They Better Pray There Is No Short Squeeze...

T

thatguy

Active Member
They Better Pray There Is No Short Squeeze...
http://www.zerohedge.com/news/2013-05-22/they-better-pray-there-no-short-squeeze
20130522_gold_0.jpg

As the following chart of the day from Bloomberg shows, as of this week, hedge funds have made "the biggest bet ever" against gold by taking Comex gold shorts to all time highs.
Click to expand...
Contrarian bit cheese
 
sippy_stacker said:
Nikkei dropped 7.3 percent today...risk off? PM's to da moon lol
http://www.bloomberg.com/quote/NKY:IND
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http://www.zerohedge.com/news/2013-05-24/despite-promises-japanese-market-chaos-continues
UPDATE 1: Japanese stocks turned negative (NKY -600pts from highs, -1.5% on day; and TOPIX down over 4% from highs); Japanese banks -11% from yesterday highs; S&P futures down 10 points from after-hours highs...

UPDATE 2: *KURODA WANTS TO AVOID INCREASING VOLATILITY IN BOND MARKET (yeah thanks... as useful as saying "we all want to avoid syphilis")

UPDATE 3: Nikkei 225 Drops below 14,000 - TOPIX down 11% from highs

For the second day in a row, and in spite of comments from Abe and Kuroda on communicating with the market (as Kuroda says BoJ Monetary easing sufficient), Japanese capital markets are out of control.
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I'm thinking... liquidity event to push gold to ultimate low of 1260ish ~28th-30th
 
Hi Dan,

It's the opposite way around actually. Lots of short selling means they are betting on gold or whatever asset/equity class being a lower price at a certain point in time. There is currently quite a big bet on gold going lower based on the amount of short selling going on, but although its an indication of direction and sentiment, it's no guarantee it will happen. If there were a guarantee, the market would move immediately of course!, and there have been many instances of experienced traders losing big on short selling.

The way I see it, is that sentiment is what drives the market, and right now the sentiment is pretty poor, so there is a chance it could go lower. Having said that, sentiments not been great for 18 months, so you might also argue the worst of the correction is over. I have taken the opportunity to buy a small amount, mainly as I consider the price low, but also as a hedge against the much bigger positions I have in other investments currently doing very well, mainly equities.
 
Thank you very much richo. I thought that was the correct way round but it was the big bet on pm's going down that got me confused. Thanks again for the free lesson
 
http://www.zerohedge.com/news/2013-...ational-mans-response-all-time-high-gold-shor
Two days ago we suggested that "they better pray there is no short squeeze." Today, following the just released latest CFTC Commitment of Traders data which showed that the Comex gold short position grew once again to a new all time high of 79,416 shorts, all prayers are now off. If we may be so bold as to we suggest, the time has come to upgrade to the sacrificial slaughtering of at least a lamb on the altar of Saint Ben, because even the tiniest hint of a forced cover will now result in the biggest rip your face off levered short squeeze seen in the history of the yellow metal. Maybe throw in an ink cartridge or two for good measure...
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20130524_Gold_0.jpg
 
I find this interesting but I'm finding it hard to understand the exact ramifications. Could someone please explain in laymans terms what this means if the is a big up/down move in the price of gold?
 
Dr.Gold said:
I find this interesting but I'm finding it hard to understand the exact ramifications. Could someone please explain in laymans terms what this means if the is a big up/down move in the price of gold?
Click to expand...

such a large short position will eventually have to be closed at some stage unless gold is to go to zero so closing those shorts should support/raise the price?
 
My view of shorting (no matter what it is) is that on average you are pissing against the wind. Why? Because over time, nearly anything of any value rises in price. So to short means you are going against the long term trend of pretty much every asset on earth. Yes I know if you hold a 1 month or 1 week short its different BUT you are still always betting against the relentless march of prices upwards.
 
trader dan has a different perspective on it.

Folks, I have to say something here at the risk of irritating some others in the gold community that I consider to be friends. Many keep pointing to this fact of a building speculative short position as a bullish development. It is not. It is bearish. Why? Because as I have stated ad infinitum over here, Speculators drive markets today, not commercials. As long as the specs are interested in selling gold, the market will struggle to overcome chart resistance levels and reverse to the upside. Yes, there is definitely the potential for some strong and sharp short covering whenever you see specs with a building short position, but it requires a CATALYST before that will occur. At some point we will indeed get such a catalyst (we got a preview of it this past week at the introduction of Bernanke's speech when he mentioned that a premature slowdown in QE would not be wise) but until we do, the trend is very obvious.
Click to expand...

http://www.traderdannorcini.blogspot.com.au/
 
Silverthorn said:
trader dan has a different perspective on it.

Folks, I have to say something here at the risk of irritating some others in the gold community that I consider to be friends. Many keep pointing to this fact of a building speculative short position as a bullish development. It is not. It is bearish. Why? Because as I have stated ad infinitum over here, Speculators drive markets today, not commercials. As long as the specs are interested in selling gold, the market will struggle to overcome chart resistance levels and reverse to the upside. Yes, there is definitely the potential for some strong and sharp short covering whenever you see specs with a building short position, but it requires a CATALYST before that will occur. At some point we will indeed get such a catalyst (we got a preview of it this past week at the introduction of Bernanke's speech when he mentioned that a premature slowdown in QE would not be wise) but until we do, the trend is very obvious.
Click to expand...

http://www.traderdannorcini.blogspot.com.au/
Click to expand...
Japan
 
thatguy said:
Silverthorn said:
trader dan has a different perspective on it.

Folks, I have to say something here at the risk of irritating some others in the gold community that I consider to be friends. Many keep pointing to this fact of a building speculative short position as a bullish development. It is not. It is bearish. Why? Because as I have stated ad infinitum over here, Speculators drive markets today, not commercials. As long as the specs are interested in selling gold, the market will struggle to overcome chart resistance levels and reverse to the upside. Yes, there is definitely the potential for some strong and sharp short covering whenever you see specs with a building short position, but it requires a CATALYST before that will occur. At some point we will indeed get such a catalyst (we got a preview of it this past week at the introduction of Bernanke's speech when he mentioned that a premature slowdown in QE would not be wise) but until we do, the trend is very obvious.
Click to expand...

http://www.traderdannorcini.blogspot.com.au/
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Japan
Click to expand...

Moodys.
 
wow some crazy shit going down... can see how things could get out of hand in either direction

Seems they want it kept under 1400
 
thatguy said:
They Better Pray There Is No Short Squeeze...
http://www.zerohedge.com/news/2013-05-22/they-better-pray-there-no-short-squeeze
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/05/20130522_gold_0.jpg
As the following chart of the day from Bloomberg shows, as of this week, hedge funds have made "the biggest bet ever" against gold by taking Comex gold shorts to all time highs.
Click to expand...
Contrarian bit cheese
Click to expand...


Forgive my ignorance and correct me if I'm wrong. This graph looks too simple, I must be reading it wrong.

Does this mean that someone with enough money or organisations in cahoots etc could...



Take massive short position - affecting sentiment (wow that much money going short, its sure to fall some one knows something.... Quick sell your gold)
Buy gold at discounted price.

Take additional massive short position, while selling (some) at the "top" affecting sentiment and price back down to cover previous short position with both sides positions.

Would this work? How much money would you actually need to throw at it to move spot this much? And could central banks use QE money they have sitting as excess reserves for these kinds of missions?


Please someone correct me? Surely it cant be that simple
 
Rinchin said:
thatguy said:
They Better Pray There Is No Short Squeeze...
http://www.zerohedge.com/news/2013-05-22/they-better-pray-there-no-short-squeeze
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/05/20130522_gold_0.jpg
As the following chart of the day from Bloomberg shows, as of this week, hedge funds have made "the biggest bet ever" against gold by taking Comex gold shorts to all time highs.
Click to expand...
Contrarian bit cheese
Click to expand...


Forgive my ignorance and correct me if I'm wrong. This graph looks too simple, I must be reading it wrong.

Does this mean that someone with enough money or organisations in cahoots etc could...



Take massive short position - affecting sentiment (wow that much money going short, its sure to fall some one knows something.... Quick sell your gold)
Buy gold at discounted price.

Take additional massive short position, while selling (some) at the "top" affecting sentiment and price back down to cover previous short position with both sides positions.

Would this work? How much money would you actually need to throw at it to move spot this much? And could central banks use QE money they have sitting as excess reserves for these kinds of missions?


Please someone correct me? Surely it cant be that simple
Click to expand...
Simple possible urban legend goes that JPM was getting his shoes shined by a shoeshine boy who offered him some tips on the stock market at the time. JPM figured that if the shoe shine boy was in then almost everyone was in and therefore there was no greater fool to sell to. Same goes here. The ammunition to drive it lower is already been fired but possible ammunition to drive it higher is still in the gun. Does this mean it can't go lower? Hell no :)
 
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