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The Lunatic Fringe - Trading talk.

Zed

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#81
Re: Top June 2015 Gold Option Positions By OI

The site that may not be mentioned is saying that Egon von Greyerz is claiming the Swiss Gold Initiative has had some of its funding frozen, Paypal donations have been shut down without explanation. Apparently they feel that the YES campaign is going too well.

Mebe they should take Bitcoin... if that worked for them what a statement it would be making.
 

savvydon

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#83
Mining shares look terrible. Sliced through the lows of 2013. How low will the miners go, and are they precluding a drop in the POG? I say dunno, and yes
Gotta believe there is an attractive entry point into the miners there not too far out.
 

Zed

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#84
CME Comex Silver Quote

... for da bloody Thursday.



Net we put on 4551 contracts! I still find this amazing... when this OI finally contracts price should move very quickly.

Price is telling us that the shorts have not folded.

Expanding OI is telling us that the longs are holding fast.

Someone is WRONG, yet neither side looks to be phased... yet.

This is a deep pocket stand off.... and that OI keeps on keeping on.

I really expected some contraction last session, I feared it may be considerable indicating that the longs where really folding. Best case I expected was flat, not +4551 and what is more +5844 in December, the juice came from other contracts.

:bear_tongue:

Edit: Preliminary numbers... but still.
 

Zed

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#85
Maguire reporting solid European buying of gold. This is what you'd expect given trouble developing over there. It's on "that" site...
 

Zed

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#86
Gotta believe there is an attractive entry point into the miners there not too far out.
Either that or I am going to suit up and step out onto the window ledge.

keep_calm_and_suit_up.jpg
 

smooth

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#87
And so the beatings continue. Just when I thought $16.xx may have been the low, it appears $15.xx could possibly close the week? Since early July we have only closed in the green twice on the weekly. Indeed tomorrow will be interesting.
 

Zed

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#88
... yes... and all the while OI trends up, not down like you'd expect.

Odd ain't the word for it.
 

lunar

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#89
[HR][/HR]
Swiss Gold Vote @swissgoldvote
·

SRG @gfsbern polling data on #Swiss #gold vote: rich least likely to vote yes? #goldinitiative #CHvote #abst14 #30nov


__________________

:rolleyes:

...a comment from Tyler Durden's blog (http://www.zerohedge.com/news/2014-...n-goes-all-er-increases-qqe-jpy-80-trillion):

Fri, 10/31/2014 - 01:12 | 5397067 philipat





This all looks like the end game to me. And in an almost unbelievable development, PayPal have, without warning or explanation, closed the Account which was set up to receive donations in support of the "Yes" campaign for the Swiss Gold referendum
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/10/30_P...
Isn't this all smelling a little like desperation?
 
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smooth

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#90
$16.00 broke there for a minute...
 

jelly

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#91
And so the beatings continue. Just when I thought $16.xx may have been the low, it appears $15.xx could possibly close the week? Since early July we have only closed in the green twice on the weekly. Indeed tomorrow will be interesting.
There is very strong support at $15 going back to the 1970's bull run. I bet silver puts up a fight at $15.
 

jelly

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#92
Re: CME Comex Silver Quote

... for da bloody Thursday.
Net we put on 4551 contracts! I still find this amazing... when this OI finally contracts price should move very quickly.

Price is telling us that the shorts have not folded.

Expanding OI is telling us that the longs are holding fast.

Someone is WRONG, yet neither side looks to be phased... yet.

This is a deep pocket stand off.... and that OI keeps on keeping on.

I really expected some contraction last session, I feared it may be considerable indicating that the longs where really folding. Best case I expected was flat, not +4551 and what is more +5844 in December, the juice came from other contracts.

:bear_tongue:

Edit: Preliminary numbers... but still.
Zed, thanks for giving us your thoughts on the open interest. I've been watching the OI for a few months now, and have been puzzled by its action recently. OI SHOULD have decreased on this plunge below the major support level at the 2013 lows. The fact that it is actually increasing is very strange to me.
It seems to me that neither the bulls or the bears are willing to give up yet. This is quite a struggle, and shows we are down to the strong hands now. Because of that I don't think this plunge will be very deep. Unlike the plunge in early 2013, where the weak hands gave up quickly, we are now witnessing the strong hands holding on as if they know its turning soon.
 

savvydon

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#93
Agree we are down to the strong hands, now. The thing about physical metal is that it costs money to physically get it out of the ground. I think the shorts are running short on open territory - they are on their way to painting themselves into a corner. If and when metals respond to the upside miner's should take off with them like a cat on a hot tin roof. Today as the metals are taken out back I assume the miners will be as well. They are becoming incredibly depressed. The set up for a strong upside burst is starting to look very promising here.

2c
 

Zed

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#94
My guess is that this is somewhat of a major setup moving into its final phase as the USD shoots to what will probably be a peak. Some big money throwing some big weight around... time to buy fear.

That is my gut reaction.
 

Zed

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#95
Charts are going to be a whole bunch of fun this week,. I think it is going to be Sunday (for me) coffee and charts... local domestic events are, shall we say, impinging on chart time. Weeklies and monthlies to do this time.

Get a load of the USD, now that is a pennant breakout, target ~93, chop, chop, chop.

Get a load of the DOW, new highs, yet I think it might take more convincing.

Get a load of gold!... believe it or not it is still on the reservation with a little bit more space to run, not much, but a little.

I think that Nov/Dec is going to hold some real surprises and we work out who is wrong...

Cheer up!
 

Zed

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#96
Just before I go to bed...

For all that red in Silver the prelim numbers suggest that we only dropped 513 contracts in OI.

Not looking like the beginning of a capitulation yet.
 

Silver Buck

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#97
Capitulation as defined by Investopedia:

"When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling.

The term is a derived from a military term which refers to surrender. "

Would the plummet a few years ago be a classic example of Capitulation, investors bailing out of a position that has had a great but volatile run, and taking profits while they could?
 

Zed

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#98
Would the plummet a few years ago be a classic example of Capitulation, investors bailing out of a position that has had a great but volatile run, and taking profits while they could?
With stocks you look for big price break down well below the current theoretical fundamental value of the company on volume. Prices that are discounting complete failure.

Plus, when you watch it live there is a desperate quality to the trading. It is a little intangible but it is just the way that every bid is aggressively hit and the bids can't seem to pull back fast enough so slow the selling. Its also unrelenting, it just plows on with little in the way of stability. You know it when you see it.

With commodity futures we have open interest which adds to our windows into the crowds psychology. In a capitulation OI should collapse as the long side of the contract starts selling closing out positions. Here we have had, on average, the selling opening new positions, despite falling price... that is not capitulation.

From a price perspective and the OI perspective and just the feel of the trading 28/6/2013 was a capitulation. This hasn't really got all the elements in place yet, it may be coming, it may not. This may be tape painting in order to create a reaction, the market may or may not let that play... the OI is a sticking point right now.

More muttering later as I do charts...

Your thoughts?
 

Silver Buck

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#99
My thoughts were that just after The Great Run Up we had a classic Capitulation, peeps fleeing PMs and closing out positions while taking obscene profits.

"So Fred... the freaks are buying at $40+... can you believe it?"

"Yeah Joe, I can. Dump-dump-dump!"

Since then, it's been a bunch of bag holders wishing they had dumped a day too soon, than having to wait another 25 years to simply break even.

Right now, Fundamentally, Base Metal Miners are scratching the ground for all its worth, digging up Zinc, Lead, Copper (obviously beyond expectations), and so forth. While 'Little Johnny' is busy digging holes in the back yard with his Tonka truck pulling up worms and quartz, he's also pulling out other junk like Silver.

The damn stuff just keeps piling up, and Little Johnny has run out of tarps in which to cover the various slags.

So... Uncle Silver Wheaton comes along, and offers to 'stream' the slag away, for a pittance. Other companies have took up the mantle of 'Streamer' and offer their services to other Base Metal Miners, doing them all the favor of taking away the excess ores for a marginal fee (adjusted over the next 25-50 years for inflation).

Capitulation happened 3 years ago, across all metals (except for Palladium... and I have a much different story for it).

For those still waiting for capitulation to happen... that bus left 3 years ago.

Now... it's a matter of construction getting back to business (long overdue since a lot of the US projects were held up due to Teh Great Recession... and then Teh Great Wait until a Repub Prez got into office.. which didn't happen...). And since construction is booming (don't listen to the media... feckers are brick dumb...) and pulling up everything out of the ground... PMs are going to stay in a slumber.

Seriously... in these parts, the Gravel Pits are looking at their best years... ever... of all time.

And I was made aware of this last December.

They have been begging for Teh Ordinances to loosen up and allow them to expand their hours of operation, since January, when Teh Pits are typically closed and retooling.

Pit Operators have been begging for time off.

Gravel haulers have been making great moniez, and have been faking medical conditions in order to get a couple of days off (what we call 'Broke Dick Syndrome).

"Dude, I would have been here months ago, but I haven't been able to get any time off."

"Well, glad you could stop in! This is what it's going to cost to...."

"Dude, I don't care the cost. Just fix me up."

I've been having operators shaking my hand and thanking for charging them a reasonable fee to fix their communication equipment, and I've raised my rates about 25% over the past year.

I've raised my retail sales prices at least 10%, and no one has noticed.

For perspective, I've been catering to these feckers for damn near 25 years, and they've paid for everything I possess today.

But hey, I'm just a Bin Gottling hack... who has fired more bosses than who has fired him...

...

Excuse me, but my Gin Glass is empty.
 

Zed

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Thanks for the opportunity to...

...do a repost.

Silver Supply Demand Breakdown.

This is basically unedited due to time constraints! If you want you can PM me with errors or questions and I will attempt to clarify my meaning.

OK... lets have a go at understanding the silver market. To start those that don't understand the economic term inelastic should. Basically it means unresponsive, or less responsive. Like all things economic it is a slightly fuzzy concept and can cover anything from no response to less than a linear response. So statements like demand for x is price inelastic, means that a higher or lower price for x does little to change the level of demand.

So lets look at Silver supply. Silvers supply and demand both have inelastic elements. As mention by others a big portion of Silvers production is as by-product. This means it is coming out of the ground anyway and is sold at any price without consideration to the cost of getting it out of the ground. For all intents and purposes it is a production credit against the cost of producing the mines primary metal. In some cases it is forward sold at a fixed rate as a condition of financing the mine, this can happen if the mines economics are tight on establishment. Even though that may change the fact often remains that life of mine agreements are in place for the silver off take. Last year 819.6 Moz came from mine production, 573.72 Moz of that was by-product.

By-product production is absolutely price inelastic and will not respond at all to the price of silver. That is not to say it won't fluctuate, it will, but only in response to the demand for the primary metal being mined. In reality the situation is some what less clear cut, simply because the factors affecting silvers price are often also impacting the price of the primary metal being mined. In some cases the primary metal is Gold and the price normally travels with silver, in this case by-product production will be a little more elastic.

The next thing to consider is that all primary mine production is also somewhat price inelastic. Basically massive investment is made in getting a mine going, once going it cost yet more money to put it into "care and maintenance" and pull it out again so this is done VERY reluctantly. It can be cheaper to trade through a tight price period than shutter the operation. Mines will use what ever strategy they can to stay operational while hopefully their competitors fall and the price comes back to a reasonable level.

This leads to some interesting price dynamics. As we approach a mines cost of production the incentive becomes for the mine to forward sell production, hedging or protecting some level of profit out into the future in order to ensure the mines survival through the price dip. As far as price is concerned this brings a supply burst into the market at a bad time and has the effect of suppressing prices further. Miners use LBMA forwards or futures to achieve this, forwards tend to bring real loaned metal to market where as futures are mainly notional supply. Combined across the industry this selling adds to any speculative short selling and can take the price below the cost of production.

When price is down below the cost of production we get another interesting price dynamic occurring. As the price falls below a mines cost of production it now becomes more profitable for a hedged mine to acquire metal in the open market than to mine metal to supply into any forward selling arrangements they have made. If they have used futures they can simply close out the short hedge and use the greater profit over actually mining the metal to keep the operation going for long than they otherwise would if mined metal was supplied into the contract. This leads to a net hedging across the industry and has the effect of helping to support a price floor.

If you look at the Net Hedging supply line you can see the periods of hedging and dehedging. Often hedging will ramp up when miners believe that the metal is over price and it will ramp down as it goes below cost. You can see that in 2012 and 2013 hedging supply saw a net contraction in the Silver market.

As price rises the reverse is true, mine supply is not that responsive to price because by-production will not alter unless the demand for the primary metal alters and primary producers will not expand capacity unless they are convinced of a longer term sustained rise in price.

The remaining elements in the Silver supply as a little bit of a wash, government sales are dwindling and basically every scrap ounce of silver supply is the result of recycle so roughly the same volume is consumed by the new goods replacing the recycled goods. IMO you can draw a line through scrap supply because it is a function of demand and will rise and fall with demand... scrap will only ever have short term impacts on price.

These factors all muddy the waters somewhat on the Silver supply side but basically mean that Silvers supply is not directly responsive to the silver price.



Onto demand... Silvers industrial demand is also price inelastic for the simple reason that silver is used in very small quantities in relatively higher priced goods and has no near priced substitutes or sometimes no substitutes at all. Silver at ten times the cost will not greatly impact the price of most all of these goods yet no silver will mean that many things simply cannot be made as they are today. To much of industry the supply of silver is of greater importance than the price of it. Silvers industrial demand is more a reflection of over all economic conditions than it is of Silvers price. As you can see industrial demand is now somewhat lower than it was pre 2008 and interestingly it is about the level of secondary mine supply.

Next we have demand from silverware and jewellery... FLAT is about the best description I have for those chart lines. Basically it is the same deal, the final products cost out weighs the raw materials cost by such a margin the cost of the raw material is of less importance.

That leaves us with Coins and Bars... or investment product. This is price sensitive demand, IMO it is the most price sensitive element in the whole silver picture. Now take a look at it and what happens to demand and price. Counter to most products, and because Silver is an investment product, very often demand rises and falls with price and inline with overall sentiment toward the metal. That is typical, atypically demand for new product has been rising since 2012 against falling price. We need to keep in mind that this is not the whole investor picture, this is the new product that has been added to the market. The Silver survey has no way of accounting for the existing product changing hands in the private market other than the "implied net investment/disinvestment" number, as I referred to in an earlier post, that is needed to make all the other numbers balance out supply and demand.



So can you see the picture I am painting? We have a metal that is relatively supply inelastic, relatively demand in elastic, that has a supply shortfall and is dependent on net private investor disinvestment to plug that gap. Added to that the only line in these supply demand charts that moves significantly in response to price is the line driven largely by those same private investors.

I put it to you that you can look past by-product supply and industrial demand etc when thinking about the current Silver price. The swing factor is private investor sentiment AND "THEY" KNOW IT. The best way to influence that sentiment is through price and the cheapest way to move Silvers price is through futures.

We now have a situation where Silver futures open interest is around one full years mine supply (astonishing for a price low) while at the same time legitimate hedgers are reducing positions and bar and coin demand is rising ---> all at a price low point! I can't see how this resolves to a yet lower price, can you? If so please explain it to this simple soul.

The two really unusual things about this picture are the expanding OI as price has been falling and this increasing new coin and bar demand since 2012. The former is not typical of Comex speculators, typically they take profit and cover into lower prices reducing OI into lows. The latter is not typical of private investors, normally they need the reassurance of rising prices in order to buy.

My guess is that the excess factor in both the the OI number and the bar and coin number is not being driven by the usual suspects. There is something very different about this market structure, you can speculate as to what is happening, I have some ideas but no directly supporting evidence.

This remains a very curious setup!

You disagree? ---> Please tell us why. I'm looking for any greater understanding you can bring to this party.

Cheers
Z
 

Zed

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Finally some charts...

I am sick as the proverbial dog so this is going up in bite size pieces... might take today and tomorrow!

First up I am going with the "driver" of most of this, the USD and its strength.

All these charts are basically untouched from the last time I posted them, save for the price data updates. Essentially I am a lazy chartist.

First up the daily chart just to show the flag formation that has broken upward. This was the high probability outcome and now it has broken we can put a finer point on the target it projects. ~92.43



Now the weekly chart, this chart suggests that this rally will run into head winds in the 89 area say towards Christmas. This will be at the top of the speedline range we have been within since early 2011. I would say that this is the minimum target with the daily being the maximum.



The monthly shows both areas of resistance an where they hail from. Breaking up out of the 80's will signal that this dollar move is quite a fair bit stronger than I think most would imagine possible. IMO this is the thing driving the scene for now so it bears close observation. If we get over the 93 level it will likely cause some serious dislocation, I don't think many would be prepared for that. Theoretically the USD could blow off to the daily target intra week and close at a level to keep the weekly intact. That would be wild volatility beyond what anyone, including me, expects. Chop, chop, indeed.



Given the way the DOW moved I think I might be moving my expectations a little closer and lower before we correct there and that would point toward the weekly USD target being more realistic with say an intraweek spike to a 9 handle. A 9 handle will probably be enough to get the USD bears sniffing around again. So that weekly chart and December will be the main price time focus for me.
 

Zed

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The DOW Daily....

Whoa baby! This is just too hot for a big index in a normal world! I suspect it is going further but I'm bringing forward my time expectations... this Santa Claus rally period, which I think is likely to play out, will IMO quite possibly be where we flame out. We are over bought now but I think seasonal elements may carry this further. There might be 1000 more iffy points in this by the end of December, that would tie in with a say 90 ish USD peak by then



We have some resistance at the say 17500 level, if we crack that I think we will push the top of the speedline structure by the end of the year. Keeping an eye on the USD for timing, because I believe that is what is driving this, Dec/Jan looks about right to me. That gives us the potential to get into the low 18,000's. IMO that should bring the bears out to play.

Note the divergent STO pointing to the fact that we are likely losing steam here.



That would fit the monthly chart as well. It is looking like a 2000 to 3000 point swing is due, maybe a few over enthusiastic bars need to be put in first... Nov/Dec = blow off months? Santa Claus rally fueled by "buy backs" and shorts getting their nutz roasted for Christmas? The New Year hangover maybe a beaut!



So yeah... 18,250 to 18,350 will not surprise. 18+ very likely if we crack 17.5 and I think that will be more than the bears can bear... IMO they will short the snot out of that the moment the USD looks stalled.

The Fed & Treasury... stuck between a strong USD and a strong DOW...


... this I will tell ya brother, I don't think you can have one without the other... so watch this space.

Making sense?

That will be a surprise. Cough, cough, hack, hack... :withstupid:
 
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Zed

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Gold!

OK, first up ---> Mea Culpa! I called what I thought was the capitulation low on the 28/6/2013... we just broke it so bad call I guess!

That said, so far this trading doesn't look like capitulation to me. Take those last three red daily bars. Wednesday +5045 OI, Thursday +95 OI, Friday +3711 OI. This is not the long side folding up and giving up! If you look at the short term charts most of the downside action has happened in minutes. To be frank it looks like a drive by shooting off the back of the USD strength AND it looks like it hasn't done one heck of a lot to force the longs out of position. The picture is not that different in Silver! If this where a proper washout we should be seeing OI collapse. Granted that may yet happen, and if it does it will get bloodier, but so far this market is hanging SURPRISINGLY tough. Now I know that there are a bunch of you that only really consider price, all I can say is open your eyes a little wider... this is not as bad as price would suggest, the structure of the market is holding up OK all things considered. We where in worse shape IMO on 28/6/2013! Maybe I'm wrong, but I am just not seeing this as catastrophic leading to $7xx lows as is being touted.

OK daily chart. Over sold, due to bounce soon, indeed looks like we may have started, maybe some sideways action as we put the turn in. No idea where that leads, but we need to let the pressure off here, could be a battle to get 1200 back, if we fail there then we are looking @ 1145 odd IMO.



Weekly chart... OK... An explanation, with TA and Gold I lean toward Tom Mcclellans view. I am not as absolute as he is but... Tom believes that you simply cannot use a horizontal support/resistance line with gold. This is because you are essentially measuring two things against each other that are not constant in value. Stocks etc exist within a USD framework and can be judged with it more as a constant, even though it is not, but still it is constant enough. Gold on the other hand fluctuates as a currency set against the USD. So HE believes that sloping support resistance lines are all you should use on Gold.

I use both, but as you know a tend towards speedlines which are essentially sloping support resistance lines. They often coincide and that gives me higher confidence. If I have to weight one over the other I tend to go with speedlines or sloping support/resistance.

OK... yeah I know blah, blah, blah... Thing is I think we are still on the reservation, just. This chart has been updated for clarity, one extra speedline shot off the previous extreme low on 28/6/2013 and a bunch of horizontal stuff removed. The channel is basically the same.Yeah, yeah, I can hear the peanut gallery now... but frankly my dear.



That $1145 area works on both the weekly and the monthly, it is a 61.8% retracement of the previous rally and leaves us with in norms for a deep correction. Beyond that I will start talking about the $700 to $800 region but for now I think that is premature.



To my eye the the daily looks like a bout of short profit taking needs to happen, we will see where that leaves us but they have made big money in three days, the temptation to seal that deal will be huge. The weekly looks oversold and near support and the monthly looks like we have been gathering some internal strength since the 28/6/2013 event. So far the OI response to this price flush supports that notion.

So I would guess that we will spend from now to say 1/12 bouncing around 1145 to 1220 and then maybe December delivery brings back some buying as the USD starts to look stretched toward its limit. All speculation, just trying to draw a common thread between the charts...

This is not that far from done IMO... may be a month or two but in the context of three years that is not that far. Don't lose it now, most of the work has been done here.

My 2c FWIW.

Silver tomorrow, tardy bitch, then maybe oil.
 

Zed

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All unedited guys so be kind... the kids are destroying part of the house and each other so I am off...tamarra.
 
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pre-64'

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Kinda like weathermen eh?


Why cant they just use straight lines foreva!
 

Zed

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Kinda like weathermen eh?


Why cant they just use straight lines foreva!
Be to damn convenient if they did. :bear_laugh:
 

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Zed I know you aren't a fan of Sinclair, but he just posted this tonight...


My Dear Extended Family,

The Japanese central bank has stepped in to replace the US Federal Reserve’s QE.

The US Federal Reserve will step into MA (Monetary Accommodation) to maintain low interest rates after the end of QE.

The dollar is up in a mirror image to low yen as a result of their QE. Gold is down because the dollar is up and because an important Swiss vote is pending that could go quite pro gold.

Nothing has changed. This will make the gold internet Trolls wild.

Sincerely,
Jim​


I find he has a big picture view of the world economies that most folks do not.
 

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Charting Banzainomics: What The BOJ's Shocking Announcement Really Means
Submitted by Tyler Durden on 10/31/2014

Still confused what the BOJ's shocking move was about, aside from pushing the US stock market to a new record high of course? This should explains it all: as the chart below show, as a result of the BOJ's stated intention to buy 8 trillion to 12 trillion yen ($108 billion) of Japanese government bonds per month it means the BOJ will now soak up all of the 10 trillion yen in new bonds that the Ministry of Finance sells in the market each month.

In other words. The Bank of Japan’s expansion of record stimulus today may see it buy every new bond the government issues.

This is what full monetization looks like.



More from Bloomberg:

The central bank is already the largest single holder of Japan’s bonds, and the scale of its buying could fuel concerns it is underwriting deficits of a nation with the heaviest debt burden. The BOJ could end up owning half of the JGB market by as early as in 2018, according to Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo.

“Kuroda knows when to go ALL in,” Okubo wrote in a note. “The BOJ is basically declaring that Japan will need to fix its long-term problems by 2018, or risk becoming a failed nation.”

The unprecedented efforts to stoke inflation could scare bond investors, said Chotaro Morita, the chief rates strategist in Tokyo at SMBC Nikko Securities Inc.

Kuroda said earlier this month that while the BOJ holds only about 20 percent of Japan’s outstanding government bonds, the Bank of England holds approximately 40 percent of U.K. government debt.​

We wish Japan the best of luck in avoiding becoming a "failed nation."

Then again there is something to be said about a nation which is now desperately, and obviously to everyone, trying to unleash hyperinflation... and, for now at least, is failing.
 

Zed

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Zed I know you aren't a fan of Sinclair, but he just posted this tonight...
Like most of these guys I read them and add salt... I'm not a blind devote but I'm not a blind basher either like some of my past friends have been.


My Dear Extended Family,

The Japanese central bank has stepped in to replace the US Federal Reserve’s QE.

The US Federal Reserve will step into MA (Monetary Accommodation) to maintain low interest rates after the end of QE.

The dollar is up in a mirror image to low yen as a result of their QE. Gold is down because the dollar is up and because an important Swiss vote is pending that could go quite pro gold.

Nothing has changed. This will make the gold internet Trolls wild.

Sincerely,
Jim​
Yup I would agree, add in some Euro fleeing and I can still see the USD doing OK right along side gold. Has not happened yet but I think it might play that way... but I'm repeating myself!

I find he has a big picture view of the world economies that most folks do not.
He points out some obscure things sometimes and sometimes they are good leads on understanding the why.

I have not got it in for Jim, just for some of his rabid followers that don't even seem to get what he says half the time.
 

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Re: Thanks for the opportunity to...

The two really unusual things about this picture are the expanding OI as price has been falling and this increasing new coin and bar demand since 2012. The former is not typical of Comex speculators, typically they take profit and cover into lower prices reducing OI into lows. The latter is not typical of private investors, normally they need the reassurance of rising prices in order to buy.

My guess is that the excess factor in both the the OI number and the bar and coin number is not being driven by the usual suspects. There is something very different about this market structure, you can speculate as to what is happening, I have some ideas but no directly supporting evidence.
Good stuff Zed. Here is a repeat of my Wild A$$ Guess from a month ago, for what it is worth:

I too have been closely following the changes in open interest each day, and I agree that the current buildup is strange. It looks to me like the longs are buying more in anticipation of a rally instead of liquidating into the falling prices. At the same time, the shorts are increasing the size of their bets in a effort to force the longs into capitulation marked by sharply lower prices. If this abnormally high open interest stayed high for much of the next year, my guess is that the shorts would win as longs abandoned their positions over time to reduce the level of pain they must feel. My hope, however, is that the unusually strong longs may have very deep pockets, and a surprise game plan. If the longs stand for delivery in December, the shorts (who do not have the metal to deliver) would be instant road kill. Just in case something like a short squeeze does develop in the next two months, I intend to have my near term quota of physical purchased and safely put away this month. In a short squeeze situation, premiums would increase substantially, and availability would quickly become difficult to find.
I did indeed purchase “my near term quota of physical” Friday morning. Now I can hope that some very rich people (and/or nations) are accumulating positions with a plan to drive prices sharply higher by standing for delivery into the December expiration that begins in a month. That could trigger a vicious short squeeze, and bring tears of joy to us badly battered bulls. :s1:
 

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Somebody is very wrong, that is about all I can say for certain.

Hard to believe that it is the bulls after three years of negative price action and sentiment.
 

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Zed, thanks for the charts.
The miners (HUI) are resting on strong support here. I think we are due for a rally.
 

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been looking at all of this,

one thing I believe we can all agree on is that the miners lead out the metals, historically anyway

with the last baby run in gold, miners didn't play and neither did silver,

then we also had no selling exhaustion, just steady knife cuts all the way down,

then came the hard hit,

that may signal a bottom area, and to me anyway, I will be watching the miners to see how they react,

so far they have destroyed the seasonal once again for this year regarding metals, and now we see if there is any strength into year end

fwiw, metal premiums are going up, and availability is dropping from those that I check anyway, which all can be positive,

watch this week to see if there are any specials on shelf silver, not the divas, but everyday rounds and bars
 

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There most ricky-tick IS a disconnect:

Went to the LCS. The guy had numismatic silver only.
 

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Where Is Swiss Gold? – Location, Location, Location

Submitted by Tyler Durden on 11/03/2014 - 11:38
With the Swiss gold stored at the Bank of Canada, now having been transferred out of the Bank of Canada’s Ottawa vault to an unknown location, the Swiss public would be wise to question the SNB on this move. The Swiss gold stored at the Bank of England in London seemingly being ‘actively managed’ one of the world’s largest centres for unallocated gold trading, the Swiss public would also be wise to enquire on this issue. And with significant historical quantities of Swiss gold that were stored with the US Federal Reserve Bank in New York no longer there after the SNB seemingly brought their US vaulted gold holdings to zero, the Swiss public need to question why these particular holdings were targeted for sales from 2000-2005 and not domestically held gold.



....just some info
 

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I know I'm just a hack, with a different set of glasses with which to view the world...

"So can you see the picture I am painting?"

Much more clearly than what you see.

At the end of the day, even with Futures (which may suffer a Margin Call on any given day), we ALL look at the bottom line, and what is piled up out back, under the tarps, the Gorilla In Teh Room.

We have way too much fecking Silver Supply in which to meet Silver Demand.

Paint it how you wish. Spin it how you desire.

I don't live in Wonderland; however, I have tried to see how far down the Rabbit Hole goes.

Silver is a fecking dog, and has been for over 3 years.

Wishing it wasn't so doesn't change the fact that your daughter is a fecking slut.

In the end, you still love them...

Just don't expect too much out of them.
 

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I know I'm just a hack, with a different set of glasses with which to view the world...

"So can you see the picture I am painting?"

Much more clearly than what you see.
History will decide that.

At the end of the day, even with Futures (which may suffer a Margin Call on any given day), we ALL look at the bottom line, and what is piled up out back, under the tarps, the Gorilla In Teh Room.

We have way too much fecking Silver Supply in which to meet Silver Demand.
Yeah... that mine supply deficit that relies on investor dis-hording to balance the equation. Obviously way too much!

Your analysis on that front is lacking, yet you persist in trolling the same way, why is that?

Paint it how you wish. Spin it how you desire.
Why not? You certainly do.

I don't live in Wonderland; however, I have tried to see how far down the Rabbit Hole goes.

Silver is a fecking dog, and has been for over 3 years.
... yes, and? Price and value are different things, only the ignorant confuse them.

Wishing it wasn't so doesn't change the fact that your daughter is a fecking slut.

In the end, you still love them...

Just don't expect too much out of them.
Your language is always set to push emotional buttons, the way you constantly refer to silver is in probably the most emotive I have ever seen. Frankly losers tackle markets with that level of emotion.

All I can say is bring your A game or take off... I want to see the why of it, not emotional BS.

OK?
 
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Zed

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Using SLW to analyse Silver.

This is a chart that I keep an eye on, I doubt you will see it posted out there in the blog-o-sphere but I believe that it gives some insight into silver.

The chart is Silver Wheaton share price divided by Silver. The basic idea behind the chart is that if you want to gain leverage on the price of silver then Silver Wheaton (SLW) is an obvious choice, you get leverage without the expiry issues of options. Given this SLW's price in terms of silver gives you a window into how much the market is willing to pay up or down on silver. That is to say a window into the markets expectation for the metal.

Short term you can see the ratio wends largely with the price of silver, but take a look at the average. The average has generally moved up since the first time we tested $25 support. At is nadir it took 0.85oz of silver to buy SLW at ~ $23 odd POS, now it takes 1.11oz to buy the same share of SLW.

This is significant because SLW's profit is linked to POS in an exponential fashion. Their cost is fixed and quite low so every dollar down is a larger percentage off the profit than the previous dollar down. It works the same way on the upside, every dollar up increases profit by a larger percentage than the previous dollar because costs are largely fixed. So what should this mean? This SHOULD mean that as Silver falls in price SLW should fall faster and it should take less silver to buy that SLW share, i.e. the ratio should fall. Which it does in the short term... but over the three year period what has it done? This is the market stealthy gaining more exposure to silver via SLW, not a market that is preparing to bury Silver for good.



You line things like that up with the resilient inventory of SLV, there is no liquidation pressure there to speak of, unlike GLD. Add to that this curiously high OI that, all things being equal, should be falling with price and not rising. The still strong physical demand, talk to German dealers this week, they are a little taken back with the response to this price wash out. The Silver survey results that paint the picture of a market that is still suffering a mine supply deficit and is feeding off net investor dis-hording to keep the books balanced.

Add all that up and you have a market that only needs one thing to change for price to fly and that is investor sentiment. Looking at investor sentiment you can see the three metrics posted here suggest quiet buying (not selling) is going on. Money wants exposure to silver, it is impossible to argue anything else from the publicly available numbers if you look 2" past price.

If you focus on price alone you will get what you deserve.

Do the work, prove me wrong if you can, the numbers are out there.
 
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Zed

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A wider view of SLW v Silver

From another of my many spreadsheets...

This is using SLV as a proxy for silver.

I am not pretending that this is perfect BUT the guys trading SLW have a better track record than most news letter writers. You could probably publish a silver letter off the back of close observation of this ratio and do a better job than most.

This makes it plain, a major divergence in the ratio has been obvious since say mid 2013. This is since about the time that those big way out of the money call options in gold became evident, those insurance positions.



Make of it what you will, I think it is saying something.
 
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