Son of ChartDaddy

Before we get rolling. we should all be encouraged by the action in the PMs today, particularly silver. Blythe drove the March11 all the way down $28.06 before it rebounded. I have a last of $28.70! The hold of $28 again is significant as the EE just can't quite seem to get it through there. Wednesday it made $28.01 before rallying. Yesterday, it hit $28.20. Looks like the BoS has determined that $28 is a decent price. That said, take a look at this chart:

$28 looks great as proven support but its easy to see that, if this current pattern holds, $28 may give way to a move toward $27 before the metal regroups and makes new highs. It certainly doesn't have to but don't panic and get all freaked out if we see $27 at some point next week.

In gold, I spent a lot of time discussing the long-term bull market earlier so I thought I'd give you a weekly chart to peruse. I could draw lines all over it but what would be the point? You can see, quite clearly, the same "Swiss Stair" formation that we've discussed often in the past. Though in this case, I've drawn it more like a "Swiss Escalator". Oh well, I think you get the idea.

I thought I'd include a USDX chart, as well, but I'm not sure why. Where it goes in the short term is anybody's guess. For now, it appears rangebound between 79 and 80.50. The chart looks like it wants to roll over but I'm probably just seeing what I want to see. As discussed earlier this week, it looks like every round number will act as support if we start heading lower (79 then 78 then 77...).

Finally, the BIG STORY today for me is the new POMO schedule. For new Turdites wondering what the heck POMO is, check this:
http://tfmetalsreport.blogspot.com/2010/12/turds-glossary.html

I always count at the upper end of each daily range so this current schedule adds up to another $117B in brand new, fresh greenback for the PDs to play with over the course of the next four weeks. My advice to you is simple: Be long or be out. Do not attempt to be "Mr. Smartypants Topcaller" and try to short anything. Don't be short stocks, grains, crude, PMs. Nothing. Long or out are your only choices.
For reference, the just-expired POMO schedule began on 11/12. On that day:
The ES (mini S&P) closed at 1195.50. Last 1239.25. +3.66%
Feb11 gold closed at $1367.70. Last $1387.40. +1.44%
March11 silver closed at $26.02. Last $28.68. +10.22%
Jan11 crude closed at $85.34. Last $87.74. +2.81%

I think you get the point. As long as we're creating from thin air over $100B in new cash every freaking month, shit ain't going down. Period.

Please check back for some additional, new posts over the weekend. Don't forget to visit our "advertisers" on your way out and please tell all you friends about The Great and Powerful Turd.

Thanks again for another fun week. Turd out.