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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jims101
May 4, 2013 - 12:32am

Here you go

I try to keep it simple by always using this:

https://news.goldseek.com/COT/1367609629.php

AnonymousNonoverlappingMagicCereal
May 4, 2013 - 12:30am

Removed comment

Removed comment.

Magpie
May 4, 2013 - 12:25am

They've been lying to us for a very long time...

no wonder they're so good at it.

https://www.citywatchla.com/4box-right/5005-humans-used-for-radiation-ex...

EXPOSE REVISITED - This year marks the 20th anniversary of the declassification of top-secret studies, the “Human Radiation Experiments,” done over a period of 30 years, in which the US conducted radiation experiments on as many as 20,000 vulnerable US citizens.

dgstage
May 4, 2013 - 12:24am

Reach West

The article from debka was dated April 29?

Gold Dog
May 4, 2013 - 12:22am

@Ruffian

I agree with most of what you wrote.

That said, my largest wager will be on the over- 2:02:50

With a wet track it could be a jump ball and I don't see the speed over the distance either.

My what-the-hell bet is on GoldenCents for obvious reasons.

If I had a gun at my head I would go Verrazano A-T-B.

Your friend,

Dog

PS- Thank you Blackhawks......I will your victory tonight as a stack adder!

NonoverlappingMagicCerealAnonymous
May 4, 2013 - 12:19am

Re: The entire world hates

Actually, my experience has been that the 'everyone hates us' thing dropped off significantly in 2008 when we elected Obama. This has been expressed unanimously to me by Europeans, Indians and Iranians.

Not a good reason to vote one way or the other at all (and I didn't), but it is what it is.

philipat
May 4, 2013 - 12:16am

@Ruffian

Agreed and it is very much ONLY The Government which nobody trusts, even US citizens. Many of my best friends hail from The US and are great people. So, bottom line, I guess is, what are you US citizens going to do about it and when?

It is supposed to be "Governance of the people, by the people for the people". And the founding Fathers DELIBERATEL:Y did not create a Democracy, because of "The tyranny of the majority", but a Constitutional Republic, in which the people remain in control.

Something seems to have gone wrong in the last 200 years?

philipat
May 4, 2013 - 12:10am

Site Refresh Problems

Not complaining but trying to help.

I STILL have problems refreshing page views in TFMR. And ONLY TFMR. When I refresh a page I get either an "HTML Site Architecture" view or a view with a narrow (Half Screen width) view of posts. Also, the page number boxes at the foot of the page will spread out from their normal close proximity and various avatars get replaced by "XXX's picture". This NOT an isssue with cookies or cache and I have the same issue with Firefox, IE and Chrome. It's also not a Java issue because by default I have Java "Disabled in Browser".

Perhaps it is just me? Please assist and Hat Tip this post ONLY if you are experiencing similar problems. It's irritating and time-consuming unnecessarily.

AnonymousHagarth
May 4, 2013 - 12:08am

Removed comment

Removed comment.

Anonymous
May 4, 2013 - 12:02am

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