Gradual Rally Into Year End

52
Mon, Dec 21, 2015 - 12:13pm

"Gradual rally into year end", along with "sell the rumor, buy the news" regarding the Fed rate hike, has been our mantra since we saw that November price smash coming back in October. So far, its sure seems like it's all coming along as planned.

Metals prices are UP again today and gold is now HIGHER than it was when the FOMC rate decision was announced back on Wednesday. Uh-oh. This has to be making some of the big Spec shorts more than a little nervous.

So, whaddayathinkathis?

Perhaps more importantly, how about this?

And what if we looked at it this way?

So, 80 and 90 become pretty important this week. It's certainly no coincidence, therefore, that the high of the day (so far) in the Feb16 gold is 79.80. If we can get through there and head off to tackle 05 before the end of the year, our plan of a decent January rally will really begin to take shape.

And it's not just gold. Silver, too, is now ABOVE where it was prior to the FOMC fedlines:

So, think of this from the perspective of a Spec short...at least those shorts that are actually held by thinking, logical human beings. You've followed gold all the way down from 80 in late October, in a plunge that was "caused" by the expectations that The Fed was finally poised to raise rates. On October 27, one day before the October FOMC that The Banks used to start the ball rolling, a CoT survey was taken and it looked like this:

Large Spec: Long 225,985. Short 68,551. NET LONG 157,444 contracts

Small Spec: NET LONG 8,404 contracts

Gold Commercials (Cartel): Long 138,770. Short 304,618. NET SHORT 165,848 contracts

Compare those numbers to the CoT from last Tuesday, one day before the December FOMC that finally produced the first rate hike in nine years and the one which had been promised almost since the beginning of QE3 in October of 2012:

Large Spec: Long 155,934. Short 142,278. NET LONG 13,656 contracts

Small Spec: NET SHORT 5,393 contracts

Gold Commercials (Cartel): Long 151,015. Short 159,278. NET SHORT 8,263 contracts

So...

If over the past six weeks...

You're a Spec short (large or small)...

At what point do you begin to get nervous about your position?

The Fed has hiked rates just as you were told they would. But you were also told that this would cause gold prices to fall even further. But they haven't. Instead, after falling initially, they've completely reversed and are how HIGHER than they were before the news back on Wednesday. "Oh crap", you say, and you begin to cover. Not so much at first as you're hoping that this is just a simple dead cat bounce. But then gold move UP through 90. Does this make you even more nervous? How about 05 and the 50-day moving average? Would bursting through there cause you to not only buy to cover BUT also buy to move long?

This is how it works, my friend. And this is why I've repeatedly told you to expect a gradual rally into year end and then a strong rally in January. And this is why I bought that small collection of call options for expiration in late January.

And what is THE KEY POINT in driving this "unexpected reversal" in gold? Go back and look at that CoT data. While price was falling from 80 to 60, the freaking Commercials covered an incredible 145,340 shorts. That's 14,534,000 ounces of paper gold obligations that they were able to buy back. If you figure that, on average, they made at least /ounce on the "trade", that's just north of one billion freaking dollars they made by shorting and capping in October and then covering the contracts back up in November/December. Yes, The Bullion Banks work at the behest of The Central Banks in managing and maintaining the gold price. But that's just in The Big Picture. For the day-to-day, they make A LOT of freaking money in the process of doing it, too. It's good work if you can get it and The Banks will do everything they can to protect this CASH COW.

Again, this is why we hope/pray/plan for the day when this entire fraudulent fractional reserve bullion bank pricing scheme comes crashing down. Besides the obvious economic disparities caused by the manipulation, how many untold billions of dollars have been stolen from "regular" investors and traders over the years through this criminal control and manipulation of the paper markets?

What will likely happen now and in January? All of the Spec short-covering and buying will be absorbed by The Banks through brand new short-selling. The Spec NET LONG position will expand as will The Commercial NET SHORT position. Will the "market" begin to break this time, with a higher high and an UPward resolution versus The Nemesis Line? I don't know. We'll have to wait for January and February to find out. In the meantime, however, I am completely comfortable with the forecast made back in October, well before this current selloff began...That, after bottoming in early December, gold (and silver) will gradually rally into year end and then accelerate this move in January. What happens next is anyone's guess.

TF

About the Author

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

  52 Comments

bikerdoc
Dec 21, 2015 - 4:01pm

What is going on now?

https://www.rt.com/news/326563-kerry-russia-syria-ukraine-libya/

What is going on now? I thought they have agreed Assad can stay.

The Humiliation Is Complete: Assad Can Stay, Kerry Concedes After Meeting With Putin

https://www.zerohedge.com/news/2015-12-16/humiliation-complete-assad-can...

s1lverbullet
Dec 21, 2015 - 4:05pm

Obvious ramp job right before the close

Bastards. There was no accompanying move in the USDJPY or anything else. Just an obvious hit job to to keep the indexes from closing red. How else do you explain a move like that right before the close?

That's manipulation 101 in my book.

canary
Dec 21, 2015 - 4:11pm
MiningJunkie
Dec 21, 2015 - 4:18pm

Best $10/month on the planet

Good work, Craig.

gold slut
Dec 21, 2015 - 4:39pm

@ s1lverbullet & canary

I have seen this exact same thing a good few times over the last few months. I think it is called QEHidden...

QE is never going to stop... ever... until it all blows up. Simple rule, " are they quantitative easing??" Answer = "has the system blown-up yet?" Answer 'Yes or No'. QE (seen or unseen forever).

Angry Chef bikerdoc
Dec 21, 2015 - 4:46pm

Assad

This is all part of the Greater Israel Project and how Oil and Energy is going to be settled amongst countries off the USD. The USA, London, and Wall St and Israel is not going to stop until Assad is gone. As long as Assad is in power the Greater Israel Project and the invasion of Iran won't be successful. So we'll tell Russia and the World anything they want to hear but since we're the biggest liars on the planet nobody really believes us. So since Turkey has been exposed as paying for ISIS Oil and Israel has been exposed as the buyer of ISIS Oil. And Putin has shown the Countries supporting ISIS...USA, Israel, Saudi Arabia, Turkey, UAE, Britain. That is what is going on. We'll tell Russia one thing but we'll backstab them if not directly then thru our proxies.

Angry Chef
Dec 21, 2015 - 4:47pm
lakedweller2
Dec 21, 2015 - 5:08pm

@angrychef

So are we going to bomb it or not?

tyberious
Dec 21, 2015 - 5:13pm

Stick A Fork In The United

Stick A Fork In The United States

December 20, 2015Financial Markets, Market Manipulation, U.S. EconomyFed funds rate, FOMC meeting, ISIS

The tragedy of our day is the climate of fear in which we live and fear breeds repression. Too often sinister threats to the Bill of Rights, to freedom of the mind, are concealed under the cloak of anti-Communism. – Adlai Stevinson, Speech to the American Legion Convention, 1952

Today the climate of fear being fomented is concealed under the cloak of terrorism/ISIS. Severe repression is coming. The policies and laws implemented since the inauguration of Bush 2 in 2000 have been slowly strangling the middle class, financially and legally. The affects of the latter are about to become more apparent and more painful for everyone.

The American public has stood by passively in complete acceptance of the horrendous acts of brutality, savagery and wealth confiscation thrown at it since the passage of the Patriot Act. We stood by and watched as our Government implemented an illegal attack into Iraq predicated on blatant lies, conducted unimaginable acts of torture on illegally detained prisoners of “war,” bombed weddings and funerals (Hillary Clinton: “oops, my bad”) – the list seems endless. The U.S. Government shamelessly throws propaganda in our face which turns the truth inside-out. Everyone else is the bad guy. The U.S. is exceptional and therefore entitled to trample over the rest of the world.

Perhaps the most egregious crimes have been right under our own noses, where the elitists have been openly wiping the last crumbs of middle class wealth off the table and into their own pockets. You really think your retirement fund or pension money will be there when you retire? That’s laughable.

I’m still trying to sort out and understand the exact reason why the Fed decided to push up the Fed funds rate from zero to not-much-more-than-zero. What you might of missed is that the Fed raised the interest it is paying to the Too Big To Fail banks who have $2.4 trillion in cash given to them from QE that is earning interest in the Fed’s “Excess Reserve Account.” The rate was raised from .25% to .50%, effectively doubling the amount of free cash flowing into the banks from their Excess Reserve largesse. On the other side of this, consumer borrowing rates were immediately raised.

The only conclusion that can be reasonably drawn by the Fed’s move is that the noose described above – put in place quietly over and with no resistance over the last 15 years – is now being tightened.

https://investmentresearchdynamics.com/stick-a-fork-in-the-united-states/

AlienEyes
Dec 21, 2015 - 5:27pm

@ tyberious

So, if I understand correctly.....I am soon to be very rich and the feds are going to try to kill me to get my PM's....ah....that were lost in a tragic boating accident.

SteveW
Dec 21, 2015 - 5:36pm

Sochi speech

I'd just like to second the posting Joseph Warren made yesterday about Putin's Sochi speech in October 2014. It set the background for Russia's involvement on the world stage and their goals. The address Putin made at the UN follows through on this policy, particularly regarding their attack on ISIS. Everyone should read this speech.

"this is probably the most important political speech since Churchill's “Iron Curtain” speech of March 5, 1946."

https://cluborlov.blogspot.ca/2014/10/putin-to-western-elites-play-time-...

Now if only we knew what was really discussed (explained) at last week's meeting between Kerry, Lavrov and Putin that removed "regime change" from the US goal for Syria.

boomer sooner
Dec 21, 2015 - 6:02pm
Angry Chef lakedweller2
Dec 21, 2015 - 6:09pm

Bomb What ? Syria ?

I suspect that the exposure that Russia has brought forward showing who is funding ISIS. Including the countries and individuals may be enough to hold things off this powder keg for awhile. We'll likely see a very large false flag with lots of innocents dying within a few weeks and blame it on ISIS so they can try to get this War going. And it parlays into my belief that the reason for all these fake shootings and "O's" desire to enact strict gun Laws and confiscation is because the next crash is going to make 2008 look like a picnic. And when American citizens start losing their life savings in the casino, they're likely to start looking at Wall St. and they're local Congress Critter as the culprit. You certainly don't want people pissed off and with guns in their hands in that scenario.

rxman
Dec 21, 2015 - 6:47pm

Foreign policy backpedal

https://www.whatdoesitmean.com/index1963.htm

Obama “Surrender” To Putin Throws US Media Into “Complete Meltdown”

After presenting to Secretary Kerry the Federations entire portfolio of evidence regarding which nations, and intelligence services, were supporting the Islamic State, this report continues, and turning over to the Americans the secret emails of both former US Secretary of State Hillary Clinton and present US Defense Secretary Ash Carter obtained by the Federal Security Service (FSB) from these two US officials private unsecured emails, the Obama regime immediately “surrendered” and announced the following historic moves towards what may be peace in this region:

rxman

rxman
Dec 21, 2015 - 6:55pm

Hillarious's Emails Unprotected like in sex

https://townhall.com/tipsheet/guybenson/2015/10/01/new-hillary-emails-n2059221

Confirmed: Hillary's Email Server Was Targeted by Russia-Linked Hackers

You'll recall that intelligence experts have been stating with virtual certainty that foreign agencies, proxies and entities were able to penetrate Hillary Clinton's improper, private email server on which she conducted all of her official business. Prior to being protected by woefully insufficient means, her server was reportedly totally unsecure -- no safeguards at all -- for approximately three months.

rxman

lakedweller2
Dec 21, 2015 - 6:56pm

@angrychef

Are we going to bomb Agrabah?

JackPutter Guardian of the blind
Dec 21, 2015 - 7:00pm

@ Guardian Ham-Key is a codeword

I think the Ham-Key is the bone that's left over for soup the day after Christmas. (jk)

climbthathill
Dec 21, 2015 - 9:20pm

Hedge Funds Ripe for Fleecing

A number of hedge funds have built up quite large short positions.

Now, imagine you are a looting bank and you want to fleece them... Thanks to Aunty Janet conveniently increasing the interest rate you finally have a little headroom to let gold and silver prices rise... but not too much because you don't have enough physical if too many people start standing for delivery... but enough to shakedown the hedge funds.

Fred Hayek
Dec 21, 2015 - 9:50pm

The bullion banks don't make money on wash trades

Turd, you make an excellent point about how the bullion banks, at least officially, profit tremendously by their ability to crack the whip whichever direction they choose whenever they choose.

But, if JP Morgan's activities at the Comex are largely or nearly all wash trades then they don't really make any money, do they? You and Bill Murphy and others have talked about the two whistleblowers who gave the CFTC all the information an honest regulatory agency would need to take JPM to the fucking cleaners for using a series of offshore accounts with which to trade back and forth. The hypothesis of a giant wash trade market This also kind of fits the official story at the Comex in August where gold was transferred from JPM customer eligible accounts to JPM house, registered then officially "delivered" then, somehow, like cake that was eaten and yet you still have, given back to JPM customer accounts.

Here's my question, Turd, or series of questions. Maybe this is pointless, because JP Morgan can tell any lie it wants in its public statements. But is there anything in JPM's quarterly statements that jibes with it making tens or hundreds of millions of dollars from illegally screwing with the gold and silver markets? JPM and Goldman have open declared that they had zero losing days in the stock market for some quarters. Does JPM declare how much it made in the futures markets and specifically in the gold and silver futures market? And if they do and they say they don't make anywhere near as much as they're actually making if the Comex doesn't consist of mostly wash trades then doesn't this further corroborate that hypothesis?

Angry Chef lakedweller2
Dec 21, 2015 - 10:42pm

Yes...

And we're going to steal all they're magic carpet technology so the Russians don't get it first....

bikerdoc Angry Chef
Dec 21, 2015 - 11:47pm

@angrychef

Anyone who can lead that 30% idiot voters will win the election. It shouldn't be so difficult. LOL

Craig, you should run 2020 election. We will support you. I think many of your subscribers regretted that they talked you down for this 2016 election. haha

Fred Hayek
Dec 22, 2015 - 9:05am

Hi, Fred

I recall a couple of years ago that Blythe made a pretty big deal out of how many billions her commodity division had made so that information must still be published.

With regards to wash trades and whatever opposing positions a bank might hold in an offshore account, we can't be sure. All we have to work with is what the CFTC reports.

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