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Wrapping UP

204
Wed, Jul 20, 2011 - 3:29pm

Before we wrap up today, let's put the finishing touches on yesterday.

The chart below was posted in the comments last night. It pretty much tells you all you need to know about the Cartel's raid in silver yesterday. Overwhelming evidence such as this can only lead you to two conclusions about those that deny the existence of The Evil Empire and their detrimental effects/actions:

1) They are hopelessly naive and uninformed and therefore have no credibility. Frankly, these people should refrain from commenting on the PMs altogether and should stick to something about which they have some expertise.

OR

2) They are simply a paid agent of disinformation. Get away from these people. Fast.

large_screen_shot_2011-07-19_at_3.29.26_pm_0.jpg

Whether the intention was simply to trim price or start a cascade like early May, it doesn't matter. Open interest in silver is currently 25% less than it was in late April. Once the waterfall starts, there simply are not enough weak-handed longs around to promulgate the decline. At this stage of the nascent rally/recovery from May-June, The Cartel can only hope to occasionally frighten. The likelihood that they can start a massive C/C/C (Cartel/Comex/CME) long liquidation similar to May is minimal.

And don't forget to make a mental note of the timing of the raid yesterday. By delaying until after the Comex close, not only did The Cartel make their transactions in the thinly-traded Globex, thus having greater effect, they also were able to place 50,000 new shorts that won't show up on this week's CoT report! They've now got until next Tuesday to cover their tracks. Definitely all part of their devious master plan.

OK, enough of that. Onto today. Very nice FUBMs have left us with a very clear technical picture. The charts below are self-explanatory. Yes, we could drop again as Blythe and The Monkeys are certainly capable of anything but I don't think we will. I think, instead, we'll be back above 1600 and 40 before the close on Friday.

paper_7-20pmgold.jpgpaper_7-20pmsilv.jpg

Below is a chart I lifted from Trader Dan. It's such a great chart that you should print it and keep it as a roadmap for the move until year end. (By the way, Dan still posts on his blog from time to time so you should be sure to check it daily.)

paper_7-20pmgolddan.jpg

I've mentioned repeatedly that strength in crude and copper will continue to reinforce the bid in the PM pits and nothing has changed in that regard. Despite yesterday's nonsense, ole DrC continues to impress and crude seems extremely resilient, much to the collective chagrin of The O'bottom Regime.

paper_7-20pmcop.jpgpaper_7-20pmcrude.jpg

Lastly, I found this last night through another site but I don't remember which one. I don't know who this guy is and, frankly, I don't trust anyone from Colorado. However, Harvey likes to cite his work and this missive is certainly compelling.

https://truthingold.blogspot.com/2011/07/what-to-look-for-in-advance-of-big.html

"MONDAY, JULY 18, 2011
What To Look For In Advance Of The Big Collapse
I'm a bit short on time today and a commenter asked my views in the comment section about what "signs" in the market to look for in order to try and anticipate a systemic/dollar collapse in this country. He was referencing a view by "Another," an anonymous individual who started writing views on the global financial system back in the late 1990's. This person and a "friend of Another" were mapping out the demise of fiat currencies and the eventual collapse of the global financial system long before most of us even knew how to spell "gold" and "banking cartel." Anyway, you can read the inquiry comment in the comment section of yesterday's post and I kind of like what I wrote in the comment section in response, so I polished up that response and decided to post it:


I'm not sure if there will be definitive signs that will tell those watching for them that "it's over." Right now everything is in a slow-motion state of collapse dating back to probably the 1970's "oil crisis," but really to the closing of the gold window. Since then, starting with the junk bonds/S&L crisis, we've have successive bubbles and blow-ups, each one getting bigger and more vicious - each one a catalyst to transfer massive wealth from the middle class to the political and business elite.

I truly believe Clinton could have turned things around after the Long Term Capital collapse, but Rubin and the other puppet-master bankers/oil barons/defense industry magnates already had their hooks too deep into the Oval Office. Ironically, and I'm not the only one out "there" to remark on this, it was during the populist Clinton's Presidency that the extreme and blatant corruption we see on Wall Street and DC seems to have accelerated. Hell, Clinton himself barely had a pot to piss in when he entered the White House and now he's worth $100's of millions. I don't recall that ever happening to Harry Truman...You think that Clinton "self-made" that wealth? LOL

In terms of predicting "THE Event," I dunno. How many really wealthy people in Germany with billions in marks in the bank on November 13, 1923 thought they would wake up on November 14 to see their paper wealth literally incinerated? Surely "insiders" were looking for signs that the mark would collapse. The revaluation was 1 billion to 1. On November 13, 1923 if you had a billion marks in the bank when you went to bed, the next day when you woke up you had 1. Although the process of collapse is accelerating, the actual "Event" historically seems to happen all at once. And you have to be prepared a long time in advance in order to set up your plan of protection and you have to be prepared for the insanity to drag on a lot longer than you truly believe that it can.

I think this situation has more time to play out and I've stopped putting out timeframe predictions. For sure our country won't last as it is until 2020, probably not even 2015. But then again, I thought in 2002 that where we are now is where would be by 2006/7. They have run out of assets to bubble up, so now I think you'll eventually see wealth confiscation via retirement fund confiscations in the form of exchanges for "Government guaranteed" Treasury annuities. In fact, I said back in 2002 that our system would not collapse until the ruling elite (bankers/politicos) had swept every last crumb of middle class wealth off of the table. That "last crumb" of wealth most people have left is their retirement assets. We will also see the Government implement stronger totalitarian control over the citizens (that's happening already).

Think I'm nuts? The concept of the Government taking over the retirement fund system has already been discussed in Congress, including an academic presentation to Congress back 2008. They'll need those assets to pay for the Government spending and they'll issue Treasury bonds in exchange. Most States have already done that with State employee pension plans and the Federal Government has already done that with the funds in the Social Security Trust and they started doing that a few weeks ago with the Federal pension assets (to the tune of a couple hundred billion). Expect that gameplan to eventually expand into all retirement asset plans public and private. As they lose control of the ability of the global financial system to finance the Government and lose control of the value of the dollar and the value of precious metals, the Government will impose its political will more forcefully on the citizens. The ability to make all of this happen has already been legislated via the Patriot Acts (1 and 2), the Homeland Security Act and the Detainee Bill.

The only way to avoid this is to leave the country, which people are doing in record numbers every year. Owning gold and silver will help a lot if you stay here, because you want to move as much as you can out of paper assets and out of "the system" and into gold and silver and out of the Government's ever-expanding "reach." We could well see the black market scenario to which Another refers because once the dollar/system actually collapses, there won't be much gold/silver for sale, as those who don't have it but have goods to offer will only accept gold/silver in exchange and those who do own it will hold onto it to trade for things they need. In the best-case scenario after the collapse, a new system of gold/silver-backed currency will quickly fill in the "vacuum" left by the collapse and that will help restore a more "normalized" system of commerce. The worst case scenario? Read "The Road" by Cormac McCarthy.

Before that, I bet we see at least $10k gold and $500 silver..."


That's likely it for today. Keep the faith. We are winning! TF

About the Author

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

  204 Comments

· Jul 20, 2011 - 8:37pm

I can totally see the "I really don't enjoy CU trips as a visiting fan" thing, as an Aggie I don't like CU either. But I once asked a Cornhusker football player what the "N" on his helmet stood for, and he said "Knowledge"...

That wasn't Mr. Hyde, was it? ;-)

Double Bogey · Jul 20, 2011 - 8:52pm

I was hoping the beautiful frosty 2010 Kookaburra I picked up today would help me cool off.

It didn't, but I feel better. :)

buffalo3 · Jul 20, 2011 - 8:53pm

Now they are worried.

maravich44 TheGoodDoctor · Jul 20, 2011 - 8:57pm

This site might be a little off the beaten path but has some interesting observations. I have long been a John Lennon fan and he always struck me as a major Pacifist. I recently watched a documentary on him from the 70's concerning Vietnam and he had nothing to gain and everything to lose in it all. He had huge balls just to 'Speak Up'. Anyway it certainly gives me cause for reflection.

¤ · Jul 20, 2011 - 8:57pm

Geithner and the Bernank as kids>

Stymie and the Fidgets
ewc58 · Jul 20, 2011 - 9:08pm

Just check out the byline under the title of his blog:

Armageddon was yesterday - Today we have a serious problem

Endzeit scone · Jul 20, 2011 - 9:10pm

That's a very interessting observation in the video with the 50k contracts in one minute.

I'm trading silver futures myself. Therefore i have a bit of experience. IMO the explanation and interpretation is totally wrong (but correct that it is a completely manipulated market):

1. The usual market depth at +-5 cents is usually between 30-200 contracts, depending on market activity.

2. This enourmous volume of 50k contracts that was traded in one minute, therefore needs a buyer and a seller for that amount appearing at the same time. Otherwise if someone wants to sell 50k contracts at a certain price, it would take hours, until the bids can eat away that amount of contracts in the ask.

So here is my explanation, of the activity:

Let's look at the increased volume in the waterfall period in the minutes before the 50k spike. With this increased volume of sold contracts, the price was brought down.

And i'm convinced, this selling wave was not done by a long holder liquidating, but by a short-seller. Why? Because a long holder who sells, does not want to destroy the price. He wants to achieve the best price and therefore he lets his software sell in small amounts over a longer period of time with limits. But which seller profits from a going down price? A short seller ofcourse. Therefore it is logical to assume, that the wave downrun was achieved by shortselling of contracts and not by liquidating of long positions.

I also want to note, that it is correct, that the 50k contracts @40$/oz equal to 10bn$, but that's not the amount that the trader needs. The margin requirement for a silver contract is around 16k$. That means there were "only" around 800m$ necessary on each side for this raid.

Ok. Now comes the interessting part:

If we integrate the volume in the waterfall-decline, i wouldn't be surprised to get a number of around 50k contracts...

The short seller, who brought the price down, needs to buy back the contracts. But if he would buy back 50k contracts in the small silver market, he would raise the price again and nothing would have been won. But if during the waterfall-phase, the seller had a buyer, who was setting enough bids, but always lower, then the price went down and the contracts were accumulated in one hand. Then, after the raid is done, the buyer sells all the accumulated contracts back to the shortseller.

So the key point IMO is: after the raid, the positions were liquidated.

The result of the raid:

The profit for the short-seller should be roughly equal the loss for the long buyer during the waterfall. So in the sum it's quite neutral.

But - and that's what's about - a lower price due to price manipulation - but no necessarily increased short or long holdings, since they were liquidated at the end of the trade. Therefore the 50k spike.

So this behaviour of the 50k spike with the increased volume at falling prices previously and disappearing volume afterwards, should be enough for the CFTC to take a look who were the involved traders in these minutes.

I hope someone forwards this video to Ted Butler and Bart Chilton.

BTW: if my interpretation is correct, then this kind of price manipulation is called circular buying (buyer and seller work together) and it was practiced from oil companys in the oil market to drive prices up.

raulv · Jul 20, 2011 - 9:17pm

Ppl!! Calm down!!

Take it like a stupid joke.. he could've said he wont trust anyone from Texas (I'm texan), and I'll be laughing my way all day long!

FogHorn LegHorn · Jul 20, 2011 - 9:36pm

"Dance like a butterfly ,Sting like a bee"from Cosell or the Greatest I can't remember.Being nimble and fleet of foot seems, to Me, the only way trade this week.The markets are up and down, like the painted ladies bloomers on Saturday night at the Gold Rush saloon.Buy, Sell, Longs and Shorts, what fun. Scooped some choice contracts. Bam zoom right to the moon! OEs goin to be sparktackular. EEs goin to have, to pull all the stops to get this bull back in the pen. World demand is kicken the bull in the butt, not just usual suspects.Exciting times, high stakes.Politics and treachery. Best wishes all, keep ur stick on the ice.

Bay of Pigs · Jul 20, 2011 - 9:41pm

Hey Turd,

Bay of Pigs ancestors (Mom's side) all hailed from Nebraska. They were Cornhuskers (farmers). Salt of the Earth. I remember visiting as a kid being in Osceola, and it was like 11o everyday. Crazy heat. Can't say anything bad about the people there though. Straight up honest and hard working. Wonderful memories.

I grew up in the state of WA and have been a UW Husky fan forever. National Champs in 1991 when we went into Lincoln and kicked some serious ass on the way to an undefeated season. ;o) 

My Dawgs come back to Lincoln in Sept. Turd. I imagine my team will struggle this time around. Nothing but a Sea of Red awaiting them.

¤ · Jul 20, 2011 - 9:48pm
The Verdict - Judge Napolitano on Obama's Plan Giving Unlimited power to the Federal Reserve
Turdle GG · Jul 20, 2011 - 9:53pm

... the battles at $1,600 and $40 rage on

wholetthedogsout kenklave · Jul 20, 2011 - 9:56pm

Seriously. Say anything against my home state of California and I'll most likely agree with you.

Bay of Pigs California Lawyer · Jul 20, 2011 - 9:58pm

I learned far more from Black Swan than I ever did from Mish (no offense). I found the guy to be brilliant. Sadly, Mish has driven lots of good posters away with his condescending attitude. I don't go there much mostly because I got sick of him writing and blaming unions for everything under the sun when I knew it was the Banksters and the FED who are at the root of our economic and financial problems (politicians as well). And no, I don't like public unions so please don't go off on me thinking I support them. I don't.

Cheers Cali. Great to see you here...

.

Pale Green Horse · Jul 20, 2011 - 10:06pm

PM's and commodities are going to kick your fiat money out of your hands, and like any gambler the working man will kick your butt. This country only exists because of the the small farmer that allowed Industry to prosper, and the bankers turned it into a financial waste land, they let their soil erode to the point it has become worthless to grow anything. Your financial instruments as are dead, we saved our soil instead of raping it like you did, so FUBM.

We care for and saved our soil and you think your financial instruments will still work after completely ruining that which give you sustenance. Go to Hell. We are kicking your butt. In farming it is called conservation, something you Blythes have no clue about.

Your time has come, your soil is sterile and nothing will grow now. It is our turn!

John Mellencamp - Rain On The Scarecrow
Save_America1st · Jul 20, 2011 - 10:22pm

And junior miners...a very nice quick read w/ good charts

https://seekingalpha.com/article/280358-an-extreme-buying-opportunity-in-silver?source=yahoo

As always, thanks for everything Turd!!!

Mr. Hyde · Jul 20, 2011 - 10:40pm

"N" = knowledge was not Mr. Hyde. The Huskers are too fat and slow. Mr. Hyde played for the U. I bet Turd himself would like to tell you how we beat his beloved Huskers (who were being called the greatest college football team of all time in 1983) for the national championship. The day after the Orange Bowl they were no longer the greatest team of all time.

Sorry Turd in know it's still very painful for you.

raulv · Jul 20, 2011 - 10:57pm

Seriously, has this blog become a place of PC nonsense? We trade silver but suddenly we cannot handle a little humor?

This country needs to toughen up.

Kegfreak · Jul 20, 2011 - 10:59pm

Turd,

My friend Super_douche and I may contribute nothing to this site, but we are metal hoarding freaks!!!! We live in a bunker deep in the foothills of Lakewood and post only when our internet allows. I think we represent the majority of Coloradans and we hate to lumped with all the Californians that live here. 

The easiest way to tell is by smelling them...they smell like petroli oil. F'ing hippies!

Mr. Hyde · Jul 20, 2011 - 11:04pm

All here should never, ever forget that Hyde was dropped on his head when he was a baby...several times, in fact.

Shill · Jul 20, 2011 - 11:04pm

Pick on Massachusetts instead. Ill do it for you sir, this State sucks as well as the Douche Bags who live in it.

Don't like it, Tuff.

Bull Bay of Pigs · Jul 20, 2011 - 11:04pm

Great read! Changed my view of finance and the universe at large. There's a swan approaching kids.

dannyhaha robov · Jul 20, 2011 - 11:07pm

Actually it is "The love of money is the root of all evil".

Bay of Pigs · Jul 20, 2011 - 11:09pm

Bay: I was at that game, too. 36-21 was the final, I believe. Steve Emtman was a monster.

Looking forward to the rubber match on 9/17!

exiledbear · Jul 20, 2011 - 11:21pm
Joe Satriani - Summer Song (Music Video)
Icarus TF · Jul 20, 2011 - 11:23pm

Wow! I cannot believe the responses to your off the cuff remark about Colorado! Some folks need to take a chill pill, relax, and focus on something really important. A few good natured digs doesn't hurt anyone, don't take it so personally. Yeessshhh!

And by the way Turd, my last trip to the Peoples Republic of Boulder for a football game, I was spat at, cursed at, and pelted with tomatoes and eggs. All because I wore the uniform of the United States of America military. I suspect all those former 'kids' have grown up now, live in Colorado, and haven't changed much.

Thanks for all you do for the little guys!

Icarus

Mr. Hyde · Jul 20, 2011 - 11:24pm

Every August it is so painful to listen as you go on and on about why this is finally the year the Huskers are going to win it all. By mid-October we talk about where it all went wrong. Since you are Chart Daddy I think you should create a Huskers chart for the last several years and you might realize the Huskers still have not hit the bottom, they just keep falling. When they finally bottom out...maybe we could call it Turd's Bottom 3.

exiledbear Icarus · Jul 20, 2011 - 11:24pm

my last trip to the Peoples Republic of Boulder for a football game, I was spat at, cursed at, and pelted with tomatoes and eggs. All because I wore the uniform of the United States of America.

Why were you wearing a military uniform in the People's Republic of Boulder right outside the University there? That's like wearing hippie clothes in Colorado Springs, right outside the Air Force Academy. Of course people are gonna not like you.

That would be like walking down the street as a tranny in Jackson, MS. There's some things you just don't do in certain places.

Mr. Hyde · Jul 20, 2011 - 11:28pm

 Whatever, Hyde. At least I don't have to watch Pick Machine all fall.

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