I hijacked this from ZeroHedge as I can't find it anywhere else. Please take time to read:
Here's my favorite line. How many times have you heard me say this?
"Second, all technical analysis of all markets now is faulty if it fails to account for pervasive and surreptitious government intervention."
And if you'd like to read the rest of Kipling's classic, you can find it here:
Eric King has so much valuable information on his site today, you could spend hours there. I'd say this is a pretty good place to start:
Harvey refutes the current "story" behind the unprecedented, one-day drawdown in OI this week.
Lastly, I know its the weekend and its fun to give your brain a few days off but you absolutely must keep an eye on the Middle East. There are a wealth of links on Drudge. I'll be checking it often:
For example, check this out, Note the reference to The Muslim Brotherhood:
ZH has a link to a story about protests spreading to Saudi Arabia, which would be very disruptive to peace and commerce, to say the least. Again, I mean this only as it pertains to the PM trade. Any attempts to hijack the comments below will result in comment deletions by yours truly.
I traded emails last evening with my pal, TraderDan, and he said this regarding the next few days:
"If we come in Egypt or if it looks even worse and appears to be spreading to perhaps Jordan or some other neighboring nation, crude is going to jump another $4 or even $5 and gold will be up another $30 or more. and that stuff is still going on in
If things look tamer, gold will probably drift lower as the mental midgets that constitute the world of today’s hedge funds forget all about global instability and turn their short sighted focus to the “improving economy”. Makes me want to scream at the utter stupidity of the crowd that really believes you can just print your way out of
Crazy times we live in....
Speaking of crazy, what a week, huh? For me, personally, it all started when I typed this back on the 20th. If you haven't read it yet, I ask you to do it now because it provides necessary context:
You might also review this:
And this. As you know, gold then traded lower but silver did not:
We now sit in a rather interesting position. Have we, in fact, now put in what will henceforth be known as "Turd's Bottom"? Or, are we simply hoping for a bottom and Blythe is now sharpening her giant silver auger, preparing to bore us out and send us packing to CVS again for Prep H and maxipads?
As you might expect, I believe in the former but I also know that the latter is always a possibility.
One thing that is certain, we will experience some crazy volatility in the PMs this week. The tightest range of any day this past week was Tuesday, when it was fifty cents. The other four days all saw price ranges of over a dollar and Friday the range was $1.73. Incredible! Expect this to continue in the new week as PM "market" participants attempt to discern the future of price and trend. (If they all just read Turd, they'd know!)
OK here are your charts of interest. First up, here's the CRB. Another weekly high makes places it UP six of the past 7 weeks:
OK, I want to close this note by getting back to the very real risk to global peace and security that is being caused, in part by the skyrocketing costs of food. Fat and happy people will "put up" with a lot. Hungry, desperate people will do anything to feed themselves and their children. What you are seeing now play out is just the beginning. The American political/financial complex, in its sickening attempts to maintain status quo and retain power, has brought this evil upon us. It will get worse. For confirmation, as you look at these charts ask yourself if the staggering percentage moves are from global economic growth and demand OR are the moves caused by a nearly infinite amount of new dollars chasing a static, if not declining, amount of goods? Knowing what we know about QE to infinity, will these price trends reverse or will they continue and, perhaps, even accelerate? If Egypt and Tunisia are rioting now, which countries might be next? Are you glad you own physical PMs? If you don't, why not?
One more thing, here's a chart I don't usually give you but its so odd and so telling that I felt I must. Its a daily chart of the US long bond (30-year bond future). Note that since early December, the bond has been in a very tight, 3-point range. Words cannot describe how strange this is and it utterly wreaks of manipulation by the Fed. Look at the precipitous decline from October to December as the world came to grips with QE2 and the likelihood of QEinfinity. Rates were skyrocketing. As you know by now, we can't have that! Do you recall what cartoon Blythe taught you last week about the importance of low interest rates in maintaining the Great Ponzi? If not, maybe you'd better re-watch:
And if the only thing preventing outright ponzi collapse is low interest rates...and if the only way the Fed can keep rates low is by QEinfinity and active participation in the treasury "market"...then have we dispelled any doubt you may have about the reality of QEinfinity? I hope so.
The end of the Great Keynesian Experiment is upon us. Prepare accordingly.