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   Strategies & Market TrendsThe Ego Forum


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From: hubris3312/18/2012 12:42:57 PM
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TA anyone? .......................... ......................... .............................



Does it go this time or have another round of down?

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To: JimisJim who wrote (11529)12/18/2012 9:46:14 PM
From: hubris33
   of 12175
 
I note Rob McEwen's Lexam VG Gold (LEX.to) just retained its 60% ownership of the Paymaster Property after GG failed to exercise its back-in rights several days ago. i.e. GG's window for backing into the project expired several days ago.
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Will be interesting to see what McEwen does with this company & projects. He owns 27% and I suspect if he wants to continue he will be able to raise needed cash. I am guessing the potential for a big hit lies with much deeper drilling on the Paymaster Property

1 MM M&I ounces [moderate grades 4-5 gpt], plus some Inferred (850K oz), all for a M/C of $35MM, or about $20/oz "gold in the ground."
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LEX near a 52-week low here, fwiw.

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From: hubris3312/19/2012 11:15:19 PM
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COT tells a story here - GAME ON? ...................... ........................
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OK so there are few posts on the threads these days as investors hide under the desk, wallow in some holiday cheer in order to forget the dismal performance of the PM sector this year, or just tremble in fear and shell shock from the volatility of the news driven markets.

But while one may be down in the dumps over the POG and wanting to just ignore it, good old COT has some news for you - if one takes a look. So let's do that...
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Yesterday (Tue) was truly a day for hiding under the desk as POG got smacked down in a suspicious looking session - Down $27.50 on the day. That's the largest single day drop in POG going back to July 6 when POG dropped $30.50. But get this, on a day where there was blood in the streets, good old COT added open interest.

Let me repeat that, COT added open interest on the very day that the price dropped $27.50! Let me put this in perspective, in the last three weeks we have had 5 days where the POG has dropped by double digits (>$10) and on each and everyone of those days, except yesterday, COT puked up some open interest. Yep those past 4 times POG has dropped double digits, COT has dropped OI ranging from 6,576 to 27,236!

So to see COT add 4009 of open interest yesterday is a bit surprising! This wasn't an add of a few hundred contracts of OI, it was several thousand! Shoot the average day's add, for the days when COT adds OI, is 4577, in the last 6-months. So the swing of +4K of contracts is close to the "normal" add on a good day, AND it represents a net positive move of +10K of OI from what it normally does on days POG is down double digits. It sure appears to be divergent from what one "expects."

So this divergence leaves us asking some key questions - Is this the sign of a collapsing market? What does it mean? What is going on here under the surface?

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Here's the COT data: OA OI +4006 to 435,742. Front month Feb added only 333 of OI. BIG add of OI was the Apr contract adding 2397 of OI, second was Jun OI +842. In fact, only 3 contracts had declines in OI and all three only single digit drops. [Dec12 -7, Dec13 -5 & Feb14 -1]

Also I note TOCOM was at 145 of OI on the 18th and today, the 19th is up to 150K OI - an add of 5K of OI! Peak, if memory serves, was around 155K of OI on TOCOM.

********
Per my count, this year when POG has dropped $20 or more, COT dropped 78% of the time.

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From: ames12/20/2012 10:08:17 AM
3 Recommendations   of 12175
 
jesse has published and linked to several important articles on the current predatory economics and the macro-disequilibrium that's crippling systems on all levels.

jessescrossroadscafe.blogspot.com

In his metals summary he links to tekoa da silva's recent interview:

<< Technical Gold Trader Gary Savage: “Big Players Use Panic Selling Events To Enter Billion Dollar Positions In Gold & Miners"
Also an interview with Murhphy and GATA.

Who will bell the cat?

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To: hubris33 who wrote (11584)12/20/2012 10:34:18 AM
From: hubris33
   of 12175
 
OH LOOK! Yesterday, COT added another 1942 of Over All (OA) Open Interest (OI)! Now at 437,684 of OA OI! THAT on a day where POG was off $3. Hmm, second day POG down, second day OI increased. Will be interesting to see if those that added Wednesday can hold on against today's smack down or will have to start liquidating?

Front month, Feb, saw OI decline -2039, while Apr once again continued its build by adding 2913 of OI. Last decline in Aor OI was 16-Nov. So if one wants to think of it this way, it appears as though all of the Feb OI volume got rolled over to the Apr contracts.

So what are you doing here? Selling with the dropping price or following "the crowd?" <g>

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To: ames who wrote (11585)12/20/2012 10:50:03 AM
From: hubris33
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This line from Jesse, spurred some firing in the synapses (1)

There could be a squeeze on, and front running of forced sales, but the timing makes this a little problematic in my mind.

Wonder if the producers could be, in fact, the "forced sellers?" After all, end of the year, last chance to sell any production or built up inventor in order to generate sales for the Income Statement or cash for the Balance Sheet. These guys want maximum price and as POG declines become desperate to capture anything they can so are willing to dump. Bullion Banks no doubt could see this trend, short the paper market and use the metal to cover the short position?
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1. Then again, the brain activity could be nothing more than a seizure....

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To: hubris33 who wrote (11586)12/20/2012 11:55:06 AM
From: No Mo Mo
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The divergence could portend a bait and switch. Or players are piling on for even more down. If you post again tomorrow, it'll be very interesting to see if the divergence continues.

Question - The number of contracts held here both long and short do not add up to the total OI. Do you know why?


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To: hubris33 who wrote (11575)12/20/2012 12:34:11 PM
From: hubris33
   of 12175
 
Bought some shares [added] of EDV.to {EDVMF.pk} here at 2.05. I guess if this smack down continues for another week, I will be early to the party. There has been a floor here in the 2.04 - 2.05 range this month. Low of the year is 1.85 so I am with in 10% of that. Still have some dry powder.

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To: No Mo Mo who wrote (11588)12/20/2012 12:58:24 PM
From: hubris33
1 Recommendation   of 12175
 
>>>Question - The number of contracts held here both long and short do not add up to the total OI. Do you know why?<<<

Yeah, that chart is a "weekly" chart that captures the market on close, Tuesday only.

Total OI is shown by the thin green line, not the histogram bars. Part of the problem with that chart is its over simplicity. Way back when (I forget the timing and specific details) the COT reporting was much less sophisticated and only had a few categories.

I remember Norcini posting those COT charts {and eventually me taking shots at him for lack of DD and old data, he eventually changed}. At some point, the CFTC changed the way it reported COT and now reports 5 categories:

  • Producer/Merchant/Processor/User,
  • Swap Dealers,
  • Managed Money,
  • Other Reportables and
  • Nonreportables.

Clearly a little bit different from the three categories of just Large Specs, Commercials and Small Specs. So how one apportions the 5 categories to the old style three is something proprietary to the publisher of that chart. Apparently there is some of the "data" that gets lost in the process?

I think, from my causal observation, that the Software North LLC data is directionally correct. However, it would appear that it might be in fact "precision challenged."

If one wants the "true" story they have to go get the data from the source - the same place that the repackagers get their info - from the gubmint website! Data can be found here:

cftc.gov

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To: hubris33 who wrote (11590)12/20/2012 1:34:24 PM
From: No Mo Mo
   of 12175
 
Very interesting. I always wondered why the #'s didn't balance.

I've never looked at that CFTC site. Looks like there is only lagging data there. Must explore more.

It'll be VERY interesting if OI increases after today's POG drubbing.

Thanks much!

I remember your pokes at Norcini :)

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