The Turd is very impressed with the continuing action in silver. It continues to find strong support every time it moves down toward $33 and it beginning to de-couple from the POSX.
So let's start this lovely Tuesday right there. The POSX has been rallying of late, primarily due to Euro weakness. We're now also seeing weakness in the Yen but more on that later. For now, here's the same old Pig chart that we've been watching. 79.60 is obviously a level to watch very closely.
Interestingly, silver is beginning to de-couple from The Pig. As we detailed last week, silver and Pigatha have been in a nearly perfect, negative correlation for almost 3 weeks. That is beginning to change and, if this trend continues to strengthen, would be a clear sign of an impending move higher. Silver would look to finally move through 34-34.40 and head to 35-35.50. Adding to this optimism is the continued, almost-herculean strength of silver above $33. For the first time that I can recall, the battle seems evenly fought. Though the EE is working desperately to keep silver below $34, The Good Guys seem equally resolute in keeping it above $33. Seriously, when was the last time that we saw such an evenly matched fight? The Forces of Darkness almost always overwhelm our miniscule, under-armed and under-funded Freedom Fighters. Is this another sign of the major shift of 2012 that we've been predicting (hoping) would happen? Maybe.
Gold continues under Cartel pressure. One would logically expect gold to be trading significantly higher here given all of the unrest in the world. That it isn't is a clear indication of Cartel intent. Again, a 5% correction following a 15% advance would take gold back to 1680. That would work for me!
Here are four links before we get to the updated crude chart:
Here are two other links that you should find interesting. First, the American state of Utah is considering the issuance of their own gold and silver-backed currency.
And Patrick Heller chimes in regarding the PMs but includes some very helpful information about counterfeit silver rounds and bars.
The Bank of Japan intervened again overnight by announcing another significant Yen dump. You can read about it here: https://www.zerohedge.com/news/bank-japan-drowns-world-surprising-¥10-trillion-valentines-day-liquidity-present
Though Japan has been in economic tar pit for over 20 years, the earthquake of last March has been a devastating game-changer. If I recall correctly, last night's action was the third such overt intervention in the time since. So, here are three questions:
- Has the earthquake so dramatically effected Japan's economy that the long-term trendline shown on the chart is doomed to fail sometime soon?
- Will a breakdown on the yen chart foreshadow a breakdown on the gold chart?
- Maybe it doesn't matter. Are the two charts correlated or are they just a coincidence?
(Perhaps and industrious and helpful Turdite can plot and post a chart of the Yen and gold together?)
Finally, it was with great disappointment that I watched the final episode of "Freedom Watch" last night. This program was unlike any other in the media and it will be greatly missed.
4:00 pm EST UPDATE:
Just wanted to add two things after observing the action today.
First, The Pig is very close to breaking out and moving higher. IF it does, it has room to run all of the way toward 80.50 or so. This would likely be detrimental to the short-term price of paper metal.
Second, I've noticed some discussion about the relevance of lease rates on price. Please review these two charts again. Notice that in September and December, just days after moving below -0.40%, silver was crushed. Is there a direct cause/effect? Who can say for sure? What I do know is that these two charts say a lot and if rates fall below -0.40% again, I'll be looking to buy some puts.
For a more in-depth review, I urge you to read this post from last Saturday:
Have a great night. Watch the POSX and gold very closely. TF