Ole Pigatha Christie looks so awful right now that The Forces of Darkness have seemingly decided to stay away from the PMs today. Don't get too comfortable, though, because they are definitely lurking in the shadows.
Longtome traders know that the Forex markets are where the real action is. Individual equities, bonds and commodities can always be searched for clues but, if you really want to judge global opinion and trend, you look to the currency trade. With that in mind, I think I can now predict when the U.S. debt ceiling "crisis" will end. Take a look at this chart of the POSX:
We've seen this movie so many times before that we know the ending. The POSX is now just a scant 50 basis points above the low/bottom made in early May and, below there, all that remains is hoped-for support near the lows of early 2008. I fully expect a "deal" will be reached and a "grand compromise" will be accepted at about the same time the POSX reaches or moves just below 73.30. Watch that level very closely in the coming days. As it effects PMs, you've already seen a couple of steep selloffs due to rumors. News of an actual "deal" will almost certainly be met with a similar reaction. The Cartel will pounce and we'll all get another opportunity to buy the dip.
Frankly, I'm ready for all of this crap to be over with anyway. Let's get a deal done simply so that we can get the obligatory dollar rally and commodity selloff over with. With that behind us, the markets can begin to focus on:
1) From where will the next $2T in debt come? More QE, anyone?
2) The terrible U.S. economy and employment numbers. More QE, anyone?
3) Possible downgrade of U.S. credit rating. More QE, anyone?
These charts all look terrific. I'd really like to buy some crude but I'm having "liquidity issues", myself. The fact that I want to but can't virtually assures that crude is finally headed back through 100 very soon. Copper is very strong and portends higher PM prices in the coming weeks. Silver, once it gets through 41 should move quickly to 42-42.50. Gold just keeps heading higher.
So, anyway, here we sit. I'm still long my spreads in Dec gold and silver. If we can get the spike to 42 and 1650, I might take them off and hope to reposition. Until then, I'm just stuck watching and waiting for something to happen in DC.
More later if necessary. TF