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The Lunatic Fringe - Trading talk.

Strawboss

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I appreciate the updates on the physical situation Zed...
 

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Published May 11
Trump orders federal retirement money invested in Chinese equities to be pulled
The assets at hand number around $4.5 billion in Chinese stocks
President Trump is moving to cut investment ties between U.S. federal retirement funds and Chinese equities, FOX Business has learned in a move that is tied to the handling of COVID 19.

In the first letter written Monday, obtained exclusively by FOX Business, national security adviser Robert O’Brien and National Economic Council Chair Larry Kudlow write to U.S. Labor Secretary Eugene Scalia stating that the White House does not want the Thrift Savings Plan, which is a federal employee retirement fund, to have money invested in Chinese equities that numbers about $4 billion in assets.

It says the Federal Retirement Thrift Investment Board is “Departing from the Board’s established index for the International Stock Investment Fund (I Fund) to track one that maintains Chinese equities is risky and unjustified." The letter directly links China’s handling of COVID-19 as one of several reasons why investment in Chinese companies should not occur.
 

Zed

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GSR Weekly - As much as I hate to say it this thing is holding up and looks like a high level consolidation with a strong potential to move higher. A gold breakout aka J. Sinclair would do it. A crushing sell off would also get us there.

GSR-W-20200513-1.gif
 

Zed

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In the background here China has been tightening its death grip on Hong Kong.
 

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Zed

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SILBUR!
 

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the_shootist

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Zed

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Alright, how did you upload that file and attach it to your post? Is it because its a pdf?
Yes...

I have the "Reader View" Extension in Brave/Firefox. I use that, then I print to PDF and give it a shorter name. Then you can just attach it to a post. It makes it readable, permanently here and eliminates the possibility of later editing that happens on some sites.
 

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Silver Market Update - massively undervaluation relative to gold makes it irresistible!
 

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Zed

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Slightly dated but relevant.
 

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the_shootist

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Yes...

I have the "Reader View" Extension in Brave/Firefox. I use that, then I print to PDF and give it a shorter name. Then you can just attach it to a post. It makes it readable, permanently here and eliminates the possibility of later editing that happens on some sites.
AH...testing! It works!!
I learned something today. Thank you!
 

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Zed

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Moar SILBUR!
 

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Zed

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The Internutz is bullish SILBUR! This might not be a good thing in the short term.
 

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Goldhedge

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I speed these up to 1.5x (gear icon lower right tray)

Jim Wille interview talking about silver and the Comex being a dead entity, JPMorgan is acting as a Chinese agent as a silver replacement to their stockpile $17-18 billion, it's far bigger than we know! End of the Rothschild central banking empire.
FWIW


We Are Now In The Process Of Dismantling The Rothschild Banking System, Target Locked:Jim Willie

 
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Zed

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I speed these up to 1.5x (gear icon lower right tray)

Jim Wille interview talking about silver and the Comex being a dead entity, JPMorgan is acting as a Chinese agent as a silver replacement to their stockpile $17-18 billion, it's far bigger than we know! End of the Rothschild central banking empire.
FWIW


We Are Now In The Process Of Dismantling The Rothschild Banking System, Target Locked:Jim Willie

He seemed less rabid, less frustrated and more coherent.
 

Zed

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Gold USD COT - Big reduction in OI but no commensurate change in the Commercial/Spec balance. The commercials are still quite short considering the OI washout and the volume has fallen right off. Meanwhile price only took a brief hit. If you subscribe to the notion that a small number of commercials have had reasonably large sway over gold pricing then you could arguably be looking at the evidence that this is in the process of breaking down, at the least in the short term. If it where business as normal the reduction in OI would see the net long/short balance between the commercials and specs shrink quite a lot and price come back down with it. That's what happens if the commercials are successful in gaining enough contract liquidation (shrinking OI) to cover their position in a profitable fashion. Ideally they end up with the majority of the shorts closed out, a lower price and a lower open interest number. That resets the game and they can go again. So far we have seen a shrinking OI and volume with a reasonably persistent and high level of net short/long for the commercials/specs. This implies that the specs are solid on the long side and that the commercials are being squeezed. Price is moving up overall and volume is down, suggesting that the short side is generally less willing to sell at these prices. We need to keep in mind that leverage is also harder to come by now so you need to be a solid player to take on the risk here as brokerages lick their wounds after the oil debacle. Similar happened out of 2015 into 2016 but it ran out of steam, so we are not out of the woods on that front. If this is to be sustainable we need volume and OI to expand with price in a gradual manner. I think we might be @ the very start of that happening with the recent uptick BUT we need a lot more data on that one -- just my guess. Latter in the piece we may see OI shrink as price rises, that can prove fatal as 2011 proved, indeed that could prove fatal here as we have a similar dynamic save for maybe the greater reduction in volume and the degree to which the commercials are short.

To me this is looking those rare times when the large specs will overwhelm the commercials, you could argue it has begun but I don't think that the result of the fight is completely clear just yet.

Mumblings and mutterings from downunder.

XAUCOT-W-20200514-1.gif
 

Zed

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Silver USD COT - Silver on the other hand looks to have had the majority of a classic commercial reset achieved. We are close to a market structure from which silver can almost do nothing but rally. $12 looks to be the capitulation low, Silver looks to be @ Oct 2008 levels. Brave statement maybe, if you believe that silver will lose its monetary role and be driven by its industrial side then I guess it goes into the crapper with commodities but given silvers supply/demand dynamic I can't see that one happening.

Mutter, mumble... quick, look over there kangaroo!

Quiet exit stage left while the crowd is distracted with Skippy.

XAGCOT-W-20200514-1.gif
 

Strawboss

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I like it the BANG stocks.... However, I feel like there has to be a gun maker or explosives company in a BANG index.
Dont forget the ladies...if you are gonna have a bang index...gotta make room for some of them....
 

Zed

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A qualifier on Silver... if we get blood in the stock market again it is highly likely that silver gets another spanking. I'm going out on a limb and saying I think that will be a short lived buy opportunity. New low possible, yes, GSR implies that much BUT it should prove to be the last one.

2c

FWIW.
 

Zed

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Another 2c worth...

I think that what is holding gold back for now is the restriction in allowable leverage or credit from the brokerage houses. Remember that this is a market that typically operates with a lot of leverage and we have seen all the weakhands wash out and the playing field shift toward only the gilt edged traders who can handle the volatility without leaving the brokerages on the hook for bad positions. aka the oil fiasco.
 

Strawboss

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What concerns me about that chart is what the swap dealers are doing...

They are usually right at major turning points - and right now they are heavily short...Look at past times they were heavily short and compare to price...

I think of the USD and how it is consolidating at a high level - and I think of the USDX at like 130 and what that would do to gold price...

Then I think of what Armstrong said about when Euro starts to crack and the money flows into the US - it will drive the dollar much higher which will initially drag gold lower until eventually gold and the dollar will rise in tandem...

I wonder if that has already happened with the sudden bear market that gold just went through recently and the depression that the miners went through...many lost 2/3 of their value...

Then there is Sinclair saying that gold will no longer have meaningful corrections because there are so many people wanting to buy the dips....

And then there is the persistent premiums for physical metal over COMEX...

I throw all these observations into the blender and the output suggests hanging tight and letting the continual demand for physical metal push prices inexorably higher...

Which is what Jesse Livermore would have counseled...sit tight and be right...
 

Zed

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Inflation adjusted gold 1915-2020. To me this chart implies a top of $4K, I know that is lower than all the experts are saying is due but I suspect that is where the pain window opens to the point that something is done about the worlds monetary order and it is that action that stops the bull run. As previously stated my targets are $4300 @ the low end and $5400 @ the top end. Once they where wild numbers, now they make me seem very conservative. Well, when I say me... it's just Fibo based maths.

iGold1915-2020.gif
 

savvydon

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Gold USD COT - Big reduction in OI but no commensurate change in the Commercial/Spec balance. The commercials are still quite short considering the OI washout and the volume has fallen right off. Meanwhile price only took a brief hit. If you subscribe to the notion that a small number of commercials have had reasonably large sway over gold pricing then you could arguably be looking at the evidence that this is in the process of breaking down, at the least in the short term. If it where business as normal the reduction in OI would see the net long/short balance between the commercials and specs shrink quite a lot and price come back down with it. That's what happens if the commercials are successful in gaining enough contract liquidation (shrinking OI) to cover their position in a profitable fashion. Ideally they end up with the majority of the shorts closed out, a lower price and a lower open interest number. That resets the game and they can go again. So far we have seen a shrinking OI and volume with a reasonably persistent and high level of net short/long for the commercials/specs. This implies that the specs are solid on the long side and that the commercials are being squeezed. Price is moving up overall and volume is down, suggesting that the short side is generally less willing to sell at these prices. We need to keep in mind that leverage is also harder to come by now so you need to be a solid player to take on the risk here as brokerages lick their wounds after the oil debacle. Similar happened out of 2015 into 2016 but it ran out of steam, so we are not out of the woods on that front. If this is to be sustainable we need volume and OI to expand with price in a gradual manner. I think we might be @ the very start of that happening with the recent uptick BUT we need a lot more data on that one -- just my guess. Latter in the piece we may see OI shrink as price rises, that can prove fatal as 2011 proved, indeed that could prove fatal here as we have a similar dynamic save for maybe the greater reduction in volume and the degree to which the commercials are short.

To me this is looking those rare times when the large specs will overwhelm the commercials, you could argue it has begun but I don't think that the result of the fight is completely clear just yet.

Mumblings and mutterings from downunder.

View attachment 165124
Nice analysis, Z. I don't have much of that to counter with, but it 'feels' like price action just wants to break out. London and Comex coordinated beatdowns seem to just sputter these days, and meanwhile it feels like price just wants to drift up. If and when we get a new catalyst that might become the fuel required to take us into the final approach toward a new high. 2c
 
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Zed

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What concerns me about that chart is what the swap dealers are doing...

They are usually right at major turning points - and right now they are heavily short...Look at past times they were heavily short and compare to price...

I think of the USD and how it is consolidating at a high level - and I think of the USDX at like 130 and what that would do to gold price...

Then I think of what Armstrong said about when Euro starts to crack and the money flows into the US - it will drive the dollar much higher which will initially drag gold lower until eventually gold and the dollar will rise in tandem...

I wonder if that has already happened with the sudden bear market that gold just went through recently and the depression that the miners went through...many lost 2/3 of their value...

Then there is Sinclair saying that gold will no longer have meaningful corrections because there are so many people wanting to buy the dips....

And then there is the persistent premiums for physical metal over COMEX...

I throw all these observations into the blender and the output suggests hanging tight and letting the continual demand for physical metal push prices inexorably higher...

Which is what Jesse Livermore would have counseled...sit tight and be right...
They where long @ the start of it and have moved short, this is what happened in the 2011 bull run. In fact the run came to an end when they moved back to a more neutral position. Maybe the same dynamic will play out here?
 

Zed

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Then I think of what Armstrong said about when Euro starts to crack and the money flows into the US - it will drive the dollar much higher which will initially drag gold lower until eventually gold and the dollar will rise in tandem...

I wonder if that has already happened with the sudden bear market that gold just went through recently and the depression that the miners went through...many lost 2/3 of their value...
If the Euro cracks I can't see that they don't go for gold as hard as they do the USD.
 

Zed

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ASX Gold Tribe on a slow green burn today. Nice to see steady progress upward, no fits, no starts, just plodding along.