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Michael Noonan Edge Trader Plus Michael Noonan is the driving force behind Edge Trader Plus. He has been in the futures business for 30 years, functioning primarily in an individual capacity. He was the research analyst for the largest investment banker in the South, at one time, and he... More
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  • To Central Bankers: You Are Golden Toast On A Silver Spoon. 1 comment
    Apr 20, 2013 2:56 PM

    Saturday 20 April 2013

    Memo To Central Bankers:

    How dumb can you be? What better way to expose your naked
    short backside than to trash a market with known world-wide
    demand? So arrogant, so parochial. The world thanks you. The
    bullion dealers than you. The gold/silver buyers thank you.

    When there is more and more smoke about the possibility of the
    bullion cupboards being bare, the fiat-makers are doing the same
    thing to paper gold and silver as they have done to currencies:
    destroying them.

    Those few banks responsible for the naked shorting in both gold and silver do not have to post any margin, nor do they have the
    underlying physical were they required to make delivery. In essence, they are doing what bankers only know how to do: create fiat paper
    gold and silver that exists only in the minds of the mis-guided
    believers.

    People who are following the "yellow brick road" are discovering that the "Wizard behind the curtain" is a collective of the three main
    characters: no brain, no heart, a total coward, and most
    importantly, no true power! Central bankers are a bunch of
    munchkins.

    We have frequently stated that those with power will not give it up
    without a fight, and that they will stop at nothing to retain it. You
    are witnessing an example of the extremes to which the fiat-issuers
    will go. We have also frequently warned that when it comes to
    markets, Anything Can Happen! You have an example of both, from
    last week.

    We know from direct experience that the available supply for
    physical gold and silver is becoming more problematic, and the
    premiums have exploded. Almost all dealers have no supply to meet
    the real demand for one ounce gold and silver coins. They stopped selling them, and availability for 10 oz and higher bars has been
    delayed for weeks. For this, too, we have been sounding the alarm.

    Price is not the ultimate issue, at this stage. Owning and having
    possession of the physical is what matters. Silver may be at $23,
    and gold at $1,400, but try buying them at those prices! Get what
    you can, whatever the price.

    In a Commentary from a few weeks ago, [Comex Prices Manipulated? Still "Accurate." http://bit.ly/YYX5HV, if you missed it, and it also
    captures the essence of why the physical market is so much more
    important than the paper one, relative to what just occurred, last
    week], the point was that the charts which reflect New York and
    London exchange traded paper is precisely what the central banking cartel wants everyone to "see" and "believe." Their attempt to have
    "paper cover rock" scam is tearing apart.

    These charts have lost relevancy because they do not reflect the
    actual demand for the underlying physical metals, but they do show
    some interesting points. The spike lower for April, not yet over,
    shows what central bankers want you see and "fear," but what the
    chart does not show is that behind that "curtain," demand for the
    physical has spiked even more to the upside!

    Instead of driving people away from gold and silver by artificially
    suppressing the now fiat paper market, the true picture is in the
    physical market, and around the world, investors are flocking to
    dealers to buy record amounts of gold and silver. Reports from
    China, Singapore, Hong Kong, India, Australia indicate long lines of
    more than willing buyers to "get while the getting has gotten
    better!" Now, it takes less of the trash fiat to buy more of
    something with real intrinsic value. Unfortunately, most Americans
    are missing the boat, but those who do know are also experiencing
    delays, unavailability, and sharply higher premiums.

    GCA M 20 Apr 13

    We often state that exceptionally high volumes are an indication of
    a transfer of risk from weak hands into stronger hands. Irony of
    ironies, the central bankers are now the weak hands, and their
    efforts to suppress PMs has merely fed the voracious appetite
    existing for direct ownership of the physical, the undeniably stronger hands.

    Central bankers are committing financial suicide and bringing about
    consequences that are directly opposite from what they intended.
    What should remain uppermost in the minds of the buyers/holders of the physical PMs, [Cheers to you all!], is the time factor. It is
    unlikely either market will turn around any time soon.

    The assault is not over. Wide range bars, and especially those with
    exceptionally high volumes, also tend to lead to trading ranges in
    the following weeks or months. It takes time to digest and absorb
    the risk transfer.

    From wherever the ultimate low of the current down swing will be,
    price will trade in that range, as shown below using last week's low
    as an example. Patience will now be required. Those who have, and
    those still acquiring physical gold and silver can relax and let the
    natural order of supply and demand restore itself from its present
    distortion, however long it may take.

    GCM D 20 Apr 13

    Can silver still go lower? Yes, it can. Will it? Momentum is to the
    downside, at present. No one knows that answer, just as no one
    expected what just happened in the manner in which it did. We
    drew a potential support line but have no responsible answer as to
    where this swing low will end.

    SIA M 20 Apr 13

    As explained in the daily gold chart, you can expect a protracted TR to follow for some time into the near future. It is worth noting that
    when "surprises" hit the market, they tend to do so in the direction
    of the existing trend.

    The trend for futures is down. The trend for demand of the physical
    is telling a different story. While we often say, "Charts do not lie,"
    sometimes the truth is hidden. There are exceptions to everything.
    History is on the side of gold over fiat. If you want to know the
    future, look to the past.

    SIK D 20 Apr 13

    We conclude with some interesting charts from a Chris Martenson
    article, This Gold Slam Is A Massive Wealth Transfer From Our
    Pockets To The Banks."
    For those who hold/own physical gold and
    silver, we say there was no such wealth transfer. Most reports say
    that demand for the physical increased sharply. Paper holders got
    hurt, but there have been so many warnings not to hold any form of paper that people make choices, and choices come with consequences.

    The point of his charts is to see what so many have been saying
    about market manipulation. It is alive and well.

    (click to enlarge)

    The areas circled represent the largest 'dumps' of paper gold contracts that I have ever seen. To reiterate Ross's comments, there is no possible way to explain those except as a concerted effort to drive down the price.

    To put this in context, if instead of gold this were corn we were talking about, 128,000,000 tonnes of corn would have been sold during a similar 3 hour window, as that amount represents 15% of the world's yearly harvest. And what would have happened to the price? It would have been driven sharply lower, of course. That's the point, such dumping is designed to accomplish lower prices, period, and that's the very definition of market manipulation.

    For a closer-up look at this process, let's turn to Sunday night and with a resolution of about 1 second (the chart above is with 5 minute 'windows' or candles as they are called). Here I want you to see that whomever is trading in the thin overnight market and is responsible for setting the prices is not humans. Humans trade small numbers of contracts and in consistently random amounts.

    Here's an example:

    Note that the contracts number in the single digits to tens, are randomly distributed, and that the scale on the right tops out at 80, although no single second of trades breaks 20.

    Now here are a few patterns that routinely erupted throughout the drops during Sunday night (yes, I was up very late watching it all):

    (click to enlarge)

    (click to enlarge)

    These are just a few of the dozens of examples I captured over a single hour of trading before I lost interest in capturing any more.

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Comments (1)
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  • flash9
    , contributor
    Comments (3669) | Send Message
     
    High demand and shortages are characteristics of - you should know this yes tops. It has been all over the internet about all these shortages and it is continually presented as bullish. If the reports are correct, the little guys have been buying with both fists and the dealers are taking full advantage. So it is not surprizing that prices have dropped precipitously. And the refuge of the wrong bulls - manipulation and real gold vs paper gold.
    21 Apr 2013, 06:34 PM Reply Like
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