Another Tradable Low Coming

Wed, Dec 6, 2017 - 11:33am

The divergence from the USDJPY correlation illuminates The Bullion Bank effort to smash price below the 200-day MA and flush out as many Spec longs as possible before the next rise. We saw this is May and in July and we are seeing it again now.

I have no doubt that what you are about to read is correct.

Since last Monday, when the USDJPY was forcibly rallied from below 111, the total change in this all-important HFT driver is 130 "pips"...from 110.90 to 112.20. After discovering and then closely following the yen-gold correlation for over three years, we've learned that a one point move in the USDJPY generally correlates to a $10-12 move in the price of Comex Digital Gold. The current 130 pip move should thus translate into roughly a $15 drop in Comex gold. Considering that price was $1298 last Monday, the current price should be around $1283. Instead, I have a last of $1267. Why the 2X difference?

It's simple. Over the past several days there has been a concerted and coordinated effort to rig price below the 200-day moving average. And why have The Banks taken this action? In order to engender the same type of Spec long liquidation seen in May and July of this year and displayed on the chart below from October 24:

The CoT survey of last Tuesday gave two alarms that allowed The Banks to trigger this current action.

  1. The Large Spec NET long position in Comex gold had reached 224,417 contracts. This was the highest level in 90 days.
  2. The Large Spec GROSS short position fell to just 62,967 contracts. This was the lowest seen since 9/6/16 and thus the second-lowest level seen since 2012.

Judging that the CoT was ripe to be flushed, The Banks took action, striking yesterday at 9:07 am EST. Note the 12,000 contract dump that finally shoved price well-below the 200-day. The selling action that took price another $10 lower in the three hours that followed was brought upon by Spec long liquidation upon seeing price fall below this critical technical indicator.

Today, price continues to meander lower, even though USDJPY is down, because of this continued Spec long liquidation. Just as we saw in May and just as we saw in July.

Given the false pretenses surrounding this current manipulation, I have no doubt that another bounce and rally is both Comex Gold and Comex Silver.

Let's start with Comex Gold. Note that the May and July lows came with an RSI of near 30 and price about below the 200-day. A similar low next week would peg price near 40.

Personally, I have a hard time believing that price will fall that far before bouncing but, if it does, there's a another good reason to expect a floor there...the 200-week moving average. On three occasions earlier this year, price has fallen to this key long-term indicator and on all three occasions, price quickly reversed.

In Comex Digital Silver, the picture is just as clear. There can be no doubt that the Banks have aggressively capped CDS at it's own 200-week moving average on every attempt to move higher over the past 18 months. As you can see below, this is clearly NOT random, free, fair and natural price action:

However, another look at the same weekly chart reveals the resilience that CDS has shown every time it reached down toward . Additionally, check the massive, long-term reverse head-and-shoulder pattern that is forming:

So, quite obviously, there is another tradable low coming. Will it lead to the final breakout move toward $1400 and $22? Maybe. However, this next low is coming and why wouldn't it? Consider just this brief list that will impact the demand for gold exposure in 2018:

  • The geopolitical risk of war with North Korea, war in the Middle East and cold war with Russia.
  • The inverting US yield curve leading to undeniable recession.
  • Fed promises of more QE and even negative rates in the next slowdown.
  • Political risk in the US as calls grow for impeachment and the pending 2018 elections.
  • Continued de-dollarization in China, Russia, the rest of the BRICS and the Middle East.
  • US government shutdown and political discord

Given all of the uncertainty that lies ahead for 2018, prices for Comex Digital Metal are headed higher not lower. Prepare now for your next tradable opportunity in both Comex metals and the mining shares.


About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 6, 2017 - 11:35am

Rationale for the public thread

Since we've tried to post as many public warnings as possible over the past six weeks, it seemed only fair to make this post public, too.

Dec 6, 2017 - 11:43am

X22 Report & Jim Willie


Dec. 6 2017

1 hr 20 min

Dual Universe Of The Petro Yuan And Petro Dollar Has Arrived, It's All About To Change:Jim Willie
Mr. Fix
Dec 6, 2017 - 11:47am
Dec 6, 2017 - 11:56am

just got this photo

The current view north from LAX:

Dec 6, 2017 - 12:03pm


You took My 4th Lol Keep Stacking

Dec 6, 2017 - 12:08pm

No JBSFC last evening

The Professor was unavailable.

But be sure to listen to this, instead. In yesterday's podcast, we discussed the article from Andrew McCarthy about impeachment risk in 2018 and 2019.

McCarthy was on with John last evening. Here's the audio.

Dec 6, 2017 - 12:25pm

@Dr J

Sell before Spring if you can as land values are only going to go down. Yes winter is a hard time to sell land but if you have a nice brochure showing what the land looks like before snow then that helps. Good Luck and Keep Stacking

Dec 6, 2017 - 12:31pm

I take the F'if Winner Winner Chicken Dinner

Might as well offer fair warning from the cooler heads site.

To my way of seeing, based on living through 5 major market resets, seeing another one on the horizon, the coming E.L.E. are making markets crazier than Hannibal Lechter's pen pal Multiple Miggs. Hannibal handled Miggs. Hisssssss!

The warning signs are everywhere.

Just because every market is a One Way Market doesn't mean you need to buy a ticket

Stocks, bonds, real estate, Bit Coin; all the bullshit bourse are going to 'da moon.

Bix is hysterical "Bitcoin to $10 million so let's start mining the Grand Canyon"

Harvey Organ coming unglued over unprecedented OI. Never before seen it before.

Morgan says silver is not in short supply.

10 times a day I get fear monger missives from Bonner, Agora, Stansberry, Rickards

They're telling me the end is nigh and buy buy buy. Buy their useless rags with precious capital.

10 times a day I get offers from Vishnoi in New Delhi

Use their SEO systems to mine Bit Coin, optimize my quantum stupidity; become a home-based Amazon pimp stick.

10 times a day a breathless email tells me I inherited $27 mil from my rich Nigerian uncle

I feel so special; a front runner of the Democritization of credit, crisis, chaos.

My pain, their gain? Nope. Not a player this time.

The yield curve is puckered up tighter than a pederast at the Pelican Pay Supermax

2/30 90 BPS 5/10 21 BPS 1/30 104 BPS !?!? It's getting pretty tight at the top end.

The singularity is nigh. Bye Bye

Dec 6, 2017 - 12:34pm

The head and shoulders pattern

is probable the least reliable chart pattern

you can find them everywhere if you're looking for them

Dec 6, 2017 - 12:39pm

Getting older with a plan

Thanks Craig. I hope you receive a Christmas present of 100 new subscriptions. A tip like this is certainly worth a year's admission ticket. I am considering buying a leveraged gold or mining ETF for the ride back up in Jan-Mar. JNUG nearing single digits, again, as it has each December.

In other news, I am not liking this getting old thingy. First of all, I thought it would take longer. Sometime yesterday, I hurt my knee, causing much pain and limping for the last 24 hours. But I cannot remember twisting it or falling in any way.

Neither the wife or I could sleep well last night. So we arose at 3 am, lit a nice fire in the fireplace, and had a cup of tea on the couch while talking about our problems and planning our priorities for the coming week. We slept like babies after returning to bed at 4, oversleeping by a couple of hours this morning. We talked about purchasing acreage where we can retire, get serious about gardening, keep animals, and have room for our young relatives if they cannot make it. There is always much work to do on a farm, and my ability to do it all myself is declining. Besides, we may need someone to care for us in 25 years. Traditionally, family has taken on that responsibility until the last couple of generations. I don't expect that medicaid, social security, or the normal means of health and life-care wil exist by then. It will be up to each of us to provide for our own aging care.

My paternal grandmother held on to the family land inheritance that she had inherited from her pioneer parents. She finally sold out and lived frugally on the interest for 40 years, though she did splurge and renovate her home. Upon her death, she was worth several million. On the other hand, my maternal grandmother left their Oklahoma farm in the '30s for greener pastures in Western Colorado. She and grandpa worked hard all her life. They made a simple living but never found found prosperity. There was no inheritance when she passed away, living in a rented 1 bedroom apartment. Each grandparent was cared for by my aunts. But one always had options and the other did not.

So, I am spending the autumn of my career accumulating various forms of wealth--hopefully forms that cannot be stolen, litigated, or legislated away from our family. A nice stack of gold, some good (remote) land, and a viable gardening system are first on our list. We have prospered in real estate as our metals holdings have languished. We are expecting this real estate appreciation to give way to another crash anytime now... so far so good. but we will be quick to sell out when we see signs that the top is in... Planning on selling two properties this Spring either way.

Well, that's life in Central Arizona from my office desk this morning.

Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

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Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Key Economic Events Week of 11/4

11/4 10:00 ET Factory Orders
11/5 9:45 ET Markit Services PMI
11/5 10:00 ET ISM Services PMI
11/6 8:30 ET Productivity & Labor Costs
11/6 Speeches by Goons Williams, Harker and Evans
11/8 10:00 ET Consumer Sentiment
11/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
11/1 9:45 ET Markit Manu PMI
1/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

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