The nature of the 1 minute candles sure have changed! Yesterday we had a lot of 1 to 4 cent moves, this morning a lot of 4 to 14 cent moves and little gaps quite often seen.
Likely the knock down and run up this morning abt 8:00 / 9:00 was a raid to cover a short position . . . about the time NY opened ? Once JPM and such cover they may not be allowed to reenter the futures markets again, but would count on it, the fight will go on. . . . News . . . Volcker Rule to Scrap "Portfolio Hedging", Would Make Trillions in Excess Deposits Inert
As we have been covering for the past year and a half, most explicitly in "A Record $2 Trillion In Deposits Over Loans - The Fed's Indirect Market Propping Pathway Exposed", when it comes to the pathway of the Fed's excess deposits propping up risk levels, it has nothing to do with reserves sitting on bank balance sheets as assets, and everything to do with excess deposits (of which there are now $2.4 trillion thanks to the Fed) which are used as Initial collateral by banks such as JPM and then funding such derivatives as IG9 in a failed attempt to cover a segment of the corporate bond market. These deposits originate at the Fed as a liability at the commercial banking sector to the excess reserve asset.
That much is clear and undisputed, and was admitted by none other than JPM itself.
Which is why the news overnight from the WSJ that the Volcker Rule (if and when it is implemented) will do away with such "portfolio hedging" trades may have truly major, and potentially very risk adverse, consequences.
The WSJ reports: "In a defeat for Wall Street, the "Volcker rule" won't allow banks to enter trades designed to protect against losses held in a broad portfolio of assets, according to people familiar with the rule. The practice, known as portfolio hedging, has become a focal point of regulators drafting the rule, a controversial plank of the 2010 Dodd-Frank financial law that seeks to prevent banks from putting their own capital at risk in pursuit of trading profits.
But it won't contain language permitting portfolio hedging, which has been "expunged" from earlier drafts of the rule, according to a person familiar with the matter. Regulators decided to remove portfolio hedging from the rule after J.P. Morgan Chase disclosed billions of dollars in losses from its so-called London whale trades in 2012."
This Zero Hedge piece from yesterday is a bit of heavy reading, but is definitely worth your time if you have it
Sprott's Thoughts: The Curious Case for Silver
It has been a difficult year for silver investors with the metal falling by 36% year-to-date. While the Federal Reserve balance sheet continues to expand, ‘taper’ discussions by the Federal Open Market Committee have weighed heavily on the price performance of all the precious metals this year. By our calculations, over the last five years silver has a beta to the gold price of 1.5. This implies that price changes in gold are magnified in silver. Combine this with an 80% correlation in the price action between gold and silver over the same time frame and it’s easy to see that where the price of gold goes, the price of silver goes faster. As we break down the fundamentals for silver, market developments this year give rise to a curious conundrum – how can the case for silver be stronger while the price continues to languish?
Sprott's David Franklin, the author of this report, concludes his comments with this sentence..."The most curious part of this fundamental case for silver is why the price isn’t higher." David knows perfectly well why, as does everyone at Sprott, and that's because JPMorgan et al are sitting on the price.
Still thinking up dj, but just to make the gap resistance at 20.63 would be a big day. 21.09 or 21.23 would take a + 8 % day, happens but not often.
Price breaking up out of the triangle, seems late in the day to make much progress. maybe 20.22 or 20.56 before a retrace ... out for a while.
Sentiment: Strong Buy
jmr ...A few post back I posted Strong Buy. i of I of 3 likely to be about 21.97, then a retrace, hwb would be gap support at 20.64 , also the retrace might make 19.89 area,. after that a lot of up . I don't expect prices lower than they are today again for years,. maybe never. The 26.40 and 33.00 are up. but weeks and months away.
Sentiment: Strong Buy
Well, Wave one seemed to be settled. likely 2 as well. 21.26 . . .20.70 .... and the gap at 21.98 should finish the week. Silver still in the box near the retrace point. Last 19.32, needs 19.37 to clear the box to the up side, below 19.23 would confirm more downside. should mean we won't see 19.50 SLW for a long time
Sentiment: Strong Buy
Ed Steer . .
Grant Williams speculation of another bank holiday around a gold price reset is one of my pet theories, and that's a day that lot of us are waiting for, including this writer.
The fact that JPMorgan is now long the gold in the Comex futures market, plus making every attempt to get out of their silver short positions during the last year, gives credence to the idea that the Anglo/American stranglehold on the precious metals prices, and thus the price of all commodities, is on its last legs. But how soon it will all come crashing down is unknowable, but it's coming.
In overnight trading, the prices of both gold and silver have been in slow decline ever since their respective rallies got capped in New York yesterday afternoon, but that decline accelerated a bit going into the London open this morning. Volumes are pretty light [as of 3:53 a.m. EST] in both metals at the moment, but I was mildly surprised that there was zero follow-through either in Far East or early London trading. This short covering rally was a New York based event only, and I have no idea as to what it may portend for the Comex trading session today.
And as I hit the send button on today's column at 5:20 a.m. EST, both gold and silver are still edging lower, and volumes are about "normal" for this time of day. Platinum and palladium are more or less trading flat. The dollar index, after taking a 25 basis point header during the Hong Kong afternoon session, is now back around unchanged.
Silver had a good run up today High was 19.88, Likely a Wave one high so I expect some sort of retrace down a ways. Last 19.74 The move was strong enough to turn all the macds up and bring the RSI above 50 except the daily and it stands at 40 . . a move up from the recent 27.34 and a apx two week ago low of 20
Just a search for the wave I price sami, of course we could just wait, but a bit of foreknowledge allows one to plan ones trades better, so we search out possibilities. Once the first wave is in, guesses for the rest of the month may be made 23.xx and 26.xx seem to be likely before the end of the year, That 21.60. area is interesting as well, gaps and old highs are there
W3 = W1 if one measures from 19.28. I m beginning to think 19.23 was a fluke, still looking at 19.41 to 20.02 as a possible third wave, but just as an alternate. Was a bit impulsive