Tag Archives: Dennis Gartman

The U.S. Gold/Silver Price Managers Strike-Out Again

It’s becoming monotonous.   The precious metals get the obligatory price hit at 6 p.m. EST when the CME’s Globex electronic trading system re-opens after taking about an hour break from manipulating markets.  Then gold/silver rally throughout the eastern hemisphere trading hours, which wind down around 3 a.m. EST.   And then gold begins to fade going into the manipulated London a.m. gold price fix.   It typically trades laterally until the Comex gold pit opens (8:20 a.m EST), which is when we get the customary “cliff dive” price drop:

Untitled

For 15 years, I have been unable to understand how only the gold investing commnunity – aka “goldbugs,” or just “bugs,” as Dennis Gartman refers to it – seems to discern this daily ritualistic trading pattern in the price of gold/silver. Funny thing, that.

It’s confounding to consider that the regulatory authorities have been able to spot and prosecute interest rate manipulative activities by several banks – LIBOR Rigging – many of these banks are also considered “bullion banks.” Larry Summers updated and augmented Gibson’s Paradox by demonstrating that interest rates could not be manipulated without manipulating the price of gold – Gibson’s Paradox and the Gold Standard.  How is it therefore possible that the bullion banks, who manipulated LIBOR and who were involved in the London Gold Fix, were able to accomplish the former without engaging in the latter? Let’s call this Kranzler’s Enigma.

After this morning’s obligatory Comex floor opening price hit, gold bounced back in “V” formation.  I emailed GATA’s Bill “Murphy” Midas to discuss the trading action, noting that “something is different.”  This “V” bounce has been occurring quite frequently since mid-December.  Historically, once the Comex price-spanking occurred, the trading day for gold traders may as well have been over.   But for some reason the gold cartel banks have been unable to keep their boot pressed on the throat of the gold market.

One other point.   Many of you may have noticed that GLD and the Comex have recently been reporting a large increase in gold vault inventory.   As I said to Midas:  “I’ve noticed in the past that a build-up in reported GLD inventory seems to precede a smash. But it’s been “building up” for a while and no smash. All hits are being bought.

Not sure it means anything, especially if the gold that is being reported in the warehouses at the Comex and GLD exists only as accounting entries, which is very possible if not highly probable.”

I’ll end with a piercing comment from John Embry.   I rhetorically asked him how high the price of gold would be if the regulators prevented Comex market makers from issuing gold contracts in an amount that exceeds more than 110% or 120% of the stated inventory of gold on the Comex:

With respect to your gold question, the price would be much higher but they could still get away with considerable chicanery OTC and on the LBMA. However, since the American government is firmly behind this Ponzi scheme, I am not holding out any hope for help from the regulators. However, things are moving inexorably in our direction, and in my mind, the question only concerns time not the ultimate outcome.Thus as frustrating as it has been I would still rather be playing our hand at this point, not their’s. – John Embry

How Much Silver Is Really Sitting In Comex Vaults?

Can anyone answer the question with any modicum of certainty?  All published analysis on the Comex and the Commitment of Traders reports is based on the data reports compiled and issued by the Comex bullion banks – primarily JP Morgan, HSBC, Scotia.  All three of these banks have been embroiled in lawsuits and regulatory action in other areas of their business involving fraud and corruption.   The COT reports originate from these banks, who operate and control the trade clearing process at the Comex.

If the big banks who operate the Comex are reporting Comex Commitment of Trader and vault inventory reports accurately and honestly, it would be the only segment of their business operations for which they publish information and data that is not fraudulent to some degree, including their SEC-filed financials.  I believe that bona fide Comex data reports are a highly improbable propostion.  I would not bet on it.  Et tu?

All publicly available data used by analysts to write commentary is based on reports that are created for public consumption by the Comex bullion banks.   See a problem here?  Anyone?  Bueller?

Currently nearly every market “analyst” and chartist is calling for a big correction in the price of gold/silver based on two catalysts:  1) the big move in the metals since mid-January and 2) the massive bullion net short position in gold and silver vs. the massive net long position of the hedge funds on the Comex per the weekly COT report.

Historically, a position “set-up” like this has predictably led to what I call a “Commitment of Traders stop-loss long liquidation operation” implemented by the bullion banks.  The bullion banks know where the hedge funds have stop-losses set against their positions because the bullion banks are the entities that clear these trades on the Comex.

Typically the banks will set off stop-loss limit triggers on days when they are able to dump enough paper on the Comex to cause a “waterfall” drop in the price of gold/silver.  This occurred on Monday morning, shortly after the p.m. price “fix” in London.  The “waterfall”Untitled drop on the chart is created when a significant number of stops are triggered, which forces the automatic selling of hedge fund positions.  (click on image to enlarge)

When a stop-loss long liquidation operation begins, it typically lasts several days, with large “shock and awe” price drops occurring over that period.  Most chart and technical analysts were issuing $14 price targets for silver last Friday.  As of Monday mid-day, it looked like those forecasts were almost certain.

But the current attempt by the banks to force-liquidate the long positions on the COT seems to have been stalled – at least for now.  After the hit on Monday, the metals bounced back to unchanged from Friday.  Yesterday, on a day when the SPX squeezed up over 2% – and the metals typically move inversely to stock market moves like that (“risk off”) – gold and silver jumped back up their pre-hit COT smash levels of early Monday morning. Another take-down attempt followed  and today the metals are once again in rally mode.   One wonders if Dennis Gartman and Clive Maund are scratching their heads at this point.

Everyone reading this is aware that the Comex inventory of gold and silver has been declining over the past several months, especially the metal that is declared to be “registered” (available for delivery).  Even more stunning has been the absurd spike in the ratio of paper gold/silver contracts vs. the amount of underlying physical metal declared as “registered.”

The fact that the corrupt bullion banks on the Comex are having trouble implementing their standard  procedural COT stop-loss long liquidation operation has lead me to question whether or not the Comex vaults truly have the amount of metal as reported.  Yet to be noticed or commented on,  the deliveries for the March silver contract so far have been unusually small.  This is because the “issuers” have not yet issued very many delivery notices.  Typically in a relatively large delivery month, like March, a lot of notices are issued in the first few days of the delivery period, which started Friday afternoon.  Why aren’t issuers sending out delivery notices in volume right now?

Currently there’s 3,440 open silver contracts representing 17.2 million ozs of silver.  In the first two days of the delivery period, only 32 notices have been issued.  JP Morgan and Scotia – no surprise there – have been the primary issuers and stoppers.  As of yesterday, the Comex vaults were reporting 24.7 million ozs in the registered account.

But are there really 24.7 million ounces of silver sitting in the registered account section of the vaults?   Yesterday over 1.7 million ounces of silver was removed from the eligible accounts.  None of it was moved into the registered accounts.  My guess is that there might be some “Charles De Gaulles” out there who are starting to wonder the same thing as me about the amount of silver actually sitting in Comex vaults.

With the Comex registered, “deliverable” inventory at a historic low,  a run on the Comex gold and silver “bank” would make things really interesting in the markets…

New Bull Market For Mining Stocks?

Concerning gold and noting that this is Friday, “they”…and we’ve no idea who “they” are, but we do indeed know that “they” exist… are out there again making mischief as they have tried to do so many times in the past. Fridays “They” wage war on gold.  – Dennis Gartman from his Jan 29 “Gartman Letter”

With the entire precious metals community is still discussing the fraudulent LBMA a.m. silver fix, I happened to notice that the HUI gold mining stock index quietly is up 20% since January 19.

UntitledWhat I find interesting about this is that if this were a stock like AAPL or AMZN, for instance, CNBC/Bloomberg News/Fox Biz would be falling all over themselves with the declaration of a new bull market in those stocks.  Instead with regard to mining stocks – crickets.

Perhaps even more interesting is this graph to the left, which shows the performance of the HUI from the inception of the Untitled1precious metals bull market vs. the S&P 500 over the same time period.  This is yet another example of information that will never be presented on the adult cartoon channels also known as financial news programming.  Since the end of November 2000, the S&P 500 has traveled from 1314 to its current 1919, or 46%. But the HUI mining stock index has moved from 42 to its current 120, or 285%.  That fact would probably surprise a lot of people.

Turning to the quote at the top of the blog, you’ll note that until very recently Dennis Gartman habitually used to lift his leg and urinate on the investment community, which he referenced simply as “bugs” (as in “goldbugs”).  He used to veto with an iron fist any notion that the precious metals market is manipulated.  Wonder what all off a sudden gave him religion?

Here’s another fact that might surprise a lot of people:  It’s now being estimated that India imported at least 110 tonnes of gold in December.  In addition, Swiss and Hong Kong gold exports to China reached a record in December.  It’s estimated that China and India combined imported 300 tonnes of gold just in December.  That goes a long way toward explaining why the amount of gold made available for delivery on the Comex has reached a low level not seen in decades and the paper to gold ratio has reached a level that is mindblowing.

The point here is that, just like the true underlying fundamentals of Amazon.com’s business model and financials do not fit the market valuation given to its stock, the underlying fundamentals of the physical gold do not fit the price as reflected in the fraudulent paper markets controlled by the LBMA and the Comex.   If anything, yesterday’s LBMA silver fix reflects the endemic corruption in the paper gold/silver market.  It also reflects the extreme degree of desperation to control the precious metals markets by the western bullion banks.  The bottom line is that they are running out of physical metal with which to perpetuate their fraud.

Thus I’m not surprised that the mining stocks, as represented by the HUI index, are up 20% in a short period of time.  The mining stocks are at their most oversold and undervalued in U.S. stock market history, especially when evaluated in relation to the price of gold and silver.   But don’t wait around for Maria Bartiromo or Joe Kernan to start promoting the mining stock sector – that will never happen.   As Dennis Gartman has noted, it’s a war on gold.  But my best guess is that the key battles are now being won by the “bugs.”

The “Bloom” Is Off Dennis Gartman’s “Rose” – Ignore Him On Gold

I have always had the impression that Dennis Gartman was nothing more than a manipulative outlet for a few big hedge funds.   His appeal caters to “high net worth” retail investors and “low level” professional/institutional investors.  He’s the perfect “stool pidgeon” for hedge funds who want to move a bad position or accumulate a potential winner by getting Gartman to promote the opposite of what these hedge funds are trying to do (the strategy for which Goldman is know and for which Bill Gross was known in his “hey-day” at Pimco).

The most recent example of this is with regard to the recent news that Stanley Druckenmiller took down a $300 million-plus position in gold via GLD during Q2.  Gartman reported on Friday that:   “One should be careful about Mr. Druckenmiller’s positioning in gold, for we were told yesterday by one or two others that he’s already liquidated his gold position into last week’s strong advance.”

Anyone who has observed Druckenmiller since his early days running Soros’ main hedge fund knows that Druckenmiller takes highly concentrated, long term macro bets.  He wouldn’t put on a massive GLD position and then turn around and sell it a week or a month or even a few months later just to scalp a few points.  He’s playing for a least 50% here and likely a double or triple.

This is an example of how Wall Street criminals spread rumors to influence directional trading – in this case to try and trigger gold futures selling.  Gartman is always used as  Wall Street’s “punching bag” for this purpose.  His latest behavior based on his market commentary and his constant shifting in and out of stocks and gold is revealing once and for all that he’s nothing but a “weather vane” which is controlled by the direction blowing of a few big hedge funds.

It’s more likely that the “smartest” money is accumulative large positions in gold ahead of some event or catalyst that will trigger the next big upleg in gold – likely accompanied by another big sell-off in the stock market.   Goldman has been mysteriously taking delivery of a lot of gold on the Comex,  Druckenmiller took down and big position in GLD and likely is buying physical gold out of the sight of SEC 13-D filings, gold is in backwardation on the LBMA and premiums for buying and taking delivery in the physical are starting to soar.

“The lady doth protest too much, methinks” (Shakespeare).  The anti-gold and silver propaganda flooding the mainstream is perhaps the biggest tell-tale that something is going on behind the scenes in the precious metals market.   If we’re all still standing a few years from now we’ll look back at the Wall Street Journal’s “Pet Rock” article as the signal that investors should have been converting as much fiat currency into physical gold as possible as soon as that WSJ article hit the Street.  Oh wait, China is and has been doing that.

My best idea right now from a risk/return standpoint in the mining stock sector is up over 2% today.  My last best idea, Silvercrest Mines (SVLC) is being acquired by First Majestic.   My mining stock report on current “best idea” explains why I believe this Company will not be stand-alone by next August.  This is especially true if gold starts to move up, as this Company has a lot of proved gold in the ground in two prolific gold mining districts.

You can access this report here:   DE-RISKED JUNIOR GOLD MINER or in combination with my 2nd best risk/return idea for a special Two-Report Discount Package.   I added a technical analysis report of the gold miner from DenaliGuide’s Summit last night.

In the meantime, this was just too funny not to share, it reminds me both of the idiocy of the Fed and the silliness of Dennis Gartman:

ROFLMAO

Oil Falls Below $40 – Looks Like My Gartman Call Was “Money”

Friday I published this post: “Time To Short More Oil – Dennis Gartman Went Long:”

NEW RECOMMENDATION:  Amidst the carnage of the global stock markets this morning and even in light of the sustained bear market in crude oil, the narrowing of the contangos in Brent and WTI brings us to become a buyer of crude as noted at length above. We’ll buy a unit of crude oil, split between Brent and WTI, upon receipt of this commentary. We shall, for the moment, give these prices the latitude to move 3% against us, hoping that we can tighten that up when we return Monday.  The Gartman Letter

Dennis Gartman has been notorious for being a “spunk receptacle” for hedge funds looking to unload a bad position.  His audience is moronic high net worth financial advisors and brain-dead institutional “buy the dip” with other people’s money” pension and investment fund managers.  Perhaps the only better contrarian indicator than Gartman is Jim Cramer.

When Gartman says he has to go long crude because the “term structure” mandates it, it tells me some slippery NYMEX or London trader is whispering sweet nothings in his ear to generate buy interest from the herd referenced above.

You can read the rest here:  LINK

We’re on the brink of another financial collapse that will make 2008’s collapse look like nothing more than a boring warm-up band.  Oil will likely eventually see the $20’s.  This blow some big holes in big bank balance sheets and devastate the junk bond market.  Both of those events will ignite the underlying derivatives napalm…

 

Time To Short More Oil: Dennis Gartman Went Long

NEW RECOMMENDATION:  Amidst the carnage of the global stock markets this morning and even in light of the sustained bear market in crude oil, the narrowing of the contangos in Brent and WTI brings us to become a buyer of crude as noted at length above. We’ll buy a unit of crude oil, split between Brent and WTI, upon receipt of this commentary. We shall, for the moment, give these prices the latitude to move 3% against us, hoping that we can tighten that up when we return Monday.  The Gartman Letter

Dennis Gartman has been notorious for being a “spunk receptacle” for hedge funds looking to unload a bad position.  His audience is moronic high net worth financial advisors and brain-dead institutional “buy the dip” with other people’s money” pension and investment fund managers.  Perhaps the only better contrarian indicator than Gartman is Jim Cramer.

When Gartman says he has to go long crude because the “term structure” mandates it, it tells me some slippery NYMEX or London trader is whispering sweet nothings in his ear to generate buy interest from the herd referenced above.

I have always maintained that the plunge in the price of oil of is first and foremost a product of the Demand side of the Supply/Demand function.  Events in China and the hard commodities markets (see Glencore’s stock) reinforce and confirm my view.

But to further bolster my “fundamentalist” view, here’s a picture of the supply/demand function per Merrill Lynch:

UntitledTo be sure, oil has fallen quickly and sharply – conditions which could lead to an “oversold” bounce on short-covering from short term scalpers. The fundamentals will ultimately drive the price of oil into the $30’s. I made that call when oil first dropped below $50 in February and I’ve maintained that call since then.

And consider this:  Merrill’s global “economists'” models are factoring in positive economic growth from the large “developed” market economies.  Clearly that outlook is severely brain-damaged…