Gold and Silver pre-BLSBS

Well, here we are. The moment of truth. It's all on the line. This is the place. This is the time.

There's so much going on that I don't even know where to start. Frankly, I don't think I'll allow myself to start because, if I do, I'll likely end up typing for the next couple of hours and I don't have that kind of time, at least not today. So let's summarize a few things, instead. (In random order)

  • The ECB leaves rates unchanged but claims that the "economic risks are to the downside". No shit. You don't say?
  • The Bank of Japan, in their infinite wisdom, has decided to print the equivalent of $200B/month or $2.4T/ year in a desperate attempt to create inflation and "growth". Shrewd.
  • Initial jobless claims came in much, much higher today than anyone expected. This is the fifth or sixth economic data point this week that has been lousy and a "disappointment".
  • The GLD continues to be drained, falling again yesterday by 2.7 mts to 1,206.22 and now down 10.64% year-to-date.
  • The situation with the N-Kos is growing more surreal with each passing day. I'm 99% sure that this "crisis" will end just like all the others over the past 60 years. However, it's all so odd. It's almost as if the U.S. is baiting the N-Kos to act. Maybe they hope the Lil' Kim will do something out of a desperate attempt to save face and, after doing so, a different regime will take over, one that is more palatable to the entire world? Hell, I don't know. Like I said, it's getting more surreal each day.
  • The metals were getting ready to take another pounding today but the claims numbers forced a retreat/rethinking of the spec shorts. Yesterday, though, had a capitulative quality as we actually saw both metals OI decrease. With no follow-trough today, maybe the worst is behind us.
  • I'd still put the chances of a brief break of support at 50/50. In fact, I'm kind of pulling for it to happen. As mentioned yesterday, a quick drop through $1525 and $26 would be The Final Capitulation that would suck in all the remaining shorts as well as clean out any selling associated with the cornucopia of sell-stops below those levels.

So we'll see what happens tomorrow. With sentiment as lousy as it is and the spec shorts so clearly in charge, it's going to take an horrific jobs number tomorrow in order for us to see a major squeeze. The most likely scenario would be a number that, at first glance, doesn't look too shabby. As is often the case, the initial move would then be a headfake. Maybe gold immediately drops to $1525-1535 and silver plunges below $26.50 and toward $26. At that point, they reverse as cooler heads digest the report and notice worsening internals like the participation rate. Price bounces on the backs of The Greatest Fool shorts and we actually end up with an Outside Reversal Day to mark The Bottom. For an ORD tomorrow we would need to bottom below today's low of $1539.40 and then, preferably, close above today's high of $1559.30.

As mentioned frequently here over the past several weeks and reiterated these past 48 hours, we could see The Final Washout, too. Maybe the NFP number exceeds 225,000 and the rate falls to 7.5%. In that case, we might get our Washout. Either way for those addicted gamblers out there, tomorrow promises to be a day of significance. For the rest of us, tomorrow and/or early next week look to be terrific opportunities to once again add to our stacks at outrageously discounted prices. (Please click the HardAssetsAlliance link or visit the TurdMart Metals page when doing so )

Here are the best two charts I can give you. Note that, if I'm right about long-term support holding, the the metals are poised to finally close out these current downtrends and begin new UPtrends, instead.

Lastly, we should note that today marks the 45th anniversary of the murder of Dr. King. Look, I know he was a philanderer and he possessed many of the same weaknesses as all of us, but his contributions toward the advancement of equality and freedom need to be respected and appreciated. Though taken too soon, he clearly lived a life of meaning and significance.

U2 - MLK

Have a great evening and overnight and get ready for a wild ride on Friday.


About the Author

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Key Economic Events Week of 7/15

7/15 8:30 ET Empire Fed
7/15 12:00 ET Chief Goon Powell
7/16 8:30 ET Retail Sales
7/16 8:30 ET Import Price Index
7/16 10:00 ET Business Inventories
7/17 8:30 ET Housing Starts
7/17 9:00 ET Goon Barkin
7/17 9:15 ET Cap Ute & Ind Prod
7/17 9:35 ET Goon Waller
7/17 2:00 ET Beige Book
7/18 8:30 ET Philly Fed
7/18 10:00 ET LEIII
7/18 1:45 ET Goon Logan
7/19 10:40 ET Goon Williams
7/19 1:00 ET Goon Bostic

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