Banks May Yet Try Stemming a Gold and Silver Rally
Following a events of yesterday, it seems correct this morning to take an in-depth demeanour during a charts in sequence to discern what moves The Banks might take subsequent in a wish of stemming this convene and reversing a trends.
Let’s start with Comex Digital Gold. It has been in an UPtrend given Jul 10 and this convene has carried it $150 or about 12.5%. In doing so, The Commercials on a CoT have augmenting their NET brief position by 182,000 contracts and, specifically, a 24 Banks of a Bank Participation Report have doubled their NET brief position, going from 104,748 contracts NET brief in Jul to 213,746 NET brief final week.
This places a CoT in a “worst” position given final Sep and this BPR reveals a largest NET brief position on record. Therefore, we KNOW that The Banks will do only about anything during this indicate to retreat a trend and start flushing The Specs behind out of paper gold. Though they are clearly means of pulling this off, it might take them a while to do it. Why, we ask?
For CDG, it’s all about a relocating averages. We remarkable early final week that CDG’s 50-day had bullishly crossed UP and by both a 10-day and 200-day MAs. This is a unequivocally bullish trend indicator and, many importantly, it sets a Spec HFTs into a “buy a drop mode”. You can see this personification out already when we demeanour during a daily chart.
Also final week, we began to plead a stress of a $1331 turn as support in any pullback. This was a turn of insurgency and afterwards support in late Aug so we hoped/expected that same movement on any pullback. And demeanour what has happened so distant this week! Even yet a all-important USDJPY is adult another 50 pips currently and dire opposite 110, Comex bullion is unresolved organisation at….$1332! For us, this is transparent justification of a HFTs shopping a dip.
And here’s a large plea for The Banks. Check where we can find those MAs. The closest is a 50-day yet it’s all a approach down nearby $1280. The Banks are not going to be means to flip a Spec HFTs until, during a minimum, a 50-day is disregarded to a downside. So, this is because we can contend “it might take a while” for The Banks to unequivocally beget a downside movement that will flush The Specs in a same old, wash-and-rinse pattern.
This doesn’t meant that a large raid can’t happen. What is DOES mean, though, is that assertive traders should have copiousness of warning and can use this time to sidestep and prepare. Again, use a draft next as a beam and watch that rising 50-day closely.
Now let’s demeanour during Comex Digital Silver. It, too, is holding a support area that we identified final week. This support is utterly clearly a many new highs nearby $17.90 final June.
Like CDG, Comex Silver has seen a possess convene over a past dual months, relocating adult a full $2 or about 13%. Also like CDG, a china “Commercials” have fought this convene by augmenting their NET brief position from 21,900 contracts on Jul 18 to 79,700 contracts final Tuesday. Therefore, we know that JPM et al would only LOVE to pound cost and force a Spec exit yet they, too, are going to need some downward movement to get a round rolling.
As we can see below, a MAs for Comex china are not in a same bullish pattern as Comex gold. Therefore, a unequivocally transparent aim for The Banks is a 200-day relocating normal found currently nearby $17.28. They’ll wish to mangle this turn on a shutting basement someday soon.
And a reason for perplexing to mangle a 200-day is clear. On a draft below, we can see four instances in only a past twelve months where cost was damaged during a 200-day and a steep, Spec-rinsing decrease followed. This is easy income for a colluding Bank trade desks so we can be certain that they are salivating during a event to lift this same pretence again!
OK, as we close, I’ve still got $1331 and $17.92 so a initial support levels are holding. Let’s wish this continues and a miscarry follows.
However, we contingency be wakeful that The Banks are still in assign and zero in their function suggests that they are “on a run” or “losing control”. Therefore, devise and trade accordingly. – Craig Hemke
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