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

Gold Dog
May 4, 2013 - 11:31am

Bongo Jim

Is the winner!

Next question in five minutes.

Sorry about the name Jim.

Carpe Argentum
May 4, 2013 - 11:32am

Question 1

edit: I'm slow.

Bongo Jim
May 4, 2013 - 11:33am

Answers

John Entwhistle - The Ox - Thunderfingers

A walk in the woods after a fight with his wife

His wife with a rolling pin onstage

Gold Dog
May 4, 2013 - 11:35am

QUESTION 2 OF 6 TODAY

Where did the name Baba O'Riley come from?

AND

Who was mute, and for how long?

This is an easier one!

Bongo Jim
May 4, 2013 - 11:35am

I've been called worse

No worries about the name, Dog.

Beastly Stack
May 4, 2013 - 11:44am

That First Post

Turd, that first post from yesterday was classic- the BS never ends. Enjoy your weekend and get ready for a crazy week next week.

https://tradermartinstake.blogspot.com/2013/05/the-pile-is-growing-growi...

Gold Dog
May 4, 2013 - 11:48am

Hint!

The start of the road to the answers also lies in the liner nores.

Gold Dog
May 4, 2013 - 11:59am

The mute one...

...is not Tommy.

Gold Dog
May 4, 2013 - 12:05pm

Nother hint...

The mute one is half of the name of the song.

dgstage
May 4, 2013 - 12:07pm
Gold Dog
May 4, 2013 - 12:12pm

The Watchman...

...a perennial second place has won!

Congratulations!

EDIT- He is our first two time victor!

murphy
May 4, 2013 - 12:13pm

four dead in Ohio

Forty-three years after Ohio National Guard soldiers opened fire on unarmed students during a Vietnam War protest at Kent State University, killing four, the healing continues -- not just for those shot and their families, but for the community, university and the nation as a whole.

Today's formal dedication of Kent State's May 4 Visitors Center, opened last fall, is an important step on that journey.

https://www.cleveland.com/opinion/index.ssf/2013/05/kent_state_universit...

Video unavailable
Gold Dog
May 4, 2013 - 12:14pm

Next question in five.

Where is Bollocks? Don't see him sweating and whipping all over the interweb looking for "tough" answers! I will lighten up a tad on the next one!

The Watchman
May 4, 2013 - 12:15pm
Bongo Jim
May 4, 2013 - 12:15pm

Two timer

Ah, if only I could enter again.

Gold Dog
May 4, 2013 - 12:19pm

Question 3 of 6

This will take about five seconds;

"watch the ? and the? miss me!"

I like the underlying theme in that line!

dgstage
May 4, 2013 - 12:20pm
Gold Dog
May 4, 2013 - 12:21pm

Bobbejaan wins

And graciously donates his prize to charity!

Bongo Jim
May 4, 2013 - 12:22pm

Geez

Too easy...even Bongo Joe could get that one.

Zoltan
May 4, 2013 - 12:24pm

Well Done Bobblejaan

That's the spirit!!!

Thanks again Gold Dog for your gracious charity and our Saturday morning fun!!

Z

Quixote2
May 4, 2013 - 12:28pm
Gold Dog
May 4, 2013 - 12:31pm

@Bobbejaan

Has donated his winnings to Guide Dogs...so he is still eligable to win!

Next question in five minutes.

Hard to find one that Baby Bear would find "just right".

Gold Dog
May 4, 2013 - 12:35pm

Question 4 of 6 today

I am curious about the Who's current drummer.

Who is his father?

and

Who gave him his first drum kit?

Gold Dog
May 4, 2013 - 12:39pm

57Goldtop knows his Who

Congratulations!

EDIT- Eyes was second and Carpe was third.

Next question in 5.

57- PM me your addy so I can get your rounds out.

Bobbejaan Gold Dog
May 4, 2013 - 12:45pm

Thank You Kindly ....

Quote:
Has donated his winnings to Guide Dogs...so he is still eligable to win!

Next question in five minutes.

Hard to find one that Baby Bear would find "just right".

For that Honourable "Re-Eligible" offer .... But after thinking about it, I think I'd prefer to withdraw from the rest of the competition this week to allow others the opportunity for a win, AND as I would only also donate any possible "2nd win" to the Guide Dogs of America charity as well.

Gold Dog
May 4, 2013 - 12:48pm

@B

It's your choice, my friend! Play or watch or take a nap!

(Merica is FREE dammit!)

Your friend,

Dog

PS- The next question is going to take a little digging but it's all there for you to find!

dgstage
May 4, 2013 - 12:50pm
Gold Dog
May 4, 2013 - 12:52pm

Question 5 of 6 for today

In the late 70's there was a stampede with fatalities in Cincinnatti, Ohio.

But the show must go on!

What four songs from the Whos Next album did they play that night?

Gold Dog
May 4, 2013 - 12:58pm
Carpe Argentum Gold Dog
May 4, 2013 - 1:00pm

Woohoo! Thanks Gold Dog! It's

Woohoo! Thanks Gold Dog!

It's actually "Argentum," which is Latin for silver. I seized it!

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