Gold and Silver Rebound
Another day, another gun of the sell-stops. That's four days in a row. Most folks call it a rebound. 'Round these parts, we call it an FUBM!
First of all, what did we learn from the BLSBS? Well, of course, not much. That's by design. But if we pick at it a little bit, we find:
- January numbers restated much lower.
- Full-time jobs declining by 77,000 while part-time jobs increasing by 102,000.
- The number of people working two jobs going up by 340,000.
- And the participation rate falling again as over 100,000 simply "left the workforce".
Hmmmm. Not so rosy after all, is it Mr. LIESman? No wonder your head's so shiny today!
Anyway, since I printed these first six charts an hour ago, things have turned a bit. Nonetheless, they're still relevant and paint a rather interesting and confusing picture.
First of all, look at these currencies. Always remember and never forget that the POSX simply measures The Pig versus a basket of other, fiat currencies, primarily the euro. A rising dollar does not always indicate Pig preferability. Often, it's just a sign that it's every other currency's turn in the barrel.
Clearly, all kinds of "money" are pouring into the dollar. But where is it going? Not the bond market, that's for sure! I guess now you know why the stock market rallies day-after-day.
So, anyway, as we've been seeing all week, the sell-stops were run again this morning, prompting the significant move to the downside. Predictably, the bounce then squeezed all of the new shorts that jumped on the bandwagon and we got our FUBM. Now, just as predictably, the metals are giving back those gains as the momo-chasing HFTs that sold short, then got flipped long, are now being jammed back lower. Monotonous? Yes. However, all of this daily churning is creating a very nice and solid floor under price. This will benefit us greatly next week and through this month.
First, here is today's stop run:
On these hourly charts you can see the last four days of stop-running:
However, all of this stuff has unwittingly created very nice floors under the markets.
So, I wouldn't expect much action of consequence for the rest of the day. We'll probably drift around with a little bit of volatility but nothing like we saw between 8:30 and 9:30. Expect pressure and no new daily highs as you can be certain that The Cartel doesn't want to see a significant, higher weekly close. Next week looks positive enough as it is and they won't want to make the charts look any better than they already do. FYI, gold closed last Friday at $1572.30 and silver closed at 28.49.
Have a great day!