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
tfmetalsreport [at] gmail [dot] com ()

  582 Comments

  Refresh
Dagney Taggart
May 3, 2013 - 7:14pm

@Turd

Re: https://www.tfmetalsreport.com/comment/194712#comment-194712

What about Golden State Mint? They produce those low-premium silver buffaloes I guess.

Cry Me A River
May 3, 2013 - 7:13pm

BEWARE: Monday Is May 6th!

SELL IN MAY AND GO AWAY?---LOL!--Who Knows?---Maybe It'll Happen Again?

How True Is the “Sell in May and Go Away” Adage?

https://www.investmentcontrarians.com/stock-market/how-true-is-the-sell-in-may-and-go-away-adage/1967/

A look at the best and worst performances for the month of May since 1928 by Bespoke Investment Group, LLC shows that for the S&P 500, two of the top-10 worst Mays (May 2010 with a 8.2% contraction, and 2012 contracting by 6.27%) and one of the top-10 best Mays (May 2009 with 5.31% growth) occurred during the recent bull market that started in 2009. (Source: “S&P 500’s Best and Worst Months of May Since 1928,” Bespoke Investment Group, LLC web site, April 30, 2013, last accessed May 1, 2013.)

Clearly, volatility in the S&P 500 has increased substantially for the month of May for the past few years over the course of the current bull market, and your investment strategy certainly needs to take that volatility’s timing into account. Additionally, since the bull market’s beginning in 2009, the S&P 500 during the month of May has averaged a decline of 2.64%.

AND THIS FROM WIKIPEDIA: https://en.wikipedia.org/wiki/2010_Flash_Crash

The May 6, 2010 Flash Crash[1] also known as The Crash of 2:45, the 2010 Flash Crash or just simply, the Flash Crash, was a United States stock market crash on Thursday May 6, 2010 in which the Dow Jones Industrial Average plunged about 1000 points (about 9%) only to recover those losses within minutes. It was the second largest point swing, 1,010.14 points, and the biggest one-day point decline, 998.5 points, on an intraday basis in Dow Jones Industrial Average history.

FROM: https://ryviewpoint.blogspot.com/2010/05/stock-slide-thursday-may-6-2010.html

On May 6, US stock markets opened down and trended down most of the day on worries about the debt crisis in Greece. At 2:42 pm, with the Dow Jones down more than 300 points for the day, the equity market began to fall rapidly, dropping an additional 600 points in 5 minutes for an almost 1000 point loss on the day by 2:47 pm. Twenty minutes later, by 3:07 pm, the market had regained most of the 600 point drop.[5]

FLASH CRASH! Dow Jones drops 560 points in 4 Minutes! May 6th 2010
foggyroad
May 3, 2013 - 7:09pm

Thank You TF.

Tough week, enjoy those frosties.

Ponies, I used to know the stable cleaner, used to pick him up hitch hikin, got some good tips.

I got friends in low places.

Garth Brooks- Friends In Low Places

I amaze myself, the pure joy that surges through my heart, gazing upon the marvel, that is the chart of one JP Morgue, that

you posted above.

A thing of the purest beauty..snuff ..snuffle., kinda brings a tear to the eye don't it?

edit. through my tears of bliss, I realized it was the stinkin Yen and not the stinkin Morgue.

We can only hope.

Robespierre
May 3, 2013 - 7:06pm

@Turd

Fri May 03 2013 - 7:05:37 pm
spot bid ask
Gold: $1468.76 $1471.70
Silver: $24.08 $24.23
Limit of $10,000 max per transaction for paper cash, & NO LIMIT on wire transfers. $1500 minimum sale for orders being shipped; (www.jhmint.com) 530 273-8175
SALE PRICE Description: On Hand WE BUY AT
% Over: $$/oz.: % at: $$/oz.:
1: 10.5% $1626 Gold 1 oz. Gold Bars Sold Out 0.0% $1469
2: 12.5% $1656 Gold 1 oz. Krugerrands, Maples, Australians, Phils In Stock 1.0% $1484
3: 13.5% $1670 Gold 1 oz. American Eagles, Buffs In Stock 1.2% $1486
4: 18.0% $1737 Gold Proof, first strikes In Stock 1.5% $1491
5: 12.0% $27.14 1/4 bag 90% Silver Coins 180 oz. $250 face Sold Out 0.0% $24.08
6: 10.0% $26.65 Silver 100 oz. bar In Stock -2.0% $23.60
7: 16.0% $28.11 Silver 10 oz. bar In Stock 0.0% $24.08
8: 16.0% $28.11 Silver 1 oz. Rounds In Stock 4.0% $25.04
9: 15.0% $27.86 Silver 1 oz Philharmonics In Stock 0.0% $24.08
10: 29.0% $31.26 Silver 1 oz. Eagles In Stock 10.0% $26.49
Prices are indications only, and are subject to current market conditions. Hours M-F 10A-5P Pacific,closed weekends,holidays and during heavy snow storms
Prices Locked AFTER we receive your wire.
· PriceBoard (v3.03) created and hosted by rkhtechnology.com - © 2013
rl999
May 3, 2013 - 7:05pm

I called it first Mam

I called all the gold first Mam, and was just trying to remind everyone. No? hmm.

I guess the theory that paper metals go to zero just prior to the moonshot is the current favorite than?

I suppose the AZ congress critters can override her veto, tho that is as likely as us getting all the zero dollar value gold. I appreciate her honesty, the metals would undercut taxes and provide incentives. For anyone on the fence that should be a good push to our side.

To bad, AZ almost made it to the top spot in my 'where do I resettle list'.

Dagney Taggart
May 3, 2013 - 6:56pm

@rl999

When GLD is 0, gold is obviously free. I expect everybody here to give me theirs for nothing in return. We all OK with that?

And yes. Those silly Utahns losing all of that tax revenue. What were they thinking? OK. So it seems like the question now is if the Arizona representatives have any recourse from Leatherhead Brewer's veto? Insanity claim perhaps? Jesus, she is so tan that she is purple. Too much drinking in the sun obviously.

May 3, 2013 - 6:48pm
Spartacus Rex
May 3, 2013 - 6:44pm
That_1_Guy
May 3, 2013 - 6:40pm

I was all set to work with

I was all set to work with Mulligan until the blowup with ChrisD. After speaking with him, I've put the project on standby.

Looking now for a different mint to make the coins and fulfill the orders. If anyone has any suggestions, please pass them along.

Spartacus Rex
May 3, 2013 - 6:39pm

Subscribe or login to read all comments.

Become member and subscribe to Turd's Vault

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 1/18

1/19 10:00 ET Mother for SecTreas hearing
1/20 12:00 ET POTUS Inauguration
1/21 ECB meeting and rate decision
1/21 8:30 ET Housing Starts
1/21 8:30 ET Philly Fed
1/22 9:45 ET Markit flash PMIs (Jan)

Key Economic Events Week of 1/11

1/11 12:00 ET Goon Bostic speech
1/12 10:00 ET JOLTS job openings
1/13 8:30 ET CPI
1/13 1:00 ET Goon Brainard speech
1/13 2:00 ET Beige Book
1/14 8:30 ET Import price index
1/14 12:30 ET Chief Goon Powell
1/15 8:30 ET Retail Sales
1/15 8:30 ET PPI
1/15 9:15 ET Cap Ute and Ind Prod
1/15 10:00 ET Business Inventories

Key Economic Events Week of 1/4

1/4 9:45 ET Markit manu PMI
1/4 10:00 ET Construction Spending
1/5 Georgia U.S. Senate election
1/5 10:00 ET ISM manu PMI
1/6 US election certification
1/6 8:15 ET ADP Employment Report
1/6 9:45 ET Markit service PMI
1/6 10:00 ET Factory Orders
1/6 2:00 ET December FOMC minutes
1/7 8:30 ET Trade Deficit
1/7 10:00 ET ISM service PMI
1/8 8:30 ET BLSBS
1/8 8:30 ET Wholesale Inventories

Key Economic Events Week of 12/21

12/21 8:30 ET Chicago Fed
12/22 8:30 ET Q3 GDP final guess
12/22 10:00 ET Consumer Confidence
12/23 8:30 ET Durable Goods
12/23 8:30 ET Personal Inc and Spending
12/23 8:30 ET Core Inflation

Key Economic Events Week of 12/14

12/15 8:30 ET Import Price Index
12/15 8:30 ET Empire State Index
12/15 9:15 ET Cap Ute and Ind Prod
12/16 8:30 ET Retail Sales
12/16 9:45 ET Markit flash PMIs Dec
12/16 10:00 ET Business Inventories
12/16 2:00 ET FOMC Fedlines
12/16 2:30 ET Chief Goon Powell presser
12/17 8:30 ET Philly Fed
12/18 8:30 ET Current Account Deficit
12/18 10:00 ET LEIII

Key Economic Events Week of 12/7

12/8 8:30 ET Productivity & Unit Labor Costs
12/9 10:00 ET JOLTS jop openings
12/9 10:00 ET Wholesale Inventories
12/10 8:30 ET CPI
12/11 8:30 ET PPI

Key Economic Events Week of 11/30

11/30 9:45 ET Chicago PMI
12/1 9:45 ET Markit Manu PMI Nov
12/1 10:00 ET ISM Manu PMI Nov
12/2 8:15 ET ADP Employment Report
12/3 9:45 ET Markit Services PMI Nov
12/3 10:00 ET ISM Services PMI Nov
12/4 8:30 ET BLSBS
12/4 8:30 ET US Trade Deficit Nov
12/4 10:00 ET Factory Orders

Key Economic Events Week of 11/23

11/23 9:45 ET Markit flash PMIs
11/23 1:00 ET Goon Daly
11/23 3:00 ET Goon Evans
11/24 9:00 ET Case-Shiller home prices
11/24 10:00 ET Consumer Confidence
11/24 11:00 ET Goon Bullard
11/24 12:00 ET Goon Williams
11/24 12:45 ET Goon Chlamydia
11/25 8:30 ET Q3 GDP 2nd guess
11/25 8:30 ET Durable Goods
11/25 10:00 ET Personal Inc and Spend
11/25 10:00 ET Core inflation
11/26 US Market holiday

Key Economic Events Week of 11/16

11/16 2:00 pm ET Goon Chlamydia
11/17 8:30 ET Retail Sales
11/17 8:30 ET Import Price Index
11/17 9:15 ET Cap Ute and Ind Prod
11/17 10:00 ET Business Inventories
11/17 1:00 pm ET Chief Goon Powell
11/18 8:30 ET Housing Starts
11/18 1:20 pm ET Goon Bullard
11/19 8:30 ET Jobless claims
11/19 8:30 ET Philly Fed

Key Economic Events Week of 11/9

11/9 1:30 pm ET Goon Mester
11/10 7:30 am ET Goon Kaplan
11/10 10:00 ET JOLTS job openings
11/10 10:00 ET Goon Rosengren
11/11 Veteran's Day. Bond market closed.
11/12 8:30 ET CPI
11/12 11:45 ET Chief Goon Powell
11/12 2:00 pm ET Federal budget
11/13 7:00 ET Goon Williams
11/13 8:30 ET PPI
11/13 8:30 ET Goon Bullard
11/13 10:00 ET Consumer sentiment

Forum Discussion

by mrcic, 1 hour 14 min ago
by scoremore, 2 hours 21 min ago
by canadapleasure, 8 hours 48 sec ago
by scoremore, Jan 19, 2021 - 10:56pm
randomness