I guess now we know why gold and silver surged on the Friday afternoon Globex. With European stocks already in the tank, the Dow has fallen 300 points this morning as the USDJPY teeters on a vital/key/pivotal support level. All of this has finally driven gold to a higher high for the first time in nearly three years.
Going to need to type as fast as possible...
The predictable effort was made to claw back Friday's gains last evening. We've seen this for years and gold was driven back to $1164 at one point last evening. However, global equity collapse and a falling USDJPY actually kept The Banks from attaining a full claw. Gold turned and rallied, instead, and now it's really rolling. As I type, I have a last of $1197. This means that for the first time since 2012, we're in a rally that has made a higher high. DO NOT UNDERESTIMATE THE SIGNIFICANCE OF THIS!
Silver popped like crazy once it made it through it's 200-day. I have a last in the Mar16 of $15.41. At present, I'm working with JimC to take off my Mar16 call spread. I'll keep you posted. (And Jim just texted that I'm filled and out. Total profit on the trade was about $1000 Too bad I made it into a spread. Oh well.)
The Dow is now down 340. The key thing to watch today will, of course, be the USDJPY. It is desperately trying to hold 116 and staying above there is VITAL. If the BoJ/SNB/ECB/FED fail to act soon to support it, it could really collapse and fast. This would spike the metals and crush equities. THEREFORE, WATCH THIS VERY CLOSELY.
Interest rates are continuing to collapse, too. The 10-year note is down 8 bps to 1.77% and the 30-year Long Bond is down 8 bps, too, at just 2.60%. WOW!
And DB is down again and now under $16. What's next? Under $15. And then under $14...
OK, to the charts. Again, we'll try to make this as quick as possible in order to get this posted as quickly as possible.
Here's your USDJPY. If it falls through 116, there's really no support until 110. Can you even imagine the carnage in equities and the dollar price of gold at 110 USDJPY?!?
(AND, OH MY GOSH, HERE WE GO. I'VE GOT A LAST OF 115.69!!)
Gold, so far, has an intraday high of $1199.50. This is now well above the October 15 high of $1192 and this gives us our first higher high since The Massive Cartel Beatdown began back in April of 2013. With gold above ALL of its moving averages, the next target looks to be near $1220. BUT, this is only a guess because, IF the USDJPY collapses and takes the stock market with it, gold's not stopping at some arbitrary line on the chart.
Silver really shot higher once it git through its 200-day and I have a high so far of $15.45 with a last of $15.34. What we really want to see is a close today above that 200-day. From there, we can begin to wonder about where it might head next. Though with gold making a higher high, $16.40 is certainly becoming a distinct possibility.
The "stock market" looks terrible. It would not be a good sign for the stockroaches if it makes a new closing low today but, of course, THE KEY is 116 USDJPY.
Two other items we've been following that you need to watch closely, too, are DoucheBank and the
high yield junk bond market. DB is making a new low at $15.64 as I type and the high yield junk ETF, the HYG, is making new lows, too. Both of these bode ill for the "stock market" so, again, watch them closely.
And the HUI is just remarkable. It's UP another 5 points at 153 and a full 54% off its lows of just three weeks ago. It's now "overbought" to an extreme so DO NOT BE SURPRISED if you see a very quick and sharp bout of profit-taking. Therefore, stay grounded and patient. Remember, in metals bull markets, it's almost always wise to sell a little when everyone is buying and buy a little when everyone is selling.
OK, I'm going to stop here so that I can get this posted. More later.
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