The Critical Importance of 1260 and 20.50
It's all there for everyone to see and it will likely come down to Friday's BLSBS for resolution.
Just a quick post this morning. Actually I wasn't planning to post anything before the podcast but the price action post-ADP demanded it. I've still got more snow to shovel and I haven't showered since Monday. Ick.
This is just pathetic, frankly. CNBS and other bubblehead commentators will lament gold's "lack of follow-through". Bullshit. Gold followed-through just fine. The problem is The Banks. They are intent upon keeping price down and under $1260 for as long as possible. Not only that, it is absolutely vital to the shorts that price be held below the 100-day moving average, too, currently near $1274 in the Apr14 contract.
When ADP was "disappointing" today (http://www.zerohedge.com/news/2014-02-05/adp-plunges-january-175k-biggest-miss-august-december-revised-lower), price shot higher and actually tapped the 100-day. THIS COULD NOT BE ALLOWED TO STAND. The Forces of Darkness sprung into action, with the intention of beating gold back and living to fight another day. All else be damned. The fundos. The news. The global "safety trade". "Screw 'em", said The Banks. "We must try to restrain price today in the hopes that Friday's BLSBS will be stronger and we can keep price down even longer for once price exceeds $1260, $1280 and the 100-day MA, it will be clear for all to see that The Bottom is in."
On the bright side, silver finally broke through $19.50 AND it's 50-day MA. Additionally, it has actually found support from the 50-day on a retest. This is very encouraging but it was only allowed because silver is still well short of breaking out and through it's major resistance level of $20.50.
And so here's where we stand as we barrel toward Friday. You can plainly see that the pressure is significantly building against The Bad Guys at $1260. Another lousy BLSBS and the dam will break. A bad BLSBS will also shove silver back toward the top of it's range, too. Maybe even through it.
But, again, I can't stress enough how vital and important it is to the shorts to keep prices below these lines. If they are broken and price accelerates away from $1280 and toward $21, it will be abundantly clear and undeniable to any fair observer that THE BOTTOMS are in. Shorts will be squeezed and forced to cover and specs will actually begin to flip LONG. The Banks want to avoid this for as long as possible.
We joke all the time about how the bubblehead hypemeisters of CNBS et al like to spin each month's BLSBS as the "most important data point of all time". For us, this Friday really will be important. Be ready.