You Don't Tug On Superman's Cape...

You don't spit into the wind. You don't pull the mask off that Ole Lone Ranger and you don't mess around with Ben. (With apologies to Jim Croce.)

The new POMO schedule is out and it looks like this:

If you can read the fine print, that's $112,000,000,000 brand-spanking-new greenback about to be lavished upon our Primary Dealers. In what has become a monthly ritual, I hereby implore you again not to be short anything. Don't be "Mr Smartypants Topcaller", short the S&P and who knows what else because the fundamentals suck. One day you will be proven right but you will be broke before it happens...flattened by HellyBenny and his printing press. Each month of POMO compounds the gains in all things dollar-denominated from the previous month. Expect no less the next four weeks. To review, the just-completed $110B POMO of mid-Dec to today brought us these returns:

                                            12/10/10                   1/12/11                   Total
The E-mini S&P (ES)           1236                         1283                      +3.80%
Feb Crude                             88.31                        91.87                     +3.46%
March Copper                      411.20                      441.60                   +7.39%
March Soyas                        12.82                         14.15                    +10.29%
March Sugar                         29.13                        31.98                    +9.78%
March Silver                         28.60                        29.67                     +3.74%
Feb Gold                               1385                         1388                       flat
March Wheat                         7.75                           7.71                      flat

First of all, let me assure you that the only reason gold and wheat are flat is because I own them. Seriously, there could be no other reason than the "Turd Jinx". Other than those two, look again at the numbers!! For one month!! Do not be short anything!!! Period. You'll be crushed under a mountain of soon-to be worthless fiat FRNs. As a point of order, here's what I wrote when the just-completed POMO schedule was announced on 12/10/10:
"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."


Onto today's action, the USDX performed exactly as expected and predicted yesterday:
http://tfmetalsreport.blogspot.com/2011/01/buck-me-this-is-getting-old.html
Everything, with the exception of our precious PMs rallied today. If crude can stay near $92 overnight, eventually gold and silver will rally in a kind of algo-arbitrage type of trade. Same parameters still hold. Once silver clears $30 or so, it will quickly trade to 30.60. Gold, once it bests resistance at 1390 will zoom to 1400+. Let's look for this overnight.

Finally, be sure to read this from Trader Dan:
http://jsmineset.com/2011/01/12/continuous-commodity-index-reaches-another-all-time-high/

More later once I get a chance to review the day's events and Harvey. TF

7:05 UPDATE:
I've received a few inquiries as to why gold is not participating at the same rate in the POMO advance.
Perhaps it is. Its just being masked by EE attacks. Study this and draw your own conclusions:
http://tfmetalsreport.blogspot.com/2010/12/criminal-evil-empire.html