Gold Charts. Silver Charts. Too Many To Count.
It's 10:00 a.m. EST and I'm just starting to type. What took so long, you ask? Frankly, I printed off way too many charts. This old Officejet is smokin'! After winnowing the list down to 9, I think I'm ready to get started.
As you might have expected, we're going to start again with The Pig and, again, this disclaimer:
- I realize that, year-over-year, the Dollar Index is flat while the metals are up considerably. However, in the day-to-day trade, movements in the POSX are very significant. Why? Because the only market participants left post-MFG are The Cartels and The WOPRs. Everyone knows that weakness in the POSX causes WOPR to buy. However, strength in the POSX is even worse. WOPR sells and the Pig strength encourages The Cartel to punch the gas, too, giving POSX strength twice the impact as POSX weakness.
OK, that said, take a look at these charts. Pigatha has broken out of her pen and is rolling higher. Look for this to continue, probably all the way to 80.50 or even 81.
The clear breakout of The Pig has inspired The Cartels to finally put on the full-court press that they've been itching to apply for the past couple of weeks. It was "on" this morning right at the opening bell, as you can see on the charts below. On the bright side, The Forces of Darkness must be somewhat discouraged by the FUBMs that are forming on the charts. The Pig has since dropped back some, too, which is serving to flip a few WOPRs back into the "buy" position. Regardless, do not be surprised if The Evil Ones soon throw a temper tantrum and attempt to soundly break support. Maybe they'll wait for the Globex or the overnight session. We'll see.
So, taking all of this into consideration:
- What appears to be an ongoing bounce/rally in The Pig.
- The hard cap maintained by The Cartels for almost 3 weeks at $1750 and $34.
- The dramatically increased Cartel net short position of the past 2 CoT reports.
- A 1-month silver lease rate at -0.36%.
- The immediate hammering of the PMs right at the Comex opening bell today.
We've got to expect more downside to come. Again, in the end, this is all perfectly fine. Gold rallied 15% from late December to late January. You would expect it to give about 1/3 of that back in a small "correction". This gives us a target near $1680. Silver rallied almost 30% over the same time period. A similar 1/3 giveback would take silver back to $31.50 or so. When either or both of those levels are reached, I'm buying with both hands.
Just one reading assignment for you today. Please take time to read both of these discussions of MFingGlobal mess and the ongoing repercussions.
OK, that's all for now. Keep a close eye on things today and don't get an itchy trigger finger. Patience.