wake
up call. Many people in the U S think it will not happen to them. It already has. "

Gold Dog
May 6, 2013 - 10:11am

ATS..

Has some beautiful coins. I like those Britannias and the Isle of Man.

Do they accept worthless greenbacks?

Subject Dog

EDIT- How come so many coins have a likeness of my friend Ed's grandmother on the back?

Adolf_Hitler
May 6, 2013 - 10:15am

@Texas Sandman

Do you really believe we shall experience an exponential rise? At the moment, gold and silver look so weak. Silver even has trouble in staying above $24. $26, which is the bottom of the previous range, looks like a long shot...

AlexCojones
May 6, 2013 - 10:17am

And in Other Metals - The .Gov hates Gold & Guns - Here's Why

In a response to the Governor of Kansas, Eric Holder Has stated the Feds will enforce gun grab. Will Kansas soon be known again as "Bloody Kansas?"

https://spreadlibertynews.com/eric-holder…

Gold Dog
May 6, 2013 - 10:27am

Call Brownback

And give him some support.

https://governor.ks.gov/contact-the-governor/contact-governor

EDIT- Just spoke to a nice lady and she says they are swamped with calls from all over! GO Merica!

ancientmoney
May 6, 2013 - 10:27am

Another snippet from same article . . .

"The question of whether to buy gold and silver is an answer already known by almost all who read commentaries like this. Should you continue to buy more is a question, the answer to which is apparent to most. For us, it is the best way to survive what is going to be a worsening and even more brazen theft of whatever people have that is unprotected.

Will the price of gold and silver continue to go lower? We think they will. Does that mean you should wait before buying more? That has now become a personal decision that needs to be viewed in the context of what has been expressed above, and there are so many other instances that can be cited.

There is no single answer, no right answer. However, one to be considered is the
“averaging down” concept. The notion is to average the cost of ownership of something over time. Usually, buying something that is going down is not a good practice. In this instance, it is different. It is a matter of fiat fraud by central bankers and a matter of survival by those in opposition.

What we know for sure is that those in power have power and will not give it up easily. They will destroy anyone who gets in their way. As central banker Draghi stated: “We will do everything in our power to save the Euro.” He did not say “We” will do what we can to help out the people of any sovereign nation. No central banker ever would. You saw the form of their help in Cyprus. The sole objective is preservation of the [unelected, unrepresented] central banking cartel."

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

These are not normal times. We are near the end of fiat. Waiting for lower prices may be a fools' game. We see physical premiums rise to defeat lower paper pricing. Paper prices will go to zero, as paper markets wither and die.


May 6, 2013 - 10:32am

Gold Dog - how about a nuthatch?

Whereabouts do you live? We are surrounded by chickadees, and then this larger, almost chickadee showed up, eating at the finch feeder, hanging upside down, and kind of acting like a wood-pecker.

Rock nuthatches forage with a similar technique to the woodland species, but seek food on rock faces and sometimes buildings.

Gold Dog
May 6, 2013 - 10:35am

XTY

That's not it.

I will try to find a picture and post it.

YF,

D

Orange
May 6, 2013 - 10:35am

New world order

It seems that the Israelis and Palestinians now go to Chine rather than the US to discuss their conflicts.

I wonder if this has any implications for the Petro Dollar. My guess is yes, and the signs of a dollar collapse are emerging everywhere. China's trading block, new trading agreements with numerous countries including Japan and Australia. Gold backed reserve currency may be here before we know it.

https://www.jpost.com/Diplomacy-and-Politics/Beijing-urges-restraint-in-...

Texas Sandman Adolf_Hitler
May 6, 2013 - 10:40am

@Hitler

Yes on the exponential rise.

This assessment is based not on how things look right now, but a logarithmic monthly chart of silver (and gold) going back to the beginning of the bull market. We just kissed the trend at 22 silver & 1320 gold. Whether 24 holds or not is irrelevant to this analysis. Important thing is this. No trendline break. Trend present from the year 2000 or so in effect. That's key.

And Yes, Jake this is TA, but of the most mundane variety based only on price.

An exponential rise is certainly what I expect coming next.

Patience is required, and equanimity is the word, my friend.

Tex.

Nick Elway George Clooney
May 6, 2013 - 10:42am

@xty well said!

xty said

Quote:
It is possible that we are just throwing a narrative on random facts, as so much of the time we tend to do, trying to make sense of things ... but those facts are not necessarily random and pattern seeking is the way to determine trend, one hopes.

I spent 2 years on "the brain wave project" Engineers working with computers to detect the patterns psychiatrists saw in sleep EEGs, trying to computer count a "K-wave" artifact in the record. It turned out that different psychiatrists got different "K-wave" counts (they each had their own human filters) and when I studied how the electronic input filters behaved on a random signal stream it seemed likely that many of the "K-waves" could result from a random signal due to the characteristics of the filter. You phrased it perfectly "throwing a narrative on random facts".

That's NOT to say there aren't real patterns in the data (REM, Stage I, II, III sleep all look verifiably real) As humans we are driven to construct a narrative that "explains" our sensory input stream. It is what we do. It is almost impossible not to ignore new data that conflicts with the narrative one has adopted.

ALMOST EVERYBODY thinks they've taken the red pill and are awake, including Obama supporters. I tend to trust people (like Turd) that can admit their narrative needs adjusting and examine and integrate new items into their narrative. Adamant know-it-alls are not trustworthy.

Gold Dog
May 6, 2013 - 10:45am
Bollocks
May 6, 2013 - 10:50am

@Kerbouchard

Regarding Turd's reply to your post, currently the best prices in the UK aren't where he suggests, they're here:

https://atkinsonsthejewellers.com/

I've pm'd you with more info.

Gold Dog
May 6, 2013 - 10:57am

On TA and charting

Here is what you would have done using the yearly high and the simple moving average entry system.

Recall- after a commodity or major equity index hits a yearly high or low and then crosses the 80 day SMA you enter. You close out the position on either a 5% loss or the next time it crosses the 80 day SMA.

In this instance you would have sold a little above 165. And would still be short.

https://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=gld&time=8&startdate=1%2F4%2F1999&enddate=5%2F6%2F2013&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=1&maval=80&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=2&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=10&x=0&y=0

Watcher
May 6, 2013 - 10:59am

I'm a Birder It's

I'm a Birder

It's a Black-capped Chickadee up near Chicago land.

Further south the Carolina Chickadee takes over.

Here's the range maps for Chickadees.

https://www.birdsource.org/Birds/chickadees/

Yes, it's time to nest.

Zoltan
May 6, 2013 - 11:07am

New Thread

See you there.

Z

Kerbouchard TF
May 6, 2013 - 11:09am

Thanks, Turd.  Appreciate the

Thanks, Turd. Appreciate the follow-through. A $9,000,000 inheritance turned into ol' yellah would definitely make a dent.

Sincerely,

K.


May 6, 2013 - 11:13am
Gold Dog
May 6, 2013 - 11:21am

Watcher..

....right on the nose! Are they known for playing Innagodadavida on the windows?

Edit- I read your post...our yard is about 25 acres of deciduous trees.

Your friend,

Dog

Watcher Gold Dog
May 6, 2013 - 11:30am

Are they known for playing

Are they known for playing Innagodadavida on the windows?

No, but they do like Vanilla Fudge. ;-)

erewenguy
May 6, 2013 - 11:56am

@vonburpenstein

Please check your pm

SilverSurfers
May 6, 2013 - 3:24pm

Aspect I

number one of the attack plan first involves getting makeup on the star for his staring role, and in careful review of the star over the many months, the star is in sillys cross hairs as the celestial complainer, and hence one in the same, and many other candidates are possible minimally holding one AGE and one ASE, for sufficient damages purposes, but for the time being, let assume the star will be the celestial complainer, but over the time spent carefully reading every post of star by silly putty, the star appears to have that terrible thing going on including paper assets and forbiddingly actually trades paper assents on the exchanges, a super huge no no, probably to make a buck for food as we all have to live, and so can think of star currently as a spy in the hard core stacking bug ranks, which hard core bugs to not trade come heck or high water, which staring role should now be transformed considerably before the initial salvo, the purpose here is to secure cost-effective short communication lines between the manager and the star, and, the star can now enhance and modify those communication lines with minimal logistics, which is significant to winning the war, and thus, there will be several instructions placed upon the star, as the star is made useful in showing convincingly that there such maniputations from the the commitment of trading folks and from technical chart action as daily presented, but presented summarily as a supplemental psuedo torpedo on the stand with evidence over current bull market time, which star could appear as a self-serving psuedo torpedo in a dual role in a cost effective limited man power space, sillys personal favorite type on stand, and thus acting as a pseudo precision torpedo, for initial salvo explosion at the vitals of the ship, and hence, trading paper and respective positions with natural counter party risks thereof should be shredded and all such position liquified so as to place the eight ball only in us minted one ounce AGEs and ASEs posture from the get go, and that includes eliminating numismatics and such odd ball coinage as well as all paper positions and supporting documents and with brockage accounts zero out and cease all further brokerage house documentations from entering the home, so that all is very simple for control of command and control, and thus we can send the star on operations effectively on preops missions for a huge misdirection placed upon the enemy sharks, hereinafter called akulas, with is Russian for shark, hence, the silly team will have our sharks and leviathan have their akulas before the black robe reaper, now, the trick is minimize akula attacks from the outset personally upon the star, the star saving necessary commitment and analysis chart data for person reference, which will be discoverable along with documents showing basis of such standard one ounce coinage kept during liquidfications, and such discovery personally served upon the celestial complainer, thus, there are three objectives of the preops namely to secure short communication lines and waste akula assets and misdirect the akulas, as well as show necessary damages holding on to only such coinage, and all three objectives are done by the same step taken of this aspect of the attack plan, and, by reducing to standard coinage and their respective documents, as suggested, and the shredding of extraneous documents, the expected discovery demands are simple to comply with, as, akula examinations of opposing documents are wildly intimidatingly searched by the akulas, as standard obscene traditional practices of sharks and akulas, while currently shredding of such paper position documents in the stars personal possession, and hence, there is a need to produced for examination with minimal logistics, yet these shredded documents are available on line for personal tax reporting and through akula discover subpoenas for production, as, the akulas must look elsewhere for sought after documents through expensive third party production notices, and hence, expensively misdirecting the akulas, thus saving the star the trouble, which in the long run, work outs best for the star, and also, as to any businesses operated, the star should appoint a respective members of such businesses and appoint them as respective document heads, so that the personal home should be purged of all business documents relevant except as to those us minted coinage suggest showing their basis, so that, the akulas must by discovery again search third parties being your businesses and brokerages only through an appointed documents manager, and thus the home and the star are secured as best able from the akulas, and there will be legions of discovery attacks from the akulas, so the star should nip that in the bud, so that star and those managers can better communicate and comply as will be ordered, as akulas time and money is spent on wild goose chases, relieving the star and thereby making time for the star to then go on the offensive during the initial salvo, to put in his expertise of trading commitments and chart analysis in play, thus, the star complains and misdirects the akulas, because, as part of the conventional shark world, harassment and opposition waste is always part of the game, to milk the clients as usual, and the star must be protected, and the star can then effectively be used in combination with the precision torpedoes, and thus, the initial salvo including a full spectrum spread launch toward leviathan including the precision torpedoes and the pseudo torpedo and gang torpedoes with offensive and misdirection torpedoes fired concurrenty, and, while the akulas are misdirected on wild goose chases, and the akulas can not lethargically focus, while akula destroyers are overwhelmed from all the many precision and pseudo and gang torpedoes, all of which will be very well guided toward the vitals of the ship, as the target, to sink the ship notwithstanding destroyer interference during initial salvo, and when getting both offensive and defensive assets in play, a high aspect ratio is a must and here well served, with akulas on wild goose chases during preops while your torpedoes bypass their destroyers, and hence, this preparation serves to focus the eight ball, while concurrently misdirecting the akulas, for the slam dunk at the dog and pony show, for creating a global kenysian scandal.

Billy Idol - Eyes Without A Face
Survivor - Eye Of The Tiger
The Warrior - Scandal (HQ Audio)
Boswell
May 6, 2013 - 3:48pm

Did someone say "Chickadee"?

Good for a few laughs...

"My Little Chickadee" Trailer 1940

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