Still Looking Good
It seems like everybody is now jumping aboard the "Double Bottom and Bull Market Resumption" train. That's fine. The train may soon get a bit crowded and need to offload a few non-believers for a few days but, for now, it just keeps speeding along.
First of all, let's talk about something it seems no one else has noticed...What the heck happened to The London Monkeys? Are they suddenly on vacation? Maybe the floods in England have kept them from manning their cubicles? I don't know and I also don't know when the last time was that we had three, consecutive days without a 7:00 am London time beatdown. This must be watched and they'll likely assert themselves again as soon as tonight...but...what could this mean?
- The Big Manipulator and key to the EE is JPM.
- Therefore, JPM is likely the key London Monkey trading desk.
- The London Monkeys usually act 4 out of 5 days per week. Their goal is to stem any rally out of Asia with the intent of keeping price from springing forward at the next day's Comex open.
- JPM is now NET LONG Comex gold.
Could this rather unprecedented London Monkey standdown be a signal that JPM is ready to release price to the UPside, thereby profiting while squeezing the Spec Shorts and their fellow Bullion Banks? Maybe...let's see what happens tonight and Friday before jumping to any conclusions.
OK, now to the charts. First of all, gold looks great. It keep charging higher. As you know, it took out the 100-day MA on Monday and then surged even higher yesterday. This is a very bullish sign. Lots of momentum. The key resistance that nearly everyone seems to recognize will now be the 200-day MA (today near $1313 in the Apr14) and the area around $1320. Because so many folks are focused on those points, you can be almost certain that resistance will appear there in a classic self-fulfilling TA sense. That's fine. A little consolidation would be OK. As I mentioned last evening, though the bull market is resuming, the metals are not going to go UP every single day. Just use the dips and weakness to continue to accumulate.
And this weekly chart shows you where the next key resistance will be found once $1320 is in our rearview mirror:
Now, here's the BIG NEWS of the day....I think silver is finally ready to begin moving higher. Now, as you read this, keep in mind all my talk about multiple resistance levels etc keeping silver pinned below $22. That hasn't changed. You should also keep in mind, though, that two weeks ago I gave you "gold to $1320 by Valentine's Day". This looked pretty bleak with all of the resistance ahead at $1260 and the 100-day but here we are...getting close.
Why do I think silver is finally ready to bust through $20.50-20.60 and begin moving through $21 and toward $22? Well, one of the key inhibitors for silver these past two weeks has been the coincident pressure on both copper and platinum. Gold was rallying but the weakness in the other two metals kept holding silver back. Look now at the recent turn in platinum:
And check out copper. I've been thinking that copper would be held in check until mid-month, just like it as held down until mid-November ahead of the Dec deliveries. Well, it's now mid-month ahead of March deliveries and whaddayaknow....Could this be the beginning of another copper rally toward 340+?
Along with platinum and copper, check out crude! I though this rally would stop at $101 but, so far, it's not. Could $102+ be in the future? There's a lot of talk about a number of "hostilities" beginning shortly after the Olympics conclude, Russia-Ukraine being a still unresolved issue among others. Is this why crude keeps charging higher. And if gold, crude, copper and platinum are rallying, can silver really be that far behind?
And so, here you go. First, here's a daily chart of silver showing the exceptional bottom near $19 as well as the oppressive cap at $20.60. It's that cap that is about to break. WHEN it does, the attendant short-squeezing will pop price higher very quickly. That's almost three, full months of price under $20.60. There has to be a a cornucopia of buy-stops above there.
But on the weekly chart, you can still see the challenges ahead. Once above $22, silver will roll toward the late August highs near $25 and, from there, it will be a quick trip to the ultimate test of $26. Once back above there, everyone will be screaming about $36 silver being inevitable and in reasonably short order. But let's not get ahead of ourselves. For today, all I'm prepared to get excited about is the final break and rally through $20.60. I expect to have that level behind us as soon as Friday and no later than sometime next week.
For more on silver's potential, be sure to see this from Fitz at Citi: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/2/12_Silver_Price_Set_To_Shock_Traders_With_Stunning_55_Surge.html
Finally, let's close today with a discussion of the HUI and the miners. It took a lot of gas to get it UP and through the 200-day yesterday and, frankly, a lot of individual issues like EXK have gotten short-term overbought and need a brief pullback. The HUI will also likely pause here and consolidate around the 200-day much like it did around the 100-day. Though I don't expect this consolidation to play out over 3 weeks like the 100-day did, the HUI could easily oscillate around the 230+ area for the next week or so before charging higher again. Let's be sure to watch this closely because IF it does convincingly break through the 200-day and begin charging higher again, you're going to want to own some of these miners. The leverage they provide is significant and you'll be able to make some considerable fiat, which you can convert into phyz at a later date.
OK, that's all for now. I'll have a podcast for you later today so be sure to check back when you can. Also, with the strange week I've had, I was unable to schedule a guest for A2A tomorrow. So, instead, it's just going to be me. I'll set up the webinar and, if you'd like to ask me questions directly about anything on your mind, feel free to join us.
Thanks and have a great day!