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 3, 2013 - 8:34pm

COT information

Turd, I've been following your web site. I have a question about the source of your COT information.

You speak about Small Specs, the "unreportables" being short 1500 gold contracts net.

I would appreciate the source of that information.

Here, one of the four formats of the metals COT report, one hardly sees the small specs, the unreportables being net short 1500 contracts. On sees instead their being long 45,000.

https://www.cftc.gov/dea/futures/other_sf.htm

Checking the other three formats of the COT information, I see nothing near the unreportables being net short....long in every one of the tables' information.

Can you put be straight...can anybody?? Has anybody else noticed.?

Southern Cross
May 3, 2013 - 8:30pm

Largest Wholesaler In U.S.

Largest Wholesaler In U.S. Sold Out Of 100 Ounce Silver Bars

‘The physical market has come alive.’ There’s absolutely no doubt about it. I’m wondering when the buying is going to slow up, but it is not slowing up (right now).” "the largest wholesaler in the United States is no longer taking orders for 100 ounces silver bars. "

I remember back in 2009 1,000 ounce silver bars were becoming scarce. Since 2010 you never hear about 1,000 ounce silver bars in the media. Now we are hearing 100 ounce bars are becoming scarce. This makes sense. Usually the premium is lowest on larger bars so my opinion is people buy larger bars first to save premium if they can afford to.

Have a great weekend.

Consider buying a LifeStraw ($20.00) for each member of the family. Here's a youtube video.

Drinking poop water through a life straw
Kcap
May 3, 2013 - 8:25pm

@Turd

Hope you are enjoying the frosty ice cold brewski...or by now, many...

My recommendation for you is NWT mint. Without a doubt, aside from a long lead time, extremely reliable and no games. And they pay all shipping.

Hope it all works out!

Kcap

Ps. COT = more of the same.....which means, all going in our direction. Just 14,000 contracts between us and the promiseland.

Gold Dog
May 3, 2013 - 8:18pm

Tradesman

I was charged $50 per certificate three or four years ago.

My understanding now is that the majority of the S&P 500 companies don't even issue certificates but you can become a "registered shareholder" on the companie's books.

Turd- If the design is acceptable you can put me down for a monster box. Added codicil- If AG moon-shoots to $500/oz I may have to lighten up a smidge!

Dog

EDIT- I recently sold off a large portion of my equities and was charged another $50 per Cusip to get them back into street name before they could be sold.

The Watchman
May 3, 2013 - 8:13pm

Turd-Add A Few More Pallets

GLD Continues to be DRAINED-3.6 TONNES GONE

Tonnes1,065.61

Ounces34,260,271.68

Value US$50,311,416,921.40

That_1_Guy
May 3, 2013 - 8:11pm

Mint Ideas

Turd.

There are alot of mints out there. I only have 1 that I worked with and its a corporate account through a mining company in Vancouver. You will know who they are ..its just not a walk in shelf offer. PM me I will send you a contact, I cant just broadcast info. I just wanna be involved in some kind of coin. I would have ordered 1000 of my own choice.....but i went all in 4 times in a row. Dont get me wrong, I used to have some beautiful Numismatics prior to the ice fishing accident.

@Dagney-Empire of Fallen Graveyards......hmmm. I like the idea. Pinning coins?

In regards to Duane. Hes a great guy. I support him and have received all the coins that I ordered from him (not Rob). Even though Rob punchbowled it, the message is more important than Rob. Gus is a good guy I talked to him a couple times and believe him to be true, as well.

GUY

Green Lantern
May 3, 2013 - 8:09pm
Cry Me A River
May 3, 2013 - 8:07pm

Gotta Go Cya Tomorrow!

Before We Go, Elwood Gonna Do One:

Blues Brothers - Rubber Biscuit
Headswim
May 3, 2013 - 7:58pm

@Turd

Why not just start your own mint? You have thousands of stackers who would probably LOVE the opportunity to buy rounds from you and there are probably turdites who may be able to help with financing. Even if a single machine costs ~$100k, selling tens of thousands of rounds would pay it off within a few months. Maybe an anonymous poll of some of your viewership is in order, such that only you can view the results and asking simply: how many oz/month do you buy and how many would you buy from turd at X premium.

You could offer X dollars above cost on any qty for life to those who contribute to startup costs.

I work in logistics/distribution and supply chains are actually pretty easy to create and maintain once you've done it a few times. I started with my employer when it was ~70 people and < $5mil/yr in revenue and have helped considerably in designing and growing the supply chain with revenue growth of 200x. I even helped my wife start a business at home that is now making ~2k+/month and allows her to scratch her creative itch in lieu of working for $12/hr. I would be extremely pleased in supporting this kind of an effort with my expertise, and I am sure there are many others who would jump at the opportunity to contribute their unique knowledge and skills if posisble.

Edit: I just thought of this - I'm sure there are many among your readership that are of the artistic persuasion. Perhaps they could contribute designs that could then be voted on by the community. This could be a really big thing for the citizens of turdville. /Edit

Most importantly, you leverage knowledge of what is happening and the trust you've earned with several thousand people to enhance the lives of all involved and remove money from "the system". I really applauded Chris Duane for his efforts in trying to start a business off of this knowledge. He failed only in trusting the wrong person and not communicating effectively.

The next step, obviously, would be to also start a full-reserve bank based on gold's Basel 3 status as a tier 1 asset. That one is a bit more involved....

Edit 2: Showing sales figures would be another great way to show what an impact this community is making without reporting on individual sales. I bet we could collectively buy over 100,000 ounces in a year without breaking a sweat (even at 50 cents/round profit that's a cool 50 grand/year!)

dgstage
May 3, 2013 - 7:55pm

Turd

The next time you talk to Chris D ask him to return emails are phone calls about missing coins.

Thanks

Oh Suggestion as some have already stated, produce your on coin!

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