Closer Look at Gold Chart's "Cup and Handle" and the Handle Details - Blitzsilberkrieg

As a reminder there are option expiration in gold and silver on the Comex next week on Tuesday the 27th.

My friend Dave says he sees a bulge around 1800 in the gold option positions that could mark the heart of the resistance. This coincides with my own thinking.

As you know, I have anticipated this inverse H&S targeting that outer perimeter from 1790 to 1810 of the bears' Maginot line at 2000-2100.

Let's see if gold can be broken out by a distracting run from silver that shocks the bullion banks in a blitzsilberkrieg, a quick advance from out of this trading range to to upper limits of resistance at 40.

The terrain is easily marked as in the last chart below, and the potential for it is in the market positioning of bullion demand and the big paper shorts.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

The dichotomy in premiums between the Spicer Funds (CEF, GTU) and the Sprott Funds (PHYS,PSLV) is remarkable.

Either the Sprott Funds have now become large and liquid enough to become trading vehicles for the desks, including those who have underwritten the shelf offerings, or investors have become shy given the repeated and somewhat heavy-handed treatment of the expansions. Perhaps a bit of both.

A highly simplified pair trade would be to go long SLV and to short PSLV, for example, to take the premium on PSLV. This would tend to compress the volatility in PSLV into sharp bursts as these trades strengthen and weaken, and then fall apart. The pros can manage the risk in it, but the specs will get something more than the premium handed to them on the breaks. This is one of those 'LTCM trades' that look quite good on paper, and supply some nice gains, with a hidden barb of risk.

Next week is an option expiration in gold and silver bullion futures, and there is a fairly obvious attempt to 'hold the line in price' before then. As I have said, the next big resistance on my charts is in the 1790-1810 area. It is the outer permimeter bears' Maginot Line at 2000-2100.

From a Nov 19 posting:

"The inverse H&S pattern measures to 1810 as a minimum objective. That is also the point at which the handle would be at a breakout to validate the entire cup and handle formation.

I would expect gold to break out and run to that point, with resistance heavier around 1790-1810. There may be some time to actually break out, as the shorts will attempt to hold a strong line there and at the next major objective at 2100 or so, which is the first objective of the cup and handle."

Nov. 27 Comex December gold options expiry
Nov. 27 Comex December silver options expiry
Nov. 27 Comex December copper options expiry
Nov. 28 Comex December miNY gold futures last trading day
Nov. 28 Comex November copper futures last trading day
Nov. 28 Comex December E-mini copper futures last trading day
Nov. 28 Comex December miNY silver futures last trading day
Nov. 30 Comex December gold futures first notice day
Nov. 30 Comex December silver futures first notice day
Nov. 30 Comex December copper futures first notice day
Nov. 30 Nymex December palladium futures first notice day

Chris Hedges and Marc Maron On Break Room Live

"When I despair, I remember that all through history the ways of truth and love have always won.

There have been tyrants, and murderers, and for a time they can seem invincible, but in the end they always fall.

Think of it--always."

Mohandas K. Gandhi


"For we wrestle not against flesh and blood, but against principalities and powers, against the rulers of the darkness of this world, against spiritual wickedness in high places."

Ephesians 6:12

"Good men and bad men alike are capable of weakness. The difference is simply that a bad man will be proud all his life of one good deed - while an honest man is hardly aware of his good acts, but remembers a single sin for years on end...

Human groupings have one main purpose: to assert everyone’s right to be different, to be special, to think, feel and live in his or her own way. People join together in order to win or defend this right.

But this is where a terrible, fateful error is born: the belief that these groupings in the name of a race, a God, a party or a State are the very purpose of life and not simply a means to an end.

No! The only true and lasting meaning of the struggle for life lies in the individual, in his modest peculiarities and in his right to these peculiarities...

I have seen that it is not man who is impotent in the struggle against evil, but the power of evil that is impotent in the struggle against man.

The powerlessness of kindness, of senseless kindness, is the secret of its immortality. It can never by conquered. The more stupid, the more senseless, the more helpless it may seem, the vaster it is.

Evil is impotent before it. The prophets, religious teachers, reformers, social and political leaders are impotent before it.

This dumb, blind love is man’s meaning. Human history is not the battle of good struggling to overcome evil. It is a battle fought by a great evil, struggling to crush a small kernel of human kindness.

But if what is human in human beings has not been destroyed even now, then evil will never conquer.”

Vasily Grossman, Life and Fate

I do not know if I would call it senseless kindness, but selfless, in the sense that if you lose yourself to love, you will find a true happiness and lasting life.

Gold Daily and Silver Weekly Charts

Shenanigans-lite, as expected.

I am off to purchase the bounty of the harvest.

Happy holiday everyone. See you Thursday evening perhaps.

SP 500 and NDX Futures Daily Charts

Tediously boring day as expected, as the adults are doing other things and have left the desks in the capable hands of their juniors, who are operating under set formulae.

Happy Holiday to all in the US, and for the rest of the world, please try to carry on.

FDR's Thanksgiving Day Proclamation - 11 November 1942

There are times when we fall to our knees and thank God for all His blessings and tender mercies.

And there are other times when we arrogantly refuse to bend or bow, and to defer to anything but ourselves, in a kind of misplaced self-sufficiency and complacent pride. And then God brings us down to our knees first, to remind us, in His providence, of who we are, and how to be grateful for what we have been given.

"It is a good thing to give thanks unto the Lord."

Across the uncertain ways of space and time our hearts echo those words, for the days are with us again when, at the gathering of the harvest, we solemnly express our dependence upon Almighty God.

The final months of this year, now almost spent, find our Republic and the nations joined with it waging a battle on many fronts for the preservation of liberty.

In giving thanks for the greatest harvest in the history of our nation, we who plant and reap can well resolve that in the year to come we will do all in our power to pass that milestone; for by our labors in the fields we can share some part of the sacrifice with our brothers and sons who wear the uniform of the United States.

It is fitting that we recall now the reverent words of George Washington, "Almighty God, we make our earnest prayer that Thou wilt keep the United States in Thy holy protection," and that every American in his own way lift his voice to Heaven.

I recommend that all of us bear in mind this great Psalm:

The Lord is my shepherd; I shall not want. He maketh me to lie down in green pastures; he leadeth me beside the still waters.

He restoreth my soul; he leadeth me I the paths of righteousness for his name’s sake.

Yea, though I walk through the valley of the shadow of death, I will fear no evil; for thou art with me; thy rod and thy staff they comfort me.

Thou preparest a table before me in the presence of mine enemies; thou annointest my head with oil; my cup runneth over. Surely goodness and mercy shall follow me all the days of my life; and I will dwell in the house of the Lord for ever.

Inspired with faith and courage by these words, let us turn again to the work that confronts us in this time of national emergency : in the armed services and the merchant marine; in factories and offices; on farms and in the mines; on highways, railways and airways; in other places of public service to the Nation; and in our homes.

NOW, THEREFORE, I, FRANKLIN D. ROOSEVELT, President of the United States of America, do hereby invite the attention of the people to the joint resolution of Congress approved December 26, 1941, which designates the fourth Thursday in November of each year as thanksgiving Day’ and I request that both Thanksgiving Day, November 26, 1942, and New Year’s Day, January 1, 1943, be observed in prayer, publicly and privately.

IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the United States of America to be affixed.

DONE at the City of Washington this eleventh day of November, in the year of our Lord nineteen hundred and forty-two, and of the Independence of the United States of America the one hundred and sixty-seventh.

FRANKLIN D. ROOSEVELT

New Twists In MF Global Scandal Focus On the CFTC - A Bastille of Deceit

Mark Melin has been doing an excellent job of covering the MF Global scandal and cover up. With a few notable exceptions like Forbes, the mainstream media has been silently complicit. Investigative journalism is far less safely profitable than staged debates amongst commercially endorsed opinionators. The news gives way to spectacle.

This is an excellent example of the credibility trap. That blatant theft occurred and no indictments and prosecutions have resulted seems so unbelievable that most tend to ignore it.   You don't understand, it takes time, it takes time. Yes, to cover things up, to kick the can down the road, and hope that the people lose interest.

And yet this is just one instance of the distortions that are plaguing the global commodity and financial assets markets. The long delayed investigation into the silver market is most likely another.

The most urgent problem facing the US and the Western nations is not a 'fiscal cliff.' It is the pernicious corruption in the financial system that has captured the politicians of both parties, and distorted the public conversation through influence in the media and directing the opinions and buying the research of 'experts' through the power of big money.  The people are held hostage in a Bastille of deceit.

What a condemnation it is, that so few love the truth for itself, and willfully turn from it, being led in their choice by the lies that favor their particular flavor of greed, and rotten self-interest.

New Twists In MF Global Mystery Focus on CFTC
By Mark Melin

A delay in a Congressional report set to outline details surrounding MF Global findings was announced at the annual Futures Industry Association (FIA) conference just as insight regarding likely criminal behavior that damaged commodity market integrity moves into plain view.

Over the past weeks Dan Roth, president of the National Futures Association, a primary front line regulator for the futures industry characterized the actions leading to missing MF Global funds as theft. Mr. Roth has pointed to the fact it matters not if the illegal funds were transferred to the benefit of an individual, as in the case of PFG, or if the illegal transfer of customer assets was due to meet operational needs of the company.

Any such transfer is considered legally theft. In fact, could the argument be made that Russ Wassendorf, founder of PFG, had transferred customer funds to support ongoing company operations? If Mr. Corzine is allowed to transfer customer funds to cover firm operational expenses, is Mr. Wasdendorf allowed the same courtesy?

While the primary focus is on the initial criminal acts leading up to the firm's bankruptcy, the potential cover-up that occurred afterwards, like Watergate, could be more troubling.

Highlighted are two points of potential criminality: the initial phase, when illegal money transfers were hidden by false segregation reports; and the cover-up phase, where the CFTC was in possession of potentially criminal information and knowingly withheld this information. CFTC's inaction and withholding of critical information, particularly in court, resulted in significant damage to the integrity of the segregated account.

The Initial Offense:
The first phase of likely criminality has been documented by both regulators and industry participants:

1. On Wednesday, October 26 2011 MF Global was given clear instructions from regulators not to transfer assets.
2. After this order, MF Global transferred assets from customer accounts so it could cover its in house trading losses.
3. The illegal asset transfers were initially hidden by false segregation reports submitted to regulators. These segregation reports were known to be false on Sunday, October 30, 2012, as the customer shortfall was the reason for inaction to sell MF Global to Interactive Brokers.

The Cover-up Offense:
The second phase, the little known aspect of misrepresentations that diminished the rights of MF Global customers and damaged market integrity, occurred after the now infamous Halloween weekend of 2011:

1. On Tuesday, November 1, 2012, MF Global went to court with the express purpose of providing testimony relative to the bankruptcy of MF Global holdings. In testimony, an MF Global legal representative represented that funds were accounted for, but did not mention known contradictory information, some of which is considered criminal in nature.
2. This testimony was delivered to the court while MF Global and the CFTC where acknowledged to possess information that a shortfall in customer assets existed, the asset transfer occurred after MF Global was given orders by a regulator not to transfer assets and reports provided by MF Global contained false information.
3. Perhaps most egregious, a CFTC lawyer, in attendance on directions from Washington, D.C. did not object when the agency possessed information contradictory to MF Global's testimony.
4. Had the CFTC objected or otherwise reported to the court at any time what it is documented to have been known, a fraud investigation would have likely ensued, MF Global customers would have retained their rights and the segregated account would have been defended.

(For details and documentation, see the article below entitled "Who Knew What and When Did They Know It?")

Delay in Congressional Report on MF Global Announced

The keynote speaker at the FIA event was Congressman Randy Neugebauer. Congressman Neugebauer is Chairman of the House Financial Services Subcommittee on Oversight and Investigations, which held critical MF Global hearings over the past year. The goal of the Congressional report, like the Giddens Trustee report, is not to identity potential criminal behavior but rather spotlight areas of concern.

It was set to release the report on the one year anniversary of the MF Global affair, but has been delayed...

"The MF Global affair is not complicated," was one message communicated to Congressman Neugebauer. "Are you aware of what occurred in court on November 1, 2011 and what the CFTC did NOT do?" was another question asked by this reporter, to which Congressman Neugebauer responded "MF Global had weak risk controls." Congressman Neugebauer is Chairman of the House Financial Services Subcommittee on Oversight and Investigations, which held critical MF Global hearings over the past year.

"The significant point is MF Global willfully ignored CME's order not to transfer customer funds," notes attorney and Customer Commodity Collation President James Koutoulas. "If the transfers were proper, why wouldn't they just ask for CME Group's approval?" The CME Group was MF Global Designated Self Regulatory Organization (DRSO) and had front line regulatory authority over MF Global.

Read the entire story with links here.