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"I'm cheering a Street gang's bust"


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Crapax

 

Sorry I don't know what the usual open interest in gold is, but I know that right now it's high with only a few days left.

 

118,000 x 100 ounces = 11,800,000 ounces x $390 = $4.6billion

 

Now there's not that sort of 'free' gold around to deliver all of it, but anyway 118,000 won't be the open interest come Friday, or Wed which I think is the final day (Comex closed Thurs/Fri).

 

So let's assume that the OI goes down by 75%, that's still over $1billion of cash gold that needs to be delivered, and that's where the panic could start because normally it's the shorts who call the longs bluff because the shorts can stay short in all of Dec (nobody can deliver to them so to speak). The longs however HAVE to be ready to accept delivery on 1 Dec, and have to have the full nominal amount in cash deposited with their brokers.

 

The rumour that has been circulating over the last few months is this: If you want to buy say $1 billion of cash gold, you can't do it easily, and even if you can chances are the bullion dealers will see you coming and skim you for many millions. So why not simply buy 25,000 futures contracts over a period of a few months and just accept deliver. It's a rumour, but it makes a lot of sense.

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Anyone recall last Friday a 60-day chart I posted with one of my key indicators dipped to 0%? I think I said I would be apprehensive and unwilling to be short at that point. Today tells the story why.

 

Stoolie Grot with my personal favorite to date:

 

From LOB forum:

 

 

post-2-1069659653.jpg

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http://biz.yahoo.com/cbsm-top/031124/ed4db...a6afe639_1.html

 

NEW YORK (CBS.MW) -- Heartened by a rebounding dollar, U.S. stocks posted hearty gains Monday morning setting a celebratory tone to the holiday week.

 

"Short-term momentum indicators are Dover Sole again, and the CBOE put-call ratio remains high, so the market may once again try to revive its recently faltering uptrend during the next week or two," Merrill Lynch's chief market anal cyst Richard McCabe told clients.

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Gruff, your clone chart kicked some major tail again. Great call over the weekend! (the stochastics divergence also helped me, but I will be dumping longs at any sign of weakness)

Yep. I'm looking for a pullback - then going long.

 

Meanwhile, new high...

post-3-1069687994_thumb.jpg

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Crapax

 

Sorry I don't know what the usual open interest in gold is, but I know that right now it's high with only a few days left.

 

118,000 x 100 ounces = 11,800,000 ounces x $390 = $4.6billion

 

Now there's not that sort of 'free' gold around to deliver all of it, but anyway 118,000 won't be the open interest come Friday, or Wed which I think is the final day (Comex closed Thurs/Fri).

 

So let's assume that the OI goes down by 75%, that's still over $1billion of cash gold that needs to be delivered, and that's where the panic could start because normally it's the shorts who call the longs bluff because the shorts can stay short in all of Dec (nobody can deliver to them so to speak). The longs however HAVE to be ready to accept delivery on 1 Dec, and have to have the full nominal amount in cash deposited with their brokers.

 

The rumour that has been circulating over the last few months is this: If you want to buy say $1 billion of cash gold, you can't do it easily, and even if you can chances are the bullion dealers will see you coming and skim you for many millions. So why not simply buy 25,000 futures contracts over a period of a few months and just accept deliver. It's a rumour, but it makes a lot of sense.

For large quantities of the precious metals, taking delivery makes perfect sense, unless that is you are concerned about a paper trail. The costs involved in the transaction are minimal. Delivery is a bit of grunt as you have to send an armoured truck to the warehouse for transport of your cargo. Not such a bad idea as picking up 1 contract of silver (312 pounds} may draw some attention on the street. :P :P

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TODAY IS HOW I WOULD EXPECT A DOWNSIDE PANIC TO START.

 

the effort to turn this mk back up is beyond belief.

 

all stops have been pulled out imo

 

MF nightmare was a few s-p points away last fri

 

lind-waldock was shut down

 

nothing will surprize me anymore

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bearman: they have pushed this pig way too far, all smoke and mirrors. Maybe they can continue, but the vast majority who are bullish and fully margined long have place a very,imo, risky bet. MY guess is they will close the mkt soon.

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