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davefairtex

Executive Summary

  • What the Great Gold Smash of 2013 tells us
  • Was $1,075/oz gold the bottom? Is the bottom indeed in?
  • Is a new bull trend ahead for precious metals?
  • How to hedge against — and speculate on, for those who dare —  future manipulation attempts

If you have not yet read Part 1: EXCLUSIVE: The Smoking Gun Proving Silver & Gold Manipulation available free to all readers, please click here to read it first.

Now let's look at the great gold smash of 2013.

There were three separate operations I saw on or around the gold smash of 2013:

Operation #1: On April 12, gold had already broken below the 1525 support level to close at 1501 after dropping $100 over the two preceding months.  After a long decline followed by a support break, the market was in a very fragile state.  Sunday rolled around, and “someone” chose this moment to unload $95 in 13 volatility events over the course of just 13 hours.  This avalanche decisively drove gold down $150 in just one day.  This engineered follow-through using volatility events coming immediately after the support break resulted in the total annihilation of the longs.  Price still has not recovered from that move.

Operation #2: two days after the $150 drop, another 3-event $23 assault completely failed.  Price did not move at all.  In fact, it rallied on the day.  Why?  Why didn't we get another $150 drop?  Well, 1325 turned out to be strong support.  Buyers came out in droves to pick up the lower-priced gold.  And so when gold dropped $23 due to the volatility events, COMEX buyers snapped up the lower priced gold, and as a result the assault completely failed.

Operation #3: two months later, another 1-event $24 assault had only a very minor effect.  Price fell that day a few bucks, which was regained the day following.  Support was not quite as strong, but the market was clearly not in a fragile state at that point either.  This assault failed as well, since there was no support break and no price reset lower.

Here are three events, in relatively close proximity to one another, but under three different sets of “chart circumstances” which provided three different outcomes.  One worked, two others didn't.  The difference, I maintain, was where the market was at each point.  Fragile markets appear vulnerable to volatility events.  Strong markets are not.

Now let's look at the most recent event: July 20, 2015…

How To Protect Yourself & Profit From This Manipulation
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Executive Summary

  • What the Great Gold Smash of 2013 tells us
  • Was $1,075/oz gold the bottom? Is the bottom indeed in?
  • Is a new bull trend ahead for precious metals?
  • How to hedge against — and speculate on, for those who dare —  future manipulation attempts

If you have not yet read Part 1: EXCLUSIVE: The Smoking Gun Proving Silver & Gold Manipulation available free to all readers, please click here to read it first.

Now let's look at the great gold smash of 2013.

There were three separate operations I saw on or around the gold smash of 2013:

Operation #1: On April 12, gold had already broken below the 1525 support level to close at 1501 after dropping $100 over the two preceding months.  After a long decline followed by a support break, the market was in a very fragile state.  Sunday rolled around, and “someone” chose this moment to unload $95 in 13 volatility events over the course of just 13 hours.  This avalanche decisively drove gold down $150 in just one day.  This engineered follow-through using volatility events coming immediately after the support break resulted in the total annihilation of the longs.  Price still has not recovered from that move.

Operation #2: two days after the $150 drop, another 3-event $23 assault completely failed.  Price did not move at all.  In fact, it rallied on the day.  Why?  Why didn't we get another $150 drop?  Well, 1325 turned out to be strong support.  Buyers came out in droves to pick up the lower-priced gold.  And so when gold dropped $23 due to the volatility events, COMEX buyers snapped up the lower priced gold, and as a result the assault completely failed.

Operation #3: two months later, another 1-event $24 assault had only a very minor effect.  Price fell that day a few bucks, which was regained the day following.  Support was not quite as strong, but the market was clearly not in a fragile state at that point either.  This assault failed as well, since there was no support break and no price reset lower.

Here are three events, in relatively close proximity to one another, but under three different sets of “chart circumstances” which provided three different outcomes.  One worked, two others didn't.  The difference, I maintain, was where the market was at each point.  Fragile markets appear vulnerable to volatility events.  Strong markets are not.

Now let's look at the most recent event: July 20, 2015…

Executive Summary

  • Predicting when US shale oil production will peak
  • Why these lower oil prices *must* result in substantially lower US shale production
  • How the 'shale miracle' indeed has numerous ponzi elements that are on the brink of collapsing
  • Expect a tsunami of shale bankruptcies to arrive soon

If you have not yet read Part 1:The Dangerous Economics of Shale Oil available free to all readers, please click here to read it first.

Production Workflow, Timelines, National Projections

Now let's zoom out, from one company in the Bakken to the whole Bakken region, which is probably the best shale region in the US. My key source of information about the current trends in the Bakken region is the Department of Mineral Resources in North Dakota, website here: https://www.dmr.nd.gov/oilgas. Every month the Director (Lynn Helms) produces the “Director's Cut”, a just-the-facts summary of oil production in North Dakota. Yes, it really is called the Director's Cut.

So now that we have an idea of when wells are profitable, we can use the Director's Cut stats to track all the stages of producing oil, to see how the region reacts to the change in oil prices. We have, in order of workflow:

  • drilling permits

  • rig counts

  • wells awaiting completion

  • well counts

  • monthly production

The spreadsheet segment below shows each element from the Director's cut. We can see permits, rig counts, wells awaiting completion, total well counts, and total production. From these numbers we can calculate some other interesting details.

But first, look at the production month-over-month change. It went negative in October. That's because…

The Destruction That Awaits
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Executive Summary

  • Predicting when US shale oil production will peak
  • Why these lower oil prices *must* result in substantially lower US shale production
  • How the 'shale miracle' indeed has numerous ponzi elements that are on the brink of collapsing
  • Expect a tsunami of shale bankruptcies to arrive soon

If you have not yet read Part 1:The Dangerous Economics of Shale Oil available free to all readers, please click here to read it first.

Production Workflow, Timelines, National Projections

Now let's zoom out, from one company in the Bakken to the whole Bakken region, which is probably the best shale region in the US. My key source of information about the current trends in the Bakken region is the Department of Mineral Resources in North Dakota, website here: https://www.dmr.nd.gov/oilgas. Every month the Director (Lynn Helms) produces the “Director's Cut”, a just-the-facts summary of oil production in North Dakota. Yes, it really is called the Director's Cut.

So now that we have an idea of when wells are profitable, we can use the Director's Cut stats to track all the stages of producing oil, to see how the region reacts to the change in oil prices. We have, in order of workflow:

  • drilling permits

  • rig counts

  • wells awaiting completion

  • well counts

  • monthly production

The spreadsheet segment below shows each element from the Director's cut. We can see permits, rig counts, wells awaiting completion, total well counts, and total production. From these numbers we can calculate some other interesting details.

But first, look at the production month-over-month change. It went negative in October. That's because…

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