you can't use gap analysis on ratio charts. gaps are EVERYWHERE. if i use the $USD/$SILVER chart, there is a gap way up there at 5.00 from June 2010. are you saying the ratio is going to go there too?
oh btw, that same ratio chart is up 44% since the bottom. quite the trade, long USD short silver, huh?
the $USD/$GOLD is up 27% from the bottom too.
GLD has a small gap down at 132. are we going there too?
You'd be correct under
normal circumstances, trading in a
legitimate market environment geared toward
price discovery instead of
perception management. This is a
non-linear aspect.
Which is in a bull market? Gold or USD? Backing and filling isn't guaranteed for the bull, ratio or otherwise. The GLD gap at 132 will not be filled until the paper/physical connection fails. Then GLD will appear to be in a bear market. Again, that will just be the
paper or official pricing,
not the actual asset price. The illusion will be maintained even in spite of decreasing effectiveness so as to prevent a precipitous decline.
The
facts are glaring, yet opinion based purely on heavily managed price data reigns. How linear is that? What has your study of game theory told you about rigged games? You need to have accurate information.
Data for Friday was made available from the CME Group. I've reproduced numbers to date of September's
deliveries made,
delivery orders outstanding and the all-important
December contract information.
As of Friday, 09/23/2011:
Deliveries made| Futures | Deliveries | Month Total |
| Gold: | 65 | 2,886 |
| Silver: | 18 | 1,269 |
Delivery orders outstanding| Futures | Open Int. | Prior Day Delta |
| Gold | 89 | +16 |
| Silver | 179 | -34 |
December contracts| Futures | Open Int. | Prior Day Delta |
| Gold | 311,141 | +3,355 |
| Silver | 72,367 | +112 |
After such a massive down day, open interest should have
fallen - and heavily. Instead, demand has increased to a very large degree. Also of critical importance is the difference in deliveries and front-month open interest. There were 65 gold deliveries, but open interest
rose instead of falling. Yesterday, there were 73 contracts outstanding; with 65 deliveries, that would mean that only 8 should be left today. Instead, there are now
more contracts awaiting delivery of
physical gold than there were yesterday, by a sizable margin. It is normally
very rare for deliveries to be requested
during the month, yet it has been a regular occurrence for the past two months.
Silver had been seeing increases in front-month open interest until today, and this only pushed out a pitifully small handful of contracts. Meanwhile, the December silver contract
rose to far more than offset September's 34 contract decline. October also saw an increase of 22 contracts (not shown in tables above), making the overall near-term open interest
increase by 100 contracts (Oct 22 + Nov 0 + Dec 112 - Sep 34 = 100 rise for 2011). If we go to the March 2012 contract, it rose by an enormous 855 contracts. Futures open interest rose for both gold and silver in all but four monthly contracts, and the declines were miniscule by comparison to the increases. Demand is
unrelenting.
With the declines in precious metal prices from yesterday, demand is being brought forward from the October and December. It is also having an opposite-of-intended effect, wherein demand overall is
increasing relative to past declines in price that
moderated demand. There is less than a week to go before the delivery deadline and there are only tiny amounts of metal being supplied. This means that the banks are loathe to part with physical metal, opting instead for other methods to secure contract completion.
COMEX warehouse stocks, in troy ounces:
| Futures | Registered Supply | 2011 Remaining Demand | Deficit/Surplus |
| Gold | 1,930,640 oz | 34,039,900 oz | -32,109,260 oz |
| Silver | 31,041,080 oz | 365,295,000 oz | -334,253,920 oz |
| Palladium | 548,400 oz | 1,797,300 oz | -1,248,900 oz |
| Platinum | 230,700 oz | 871,150 oz | -640,450 oz |
2011 Remaining Demand is the total open interest remaining for September, October, November and December in ounces (gold: 100 oz/contract; silver 5,000 oz/contract; palladium 100 oz/contract; platinum 50 oz/contract).
The banks must ensure that much less than 10% of oustanding futures contracts for gold and silver stand for delivery, and that less than 30% of palladium and platinum call. This is why the massive volatility is occurring - the banks are trying to shake off demand to avoid contract default.
Failure means complete annihilation of the major financial institutions associated with commodities, first from trading losses, then through lawsuits for breach of contract. Success gives the banks more time to save their own asses by trying to procure more physical metal in various ways.
Political games are a cover for this hidden war, only buying some time. If the banks do not rectify the situation in a timely manner, the effects will spill over into the larger economy and force nations to engage in actual warfare because of a dislocation in supply of basic resources (esp. energy - oil, and food) triggered by the destructive price action of precious metals and fiat currencies that try to manage them.
These delaying tactics have disproved the call for the GLD Puke Indicator triggering by Friday and for Japan engaging in intervention during the same week. However, delay does not mean it won't happen. If anything, the likelihood has risen for both of those events to occur in the very near future. Keep in mind that specific events might be shocking, but they do not change the trend - they are caused
by it. It is very important to determine cause and effect appropriately.
yes, in the sense that i do see it dropping below 1600 short term.
Key words.
@misreality and MatthewLaMe:
http://www.recover-from-grief.com/7-stages-of-grief.htmlyou sirs are only in #1. but you're in good company. the gold pundits are out in force this weekend desperately trying to stem the panic out of pm's. Ben Davies at least says he was smart enough to minimize his positions in pm's (meaning he was selling) but i seriously doubt it.
and baseless assumption.
he and everyone else are trapped at the top and will be forced to go thru all 7 stages of grief which end in selling capitulation.
Opinion, again based on unfounded presumption.
thats how markets work in our boom bust age. severe swings in the pendulum killing speculators at each end of the swings. when you're silent and long gone from this thread will the pain finally end.
you're in trouble and you know it.
Speculation.
Where are your facts? I trade options. I buy physical gold and cheap equities, mostly in the mining sector (some ag & energy). All of this is done without margin. The metal is in no way in "trouble". The shares pay dividends and some have
increased those. My return is not so dependent upon the rise and fall of gold as one might think.
Your emotions appear to be running the show. Is it because of dismissal toward facts, or fear that you might actually be very wrong? These are questions only you can answer.
the trouble with this theory is that all the gold bugs like yourself are standing around waiting for the other guy to go first. we've run out of buyers.
As pointed out in the
facts above, buying is far greater than selling. The selling is illusory and creating a false image. Demand is being brought forward now because shortages are being seen and there is a building stampede to procure
physical metal.
we're at the end of an 11yr bull.
More opinion presented as fact.
what happened to all the Big Buyers that were supposed to jump in at the 1680 gold gap or the silver 200 DMA misreality was talking about? we knifed thru those levels like butter. the pain has just begun.
listen to Ben Davies podcast. he's waiting for everyone else to stabilize the situation too. you'll be waiting a long time.
Once more, the
facts show demand is overwhelming supply on all fronts: it just can't be seen yet because of the smoke and mirrors games. I actually hope there's a dip below $1,600 this week - it's the perfect opportunity to grab a deep, risk-free discount before the next launch. It's also earlier than I was expecting, which is an added bonus because now I only have
one direction to be concerned about for a short time.
ask yourself, what are commodities in general telling me?
How can you know what they're saying without listening to the data? Price movement is not properly reflecting the data.
i shorted the hell out of silver then and made a fortune.
I
bought the hell out of silver and made a fortune. What's your point?
Bulls and bears get rich; lemmings and sheep get slaughtered.
The difference here is that you were willing to throw away the actual asset in favor of an illusion. I'm glad you're holding onto at least some of it regardless of your short-term trading. Everything is pointing to progressive moves that will shatter the disguise which has allowed the paper junk to masquerade as gold, leading to an
upward revaluation of
real assets in terms of
depreciating paper "assets".
Assets themselves will remain in close relation to each other, with the monetary precious metals' valuation (gold & silver) rising in proportion to the amount of global accrued wealth; what will amount to a century of growth over the span of less than two decades.
that was a huge confirmatory red flag for me. i told you way back that these different markets top not all at once but sequentially over months time to create maximum confusion. the silver retrace to an exact 61.8% was classic. you already know i was watching that like a hawk.
Key words. Confusion. Also misdirection, leading the herd to the short side.
when it refused to penetrate weeks ago i warned, waved my hands, jumped up and down here on this thread but no one esp. yourself would listen. silver is now down 38% from the top. AND the motive move for this wave 3 of 5 down is only 2 days old. its broken convincingly its support at 34 on high volume.
A better
buying situation. As mentioned earlier, I use
no leverage. Options allow for leveraged
return without margin. Physical metal pulls the real wealth out of illusory fiat.
The paper
price moves are painted to be picture-perfect. Any 2-bit technician will drool all over them and pile on with all the other lemmings.
i told you Ben's decision on Wed was one for the ages. the 3rd or 4th confirmation that no more USD printing was in store. you can kick and scream all day long that this is what he's done up til now and this is what he wrote in his 2002 paper but the fact of the matter is he hasn't and he won't. the USD is headed up in an unrelenting move and is going to crush all risk assets in its path. best get out of the way.
The Fed decision is a maneuver designed to deflect attention and guide the psychology of market participants. It does not to reverse the underlying long-term trend. Delaying tactics are extremely effective. The longer the delay, the more the weak-willed and uninformed investment categories drop off or reverse position.
As the dollar rises, it is rising against other
fiat currencies. Assets can just as easily rise along with it. Of course, once the Euro arena is declared "fixed" sometime within the next few months, the course will reverse. Either way, real assets will rise
overall. Short-term shocks such as we are seeing now do
not depict secular shifts without accompanying changes in
fundamental factors. It's like a fly buzzing around inside a big glass jar: the fly is wildly active and attracts attention, but it doesn't get anywhere unless the jar is moved as well.
