With Friday's Commitment of Traders Report, the
ridiculous has just metastasized into the sublime as the Commercial Cretins
have just gone "over the top" and added another 5.4M
"ounces" to their synthetic gold short position. At 298,077
contracts declared short, they are now carrying the largest short position in
Crimex history. The scary part is that these figures don't include the big
rise in open interest yesterday and you just KNOW that it ballooned out due
to more Cartel shorting.
While these numbers are synonymous with prior tops like
in 2008 and 2011, the difference today lies in two realities: 1) The Shanghai
Gold Exchange is keeping the Crimex and LBMA (London Bullion Market
Association) thieves at bay through some voracious arbitrage, and 2) Raw
demand from the Far East and from Western investment pools are keeping
inventories tight. If this was back in 2011-2015, the market would be limit
down on Monday as the criminals have their way with us. However, this
is a NEW bull market and dips are to be bought while holding onto your core
position for dear life as I have been trying to do with my GDXJ (Market
Vectors Junior Gold Miners ETF) position. I can't tell you how many times I
have had to lock myself in the wine cellar during trading hours because the
temptation to "SELL!" was so overwhelming.
The tape action yesterday was a perfect example of a textbook "sell
signal" with a double top, an outside reversal and a key reversal all
being lumped into one butt-ugly trading session. However, as I have written
about for ages now, technical analysis rarely works at major turns in gold,
and as one prominent gold guru lamented this morning: "No one would have
predicted a near $40 reversal when gold was at $1,318 at 10:30 a.m.
EDT!" That's because the technical picture was letter perfect having
been created-no, GROOMED-by the bullion bank trading desks with every
intention of trapping in the big algobot-run funds that were chasing momentum
and the technical funds that were "buying the breakout."
So if you are getting PAID to provide people with half-assed, quasi-decent
"advice," what do you say to the poor sad-sack soul who studies
technical analysis and takes countless online courses on candlestick
analysis? I'll tell you what you say-go get a refund for all of those courses
because when markets are this rigged, it is useless. To prove my point, had that
reversal yesterday been in copper or Proctor and Gamble stock or the
Australian dollar, I would have been short going into yesterday's close.
Because it was gold (and/or silver), I refrained from acting because the
right thing to do in markets this phony is the opposite of what conventional
"analysis" would command. Result? Up $20 and back over $1,300.
Voila!
The bullion banksters and their well-armed trading desks pulled off a
wondrous reversal, but have now arrived into somewhat of a "pickle"
in that the movie reel that they thought would play out with the bad guys
winning and gold following through to the downside on what should have been
another Freaky Friday where gold and silver get clobbered. Since it DIDN'T,
they now have to await selling from the Asian markets in order to give them
the slightest chance of a downside flush this coming week.
What IS a certainty is that the PMs are trading in a totally bizarre
fashion, and anyone who fails to pay attention to Commercials are indeed
paying no attention to "that man behind the curtain" who most
certainly is pulling levers and spinning dials frantically in order to secure
the desired effect while being short nearly 30 Moz of phony, synthetic gold
that closed within a whisker of a new closing high for the move. There must
be carloads of Pepto and adult diapers being handed out to the Cretins as the
wait in agony for the Sunday night opening.
The central banks are now in deep credibility "trouble" due to
the fact that not one shred of the $57 trillion spent bailing out the global
banking industry has served to improve the lot and lifestyle of the middle
class. Prices are spiralling northward everywhere including food and housing
and services, while the policy-makers are reacting with the highly
deflationary "NIRP" (negative interest rate policy) that now exists
for 16% of all issued bonds in Europe and appears to be coming to a U.S. bond
market close to you. These "great and powerful" central bankers are
now rarely able to move markets with a single sound bite, and when they are
able, it is usually to the downside. The fact that Yellen & Co. were
unable to convince the bond market that growth was "robust" is a
sign that the era of central bank domination is beginning to fade.
This coming week is going to be a very volatile week with all of the
shenanigans going on in Europe and the vote in the U.K. Maintaining a core
position in the miners amidst all of this volatility is painfully difficult
if you allow yourself to get mesmerized by the short-term noise, but I find
that spending a few bob on hedges is well worth it, as I've done with my big
GDXJ position. The astounding thing that I rarely write about is the
seven-week performance of the 357 Magnum Portfolio now sporting a 45% advance
largely due to the incredible move in Iconic Minerals (ICM.V) which closed at
$0.41 up 105% since it was added at $0.20 in late April. I helped with the
recent $0.20 financing so insofar as that should constitute a disclaimer of
sorts, let it be known.
Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University
where he earned a Bachelor of Science in finance and a Bachelor of Art in
marketing before completing post-graduate work at the Wharton School of
Finance. With more than 30 years of experience as a junior mining and
exploration specialist, as well as a solid background in corporate finance,
Ballanger's adherence to the concept of "Hard Assets" allows him to
focus the practice on selecting opportunities in the global resource sector
with emphasis on the precious metals exploration and development sector.
Ballanger takes great pleasure in visiting mineral properties around the
globe in the never-ending hunt for early-stage opportunities.
All charts courtesy of Michael Ballanger
