Man, they had us set up. There was hardly any doubt that a raid was coming today. But then some unexpected news hit and...whaddayaknow? A rally! A big rally! It's good to be wrong. It's also very encouraging, too, for reasons I'll discuss.
I can't stress enough how surprising, helpful and positive this is. There's a reason I'm Turd and I have a website. Primarily it's because I can usually read The Cartel signals and accurately anticipate their next move. As of late yesterday, everything was set up for a Cartel raid and, like clockwork, it began on The Globex and continued into the early Asian trade. However, instead of accelerating in London, the trend reversed, no doubt helped by the stories out of India regarding a reduction/removal of the silly tariffs on gold: https://www.zerohedge.com/news/2014-01-23/gold-surges-speculation-india-may-ease-import-restrictions
That's all well and good. Cartel plans were spoiled and a mini-squeeze developed. By itself, this isn't unusual and really not much of note. What is unusual and worth noting is the follow on buying. This is, potentially, quite significant.
WHY? Again, my major thesis for 2014 is that the structure of the global gold market is rapidly changing. One of the components of this is the heretofore unheard of JPM NET LONG position in Comex gold futures. Add to that the latest non-U.S. bank net position which was only short about 6,000 contracts. I cannot stress strongly enough the potential impacts of this change. Are we seeing one of the effects today?
Classic Turd would have been 100% correct in calling today's downturn. The New Turd is seeing proof today that his "2014 Thesis" is playing out in real time. Instead of a raid, we get a rally. Instead of a cap, we get a continued squeeze that has extended through critical resistance near $1260 as I type. Instead of Spec longs getting fleeced, we have Spec shorts getting slaughtered. IF I'm correct about this...and that's a very big and important IF...then this is only the beginning of a significant sea change in the metals "markets". Stay tuned...
Here's your latest gold chart. Note the lines of significant resistance that have been breached this morning. Also note the very impressive, bullish engulfing candle that is currently being painted on this chart. It is very hard to imagine this being allowed back in the "old days". In this new paradigm, might this become the norm?
And I want you to look very closely at this silver chart. Yes, silver is forming a very solid base for the resumption of the bull market. However, look at the surges in price that I've circled and notice that they are accompanied by high volume. And this volume is sticking as total Comex silver open interest has risen by nearly 6% since the 2nd of December. To me, this shows significant, long-term, strong-hand buying interest coming into the silver "market". I am very encouraged by all of this and even more confident that an UPside breakout and bottom confirmation is a certainty. It's simply a matter of time.
Just one other item today because I want to get this posted ASAP...Look again at the surging price of NatGas and the bounceback in crude. For a consumer already stretched thin by a double in price of such staples as gasoline, milk and beef, a surge in NatGas to near 5-year highs is a most unwelcome development.
Though higher prices for NatGas are clearly a trend that began in 2012, this latest jump is almost certainly related to the continuing snap of bitter cold weather in the eastern U.S. Therefore, though I'm not one to get excited about jumping in front of runaway trains, there is likely an opportunity for a very risk-oriented gambler to short NatGas if it touches $5.00. There are several short NatGas ETFs that trade on the NYSE if you are feeling so inclined. I'd look to ring the register on any pullback to near the old $4.40 resistance level which would now be support.
As I close, I see that we did, in fact, see some capping after the post-1260 short squeeze. Silver is all the way back to the old bogey of $20.20, too. Regardless, today's action is still very surprising and a most welcome development. Be happy and confident but stay patient. The battleship is turning and 2014 is going to be a very interesting year.