Spinning Out Of Control
In the past 24 hours alone, we've seen:
- A new IAEA report that discloses continuing Iranian nuclear tests.
- China sending two warships toward islands disputed with Japan.
- The U.S. Embassy in Cairo stormed and ransacked.
- The U.S. consulate in Benghazi burned. The U.S. ambassador to Libya murdered along with 3 others.
- Israeli Prime Minister Netanyahu rebuffed by O'bottom when asking for a meeting in two weeks and stating that "the U.S. does not have a moral place to put a 'red light' before Israel" regarding Iran.
Please pray for peace while preparing for the worst. There can be no assurances regarding the future course of events. Therefore, please do not be a sheep. You do not want to be standing in line at Costco when all hell breaks loose. Everyone reading this site must be prepared for any eventuality.
In other news....The USDA released its latest Crop Report this morning. Please help me to reconcile this information:
- 52% of Iowa's corn and also 52% of the corn crop nationally is now rated "poor to very poor". http://blogs.desmoinesregister.com/dmr/index.php/2012/09/10/iowa-corn-harvest-ten-per-cent-done-more-than-half-of-corn-in-poor-shape/
- The USDA now projects corn yields at 122.8 bushels/acre, which is about 25% lower than last year. http://online.wsj.com/article/SB10000872396390443884104577647331389763426.html?mod=googlenews_wsj
Is the USDA attempting to "manage" the situation in the same way the BLS "manages" the employment numbers? Probably. Would the bureaucrats like to avoid soaring food prices into the election? Yes. However, unlike the seemingly infinite and open-ended economic reports, corn and soybean crops do have to eventually be harvested. Will the truth finally be known later this autumn? Again, probably. Until then, I'm looking for a dip to buy and hold in corn and/or soybeans and/or the DAG.
Despite all of the Mideast tension, crude was once again turned away from $98 earlier today. Higher gas prices before an election are not preferable, either, so God only knows who was selling here. Btw, I paid $4.01/gallon last evening for a fill-up. Anyway, I still ardently believe that the next UP push in crude is right around the corner. $101 or so would be the next target before once again back-filling and consolidating.
And if you're surprised by the action in the metals today, you clearly haven't been spending enough time here at TFMR. (http://www.tfmetalsreport.com/blog/4160/storm-flags-flying & http://www.tfmetalsreport.com/blog/4168/wild-week-ahead) Yes, that's a $1.50 plunge in silver you're seeing on the chart and, undoubtedly, there will be more to come. Silver has since rebounded to $33+ and gold never fell below $1725. This has to annoy The Cartel to no end as physical demand is trumping there ability to effectively raid paper price. Knowing this, we must expect more raids but they are likely now when volume is low. Today's Globex session, for example, will probably see some...uhhh, shall we say...weakness. All in all, though, that The Cartels are rigging lower prices ahead of The Bernank tomorrow is a very good sign. Perhaps you don't recall that, on 11/3/10, The Cartels raided price right up until the QE2 announcement. They knew what was coming and they were trying to initiate raids in order to cover shorts. http://tfmetalsreport.blogspot.com/2010/11/anatomy-of-ee-attack.html We are likely seeing the same strategy play out here.
As described earlier this week, a huge rally into tomorrow would have been a major warning signal the The Bernank was going to "disappoint" and that the banks were preparing to drop the hammer. That they've chosen, instead, to raid price 24+ hours before Bernank is actually quite bullish. So, be prepared for further weakness and selling cascades but do not be afraid. Look for a spot to buy the dip and cross your fingers for tomorrow. Again, though, I must stress: Whatever The Bernank announces tomorrow will be of little, long-term consequence. Additional, unlimited QE is on the way and my long-awaited historic rally is still inevitably approaching. Be long and be strong. Buy the dip and take delivery.
More later if necessary. Watch the Globex closely.