Proceeding As Planned

173
Thu, Jan 12, 2012 - 4:38pm

OK. I'd say that everything is proceeding along almost exactly was planned. I would have preferred that price not retreat as far as it did during the Comex session but it's not as if the attack was unexpected.

One of the reasons I get frustrated by folks that don't seem to read all of each post is that the answers to your questions are so often found in the current post or one of the recent ones. For example, recall this from the previous post. I put it in bold lettering there, too, so you would be sure to notice it.

"So there you go. Watch things very closely overnight and tomorrow. Gold should be your key. If it can move through 1645-50 overnight tonight, that level should then serve as support for the inevitable raid in London and/or New York tomorrow. If gold then survives and moves on toward 1660 and 1670, it will, of course drag silver along with it and the all-important silver bottom will most likely be in."

Whatever. The main thing is that the metals broke free and headed higher overnight. They were then, rather predictably, attacked on the Comex but resistance is now acting as support and all is well. At least for now.

Tomorrow, though, is a big day. Having broken out and then tested support, the metals need to rally tomorrow or they risk falling back and all of today's gains will have been for naught. Below are your charts but I'm also including two POSX charts here. Note that The Pig is resting right at 81 and, if it falls through there, it will likely drop rather quickly toward 80. This could be just the catalyst we need tomorrow to kick the metals higher.

One more thing, lot's of talk this afternoon about some kind of "delayed embargo" by the EU of Iranian oil.

https://www.zerohedge.com/news/west-blinks-iran-embargo-likely-be-delayed-six-months

Whether or not that means that peace on earth and nirvana will prevail is hard to tell at this point. What I do know is that I would not be considering pitching any long positions in crude until and unless the trendline from October is broken. Watch it very closely as a break of that line would indicate a possible drop all of the way back toward 93, if not 90.

Lastly, total OI in gold and silver continues to contract. Yesterday, gold fell almost 4000 contracts despite being up over $8 in price. This clearly indicates continued cartel short covering and is good news. Silver was similar in that total OI fell about 500 contracts but price was a few pennies higher.

That's all for today. Pay close attention to The Pig and the overnight trade in the metals. As mentioned above, tomorrow is a big day. We need to keep this momentum moving forward into next week.

TF

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