As we discussed just yesterday, with the CoT structure very likely at historic and unprecedented levels, the next move for the metals was going to be UP, not down. We've also frequently mentioned the likelihood that an FOMC rate hike would be a "sell the rumor, buy the news" type of event. With those two items in mind, we can't consider today's market action to be a surprise.
Let's dive right in as I'm running a little behind schedule. I'm honored to have taken on a new responsibility for the greater community and I look forward to sharing the news with you later today. For now, though, let's head straight to the charts.
Below are the 2-month gold and silver charts that we've studied a couple of times this week, most recently yesterday. Maybe it's just me, but I think it's quite easy to see which way these patterns have resolved themselves this morning:
Alright, so, what should we root for over the remainder of the day. Well, let's keep it simple. As you know, the first major hurdle for this next/current rally is $1080 gold and $14.40 silver. While I'd love to see prices extend even higher today, as we close the day and wrap up the week, all I want is a close above these levels. Not asking for much, I know...but...as they say...beggars can't be choosers.
Once solidly above $1080 and $14.40, we can set our sights upon the next major resistance. As you see below, that level is $1105 in gold as well as the 50-day moving average, currently near $1120. In silver, $15 will be a challenge and the 50-day near there will be, too. Expect the SPEC shorts to put up a battle there in a desperate attempt to regain the downward momentum. They'll throw good money after bad but they will lose. Little do they seem to know...they have no chance. The Banks always win this paper game and The Specs always get the shaft. That's just how it works.
For further evidence that this is a serious Spec short squeeze, check the divergence between gold and the yen today. If the smarty-pant, momo-chasing Specs think things are painful today, wait until the yen rallies later this month. The pain will be amped up considerably at that point. Christmas won't be their only "religious experience"!
Again, there's A LOT of fuel here. The gold CoT we get later today will again show new record extremes in Spec and Commercial positioning...and with the OI increase since Tuesday, the extremes have already grown some more. Of course, we're seeing considerable Spec short covering today but the CoT is still at historic levels. Be sure to keep this in mind.
And the HUI is just beautiful and those miners I bought earlier this week are kickin butt and takin names. It's already dealing with its own 50-day MA and I'm happy to report that, as of this moment, it's actually above that critical level. The question is: Can it close there? I think it will. Check the positive chart as well as the upwardly-trending RSI and MACD.
There's much more that I could type about here but I need to get this posted before it gets too late...and we can certainly discuss the BLSBS etc in the podcast later today. As I close, the metals are still near their highs of the day at $1085 and $14.52. Keep a close watch and hope to maintain these levels through the Comex close.
Have a fun day!