Market Curiosity: Exploring Markets And Systems

July 18, 2012

Eurodollars – Extending Peter L. Brandt’s: “$144 trillion per year futures market is fixed — right under the nose of the CFTC”

Filed under: Just Watching — Tags: , , , — Jeff Fitzmyers @ 10:39 pm

99.99% don’t know that Eurodollars are U.S.-dollar denominated deposits at foreign banks or foreign branches of American banks. By locating outside of the United States, eurodollars escape regulation by the Federal Reserve Board.

– The Eurodollars futures contract (interest rate, not forex market) has historically been the world’s largest futures contract
– In 2011, Eurodollar futures traded 577 million contracts
– Each contract represents a Eurodollar Time Deposit having a principal value of USD $1,000,000 with a three-month maturity
– The underlying value of the Eurodollar futures contracts traded in 2011 equals about $144 TRILLION (based on an average price of 99.50)
– Unlike most futures markets, the Eurodollars are not settled by delivery, but rather use a cash settlement.
– The cash settlement is based on the Libor rate — a rate that we all now know is bogus and manipulated.

Bottom line is this — Eurodollar futures are a $144 trillion per year market being fixed right under the nose of the CFTC, the same U.S. government regulator that allowed the MF Global and now the PFG grand larcenies to occur… Peter L Brandt

Current open interest is 7,867,261 contracts.

Margin to control 1 contract is only about $450, partly due to low volatility.

So right now the outstanding notional value is around 7.8 trillion FRN’s and is being controlled by (very) roughly 10 billion. (This number could change drastically if eurodollars got a bit volatile.)

For comparison, M2 is supposedly about 10 trillion.

Related: Fix HFT, naked shorting, position limits, margin determination, insider trading, and questionable floats, with a few simple non-arbitrary rules.

August 23, 2011

Silver’s dip might be over by the end of the week based on seasonals

Filed under: Just Watching — Tags: , — Jeff Fitzmyers @ 10:12 pm

And it might be as simple as waiting until options expire on Thursday and then just go long. I would expect SLW to possibly bottom a few trading hours (?) before silver.

August 14, 2011

Long December silver. Updates on partial backwardation, M1 and M2, and seasonality (update 3, May 2)

Filed under: Systems — Tags: , , , , , , , , — Jeff Fitzmyers @ 10:13 am

Buy stop: 39.25
Stop loss: 37.80

+/- Weekly RSI at fulcrum point?
+ NR7 bar on near term EMA and Bollinger Band support.
– Low volume.
+ EMA’s heading up.
+ Seasonality likely bottoming.

Money supplies being inflated:

Although a low risk seasonal turn point is near the end of the month, a closer turning put is near. Worth the risk to be a bit early.

Turd Ferguson: A Look At The Latest CoT

August 16: Moved stop loss up to todays low. Price probably should have launched up today. Instead it was a narrow range 7 day.

August 17: Moved stop to break even.

May 2, 2012: Closed the trade — did not track it and don’t want to look it up right now 🙂

May 14, 2011

Silver speculation: down to 20-23 frn’s/oz then rocket up??? (backwardation too) (updated)

Filed under: Just Watching — Tags: , , , , , , , — Jeff Fitzmyers @ 1:40 pm

Assuming the COT data is honest, the banksters have not managed to cover shorts. I assume they will try, or need, to drive price down. Driving price up has not worked. Possibly banksters have not been able to cover because good traders know the shorts are trying to exit and so keep anticipating moves. Say the price does go down to 20 and the banksters are still very net short while the good traders have had a very profitable ride down, and yet are still net long. Good traders are sitting on a wad of cash AND net long, the physical market is being bought with alacrity, the down cycle has run it’s course, the fed/gov is still inanely insanely printing, and silver has been pushed rather far under water. Getting down to about 20 is expected from a technical point of view, but from the point of view of increasing backwardation. And in that situation, what choices do banksters have? Buy first = rocket. Bailout = implies rocket. False flag = ??? Speculatively, that is an explosive position. However, I don’t really understand the role SLV and GLD play. Harvey Organ has an interesting speculation about that. Basically the recent price drop might have been used as a screen to remove a chunk of the physical. Adam Hamilton see things more traditionally.

Edit: Just to be clear, I. more interested in the potential turn dates and if price will whipsaw around them, or reverse. In this case, if silver drops into June 13-ish, the deeper the drop, the more silver might want to bounce up. If it rockets up great, if it sputters up, at least a small profit might be available.

Mr Hamilton also suggests the drop would take about 6 weeks which takes us to Martin Armstrong’s turn date of June 13th (possibly at about 25 frn’s/oz).

Most blow offs return to at least near their launch pad. That would be about 20. And an AB=CD = about 23. And the monthly RSI > suggests a return to the monthly 34 EMA which is about 23.

Support based on monthly chart.

SIFO still indicating strong near term demand via backwardation.

Note that even though price has doubled, SIFO keeps going down. Rising prices are not satisfying demand.

May 8, 2011

Articles, silver and stock market charts…

Filed under: Just Watching — Tags: , , , , — Jeff Fitzmyers @ 2:11 pm

Biggest market rigger is government itself, by Chris Powell: Anti-competitive as its activity is, OPEC’s formation a half century ago was only a defensive response to the rigging of the currency markets by Western central banks and particularly by the U.S. Treasury Department and Federal Reserve, which were manipulating the value of the world reserve currency, the dollar, the international means of payment for oil, long before OPEC began to try to manipulate the oil price.

Hmmm. Did not know that. Mr Powell goes on to note, “The second problem is that there are always speculators in all major markets.” Take the nebulous evil speculators to extremes. If the corn market was only 1% speculators and 99% commercials, the commercials could not hedge and this would allow significant price swings that farmers, Kellogg, and cereal buyers would have to deal with. Then entities would stock up when prices are low and forgo when prices are high on a monthly basis. If the corn market was 99% speculators and 1% commercials, the commercials could hedge and down line prices would be rather stable. “Speculators” come in all varieties: long or short price, long or short volatility, spreaders, wise, foolish, etc. All those differing activities tend to dampen wild price swings. Why did corn hit all time highs in 2008? Who was the big disruptor?? Gov forced ethanol.

The Silver Crash of 2011? by Martin Armstrong: We have two primary possibilities for a low shaping up on the horizon. WE could create that spike low and BOTTOM precisely on June 13th/14th… If we drift lower into the final weeks of May, then we can see a rally for the week of June 13th. That will not be real good. This could set the stage for a decline especially if we close year-end below $28… The force of this decline is encouraging. The faster it comes down, the shorter the duration: remember 1987, 1929-32. This could lead to a marginal bounce into the last weeks of May, and from there silver will turn down into the June 13th target… Anytime a market doubles like this in the last few months going into a high, it is the kiss of death.

Wondering if there is not a small bounce up (0.5 to 4 days?) before kissing he magenta 170 EMA.

Gold miner bullish percent has plenty of room to drop.

Waiting to se if the SLW : silver ratio tests support with a higher low.

Stock insiders are selling at a greater pace than last November.

Weekly NYSE Summation index is making lower highs. So probably not a great time to go long stocks. (Could be an opportunity to short some stocks for a swing trade.)

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 19, 2011

Silver is almost looking ballistic

Filed under: Just Watching — Tags: , — Jeff Fitzmyers @ 11:28 pm

Parabolic markets are rare. I’m not ready to call silver in a parabolic move. But it’s getting close: the last 5 days have not declined below a previous day. Trader Dan: What is a Commercial Signal Failure

Jim Rogers [silver’s] not parabolic yet. I hope something stops it going up in the foreseeable future and we have a correction. ” There is one caveat: “maybe the US dollar is going to become confetti in 2011, and if that’s the case and silver goes to $150, then obviously I wouldn’t sell my silver. It would be the US dollar which is collapsing. But if silver goes up the way you’re talking about without currency collapse, I would be very worried.

Jim Willie: 50 Factors Launching Gold

References
+ How high can silver go before a stout pullback? Backwardation and price patterns
+ The obvious and GARGANTUAN silver opportunity

February 24, 2011

If March 1980 silver is similar to the current price pattern, a time based stop loss can be rather tight

Filed under: Just Watching — Tags: , — Jeff Fitzmyers @ 7:43 am

Long term picture from MRCI:

February 23, 2011

Silver backwardation update for Feb 23 2011 and long term chart

Filed under: Just Watching — Tags: , , , , , — Jeff Fitzmyers @ 7:59 pm

A partial backwardation now, but, relative to December 2015, entities are willing to pay 3.5% more to get silver in March 2011.

IF the fractal is a repeat, possibly expect silver to rise to 40-46 38 $/oz over the next 20 trading days, if the LBMA 12 month SIFO does not make a new low.

February open interest actually rose 4 contracts to 118 (as of Friday), minus todays deliveries of 30 contracts, is about 440,000 ozs standing for delivery. According to the Interactive Brokers contract information center, the contract expires tomorrow. Hmmm…

Long term picture from MRCI:

References:
+ COMEX settlement prices.
+ LBMA current stats.

January 21, 2009

Quick speculation: gold up, bonds down, gig up…

Filed under: Just Watching — Tags: , , , , — Jeff Fitzmyers @ 8:11 pm

+ Sheila Blair was on TV today apparently being less than honest. Seems like misleading comments like this tend to be rapidly embarrassing lately.
+ Mr. Obama mentioned he would like a bit more transparency. A LOT of people probably have A LOT to hide. Might they be reducing their activities?
+ 30 year bonds are down 2.5% and look like they are about to fall off a cliff.
– When politically entrenched things look like they will crash, they rarely do. Price would just bounce along forever. But lately things are going down — as if the price is not supported by the temporary false demand (or supply in the apparent cases of precious metals).
+ MRCI has an interesting correlation chart of the USD in the subscriber area. There is a 89% correlation to 1973 USD where it went down quite a bit quickly.

“Then the Grinch thought of something he hadn’t before!
“Maybe prosperity, doesn’t come from debt.
“Maybe prosperity … perhaps … means a little bit more!” 

I assume it would be hard for the Dollar Index to go down a lot since of 57% of it is the inverse Euro. It does not appear to me the Euro is going to crash up soon. Maybe while the Dollar Index keeps dancing with the Euro the pressure flows somewhere else. Like precious metals go up and bonds go down?

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