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Showing posts with label short covering. Show all posts
Showing posts with label short covering. Show all posts

Monday, May 22, 2017

Silver strongly regains $17 handle with a 1.5% Monday morning move

On May 22 silver is up over 1.5% to $17.20 as it finally breaks through the $17 resistance barrier after three attempts in the past seven days.

In fact silver is up over $1.00 since its May 9 lows of $16.20, and has alot of steam behind it with many of the open shorts on the Comex being covered this month.



For 14 consecutive days, the amount standing for physical has risen.  On First day notice 16.8 million oz were standing; tonight 22.94 million oz. It looks to me that sovereign China wants its silver back as it looks like we have a determined player with deep pockets willing to take silver away from the COMEX… - Silver Doctors

Saturday, May 13, 2017

Gold and silver appear to have reached a bottom as record amount of short covering has taken place

The recent beatdown in the prices of both gold and silver has been relatively historic as up until Thursday, the metals had seen 14-17 straight days of declines.  And the reasons for this have been a combination of fewer buyers, negative sentiment, and massive short covering.

Bullion banks used this demise in sentiment as the means to smash down the price using tens of thousands of naked short contracts, and relied upon the predicted reactions of commercial buyers to close out their long positions when margins grew too high.  And once prices fell below not only the recent achievement of their 200 day moving average but also their 100 day MA, these banks began covering their shorts en masse leading to what appears to be a bottom for the metals at around $1215 for gold, and $16.25 for silver.

kwn-sentimentrader-iii-5122017

Tuesday, January 10, 2017

Gold should go much higher in 2017 as short covering indicator has always led to rise in price

In this era where nearly everything in the financial system it rigged, manipulated, or controlled by a central bank, common indicators like fundamentals and technicals no longer are of much value when determining what direction an asset will go.

In fact, besides controlling the currency and bond markets through the massaging of interest rates, the equity markets are managed by an entity known as the Exchange Stabilization Fund, and the commodities are rigged through paper contracts in the futures markets.

So when doing one's research on what should be profitable to invest in, it is the direction of the manipulation that is most important, not the data provided on a company's balance sheet.

Ie... Don't Fight the Fed.

Yet with that being said, one of the 'new normal' indicators tied to gold is suddenly rearing its head, and historically has always led to higher prices in every given cycle.

And what is that indicator?  Short covering in the paper gold markets.

But the biggest indicator that gold sentiment is improving is the falling volume of short bets… 
You see, investors are starting to sell their shorts on gold stocks. One of these is NovaGold Resources Inc. (NYSEMKT: NG), a $1.5 billion gold mining firm whose number of short positions fell 3.8% from 13 million to 12.5 million between November 2016 and December 2016. 
The improving sentiment is also clear from the recent performance of the Gold Bugs Short Index (HUISH). This index tracks the short positions on gold miners that don't hedge their long-term gold production based on gold price movements. It's down 12% in the last month, indicating that short interest in gold companies is falling as well. - Money Morning
Following Donald Trump's victory in the November Presidential election, bullion banks crushed the gold price by dumping nearly three years of global mining output onto the futures markets in just three days.  But after this initial slam, using naked shorts to manipulate the price, these same banks began to cover previous short positions at lower levels and have since continued the process of covering many of their bets.

Gold has moved higher since the start of the new year, and has even begun to disconnect from the dollar as the price has moved higher even on days when the dollar has strengthened.  And as noted in the first paragraph of this article, old indicators no longer work when markets are dictated by the actions of those who manipulate and rig the markets.

Wednesday, October 5, 2016

London dumps 1,000 tons worth of gold contracts on Oct. 4 to allow pre-Brexit shorts to cover before price explosion

On Oct. 4 gold fell by more than $40, and nearly $100 over the past few days as the Chinese holiday provided the perfect environment for London to dump 1,000 tons of gold contracts onto the market to drive down the price.

According to long-time gold analyst Andrew Maguire, the London gold cartel facilitated a massive shorting of gold futures contracts to drop the price back down to pre-Brexit levels so that bullion banks and other insiders could cover their short positions still open after gold spiked $100 back on June 24.

Eric King:  “Andrew, we’re seeing a massive takedown in the gold and silver markets today along with the shares, what’s really happening here?  What is really taking place?” 
Andrew Maguire:  “Close to a staggering 1,000 tonnes of paper gold has been rinsed out in the paper gold markets today…. 
Andrew Maguire continues:  “That’s just below the targeted 100-day moving average that was taken out earlier today.  Before this is finished today, this will exceed over a shocking 1,000 tonnes of paper gold that will have been rinsed. 
This takedown is a complete joke, and the wholesale market is all over (on the buy side of) this paper takedown.  This is a desperate effort by Western officials to cover massive offside pre-Brexit over-the-counter short positions put on by their agent bullion banks near the $1,275 level. - King World News
Each year approximately 2500 tons of gold are produced, making this paper contract dump equivalent to 40% of the world's entire gold production for 2016.

With the European banking system standing on the precipice of another liquidity crisis, and the Chinese beginning their new paradigm as a member of the IMF's SDR global currency, expectations of gold skyrocketing upward in the coming weeks or months left the bullion banks with little choice but to try to pull off a massive manipulation play to cover their several billion dollar short position that had left them vulnerable when they had bet against a Brexit vote.  And when China comes back online after their holiday ends this weekend, expect the price to climb back up over $1300 as it regains all its losses imposed upon it from yesterday's gambit.

Friday, July 1, 2016

Gold rises over $20 as the second half of 2016 begins just like the start of the year

As the second half of 2016 began today on July 1, gold moved up and continued the trend set back in early January of this year.  In fact, with the gold price closing up over $20 to end the week at $1342.90, it solidified the bull trend upward and closed out above four year old resistance levels.

Live New York Gold Chart [Kitco Inc.]
Gold futures continue to see more inflows as we start the second half of the year. Both technical buyers and hedge funds put new money to work in a busy pre-July 4 Friday.
We had been worried about about a rally in gold futures causing a rush for a wing vol, a way out of a call with high volatility. The upward spike in gold futures prices on Friday (to a high of $1,344.30 for the August contract traded at the Comex) kept implied volatility of options muted as some market participants sold call options against the underlying length. That meant that traders sold calls against futures that they already purchased 
Futures contract trading volume on the Comex on Friday was equivalent to 20 million ounces, and volume in front month call options are picking up. 
The GCQ $1360 calls have been the main option interest with close to 2,000 contracts being bought and sold down .5% vol. - The Street
In addition to gold spiking higher, the one asset class that did much better was its brother metal, silver.  In fact, just as gold spiked by more than $100 on Brexit day last week, silver rose by nearly $2 over the past two days as expectations of central bank money printing and historic short covering rocketed the white metal to nearly over $20 an ounce.