Return Of ChartDaddy (updated)

10:30 Monday UPDATE:
First, take a look at the 24-hour Kitco charts to the right. As we all suspected back on Friday, the slightest bit of dollar strength drove silver all the way down to the critical support of 28 overnight. 28 held if only because the dollar rolled back over at around 5:00 am EST. Going forward, I still think what "Blythe" said in my little movie will prove accurate. Let HSBC and the LBMA pop 28 some time in the next 24 hours. Blow out a few stops on the way through and then reverse things in the early going Tuesday. We'll see. I admit I'm only guessing in this instance but sometimes hunches can be your best indicator.
The Big Story here in the early week is the state visit of Head Chicom, Long Duk Dong. Don't forget how awkward it was the last time he and President O'bottom were together:
http://www.hulu.com/watch/110317/saturday-night-live-china-cold-open
But, seriously, the status quo shills in the MSM will write off statements such as this:
http://www.breitbart.com/article.php?id=CNG.9964072691a62252d0a98b0308fb8063.281&show_article=1
They'll claim that this is just "posturing" but I can assure you that it's not. The Chicoms, as one of the worlds biggest creditor nations, are simply looking ahead to the inevitable moment when the world recognizes the lunacy/fallacy of having the world reserve currency issued by the world's largest debtor. That day is coming. Soon. The status quo shills be damned.
More later.


Happy Saturday, everyone! Before I settle in for what should be a classic Pitt/Balt brawl, I thought I should update/prepare you for what is going to be a week of significant consequence.

A couple of quick things before I unload these charts on you:

1) Thanks to everyone who watched the silly, little video I made late yesterday. I whipped that up in about 30 minutes but I must admit that I kind of like it. I used some of my PayPal "donation" money to fund it and I have enough credits to make 7 or 8 more. Maybe it'll become a continuing series of "conversations" between Blythe and Chief Monkey #1. If you missed it, here's a link:
http://www.xtranormal.com/watch/8266652/

2) CIGA Richard has filed another fantastic report on Santa's site. Some background: Have you ever wondered how a bankrupt bank can claim $1B in assets and only $800MM in debt yet be broke? So did Richard and he started digging. What he's uncovered would be considered fraudulent in any other sane, rational and honest period of time. In this current age, it's normal and fine, I guess. The main thing here is the bigger message. If the First National Bank of Bumfuck is insolvent, bankrupt and otherwise broke when you look under the hood, what do you think Citi or JPM or Wells or BoA look like? And if nearly every freaking bank in the country is insolvent, do you really think QE2 will be the last batch of fresh greenback to be printed? And does this make you want to buy more PMs or less? The latest, must-read update is right here: http://jsmineset.com/2011/01/14/jims-mailbox-622/

3) Everything you'll see below in this post will be in regards to commodities in general. I'll tie it all back in to the PMs, of course, but, since the vast majority of money managers still look at the PMs as commodities, it is important that we follow the entire commodity complex as we attempt to ascertain the general trend in price of our precious PMs. To that end, read this article on OPEC and oil. The governments of the Middle East are none too happy with our egregious money printing as it is lessening the value of their only natural resource. Suffice it to say, when oil hits $100, gold will not still be at $1365. http://www.msnbc.msn.com/id/40811733/ns/business-oil_and_energy/

OK, so here are your charts. Again, take these as components of a much larger picture. In that picture are gold and silver and we want to decide if we should be more excited by greed or fear at this point. First up, the Almighty Dollar:

Note that, though we fell very quickly this week, we are still range-bound. Chances are higher that the dollar will rebound this week than they are that it will break down. However, if it did breakdown...

Next is the CRB Index. If you're not familiar with this index, you should be as it is the most-followed of the commodity indices. Here's where we start to realize what an extremely important, significant week is coming beginning Monday. Note that we have hit almost an exact double-top on the weekly chart.

So, to prevent a double-top, we need some components to continue to rally. Well, here's crude. The same crude that OPEC would like to see at $100:

And here is copper, which rests at upon a trendline and needs to go higher very soon or the chart will start to look nasty...which will lead the PMs lower still.

Note that I drew the line through the 12-hour closes, not the lows as I am looking for as much advance warning as I can get. Now, lets look at our two favorite grains, soyas and wheat. Soybeans have very strong fundamentals and should be bought on any dips. Wheat is simply pissing me off. Both, however, are in strong uptrends which is helping to drive the CRB higher.

Let's sum up before we get to gold and silver.
1) The CRB is either poised to move higher or paint a double-top. This week begins to answer that question and the answer has implications for the prices of gold and silver.
2) Crude looks rangebound but fundamentally positive so this should help the CRB.
3) Copper could go either way and is our "coal mine canary", if you will.
4) The grains are providing solid support for the CRB, too.
OK, here's your updated, 12-hour silver chart:

We clearly stand on the precipice which is why I'm going to such great lengths discussing the CRB. If commodities in general begin to roll over and the CRB double-tops, you can bet your booty that silver will plunge through 28, down to 26.50, perhaps even 25. I know we are all mainly holding physical for the long-term but we need to follow the price swings as there is no sense in over-paying in fiat for your next purchase.
Now here's gold:

Continues to be in the same range that started back before Halloween. No real reason to get excited or nervous until and unless we break out of the range.

In summary, the metals have had a tough week and look like they might want to go lower. General strength or weakness in the overall commodity sector will influence this next move. For now, indications are that the "commodity trade" is still strong and heading higher but this is a very important week in terms of determining the future trend. Keep a close eye on copper and crude as they will either help or hurt the prices of the PMs. For now, I've raised some cash and I'm waiting to buy on this dip in price. I'm just not sure if we've seen the bottom of this dip yet.

Have a great weekend. Get ready for an important week ahead. Turd out.