I've received quite a few emails asking me why I seem so subdued. Many have indicated that they would expect me to be more excited by the silver market. I've asked myself these same questions. Here's the thing...
There's an old trader's adage: Never predict the end of the world because you're only going to be right once. The same holds true here...Never predict a Comex default because you'll only be right once. However, I made a promise when I started this blog that I would never be purposefully vague and that I would always tell you exactly what I think. The world is full of opinion-givers who attempt to surround every issue so that they can never be proven wrong. We don't do that here. In Turd's World, I tell you exactly what I think, win or lose. Take it for what its worth. That said..
HOLY SHIT CAN YOU BELIEVE WHAT'S GOING ON IN SILVER?!?! THIS HAS ALL THE MAKINGS OF A SHORT SQUEEZE AND A SIGNAL FAILURE!!! HAHAHAHAHA!!!!! EAT IT BLYTHE!!!!!
OK, enough of that. But, seriously, I sit here with my mouth agape just like you do. Every time silver pushes another 50 cents higher, I find myself in stunned silence by the enormity of it all. I honestly have NO IDEA of whether or not the Comex is on the verge of default. What I DO KNOW, however, is that I have never seen anything like this before. The consistent bid. The lack of offers. The record-breaking open interest. The daily 2%+ moves. Again, I've never seen anything like it.
We sit here on Monday evening, February 21, 2011. By the end of this week, anything is possible. The Comex may be on fire and silver may be at $50/ounce. Libya may be in civil war and oil may be over $100/barrel. Israel may attack the Iranian ships that will be passing through the Suez and drive oil to $150/barrel. If the silver Comex collapses, gold may be over $1500. Anything...and I mean anything...is possible. I've used the term "buckle up" quite a bit lately. I mean it. There's some crazy stuff coming over the horizon. As Fred Thompson's character said in The Hunt for Red October: "This business will get out of hand and we'll be lucky to survive it".
On the flip side, maybe we're getting overly worked up. Libya will peacefully transition to a new goverment. Iran will not attempt to utilize the Suez Canal. Silver will peak at $35 and then sharply correct back to $30. As I said anything is possible. Be prepared.
For tonight, take a look at this crude chart first. It is absolutely soaring and I hope you took the time to fill up your gas tank today as it will surely cost you about $0.20/gallon more tomorrow.
OK, that's it. Tomorrow is going to be absolutely crazy and volatile. A day like no other we have seen in recent memory. You might take notes, maybe keep a journal, so that you can clearly recall when it over how you felt and how you acted at various points during the day.
Get some rest. Be ready. See you in the am. TF
11:25 EST UPDATE:
An absolute classic EE beatdown tonight as Blythe tries to claw back all the gains that were made on the Globex earlier today. Take a look at this 2-minute chart for tonight's action:
I doubt she's done. I would initially look for support around the 33.25 level. We struggled with that area a little this morning (remember...broken resistance becomes support and vice versa) and it served to contain last hour's attack. It may hold again but don't be surprised if, at some point overnight, silver trades all the way back down to the highs of Friday, somewhere just below $33. If I were a BoS, intent upon taking delivery and shoving my silver auger right up Blythe's patooty, I'd be waiting right there for her with giant bids. Let's hope we see one, final, massive FUBM begin there and rally us into the morning. If I were trading tonight, I'd sit, cool as a cucumber and let Blythe come to me. Here, kittykitty....come to papa...
However, I'm not trading. I'm going to bed. Good night. See you in the morning (U.S.). TF