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Silver Spreads: Contango Crush Update

Tyler Durden's picture


A Continuation from Yesterday’s Story: Silver Contango Crushed – Short Squeeze Imminent or Position Limit Ruling Fall Out?

Courtesy of FMX Connect

Silver spreads continue to sell off on Thursday. So far, any theories that weaker spreads are ultimately bullish for the physical metal have to be viewed suspiciously. We spoke with a couple of traders on the topic and our revised possibilities list is as follows:


Silver spreads are being sold because..

  1. There is a physical short squeeze coming.
  2. The appearance of a short squeeze was manufactured as an exit strategy for a long to get out.
  3. Spreads are being messed with in light of the CFTC position limit ruling.
  4. Two-year silver rusts and spot silver doesn’t.


  1. Why is the market lower?
  2. It’s an awful lot of money to spend to camouflage your selling. Millions,upon millions of dollars.
  3. This theory remains entirely possible but the kind of sophisticated funds affected by the new regulation probably wouldn’t puke that way unless they were blowing out.
  4. We’re no chemists, but we suspect this statement is somehow inaccurate.

For the time being, we can not discount that there is a short squeeze coming but more information is needed before we can know for certain. If a bullion dealer is selling spreads because they anticipate making delivery we think we’d probably be the last to know, that’s why we are think it is more likely than not that this  a charade. Whatever the message may mean, it is  certainly expensive to send.

There is one other theory worth mentioning. The most important thing to know is that history does not repeat itself but it sometimes hums a similar tune. What happened in 1997 we do not think will happen again, exactly the same way. In 97 spreads collapses and the market screamed higher, there was no misinterpretation of the signal. We think someone is being fooled or making a mistake, we just don’t know exactly how yet. There may be a sap at the table, but  his identity is unclear for the time being.


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Thu, 01/20/2011 - 18:10 | 891472 Spalding_Smailes
Spalding_Smailes's picture

Monkey hammer meets bubble ....

Thu, 01/20/2011 - 18:14 | 891482 Richard Head
Richard Head's picture

Stick to using "blowtorch."  It's the only thing you're good at.

Thu, 01/20/2011 - 18:16 | 891493 goldmiddelfinger
goldmiddelfinger's picture

You tend to grope when you're losing

Thu, 01/20/2011 - 18:24 | 891524 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You tend to lose when you're groping.

Thu, 01/20/2011 - 18:26 | 891529 goldmiddelfinger
goldmiddelfinger's picture

Not with women

Thu, 01/20/2011 - 18:28 | 891536 tmosley
tmosley's picture

Most women don't have an adam's apple.

Thu, 01/20/2011 - 18:30 | 891541 Spalding_Smailes
Spalding_Smailes's picture


Thu, 01/20/2011 - 18:52 | 891603 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Blythe does.

Thu, 01/20/2011 - 18:55 | 891613 High Plains Drifter
High Plains Drifter's picture

Darn, is Blythe shimmy?

Thu, 01/20/2011 - 19:37 | 891738 Bay of Pigs
Bay of Pigs's picture

Treat Blythe like a farm animal.

Thu, 01/20/2011 - 20:41 | 891865 Spalding_Smailes
Spalding_Smailes's picture


Clearing Member Firms 

Chief Financial Officers 

Back Office Managers 

Margin Managers 

CME Clearing 


DATE: Thursday, January 20, 2011 

Performance Bond Requirements: 

To receive advanced notification of Performance Bond (margin) changes, through our free automated 

mailing list, go to and subscribe to the 

Performance Bond Rates Advisory Notice listserver. 


As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile 

Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the 

following products listed below.  


The rates will be effective after the close of business on Friday, January 21, 2011. 


Current rates as of: 

Thursday, January 20, 2011. 


Thu, 01/20/2011 - 22:10 | 892125 Freddie
Freddie's picture



Where is this Tyler Durden? I am losing my ass in Blue Star Airline, Teldar Paper, Anacott Steel, SLW and GLD! 

You get me in at a 45-degree angle. All the way in. You slash and burn, you buy everything in sight up to 22.

Thu, 01/20/2011 - 20:22 | 891845 Turd Ferguson
Turd Ferguson's picture

I'll have a VERY IMPORTANT gold update later tonight. Will be sure to spam ZH when ready.

Thu, 01/20/2011 - 20:40 | 891879 RockyRacoon
RockyRacoon's picture

I'm on the edge of my seat in anticipation.  Thanks, Turd.

Thu, 01/20/2011 - 21:43 | 892054 Turd Ferguson
Turd Ferguson's picture

You got it, Rock.

Give me till about midnight eastern, though. Maybe sooner but lots to do before then.

Thu, 01/20/2011 - 22:14 | 892138 Freddie
Freddie's picture

Yes yes!  Tell us more. 

I am losing my ass in Anacott Steel, Blue Star Airlines, TelDar Paper, SLW and GOLD.

"Tell China that Blue Horse Shoe loves PM."

"Get Bud Fox on the phone! "


Thu, 01/20/2011 - 18:42 | 891578 kentfinance
kentfinance's picture

you guys are backwards. spreads went wider today. the carry is going up isn't it

Thu, 01/20/2011 - 19:10 | 891644 fmxconnect
fmxconnect's picture


Fri, 01/21/2011 - 09:49 | 892886 kentfinance
kentfinance's picture

could you post the curve? would be helpful if i am bass ackwards which it sounds like i am

Thu, 01/20/2011 - 19:18 | 891672 SwingForce
SwingForce's picture

I have my helmet on, go for it!

Thu, 01/20/2011 - 18:11 | 891473 fmxconnect
fmxconnect's picture

All that said, it's ridiculous for spreads to do this without a rally at some point.

Thu, 04/21/2011 - 10:59 | 1192324 prudentbear
prudentbear's picture

What is the most the spread has been in contango between the first two liquid months for silver?

Or where can i find out?

Anyone here buying the spread in anticipation of a delivery squeeze?

Thu, 01/20/2011 - 18:11 | 891477 TWORIVER
TWORIVER's picture

Stakes are getting high as Gold's (1345) up trend from 2008 lows is at 1296 today. Very big decisions are going to be made soon.

Thu, 01/20/2011 - 18:13 | 891480 fmxconnect
fmxconnect's picture

indeed, the200 day moving average is next up in the 1280 area if we dont stabilize soon.

Thu, 01/20/2011 - 18:14 | 891485 TWORIVER
TWORIVER's picture

Silver already has Head and Shoulders top in as we broke 28, looking for 26.5 then 25 there.

Thu, 01/20/2011 - 18:25 | 891525 JLee2027
JLee2027's picture

Or 5000. Just as plausible as those Ouija boards you use on something that is manipulated.

Thu, 01/20/2011 - 18:52 | 891604 TWORIVER
TWORIVER's picture

Not really using a Ouija Board, just looking at the supply demand picture represented on by a bar chart. I don't know what you use.

Thu, 01/20/2011 - 18:56 | 891615 JLee2027
JLee2027's picture

Common sense.

Thu, 01/20/2011 - 19:18 | 891671 TWORIVER
TWORIVER's picture

So then you see the Head and Shoulders top from 28 - 31, right? Thats what common sense would tell you.

Thu, 01/20/2011 - 19:35 | 891730 JLee2027
JLee2027's picture

I pay no attention to the men pulling the puppet strings, and you shouldn't either.  Stalin would call someone like you a "Useful idiot".

Thu, 01/20/2011 - 19:40 | 891752 Bay of Pigs
Bay of Pigs's picture

Common sense would also tell you to cost average in all the ay down to 26 if you think it's going that low. I don't. BTFD.

Thu, 01/20/2011 - 19:38 | 891745 Catullus
Catullus's picture

Don't bother. The bugs think they're the only ones buying or selling. They don't think someone else may be managing a P&L and have been late to the party in the recent rally. "what's consolidation? The fed could hyperinflate silver to 5000 in nanoseconds!!!"

Thu, 01/20/2011 - 21:47 | 892066 Exposer of Inte...
Exposer of Internet Shills's picture

I smell a stink here

Thu, 01/20/2011 - 18:12 | 891478 NOTW777
NOTW777's picture

why is this a surprise when we know who controls silver with the help of the fed government

Thu, 01/20/2011 - 18:15 | 891486 fmxconnect
fmxconnect's picture

it's a suprise because you don't need to sell spreads to fool the market. they are very illiquid. it's entirely possible that a bullion dealer is frontrunning someone who had spreads to sell.

Thu, 01/20/2011 - 18:12 | 891479 goldmiddelfinger
goldmiddelfinger's picture

Can't recall any widely heralded short squeeze "warnings" that actually played out.

Thu, 01/20/2011 - 18:19 | 891497 fmxconnect
fmxconnect's picture

1997:  silver trading 4.50... spreads g ofrom contango to backwardation. mkt moves higher 3.00 in a few days. spreads go backwardated at a 40% negative costofcarry. Buffet locks it in, essentially lending the silver he took deliver of back to the miners he duped. i traded it.


footnote: he lent it back to them at a 40% negative carry on it because the govt asked. his intentions were to squeeze the industry. there are many other examples. But this should do.

Thu, 01/20/2011 - 18:24 | 891519 goldmiddelfinger
goldmiddelfinger's picture

Touche. Guess I'm thinking more about equities patterns but was there wide knowledge of the setup?

Thu, 01/20/2011 - 18:49 | 891589 fmxconnect
fmxconnect's picture

Didn't mean to be so snarky. to answer: widely understood? No. Widely known what was going on in terms of spreads adn metal coming out of the warehouse, yes. Spreads are coming in, why " I dont know that is weird, probably bullshit. Lets get a beer."

Thu, 01/20/2011 - 19:27 | 891703 goldmiddelfinger
goldmiddelfinger's picture

Excellent! Thanks!

Thu, 01/20/2011 - 20:05 | 891807 fmxconnect
fmxconnect's picture


Thu, 01/20/2011 - 18:26 | 891528 6 String
6 String's picture

I can think of a few goldmiddlefinger in the equity markets. But, yeah, I tend to agree with you: the short squeeze theory is totally ridiculous and stupid to say the least. JPM isn't going to get "short squezzed" out of paper when the CFTC just confirmed the go ahead for them in the ongoing silver manipulation scheme....

This isn't a short squeeze. It's a classic hammer down. And they are going to keep hammering away. Seriously, short squeeze? Won't happen until the COMEX is wiped out which doesn't appear immediately immiment.

I'm long siver, but i expect to see the Chinese continue to push the price down thru JPM as they accumulate the phyiscal stuff. The spot price is a fucked up barometer for what the true price will probably be....

But patience is the name....which is what they are trying to hammer down on. Get the investment demand to wane; shore up physical.

It's a damn tug-o-war like everything else right now. But an immenent short squeeze theory is plain wrong-headed.

Thu, 01/20/2011 - 18:17 | 891484 plocequ1
plocequ1's picture


Thu, 01/20/2011 - 18:15 | 891487 Yen Cross
Yen Cross's picture

  Yes you are correct! xag is a buy intrest in my book. 100sma-200sma. Silver is a much better value than gold! 25.73-22.02. I enjoy the larger contract size. I can trade a 4 pip spread on the spot market. It has real value. Not perceived value. I like it!

Thu, 01/20/2011 - 18:16 | 891491 tellsometruth
tellsometruth's picture

called my local dealer, only sterling available today....

Thu, 01/20/2011 - 18:17 | 891498 cat2
cat2's picture

If you don't know who the chump at the table's you.

Thu, 01/20/2011 - 18:20 | 891507 fmxconnect
fmxconnect's picture

exactly. but we are flat.

Thu, 01/20/2011 - 18:22 | 891512 downrodeo
downrodeo's picture

damn, beat me to it...

Thu, 01/20/2011 - 18:18 | 891499 spiral_eyes
spiral_eyes's picture

this is a china thing. they're burning their dollar pile shorting paper silver and simultaneously picking up the physical at as low a price as they can get it. truly a tidal wave of cash. they know the dollar is overvalued and want to obtain as much physical anything as they can before the ponzi comes crashing down.

Thu, 01/20/2011 - 18:21 | 891510 fmxconnect
fmxconnect's picture

this is very valid and possible. looking into it now. there are blanks that need ot be filled in on it first.

Thu, 01/20/2011 - 18:50 | 891592 goldmiddelfinger
goldmiddelfinger's picture

His theory works well because China is the one player that would benefit in scale and it also explains why the spreads wont collapse and the specs will be left waiting for the squeeze that never came.

Thu, 01/20/2011 - 20:02 | 891800 Max Hunter
Max Hunter's picture

One of my first thoughts as well.. Doesn't necessarily mean it's China though... Or, not only China.

Thu, 01/20/2011 - 20:12 | 891819 fmxconnect
fmxconnect's picture

anyone with a trade surplus wiht us, and/ or any country that wants toincrease its PM holdings as a diversifier of its FX Risk, like China, india etc. SDRs are coming and PMs will figure int othem in some small way..

Thu, 01/20/2011 - 18:26 | 891531 Yen Cross
Yen Cross's picture

  Respectfully. Whether it's nined or printed. It's all a ponzi scheme! Bonds wouldn't exist if I was wrong.

Thu, 01/20/2011 - 19:09 | 891636 MGA_1
MGA_1's picture

You know, this seems like a very plausible explanation and why the shorts keep going at it even with such robust physical demand.  I think get 'yer physical is a good tact right now.

Thu, 01/20/2011 - 18:19 | 891504 Robot Traders Mom
Robot Traders Mom's picture

You fucking sheep need to relax. Quit day trading it and hold it until the collapse. The government is no better off. The dollar is still a worthless piece of shit. The average consumer has the IQ of Spalding or Harry Wanger and is in debt up to their eyeballs.


I hope gold goes back under $1,000 so I can buy more. I will keep buying it until the collapse, regularly, and without regard to the cost in dollars.

Thu, 01/20/2011 - 18:24 | 891523 gwar5
gwar5's picture


We can't grow our way out.

We can't print our way out.

We can't cut our way out.

There is no way out.

Thu, 01/20/2011 - 19:16 | 891662 living on the edge
living on the edge's picture


We can't grow our way out.

We can't print our way out.

We can't cut our way out.

There is no way out.


It's called a "Kondratieff Winter" and you're right.

Thu, 01/20/2011 - 20:13 | 891821 fmxconnect
fmxconnect's picture

i recommend a book called the Fourth Turning, also on Macro economic cycles.

Thu, 01/20/2011 - 19:44 | 891760 Topher
Topher's picture


We can't grow our way out.

We can't print our way out.

We can't cut our way out.

There is no way out.

Thu, 01/20/2011 - 18:26 | 891532 umop episdn
umop episdn's picture

Sometimes ya just gotta use the talking bears...

Most of you saw this one last week. Listen in at 4 min 12 sec. They freakin' warned everyone this was going to happen.

Thu, 01/20/2011 - 19:29 | 891710 Eternal Student
Eternal Student's picture

+1. That bears repeating.


Thu, 01/20/2011 - 18:53 | 891606 Spalding_Smailes
Spalding_Smailes's picture

I have been debt free since 2004.

Thu, 01/20/2011 - 19:04 | 891624 goldmiddelfinger
goldmiddelfinger's picture

He'll keep buying down under $1,000 the way Wylie Coyote carries the anvil off the cliff.

Thu, 01/20/2011 - 21:55 | 892089 RafterManFMJ
RafterManFMJ's picture

Can I get a loan?

Thu, 01/20/2011 - 20:14 | 891822 Soup
Soup's picture


Thu, 01/20/2011 - 23:40 | 892292 Triggernometry
Triggernometry's picture

*keep buying it until the collapse*

Thu, 01/20/2011 - 18:21 | 891509 downrodeo
downrodeo's picture

If you're playing a poker game and you look around the table and and can't tell who the sucker is, it's you.
Paul Newman

so true!

Thu, 01/20/2011 - 19:37 | 891740 MrSteve
MrSteve's picture


Thu, 01/20/2011 - 18:25 | 891526 Quinvarius
Quinvarius's picture

JPM doesn't care about the market fundamentals.  OPEX is coming. 

Thu, 01/20/2011 - 18:38 | 891564 Yen Cross
Yen Cross's picture

  That was creative! Funny! Good work Q OPEX. How about YUAnFRICA? Chinas' home for the masses!

Thu, 01/20/2011 - 18:37 | 891530 AR15AU
AR15AU's picture

Sorry to call bullsh1t on this article...  but look at the setup on Silver Lease Rates.

A short squeeze is taking place NOW, and the powers that be are going to drop the equities market in order to deflate commodities and try to relieve some pressure. As soon as the sell off is over, it will be the last, best buying opportunity before the parabolic stage.






Thu, 01/20/2011 - 18:52 | 891602 fmxconnect
fmxconnect's picture

People find their silver and lease it out.slowly andinefficiently, butthesilver is magically found. OR there is a coordinated cartel that says "don't lease your silver anymore, we're goingto fuck the shorts. they dont have enough money to cover." which is why we feel it is a fiction that JPM is short silver. adn even if they were, their balancesheet is infinite, they will blow someone else up before they go under first.

Thu, 01/20/2011 - 19:06 | 891627 Quinvarius
Quinvarius's picture

That is hawt.

Thu, 01/20/2011 - 19:09 | 891634 Threeggg
Threeggg's picture

"A short squeeze is taking place NOW, and the powers that be are going to drop the equities market in order to deflate commodities and try to relieve some pressure. As soon as the sell off is over, it will be the last, best buying opportunity before the parabolic stage".

and bygod thats what we are seeing.

If you watch the Gold and silver price it is being frontran to the downside as the market retreats.

I thought I was the only one who thought like this.


Thu, 01/20/2011 - 18:28 | 891537 satansanus
satansanus's picture

I sold oz of silver this year from 18 to 28.50 all metal. Best year for silver as long as I can remember


I hope it drops back to 11 so I can buy it all back again

Thu, 01/20/2011 - 19:37 | 891739 mrgneiss
mrgneiss's picture

What did you exchange your silver for smart guy?

Thu, 01/20/2011 - 22:26 | 892171 Dapper Dan
Dapper Dan's picture

In 1980 silver went from $11.00 to $50.00 then back to under $11.00

Thank you Nelson "Bunker"


Fri, 01/21/2011 - 03:12 | 892617 The Navigator
The Navigator's picture

When it dips, I cheer because I can buy more for fewer USD. When it rises, I cheer for the good purchases I've made at lower prices.

But most of all, I cheer at the insurance resting inside my rifle safe that started in 2007. All Hail the Mogambo Guru who was early in the inflationary warning and got me ahead of the curve. 

Thu, 01/20/2011 - 18:30 | 891544 RobotTrader
RobotTrader's picture

Bottom line is that the PM's are now in a downtrend.

More sellers than buyers.

Both the 21-day  and 50-day moving averages have been broken.

Get over it.

Follow the tape and follow the PigMen, not your wishes.....

Thu, 01/20/2011 - 18:38 | 891563 tmosley
tmosley's picture

I'm bullish on Robo's trolling.

Seriously, Robo, sell your gold.  All of it.

Thu, 01/20/2011 - 18:55 | 891612 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

As far as I know, he did.  Robo, care to comment?

Thu, 01/20/2011 - 19:06 | 891628 goldmiddelfinger
goldmiddelfinger's picture

Appears a lot of people have sold. Gold down $75 last few weeks and PM are the worst preforming asset class since QE2 announced. Get out much?

Thu, 01/20/2011 - 19:12 | 891648 Threeggg
Threeggg's picture

Can a printing press be nominated for person of the year on the people magazine cover ?


Just askin !

Thu, 01/20/2011 - 19:14 | 891655 Quintus
Quintus's picture

No doubt it does appear like that...if you know fuck all about what's been going on, but are one of those strange people who very loudly and publicly proclaim that Gold is an investment for morons, but still can think of nothing better to do with their time than spend it trolling any and all discussions relating to gold.  Open Interest continues to increase even as JPM and their friends continue to dump ever more paper shorts on the market.  'People' are net buyers not sellers.  We all know who the seller is.

Thu, 01/20/2011 - 19:17 | 891669 goldmiddelfinger
goldmiddelfinger's picture

Open interest is paper.

Thu, 01/20/2011 - 19:29 | 891712 Quintus
Quintus's picture

Ummm yes.....and your point is?

Mine is that the $75 decline you speak of is not a result of 'People' quitting their long (paper) positions, but rather because some entity that shall remain nameless (JPM) is desperate to get the fuck out from their massive undeliverable short position and is trying to overwhelm demand with scads of unbacked paper.  

They are in full-on kamikaze mode now.  A little smackdown like in the good old days won't be sufficient to scare out enough of those longs still in the market and who might stand for delivery.  Only a monumental damn-the-torpedoes effort will do.  If they don't succeed, and too many deliveries are demanded anyway, well they're no worse off than if they hadn't tried.  They'll just change the Comex settlement rules anyway to save themselves.

Thu, 01/20/2011 - 19:45 | 891763 goldmiddelfinger
goldmiddelfinger's picture

Thanks. That's helpful. PM investing pulls in all the dogmatic doomers with guns and peanut butter and because I'm equities and options, I prefer quicker trades than 100 year floods. The PM markets get asymetrical quickly because the derivatives overwhelm the physical market and people that know that part of the market are worth hearing. Sorry to tag you with a tin can in the sideyard.

Thu, 01/20/2011 - 18:39 | 891565 Quintus
Quintus's picture

'More sellers than buyers'?

No, just '4 or less' sellers.  And they're not selling silver.  Just paper.

Thu, 01/20/2011 - 19:19 | 891677 goldmiddelfinger
goldmiddelfinger's picture

And who is buying the paper?

Thu, 01/20/2011 - 18:39 | 891570 Cdad
Cdad's picture

After hearing Dennis Gartman on the Blow Horn [CNBC], I came here to report the status of assholes and propaganda pertaining to gold...and low and behold, Robo was here with these comments.

Now I never much cottoned to Dennis Gartman.  I think he is pure BS, image, charlatan, f*custick.  But you and I, Robo, need not argue the point...because gold is under attack by PigMen, as you put it, as part of a continuing forced reallocation trade.  However, the truth about PMs, entry points, value, and future potential will clearly be decided on a big am down tick, outside day, recovering to highs by the close.  And by this I mean that anyone will be able to see it...and no 12 month charts of things that have already happened will be needed to point it out. 

So the game is on in PMs...for I have been waiting to take in some falling price action.  Will update...


Thu, 01/20/2011 - 19:49 | 891773 oddjob
oddjob's picture

Gartman is a shill and a baffoon that has never made a correct call on Gold and Silver in his lifetime.

Thu, 01/20/2011 - 20:49 | 891892 RockyRacoon
RockyRacoon's picture

Hold in now.  Gartman is a wonderful contrarian indicator.

Thu, 01/20/2011 - 21:39 | 892035 JLee2027
JLee2027's picture

Gartman points down just like the divining rod he is.

Thu, 01/20/2011 - 18:40 | 891571 SlipStitchPass
SlipStitchPass's picture

 Their is a sell off in the paper market. Until the paper market passes away and it layers of fraud exposed, we will not have true price discovery in the silver market.

I would like to see a paper sell of to the low 20's just to see what happens to the physical market. It will be interesting to see what happens to premiums and see if there is any physical available or if it is all taken off. I have some dry powder sitting in wait.

Thu, 01/20/2011 - 18:53 | 891607 fmxconnect
fmxconnect's picture

Actually more buyers than sellers. Just the 1 seller is huge

Thu, 01/20/2011 - 19:09 | 891639 Quinvarius
Quinvarius's picture

And he has a printing press to make margin calls with.

Thu, 01/20/2011 - 19:13 | 891654 fmxconnect
fmxconnect's picture


Thu, 01/20/2011 - 19:34 | 891727 Quintus
Quintus's picture

They can't be beaten at the paper game.  The Bernank can magic up enough paper of any type required to ensure that.

The only way to bring this abomination to an end is to deprive the big shorts of the physical metal they need to maintain the charade that they actually have anything at all to back up their paper.  The Bernank is just as powerless as the next guy to prevent that happening.

Fri, 01/21/2011 - 00:30 | 892399 Bob Sponge
Bob Sponge's picture

seems to be in progress

Thu, 01/20/2011 - 19:03 | 891623 lieutenantjohnchard
lieutenantjohnchard's picture

only in catfish mouth robo uber bull's world is a 6% pullback a downtrend. gld has outperformed your goog (which you don't own but would like everybody to believe you do) over the last few years by twice the amount ie ... gld is up 135% goog up 60%.

btw: pray tell us the next 5% directional move in any security of your choosing - ye old wise all-knowing jesse livermore - so we can front run and add to our wealth.

Thu, 01/20/2011 - 19:11 | 891646 Cdad
Cdad's picture


tell us the next 5% directional move in any security of your choosing

Robo does not do that.  He charts things that have already happened, and then makes the claim that he is telling the future.  You need to report to the next tent over to get what you are looking for.


Thu, 01/20/2011 - 19:17 | 891668 lieutenantjohnchard
lieutenantjohnchard's picture

yes sir. my apologies.

seriously though you are 100% correct. he's a fraud. in the meantime i've found what i'm looking for and have taken action accordingly.

Fri, 01/21/2011 - 01:10 | 892496 tekhneek
tekhneek's picture

what, you're buying the shit and oogling over it? nonsense.

Fri, 01/21/2011 - 05:30 | 892682 Hephasteus
Hephasteus's picture

I hear you suck at math. What you know about nonsense? LOL

Thu, 01/20/2011 - 19:33 | 891722 Poor Grogman
Poor Grogman's picture

Take some of your fabulous paper profits and try buying a serious quantity of silver bullion.

Or keep living in the world of the hypnotic electronic tape.

Tangible vs Pretend

Everyone will sooner or later have to choose.


Thu, 01/20/2011 - 20:53 | 891899 RockyRacoon
RockyRacoon's picture

Even the Mint is staying geared-up for furious sales:

US Mint Added New Silver Blank Supplier in 2010

January 18, 2011

For much of the past three years, the United States Mint has struggled to keep up with the boom in demand for physical precious metals. Although they have been required to mint and issue American Gold and Silver Eagle bullion coins in quantities sufficient to meet public demand, they have often fallen short of this mandate, resorting to sales suspensions and rationing programs.

The US Mint's 2010 Annual Report details some of the specific steps they have taken to increase the quantity of precious metals blanks that they are able to acquire:

  • The US Mint worked with their existing precious metals blanks fabricators to revise delivery schedules to fit production levels. Level loading materials allowed these fabricators to increase productivity and increase output.
  • A new silver blank fabricator began delivering blanks late in the fiscal year. The US Mint also continues to pursue additional suppliers. The reliance on a small number of foreign suppliers was previous noted as the "heart of the problem" in the US Mint's struggle to manufacture sufficient gold and silver bullion coins.
  • Productivity and efficiency enhancements were implemented at the West Point Mint. Coin encapsulation and packaging processes were automated, employees were trained to handle more areas of responsibility, and coordination with suppliers allowed continuous assaying, inspection, and coin production to take place.

The US Mint cited the results of their efforts during the year:

  • The average monthly supply of all gold and silver blanks from vendors increased from 2.6 million ounces to 4.1 million ounces.
  • Output at the West Point Mint increased from 175 ounces per labor hour to 215 ounces per labor hour.
  • By August 2010, the US Mint had sufficiently expanded supply to remove order limits and fully satisfy demand for silver bullion coins by August 2010.
  • Popular numismatic products like the 2010 Proof Gold Eagles and 2010 Proof Silver Eagles were launched in October and November 2010. These offerings had been canceled in the previous year.
  • Thu, 01/20/2011 - 19:37 | 891736 Ras Bongo
    Ras Bongo's picture

    Sheep is blinded by the shiny stuff.

    We'll buy it from them at bargain prices.


    Thu, 01/20/2011 - 19:47 | 891766 DosZap
    DosZap's picture


    Partially true, but not because of fundies.

    Its the paper game causing the effect.

    Sooner (much sooner) than most expect, the Physical holders will REAP the windfall, on ALL PM's.

    More Eagles have been sold this month 20th, than at anytime on record, and many more would be IF the Dealers could get them.

    They are being rationed.Also, and here is the tell, the usual clients that sell, and take profits for once ARE not, no one is selling physical.The Dealers are short all the way around, and getting worse.

    Cant get it from the Mint, cant get bullion from normal clients who traditionally sell this time of the year.

    Are not told,or given a clue how much they will get, comapred to the week before, and its all sold before it even comes in.

    Chunk Asia into this mix, and somthings gonna give.

    I say screw them, I snag a 100oz every 2 wks.More if we have a decent dip.

    Sooner or later,the Strong hands(Phys hldrs) will finally take this bitch down.

    Thu, 01/20/2011 - 20:12 | 891820 bankrupt JPM bu...
    bankrupt JPM buy silver's picture

    Missed you at $31 Robo.  Now that Blyth has reloaded you come out of the woodwork eh?  Just for the record, are you short silver right now?

    Thu, 01/20/2011 - 20:55 | 891902 RockyRacoon
    RockyRacoon's picture

    Who really gives a shit?

    Thu, 01/20/2011 - 23:33 | 892273 mouser98
    mouser98's picture

    i don't understand the resistance to the shorters.  like the bear said, i hope silver gets down to $1 an ounce so i can buy a swimming pool full of maples.  we know that every QE will only further increase the true dollar value of silver and that its undervalued at even $30 per ounce.  so i say, Good on ya silver shorters!!! Keep shorting and may god bless you, i will keep buying physical at the local coin shop and wait for the final accounting.

    Fri, 01/21/2011 - 11:40 | 893271 viahj
    viahj's picture

    exactly, let them have their paper trade games

    Thu, 01/20/2011 - 18:32 | 891551 Dan The Man
    Dan The Man's picture


    I like that too...i will mortgage your farm to buy whatever I can

    Thu, 01/20/2011 - 18:36 | 891562 Weisbrot
    Weisbrot's picture

    I suppose municipalities wont default, and fedflation wont continue then either - otherwise we may be looking at a real sweet buying op. or perhaps synthetic banking will take over all we all get forced in to digital credits.

    Thu, 01/20/2011 - 18:38 | 891566 silver is money
    silver is money's picture

    Too much thinking is not this stage

    Thu, 01/20/2011 - 19:18 | 891673 Rainman
    Rainman's picture

    Best advice on the Board. PM action might just be about movements in sentiment. The recovery propaganda is coming fast and hard from everywhere. January is a repositioning month anyway. CFTC is spooking the herd on position limits.

    Asset pickin is like betting the horse races. You over analyze the Racing Form until you figure out the horses don't read any of that bullshit. If they take a good crap in the morning and get their " medicine ", they'll run fast.

    Thu, 01/20/2011 - 21:27 | 891992 Shell Game
    Shell Game's picture

    Amen, we have a winner..

    Thu, 01/20/2011 - 18:39 | 891568 ThisIsBob
    ThisIsBob's picture

    What happened to all the citizens who were buying in hopes of toppling JPM?

    Thu, 01/20/2011 - 18:43 | 891580 SlipStitchPass
    SlipStitchPass's picture

    We are still here and we have reverse leverage of 100X and the more the price drops the more JPM will feel the pain. This war will last a bit longer than a few days.

    Thu, 01/20/2011 - 18:56 | 891614 Dagny Taggart
    Dagny Taggart's picture

    Ummm, we're buying the dips.

    Thu, 01/20/2011 - 18:59 | 891620 tmosley
    tmosley's picture

    We're buying the "fucking" dips.

    This hardly qualifies as a "fucking" dip.  I'll buy more as scheduled in early Feb.

    Thu, 01/20/2011 - 19:08 | 891632 goldmiddelfinger
    goldmiddelfinger's picture

    But don't paid trolls get a check before then?

    Thu, 01/20/2011 - 19:55 | 891787 oddjob
    oddjob's picture

    You cant even win at Gin Rummy when you cheat.

    Thu, 01/20/2011 - 19:10 | 891641 Dagny Taggart
    Dagny Taggart's picture

    Well if goes down more, I'll buy more. I really don't think the US Mint, being part of the gov't clusterfuck, is going to be able to keep silver in stock this year. Regular dips or "fucking" dips, I'm buying.

    Thu, 01/20/2011 - 19:25 | 891698 Yen Cross
    Yen Cross's picture

     Buy the 200sma and hedge on 22 something. People don't realize the 5k contact. Gold is 100toz. Silver is 5000toz. 1 troy ounce equals 31grams! Roughly. 1 pound is 12 troy ounces. The conversion rate is 1.4667. I trade spot metals on occasion. I am aprofessional currency trader. Just buy some xag @ the 200day moving average. It's highly unlikely that will be hit. SOOOOO trade the 100!

    Thu, 01/20/2011 - 19:39 | 891749 Eternal Student
    Eternal Student's picture

    I'm still buying. Currently planning on buying every week, probably through March, and will reassess then.

    I don't know, or care about the price. Nor do I know if this will really ding JPM. But hey, if you've got a better idea to voice your opposition to this corruption, do speak up.

    I'm already out of all debt, so it's got to be something else.

    Fri, 01/21/2011 - 01:19 | 892516 Captain Benny
    Captain Benny's picture

    I'm buying every two weeks as well.  More than half of my income is now redirected towards PMs.  My family is starting to catch on and they are now buying silver as an inflationary hedge... they're not __YET__ big buyers, but give them a few months and they will be.

    Thu, 01/20/2011 - 18:40 | 891572 belogical
    belogical's picture

    I don't think this is that bad of a pull back. These guys can push these charts around anyway they want and they just did. It looks bad. So do what we have been doing for for years and purchase physical with money you can sit on and trade the chart with paper. In amounts you can lose because this is a manipulated market and despite the CFTC clowns it is going to continue that way till it collapses

    Thu, 01/20/2011 - 20:14 | 891824 bankrupt JPM bu...
    bankrupt JPM buy silver's picture

    4.5% in one day?  Not bad?  Point to another industrial metal that gets slammed the way silver does?  This is so obviously manipulation its retarded not to see it.

    Thu, 01/20/2011 - 21:42 | 891996 El Hosel
    El Hosel's picture

     "4.5% in one day?"...

    It just went up 85% in a year, shit happens.  .... ( Robos PMs "downtrend" photo )

    WTF?  This has been the biggest run in silver since the Hunt Bros and nobody thought it would correct at some point?  The Fed ain't pumping the POMO to hold up the gold/silver market boyz, it will have corrections like a real market should.  GDX is touching its lower trendline for the 9th ( seriously ) time since the crash of 2008, no harm there yet. Silver went parobolic on the last "croak JPM" leg, that begs for an aswooping no matter how you slice it.

    Silver back to $20 would be 50% retrace on that weekly chart... Just saying

    Thu, 01/20/2011 - 18:42 | 891577 AUD
    AUD's picture

    Some, but only some, evidence of contangos in COMEX gold beginning to narrow. The last big run was presaged by falling spreads into the contract rollover.

    fmxconnect, can you give a little more detail on how you calculate your spreads? It would be interesting to see how they compare to mine. I merely graph the COMEX settlement data & look for odd movements.


    Thu, 01/20/2011 - 19:08 | 891626 fmxconnect
    fmxconnect's picture

    calculation of contango is simply riskless cost of money and storage cost. if you apply this to gold, which has almost zer ochance of goign backwardated, you will see that the differene in price between say G adn M gold futures is the opportunity cost of tieing up your money for those 2 months, assuming you took delivery of the G contract.

    during rollover, the front month contango typically gets distorted adn themoney calculation doesnt work because mechanical trades and regulations take precedent. historically, a fund is long gold, and MUST roll it. He cant take delivery and if he wishes to stay long he must roll when open interest and/or time hit a certain point. this mechanical rollover was exploited by dealers. There were times when the contango go so overbaked becasue of so many longs rollingthat one of outr staff took delivery with the hopes that the contango would decrease after the massivefund rolloverended.


    to answer directly. we observe settlements, calculatethe cost of carry based on the spot price adn compare that to Treasuries over thesame time frame. a better way would eb to look at the Eurodollar rates, since so much of the physical biz is London based.oen of our guys has shorted spreads adn shorted bonds adn done quite well this year, trading the correlation. but he might just have been lucky. hopethat helps

    Thu, 01/20/2011 - 19:33 | 891723 AUD
    AUD's picture

    Thanks. Good to have a different perspective.

    Fri, 01/21/2011 - 09:59 | 892907 yellowbr
    yellowbr's picture

    Great, thank you for the explanation!

    Thu, 01/20/2011 - 18:43 | 891579 belogical
    belogical's picture

    We have not had that many bad days in the last six months, so take a breath. The odds were against us. See what the expiration week looks like

    Thu, 01/20/2011 - 18:51 | 891587 Sudden Debt
    Sudden Debt's picture

    According to the Financial Times in London, “JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal.” According to a person familiar with the matter, “The decision by JPMorgan was an attempt to deflect public criticism of the bank’s dealings in silver.” JP Morgan said in a statement, “It is absolutely incorrect to say or imply that the Nymex, CFTC or any other exchange or regulator has instructed or asked us to reduce our position.”

    NIA, along with the Gold Anti-Trust Action Committee (GATA), has been at the forefront of helping expose JP Morgan’s silver price suppression scheme. Over a year ago on December 11th, 2009, NIA declared silver the best investment for the next decade at $17.40 per ounce. NIA said in its December 11th article, “It’s not a coincidence that the day silver reached its multi-decade high of over $21 per ounce in March of 2008, was the same day Bear Stearns failed. Bear Stearns was a holder of a massive short position in silver.”

    NIA went on to say, “The reason why we believe the Federal Reserve was so eager to orchestrate a bailout of Bear Stearns, is because Bear Stearns was on the verge of being forced to cover their silver short position.” NIA then said, “JP Morgan still holds the silver short position they inherited from Bear Stearns” and “JP Morgan will have to cover this short position or it could jeopardize their existence.”

    On February 5th, 2010, JP Morgan was successful at manipulating the price of silver down to below $15 per ounce. On February 7th, NIA wrote an article entitled, “NIA Bets Big on Silver Price Recovery” in which it said, “NIA is betting big that this past week’s short-term decline in the paper price of silver was just a temporary wash out, before a huge surge in silver prices later in 2010. One of NIA’s co-founders purchased on Friday, 1,300 January 2011 $20 SLV call options at a price of $0.89.” These call options that NIA suggested went on to rise as much as 1,024% to a high this month of $10.

    On March 25th, 2010, the CFTC held a hearing on position limits in precious metals. Bill Murphy of GATA (see NIA’s video page for an interview we conducted with Mr. Murphy on Thursday) was allowed to speak (within a five-minute time constraint). Right at the beginning of Murphy’s speech, there was a technical failure of the live television broadcast, which was mysteriously fixed as soon as he was done speaking. This did not stop Murphy, who was brave enough to present the evidence of Andrew Maguire, a former Goldman Sachs precious metals trader who on February 3rd became a whistleblower when he wrote to Eliud Ramirez, a senior investigator for the CFTC’s Enforcement Division, giving him the “heads up” for a “manipulative event” signaled for February 5th. Maguire described to the CFTC in February 3rd emails, exactly what would happen on February 5th (which did occur exactly like predicted), yet the CFTC refused to take any action against JP Morgan or the other conspirators.

    Murphy was scheduled for several mainstream media television interviews after the CFTC hearings, but they were all abruptly cancelled at once. In the weeks that followed, Murphy’s car was stolen, his web site was hacked, and he was punched with brass knuckles and knocked out cold less than two blocks from his house. As for Maguire, a couple of days after the CFTC hearings, he and his wife were involved in a bizarre hit-and-run car accident in London where a second car coming out of a side street struck their vehicle. The hit-and-run suspect then hit two more vehicles when he desperately attempted to flee, which resulted in a police chase with helicopters. The suspect was nabbed, yet surprisingly, his name was never released and it was never made known if charges were filed.

    On April 3rd, 2010, with silver at $17.89 per ounce, NIA wrote an article entitled, “Silver Short Squeeze Could Be Imminent”. In this article, NIA said, “With the spotlight now on JP Morgan, NIA believes they will be less likely to naked short silver at these levels and manipulate the price down like in February. With the mainstream media blackout, it is important for NIA members to work harder than ever to spread the word and help expose what could be the largest fraud in the history of the world.”

    On May 13th, 2010, NIA released its critically acclaimed documentary ‘Meltup’, which featured our in-depth research on JP Morgan’s silver price suppression scheme. Thanks to the help of tens of thousands of NIA members who worked tirelessly to spread the word about ‘Meltup’, nearly 1 million people saw the documentary and became educated to the truth about JP Morgan’s silver manipulation. Without the hard work of NIA members, JP Morgan would have went on naked shorting silver for years and the topic would have never become mainstream.

    In ‘Meltup’, NIA’s President Gerard Adams stated, “The current gold/silver ratio of 64 wouldn’t be possible unless silver prices were being held artificially low through manipulation. I don’t believe it is possible for the silver that JP Morgan is short to be backed by physical silver. Most likely, JP Morgan has been naked shorting silver, by selling paper silver that doesn’t physically exist.” Since the release of ‘Meltup’, the gold/silver ratio has fallen by a shocking 27% down to 47. Within the next few years, NIA expects the gold/silver ratio to at least fall to 16, which will mean another three times increase in the purchasing power of those who own silver. In fact, because silver prices have been held artificially low for so long by JP Morgan’s manipulation, there is a chance the gold/silver ratio will over swing to the downside and decline to 10 or lower this decade.

    Throughout world history, there have been 46 billion ounces of silver produced compared to 5 billion ounces of gold. Although gold gets all of the headlines in the mainstream media, silver shares all of the same monetary qualities as gold. Based on historical production ratios, a gold/silver ratio of 10 down the road could certainly be realistic. In fact, considering that most of the silver ever produced has been consumed by manufacturing, a gold/silver ratio of much less than 10 is possible. Worldwide inventories of silver have declined 90% since 1940 from 10 billion ounces down to approximately 1 billion ounces today. NIA believes that a major shortage of physical silver is in the process of developing.

    On September 9th, 2010, NIA released an article entitled, “Is JP Morgan’s Silver Manipulation Over?”. In this article, we discussed how JP Morgan was winding down their proprietary trading desks, which we felt were responsible for the silver manipulation. We stated that we were “hopeful but skeptical that the manipulation is coming to an end” and “cautiously optimistic at this time”. Since September 9th, the price of silver has gained over 50% and is holding strong near $30 per ounce. There have been no noticeable manipulative takedown attempts by JP Morgan.

    NIA estimates that over the past 30 days, JP Morgan has covered approximately 4,000 silver contracts, which has corresponded with about a $4 per ounce upward move in the price of silver. We estimate JP Morgan to still be short approximately 26,000 silver contracts or 130 million ounces of silver, which equals about 18% of worldwide annual silver production from mining of 709.6 million ounces. If JP Morgan covers their entire silver short position and the price of silver was to continue rising by $1 for every 1,000 silver contracts that JP Morgan covers, silver would rise to $56 per ounce.

    JP Morgan appears to be covering its shorts in a very managed and orderly way. We are not yet seeing anything that resembles a short squeeze, although one could occur at any time. If we see a major silver shortage and a real short squeeze, silver could literally rise to hundreds of dollars per ounce overnight. Silver’s all time high of $49.45 per ounce adjusted to the CPI equals $139 per ounce in today’s dollars. As all NIA members know, the CPI understates inflation through geometric weighting and hedonics. The real inflation adjusted all time high for silver is over $400 per ounce.

    With almost everybody who has ever purchased silver being up on silver in terms of dollars, it is possible we could see silver prices take a breather in the short-term. NIA is hoping for a short-term pullback, but with so many investors waiting to buy on dips, there is a chance that a large short-term pullback will never occur. NIA is very pleased that for the first time in many years, silver prices appear to be trading based on free market forces and not the manipulation of JP Morgan.

    Thu, 01/20/2011 - 19:09 | 891637 fmxconnect
    fmxconnect's picture

    i bet they are long.

    Thu, 01/20/2011 - 19:20 | 891681 belogical
    belogical's picture

    Thanks, I have heard it all before, but laying it out like that keeps my head in the game. I appreciate it. 

    Thu, 01/20/2011 - 20:20 | 891836 DosZap
    DosZap's picture

    Most likely, JP Morgan has been naked shorting silver, by selling paper silver that doesn’t physically exist.”

    Since they own SLV,( on the 100-1 ratio) and if you have read their prospectus, you know what they hold, and that you are left buck ass naked if it comes to a short sqeeze,or even just day to day .

    Basically they are not even required to pay you FRN's, you would fall into the same cat as an Unsecured creditor.

    IF they declared Chapter 11.

    Like to try and get in line with the rest of their creditors?.

    Think about that next time you play with their paper BS.

    Thu, 01/20/2011 - 18:49 | 891590 mark mchugh
    mark mchugh's picture

    If you're confused, do some arithematic.

    There's tons of money to be made screwing paper silver traders.  They could give the silver away free, that's how profitable this racket is.  The trading in SLV alone is 3.5 times the size of the world's annual silver production (PLUS it trades options).  Less than 1% of COMEX silver contracts result in delivery, and that's just for starters.

    You can play it two ways:

    1) Get physical silver at a 75% discount.

    2) Trade paper silver until you're broke.

    Bon Voyage

    Thu, 01/20/2011 - 18:50 | 891594 belogical
    belogical's picture

    The debt ceiling debate will start soon. there is no way the TPTB are going into that were we know their going to raise the ceiling with PM's on record price door step. But after the metals are going up. The stock market will not attract any serious money and if food and energy commodities get pushed up without economic growth, you'll see governments topple. The PM are the only thing they can let rise, but they can't let it happen out of control. It must be orderly. So pick up physical if you can and be patient. Time is on our side.  

    Thu, 01/20/2011 - 18:52 | 891600 Yen Cross
    Yen Cross's picture

      I would like to take moment, to express my enduring gratitude to MR. Tyler Durdan and his or her clones. This blog/site makes me want to stop cursing! HAHA! Time to hit ASIA and knock-em upside the head. Trade on!

    Thu, 01/20/2011 - 18:52 | 891601 Piranhanoia
    Piranhanoia's picture

    Talking about a real commodity for creation of new toys.  Can't do without, sort of a thing.  Wouldn't you do everything you can to manipulate the market for a low price as long as you can?  This isn't just coin, it's strategic raw material.  Good theater, bad actors.

    Thu, 01/20/2011 - 19:06 | 891617 Sudden Debt
    Sudden Debt's picture





    I'll give you a hand:

    J. ____ORGAN.


    Which one is the cheapest bullion seller on the web? = APMEX


    In which BUILDING does APMEX have it's residence?



     If the COMEX or something blows up... most likely what they'll do is say 'LOOK, we got the gold, we got the silver' And since APMEX is "in the building" they'll claim it as theirs.. on the balance sheet. But in reality they won't have any "legal" claim to it. It'll just be for dog and pony shows. It'll still be paper backing paper. But since the average person doesn't care...

    I just think it's nice to be aware that APMEX's banker is JP Morgan and they're leasing/renting Federal property from the US Govt. Maybe it's on the up/up.




    Just click on the note on the door and read the text that shows up....

    Thu, 01/20/2011 - 19:11 | 891645 Quinvarius
    Quinvarius's picture

    So crash JPM buy from APMEX.

    Do NOT follow this link or you will be banned from the site!