This Is Going To Get Interesting
Well, what a week ahead we have. Grexit fears and the FOMC will dominate but who knows what else might happen. Let's start the week by reviewing the charts.
Let's start with the Fed's bellwether...the S&P. It was just last Monday when we wondered if "V" bounce #12 was coming and, sure as heck, we only had to wait till Wednesday for our answer. Well, here we are again. The index is plunging and it desperately needs another concerted effort by The Fed and their minions to pop it back up. So, is "V" bounce #13 in the offing? You'd be crazy NOT to think so. However, this chart looks like tired and lousy. Anyone who doesn't believe that The Fed is responsible for propping it up should be crapping their drawers right about now and nervously looking for the exit signs.
Another flashing warning light for the "average" investor is the recent action in ole DrC. It puked out to a low back in January at about the same time the US economy was moving into a contracting Q1. Well now look at it! After failing to hold a breakout above 2.95 and move higher, copper is looking like a real dog. It broke down through 2.85 and 2.80 and now looks like 2.55-2.57 could be next, though someone mentioned in the previous thread that today's low was right at a 618 fib line. We'll see. Though falling copper is definitely NOT usually supportive of precious metal...particularly silver...when combined with the gnarly-looking S&P chart it sure makes you wonder just how "hawkish" Mother Fellen can be on Wednesday.
As you know, changes to the USDJPY are the key daily determinant to movements in paper gold and the events pending for later this week will likely go a long way toward determining the short-term direction of the yen. (However, even this is a bit of a joke given the relentless determination of Abe et al to devalue the yen to zero.) Last week we noted the false breakdown through 0.80 that blew out some stops and then quickly reversed. The resulting spike back higher helped gold catch a bid last week, too. Now we wait to see what Mother has in store for us on Wednesday. A decent bump in the yen could drive it back above 82 and you would really have the makings of a washout low...maybe the "head" of a reverse H&S. Again, just another item that will find some resolution at/near 2:00 pm on Wednesday.
And I think this is interesting...though, admittedly, I might be reaching just a bit. Again, you know by now how closely correlated movements between the yen and gold have been, especially since last August. Well, check the chart below. This could be a very good sign for later this week. Why? What I see here are three, consecutive mini stop-runs with all three coming at low liquidity periods, pre-Comex hours. Are these flushes the work of Cartel desks, used by them to inspire as much spec selling (Bank covering/buying) before Wednesday? It's important to note that the yen action over the flush periods is flat. Again, this could be a stretch but Turd sees what Turd sees and then passes on this information to you.
Finally, here are your gold and silver charts as we begin the week. Note that gold ($1182 last) is still within its $1180-1220 range and staying in the lower half into Wednesday, just as we expected. Very important to also note where I've drawn the trendline arrow in silver...connecting the previous breakout points of the past two squeezes.
OK, that's all for now. We'll recap with a full podcast review this afternoon.