First of all, I think its critical to remind you that I warned you of impending volatility last night. $20 drops in gold like we've seen in the past 90 minutes are to be expected. They should not cause panic.
After reaching $90.76 just about two hours ago, crude has rolled over and is down almost $2 from those highs. Predictably and just like yesterday, Blythe waited about 45 minutes and then ordered the monkeys to attack. Gold since plummeted from 1426 to 1407 in a little over an hour. So, what's next?
First up, gold should be very well bid by our BoS between 1400 and 1410. If 1400 fails, we could trade all the way back to 1390 before I would start getting interested/concerned. Two levels to watch from this point forward today:
1) We still need a daily DeathStar close above 1426 to confirm and continue the breakout above the old highs of last month.
2) Yesterday's low was $1409.80. A DS close below there would give us the dreaded "outside reversal day". The ORD is not a cause for panic. It would simply be a note of concern and it would be nullified if/when we move back through and close above today's high of 1432.50.
In silver, I'd expect a lot of bids between 29.50 and 30. I just flipped over to Lind-Waldock and I see that price bottomed a few minutes ago at 29.83 ands has since rebounded to 30.11. So far, so good. An ORD in silver would require a close below 29.48. Outside of Blythe changing the rules again or The Second Coming, I just don't see that happening today.
DO NOT forget that, as I type this, HellyBenny is in the process of off-loading about 8B in new POMO dollars directly to the PDs. That money will begin making its way into stocks, bonds and commodities later this morning so expect things to stabilize and head higher as the day goes along.
Keep the faith. Trading/watching the PMS is not for the faint of heart. All will be well.
11:45 EST UPDATE
Though clearly not out of the woods yet, we are recovering quite nicely from the raid.
Feb11 gold reached down to 1407.50 but has a last of 1416.60
March11 silver hit 29.83 but has a last of 30.22. This has got to have Blythe pissed off to no end. She's probably walking around screaming at people for no reason. "Where's my coffee?!?" "Who took my cigarettes?!?" "Somebody make me a protein shake. NOW!" My hope for The Monkeys is that she's not PMS-ing today on top of everything else.
Crude has stopped bleeding, too. Recovering back up to near 89.
The next 90 minutes will be telling. Let's watch and see what happens.
1:10 EST UPDATE
Only 20 minutes until the Death Star closes for the day and everything from stocks to crude to gold is rallying. A green close in both gold and silver would be quite a nice little victory and it would completely ruin Blythe's day. She'll probably try to whack it one more time, however, to avoid this outcome. I'll update with summary on a new blog post sometime after the close.