OK, it appears that the coast is clearing. The entire MFing Global fiasco had the potential to seriously pressure the commodity markets but...at this moment...it looks like we're going to survive.
It had the potential to get ugly. Yesterday, when we were getting the waterfall declines in the metals, I feared that another September rout was on. Silver could have dropped $5 again and gold could have dropped another $100. This would have ultimately led to more margin hikes and...well, you get the picture. Why, you ask? Simple:
1) MFing Global clients are restricted to "liquidation only".
2) This seriously disturbs the normal, fragile equilibrium of buyers vs sellers.
3) Knowing this, other paper silver holders attempt to "get ahead" of it all by selling.
4) This prompts MFing Global clients to sell.
5) This leads to more selling pressure.
6) Maybe JPM helps things along with a few, new shorts.
7) Down it goes. No buyers means no bids. Serious, cascading waterfall.
This is what I feared yesterday morning as I helplessly observed the action through my Iphone. Miraculously, however, silver and gold both stopped and reversed, right at critical support. This is very encouraging. Maybe silver is finally at a point where fundamentals are being recognized. Instead of waiting for even lower prices to develop, buyers stepped in and turned the tide. Again, this is very encouraging.
Now, by no means is this over as the MFing Global situation appears to be a rabbithole of corruption. However, the moment in time where the imbalances existed that could have crashed both silver and gold has passed. As the title of this thread states: Whew! One caveat, though. I'm going to be out and unavailable all morning again tomorrow. Yesterday marked the second straight panic-type event that has occurred while I was away from my post, the other being the selloff of 9/22. Let's just hope that tomorrow doesn't make it 3 in a row!
As mentioned above, things look encouraging. You can see it on both of these charts. IF these rallies can continue, both metals will move through their highs of last week and will be set up for further extensions of the gains. I'm still expecting $1810 in gold and $37 in silver sometime this month. A move through last week's highs will make those goals look easily attainable.
Two other things. First, a potentially fascinating interview of James Turk by Eric King. Here's a link to some text. The full audio has not yet been posted so I advise you to keep checking the link until it is:
Eric also just posted some notes from speaking with Peter Schiff today. A must read:
And I think this next item is kind of funny. Trader Dan and I have joked that we might be "brothers from another mother" in that we so often see the same chart patterns and share the same thoughts. Last weekend, I planned to write an entire column on commodity inflation, specifically cows and pigs. The weekend passed, I ran out of time and it never got written. I even still have the marked-up charts on my desk but I just haven't had the time to post them. Well, Trader Dan to the rescue! Dan has written a fabulous piece that, for all intents and purposes, states and shows most of the things I wanted to cover. Below is the link. Thanks, Dan!!
OK, that's all for now. As stated above, I won't be able to post again until after the Comex close tomorrow. Like Tuesday, though, I will be adding thoughts to the comments section of this thread if conditions warrant. Thanks again to all Turdites everywhere for making this such a special site! TF
p.s. I forgot to add this. I received this email last night. Thanks, JB. Much obliged!
My name is JB Slear, the COMEX Gold/Silver delivery boy for Jim Sinclair at www.JSmineset.com . I used to trade thru REFCO before its collapse into oblivion, none of my clients lost any of their money during its collapse. I'm certain there are a lot of people who might be scared stiff about their commodity holdings. If you feel it prudent, I would be honored to answer any questions your people might have in regards to MFG and their apparent risks. Please feel free to post this if you're ok with it .. Your people can call toll free866-443-0868 ext 0. One of us will pick up and answer any questions they have ... Happy Trades To You!!
CEO Fort Wealth Trading Co LLC