Market Curiosity: Exploring Markets And Systems

September 9, 2012

LBMA SIFO from November 2006 to September 2012 (update1, Dec 2012)

Filed under: Systems — Tags: , , , — Jeff Fitzmyers @ 3:16 pm

The last update a year ago noted:

James Turk’s Sep 17 2011 trading comments: …the LBMA’s GOFO is no longer a reliable rate. I think the banks are just making it up to paint a picture that has some semblance of normalcy. But things in Europe are anything but normal. Abnormal relationships in short-term currency vs. gold interest rates make that point clear.

Turns out this was correct. So I put zero weight on SIFO. But, here is the chart for the record. LBMA current stats.

Update December 2012: Guest Post: “Smelly Smoke Signals” by NN-L

Our pal, Ned, has cranked out a very interesting piece regarding the recent suspension, by the LBMA, of the publication of silver forward rates (SIFO)… The most interesting and compelling part of all this is the timing. The LBMA decided to suspend SIFO reporting at the close of business on Friday, November 2. At that exact same moment, some newly-created measures of backwardation such as Sandeep Jaitly’s “Basis/Co-Basis” were literally screaming of extreme backwardation and physical tightness.

Turk – The LBMA Is Moving To Cover Up Silver Manipulation

“The reason they (the LBMA) gave is they said it is just an indication and you can’t really trade at that price anyway. So what that does is prove the point that I’ve been making, that these are artificial rates which are just there to paint the tape and to mislead people into thinking the silver market is actually in a normal contango. But in reality it (silver) is actually in backwardation.”

Related
+ The last LBMA SIFO update for a while

November 18, 2011

Long term silver: Cup and handle or rounding bottom?

Filed under: Just Watching — Tags: , , — Jeff Fitzmyers @ 2:01 pm

James Turk: Silver: The most bullish chart on the face of the planet …I see forming here a massive ‘cup and handle‘. The cup is outlined by the two green lines, with the rims of the cup at $50 – the high reached in 1980 and earlier this year. The handle is now starting to take shape on the right hand side of the cup’s rims. It probably needs another year or more to complete.

Could be a rounding bottom too.

September 19, 2011

The last LBMA SIFO update for a while

Filed under: Just Watching — Tags: , , , , — Jeff Fitzmyers @ 7:24 am

More recent post: LBMA SIFO from November 2006 to September 2012

James Turk’s Sep 17 trading comments: …the LBMA’s GOFO is no longer a reliable rate. I think the banks are just making it up to paint a picture that has some semblance of normalcy. But things in Europe are anything but normal. Abnormal relationships in short-term currency vs. gold interest rates make that point clear.

I assume that goes for SIFO too. I’m not interested in keeping up with it anymore.

May 12, 2011

Silver backwardation update: Lower prices not assuaging near term demand.

Filed under: Just Watching — Tags: , , , , , — Jeff Fitzmyers @ 9:13 am

Turk – Tipping Point to Trigger $ Destruction & Hyperinflation But here is the really frightening thing Eric, 40% of what the US government is spending is coming from borrowed money… When asked if he remembers other countries with 40% shortfalls in their spending Turk replied, “Oh yeah, Zimbabwe, Argentina in 1991, and the Weimar Republic in Germany in the early 1920’s (all resulted in hyperinflation).

No crazy changes in Comes silver partial backwardation. LBMA backwardation:

April 28, 2011

Long SLW, (update 3: May 15) +0% -100%

Filed under: -0 to -4%, -75 to -99%, -Below -100%, Long Calls, Mistakes — Tags: , , , , — Jeff Fitzmyers @ 7:23 am

June 45 calls at average price of 2.15.
June 70 calls average price of 0.082.

Stop loss is price closing below this morning’s low.

The MRCI monthly silver chart is finally starting to look a bit extended.

+ Silver Warehouse Shenanigans or the Real Deal? Scroll down for the newer info and some historical perspective.
+ James Turk – The Waterfall Decline in the US Dollar Has Begun If true, far out of the money options might pay off well.
+ Mr Ferguson is suggesting a metal rise into mid next week followed by a dip into May 12 to 20 timeframe.

3 90% silver dies are currently worth $10.65.

Just speculation: At this point Mr. Bernanke would have to resign or be fired to stop the metal train.

EDIT: Sold the June 45s for 2.16. Don’t want to get caught in a down draft: SLW is still weak and I expect it to be weak until silver is above 50. Interestingly, the 70 calls are bid 9, ask 10. These are more long term speculations that I won’t trade hopefully for a while.

Now it’s best to wait until the medium term CCI looks to be bottoming. Price could easily go to the magenta 170 EMA near 41.

April 29: The trendline has been broken to the upside. Time to wait for a backtest. Those June 45 calls are now trading for 1.80, down -16%.

May 15: I was greedy regarding silver in April. Paying attention to illusions does not produce gains in anything but experience-the-hard-way. Just going to assume the out of the money in-a-galexy-far-away option will be worthless.

April 26, 2011

Silver still in backwardation. Just waiting for the correction to end.

Filed under: Just Watching — Tags: , , , , , , , , — Jeff Fitzmyers @ 11:34 am

James Turk: The important point Eric is that silver is still in backwardation. I mentioned to you previously in the KWN blog piece on April 1st of this year that if silver remained in backwardation when we neared the $50 area it would be a truly extraordinary event. Here we are with silver touching $49 in Asian trading this morning, yet it remains in a 63 cent backwardation from spot to December 2015.

I can’t stress enough how significant that event is. Over the past three months the price of silver has nearly doubled, yet the backwardation has not disappeared. Markets are not designed to work that way, the higher price is supposed to entice people to sell their physical and hold dollars instead. I think the market is quite clearly sending the signal that people would rather hold silver instead of paper money.

The bottom line is that as long as silver remains in backwardation, price declines will be short-lived, it’s also telling us that silver has not yet reached a top on this move.

In fact, LBMA is going into backwardation again indicating that significantly rising silver prices have

Comex partial backwardation is alive and well.

Starting to notice that SLW calls are coming down in price a fair bit. hmmm… Curious if SLW might go down to 35.50 ish briefly and then the far out of the money SEP calls might be attractive??

Hows the dollar index? Surely it popped up a lot when “real money” dropped yesterday?? Well, no. It went down.

April 19, 2011

A brief pause for silver

Filed under: Just Watching — Tags: , , — Jeff Fitzmyers @ 7:47 am

A few possible decision points. Silver is rather extended to the upside. Seems to me, after all the volume yesterday, price is either going to shoot up, or correct down to 41.50 within the week. Price could drop to 38.50 (34 EMA) and still be in a healthy uptrend.

Rick Ackerman’s method has a target just under 43.61. Price rising above that a bit suggests a further rise.

James Turk’s take on the S&P’s announcement: The warning from S&P is unlikely to change the spending habits of Washington’s politicians. Given the willingness of the Federal Reserve to monetize the government debt there is no major fundamental change in the outlook for the dollar. If anything it’s a wake up call for the rest of the world that the rating agencies are starting to recognize the reality that the US finances are deteriorating so rapidly, it hardly qualifies any longer for its AAA rating.

Obviously Eric this is going to cause people to look for safe havens. Given that there are no safe haven currencies anymore like there were in the 70’s when you needed to get out of the dollar, the only alternative left is gold and silver. In fact the news about the University of Texas holding $1 billion of gold is clear evidence that market leaders are abandoning the dollar for the safety of precious metals.”

April 1, 2011

Silver update for April 1st

Filed under: Just Watching — Tags: , , — Jeff Fitzmyers @ 11:36 am

James Turk on silver backwardation: …we’ve gone from $27 to over $37, again about a 40% rise in price and the backwardation is still there. It hasn’t disappeared. So what that suggests to me is that there is tremendous physical demand for silver. This is a very, very rare event and it’s very bullish.

Once silver gets above 37.80 -38.00, I would imagine it will short a bit higher. And look at how each dip is aggressively bought.

Scotia Mocatta out of 4 of 7 silver offerings again. It has been out of at least one kind of metal for at least a month or 2.

March 11, 2011

Silver update March 11 – backwardation changed a bit, James Turk flatly saying, “Short squeeze”

Filed under: Just Watching — Tags: , , , , , — Jeff Fitzmyers @ 11:05 am

James Turk: Short Squeeze In SilverThe white bullion market is tight, and the short squeeze in the futures market is exerting a constant upward pressure on the price… Silver is performing exceptionally, outstripping a vast array of commodities and stocks. Even unrest in the Middle East has not stopped the price increasing, whereas during similar circumstances in the past, silver would have taken some serious blows… As far as silver is concerned, we are living in exceptional times.

As of the London fix, it would seem the correlation has ended, but then silver is currently up a fair amount today basis the COMEX. It will be interesting to see how this plays out!

Current backwardation — 1 month SIFO is now not in backwardation, but the 12 month has little buying interest compared to all other months. Almost all the months are inverted from normal.

The complete LBMA SIFO history.

COMEX partial backwardation front month minus Dec 2015 = 1.048 $/oz. The shape and depth of the tern structure lines has been about the same for the whole (partial) backwardation.

Seems like demand is firmly in charge. (Silver metal is still leading SLW.)

March 2, 2011

US dollar nearing the supporting trendline for the 5th time

Filed under: Just Watching — Tags: , , , , , , , — Jeff Fitzmyers @ 8:40 pm

James Turk on King World News: Eric you have been saying all along that the dollar isn’t bouncing and it now appears the dollar is ready to fall off of the edge of a cliff. The dollar collapse is going to be the next big story. If I am right and the dollar really starts to dive, the implications are global in nature and I truly believe this event will shock the world.

This is what the world is valuing the past 5 days:

Surely priorities were different after the reported Libyan air strike?? Nope.

Weekly dollar index:

Monthly dollar index at MRCI.com

Daily chart:

Xiphos Trading’s take on the dollar index.

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