Targeting the 200-Day

Only the willfully blind fail to see.

Tue, Apr 16, 2019 - 10:33am

Today's action removes any remaining doubt regarding the Bank plan to break the price of Comex Digital Gold and bring it all the way down to the 200-day moving average.

Having now seen this play out again today, it is all crystal-clear for anyone not willfully blind. POSX is UNCH. Bonds are UNCH. CNY is UNCH. CDG is smashed. The same situation as yesterday and the same result.

And as you can see below, ever since the March FOMC minutes of last Wednesday, the 8:30 ET volume spike and smash has been a regular occurrence. Keep in mind that Comex trading resumes each day at 8:20 this is not simply opening tick volume.

As noted last Wednesday, price was capped within 15¢ of the 50-day moving average in the hours before the March FOMC minutes. The initial target was then a break of the 100-day which came on Thursday. When subsequent selling failed to decisively break the 100-day on Friday and Monday, sufficient firepower was deployed today to make it happen with no room for doubt.

So now the focus turns to the obvious target of all this...the 200-day moving average. A breach of this level would lead to an automatic and instantaneous flush by the HFTs that are long Comex gold. Once this key technical level is broken, these pre-programed machines will liquidate longs and some will even switch to short.

For an example of this, see the chart of Comex Digital Silver below. Note how the selling accelerates once the 200-day is broken to the downside.

And this type of selling capitulation and CoT washout is very clearly the aim of the market-making Banks that dominate the Comex. As of last week, the Large Specs in Comex gold were still NET long 105,400 contracts. While this is paltry compared to the 316,000 they were NET long in the summer of 2016, this is still way up from the NET flat and even NET short positions we saw back in October and November of last year.

So, how do The Banks cover their own shorts by inducing The Specs to sell? They break the 200-day...and they can even make this happen counter-intuitively to the "fundamentals"...forcing the supposed experts at shitco and the WGC to come up with all sorts of convoluted rationale for the selloff.

So, anyway, here's the chart that we'll watch the rest of the week...Fed fundamentals, physical demand and seasonality be damned.

More later.


About the Author

turd [at] tfmetalsreport [dot] com ()


Apr 17, 2019 - 10:38am

Welcome Back

Welcome back TF, although I wish you would be reporting better sentiment!

I am a new member here and partly on your latest post have reduced my exposure to silver mining stocks by 33%. The last thing I want at this stage is a hefty margin call!

Joseph Warren
Apr 17, 2019 - 1:19am


not ‘sadden’ in the above post. I just noticed it now. I’m not quite sure how that error happened. I usually blame my iPhone spellchecker. It can’t defend itself.

Apr 17, 2019 - 1:18am

To clarify...

Not advocating anyone cheat their taxes I was trying to point out most people don't consider tax implications when selling their metal.

My understanding was transactions under 10k are not reported and that commonly stackers will stay below that number to avoid taxes.

Joseph Warren
Apr 16, 2019 - 7:05pm

Tom Woods on Notre Dame

For Doc J & all those others sadden by what happened to that great cathedral :

“ The terrible fire at Notre Dame Cathedral in Paris has evoked sadness and horror among civilized people everywhere, and is one of those moments when we should, for a moment, set aside libertarianism and ideology, and simply be human.

It doesn't matter whether the people in question would have worshiped at Notre Dame, or whether indeed they worship at all.

They are capable of recognizing beauty when they see it, and of understanding when something is meaningful, even if they may not be able to articulate that meaning themselves.

The Church's physical structures have endured great devastation in numerous historical periods, to be sure, and in fact the monastery at Monte Cassino, the motherhouse of the Benedictine tradition, was sacked by the Lombards in 589, pillaged by the Saracens in 884, razed by an earthquake in 1349, pillaged by French troops in 1799, and wrecked by the bombs of World War II in 1944 -- though each time, the monks returned to rebuild.

The cathedrals, however, occupy a special place in the European heritage. One art historian describes them as "the greatest accomplishments of humanity in the whole theatre of art."

The more you learn about them, the more interesting and meaningful they become.

Thus at the time that Gothic architecture was evolving from its Romanesque predecessor, more and more Catholic thinkers were becoming persuaded of the link between mathematics -- geometry in particular -- and God.

Saint Augustine had made repeated reference to Wisdom 11:21, which describes God as having “ordered all things by measure, number, weight.” This idea became common currency among a great many Catholic thinkers, particularly those associated with the great cathedral school at Chartres in the twelfth century.

Ever since Pythagoras and Plato, in fact, an important strain of Western thought had identified mathematics with the divine. For mathematics was unchanging, as well as absolutely true at all times and in all places.

At the cathedral school at Chartres, explains Robert Scott (about whom more below), scholars “believed that geometry was a means for linking human beings to God, that mathematics was a vehicle for revealing to humankind the innermost secrets of heaven. They thought the harmony of musical consonance was based on the same ratios as those forming cosmic order, that the cosmos was a work of architecture and God was its architect.” These ideas led builders “to conceive of architecture as applied geometry, geometry as applied theology, and the designer of a Gothic cathedral as an imitator of the divine Master.”

Augustine, whose De Musica would become the most influential aesthetic treatise of the Middle Ages, considered architecture and music the noblest of the arts, since their mathematical proportions were those of the universe itself, and they therefore elevated our minds to the contemplation of the divine order.

The windows of the Gothic cathedral and the emphasis on light as it flooded these enormous and majestic buildings are perhaps its most salient characteristic. It makes sense, then, that the architect would have appreciated the theological significance of light. Augustine had conceived of human beings’ acquisition of knowledge in terms of divine illumination: God enlightens the mind with knowledge.

This idea of God pouring light into the minds of men proved a potent metaphor for architects in the Gothic tradition, in which physical light was meant to evoke thoughts of its divine source.

The Scholastic frame of mind has sometimes been credited with giving rise to the Gothic cathedral. The Scholastics, of whom Saint Thomas Aquinas was the most illustrious example, were intellectual system builders. They sought not merely to answer this or that question, but to construct entire edifices of thought. Their summae, in which they sought to explore every significant question pertaining to their subject, were systematic, coherent wholes, in which each individual conclusion related harmoniously to every other -- just as the various components of the Gothic cathedral work together to create a structure of remarkable internal coherence.

You don't have to know any of this to be awed by the cathedrals.

In fact, one of the great studies of the Gothic cathedral was written by -- of all people -- a Stanford University sociologist, Robert Scott, who fell in love with Salisbury Cathedral in England. He knew absolutely nothing about it. But his love for that magnificent structure led him to immerse himself in the culture that produced it -- its intellectual, social, and religious life.

I don't believe he is a Catholic. But he tells his readers, "I warmly welcome you to join me in the quest to comprehend these awesome, mysterious, and magnificent works of humankind."

The cathedrals are flesh-and-blood examples of what we mean when we speak of the Western tradition. We have no shortage of people who say they defend the West. We have a great shortage of people who have immersed themselves in that heritage to the point that they really and truly know it.

What a shame. A true garden of delight awaits you, should you ever care to look. “

Texas Sandman
Apr 16, 2019 - 5:12pm

also did a full tilt on this one...

>This, is also assuming, you're not going to sell more than 10k of your metal at any one place as a way to avoid taxes. But, if you sell more than 10k and pay all your taxes, how much do you really stand to gain? Will that gain, with taxes including, make you rich?<

You owe taxes on gains no matter how much you sell. I don't know where the "10K" came from. If you're looking to fly under the radar with the IRS, you need to understand what will get you reported to treasury and what won't. I can go to my LCS or anywhere and sell monster boxes of silver eagles or phils until the cows come home and it won't generate a report to treasury. On the other hand, selling more than $1000 face value in junk silver will. So will selling 1000 ozs of silver in bar form. I can sell gold kangaroos all day and not generate a report. But selling 26 Krugerrands will do the trick. My friend, while the gist of your post was reasonable, you need to do some serious study on the issues as far as what's what & who's who here.

It all comes down to an antiquated law. Stay within the lines and you won't wind up on the IRS hit parade, which you should really want even if you are scrupulously paying taxes on gains.

Texas Sandman
Apr 16, 2019 - 4:46pm


I disagree with this:

"But, what are the odds on that, honestly? Let's just say for a moment control of the price is lost like it was in 1980 and 2011 and the price reaches those crazy levels. How are you going to sell ALL that physical metal? Do you really think youre just going to walk into a pawn shop and do it? How quickly do you think you can sell to online retailers? Do you really think either party will give you fair value if the price rise is as extreme as it was during 1980 and 2011?"

I don't know what the situation was like in 2011 because frankly, I wasn't looking to sell my silver even at $50 then. You see, I bought in 2008 because of the money-printing shenanigans. And I made a decision then short of my suddenly getting destitute I'd only sell *** IF THE REASONS FOR WHICH I BOUGHT BECAME INOPERATIVE ***. Being a rather disciplined, compulsive, yes, downright anal guy, I have not become destitute and I've seen nothing like that since. In fact, the reasons for which I bought are even more true today than they were in 2008-2009, so I only BUY. I don't sell. But here I digress. I was active in the precious metals markets during the 1980 peak, though as a young newly minted software engineer for Schlumberger, my means weren't what they are today as a physician. I bought down around $8 when I saw a breakout on a chart and sold way too early at $13, though for a nice gain. I went to my safe deposit box with these big white paint tubs, pulled the 100 oz bars out of my safe deposit box and trucked them down to the coin shop in the villarge by Rice U. in Houston where I'd been a student. Put them on the counter, sold on the spot and walked out with a check. At the peak, the public is involved buying everything in sight. Later, right before that bubble blew, people were lined up around the block at that very same coin shop, not to SELL, but to BUY. When the time comes, when the new bag holders are in the faces of the LCS owners, screaming "GIMME THAT BAG!!!", selling won't be much trouble at all. That's how it works. JMHO.

lakedweller2Texas Sandman
Apr 16, 2019 - 4:45pm


Great school.

Island Teal
Apr 16, 2019 - 4:41pm

Consultant at Goldcorp

Anybody notice the hiring of Zinke as a "Consultant"

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Apr 16, 2019 - 4:03pm

The reason I stack is clearly found in the 'other' column

Takes a bit of reading but you will encounter the 'other column':

Hamilton: "I've A Bad Feeling US Is Following In The Footsteps Of Bernie Madoff"

Texas Sandman
Apr 16, 2019 - 3:58pm

too much, too fast

Just bought 1000 shs NUGT in my 401K. Am prepared to double that position if this continues in coming days.

Silver hardly budged. I'm calling BULLSHIT.

So be it.

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