Just felt like I needed to put this out there.
The severity of the forced reversal back on Friday, followed by the beatdown of Sunday evening and the turnaround of today has made me a bit uneasy. It seems, at this moment, that The Cartel has more conviction to cap and hammer than The Good Guys have to buy. It all feels a bit coordinated, too.
If you ascribe to the theory of "managed ascent", these first days and weeks following the QE∞ announcement would seem to be a critical time for "management" of all things dollar-denominated. To have them explode in price so soon after the announcement would be a quid quo pro so obvious that even Helen Keller could see and hear it. So what do you do if you're a central planner, you encourage your goons to "intervene" and hold prices in check, maybe even cause brief declines. After a while, when prices resume their upward trajectories, the central planner can have plausible deniability needed to assert that his policies are not causing the price increases.
We first saw this last week in crude. QE∞ is announced just as MENA tensions are flaring and crude goes down? Seriously? How could that be? It wasn't a "fat finger" event that started the ball rolling but, in the end, that doesn't matter anyway. All that matters is that some trades were instigated to trip up the momentum and cause an unlikely reversal. Take out a few technical support levels and suddenly you've got crude back down near $90 and searching for a catalyst to regain its footing.
The same thing seems to be happening in the metals. After being capped all week, we were all patiently awaiting the next breakout and appeared to have it Friday morning. The overnight trade had been weak all week but Thursday into Friday it wasn't. And when the metals finally broke higher Friday morning, it looked like the real deal. Then, out of the blue, comes a sharp slam and the bulls get kneecapped. A further $15 decline on Sunday evening then further sapped the enthusiasm of buyers and now the metals just look weak. Buying enthusiasm has temporarily waned and this almost certainly means that soon the sellers will be emboldened. Add to that the ridiculously large new short positions of the banks and the obscenely negative silver lease rates and you've got a correction just waiting to happen.
Again, now, let me go back and reiterate what I've told you several times: 5% corrections in gold and 10% corrections in silver happen all the time within bull market cycles. Do not let them catch you on the wrong foot. Global QE ∞ means that all fiat currency is being debased. The only alternative for wealth preservation is physical precious metal. You know this. I know this. Many, many others around the globe are coming to know this and the insatiable demand thus created will underpin and reverse every attempt to collapse price going forward for the foreseeable future.
IF a "correction" develops here, do not be afraid, be joyous. You will have been given an opportunity to buy even more precious metal in exchange for your soon-to-be-worthless fiat. So, relax, be happy and let's see where the rest of this week takes us.