Yawn. That pretty well sums up the day, doesn't it. Actually, after the Sunday Night Massacre and the ensuing, margin-induced madness, days like today are somewhat refreshing. Of course, we did get a margin reduction in gold last week but, as we all know by now, it meant very little.
Onto today. As boring as it was, there still are some very interesting things to watch. Significant technical events may occur over the next two weeks so you need to keep paying attention. First up, there's gold. The Forces of Evil and Darkness again showed up today as gold approached 1550. It seems they wanted everyone to know that they are paying attention, too, and not yet distracted by the bikinis and thongs of Long Island beaches.
I'll get to silver in a moment but I think we first need to look at crude. Did you notice last week when Trader Dan mentioned that "silver will underperform gold until we break from the deflationist mindset and move back toward inflation"? As you know, the key driver of general inflation is energy prices. Therefore, according to Dan's reasoning, we'll need to see a turnaround and reversal of the downtrend in crude before we can get excited about silver. The charts below give us every reason to expect solid support for crude near and just below $90. IF it can reverse there and then, with the help of a short-covering rally, head back above $96, enough strength should spill over into the PM pits to surge them higher.
So, then, here is silver. First and foremost, if it's going anywhere, it has to clear 36.25-50 first. IF it can pull that off, it should be able to make a charge toward $38 and the major resistance that resides there.
So, anyway, that's it for now. If you're looking for something to watch overnight, keep your eye on the crude market. The low today was 91.51. A re-test of that level followed by a rally could be the catalyst to drive silver toward that $38 level and inspire gold traders to attack the Death Star once more.
Have a great afternoon/evening. TF