Cracklin Rosie

I made the mistake of writing the word "rosy" on a chart below. Now this song is stuck in my head and probably will be all day. C'mon, click the link. Share my pain.
http://www.youtube.com/watch?v=s6FfjlxZLTk&feature=related

Well, our precious PMs are stuck in a little rut. Ever since the dreaded 1-2 doublepunch of the margin hike and Fed hack, we've had a little down channel that has contained us. Conveniently, it does give us some direction, however. First look at silver. It has found a "base" right around 36.50. IF it were to reverse today, break through the trendline and move above 37.25, I could do some buying as I'd expect 37.80 and then a run at the highs of last week. Conversely, IF we roll over this morning, head lower and proceed to trade down through 36.50, I think we can be quite certain that a test of 35.75 is in the cards.

 Big brother gold looks almost identical. A "base" has been found near 1412. It now needs to move UP and away, toward 1425 and beyond. IF that happens, we'll be set up for a run toward 1440 and 1450.

Lastly, here's a c&p of an email I received yesterday. Apparently, it is from the "Graham Summers Free Weekly Market Forecast". Taken with all of the other "interesting developments" of late, its another think made to make you go "Hmmm".
(Hey wait! Maybe this will break Cracklin Rosie from my head?)
http://www.youtube.com/watch?v=XF2ayWcJfxo

Anyway, more later. TF

This is the most important chart related to the financial system today:

This is a chart of the US monetary base. In simple terms, it charts how much money the Fed has pumped into the system (at least that it admits). So it’s a kind of visual of the Fed hitting the PANIC button: when the monetary base explodes higher, the Fed is FREAKING out.

You'll note that during the Financial Crisis the Fed didn't do much until the autumn of 2008 when it pumped nearly $1 trillion into the system. Think about that, the Fed didn’t go nuts pumping money until the stuff REALLY hit the fan.

You'll also note that there's only one other time when the monetary base went absolutely vertical: TODAY.

Indeed, the Fed has pumped nearly $500 billion into the system since the start of 2011. Don't even try to tell me this is QE 2. If it was then the monetary base should have spiked in late 2010, NOT in 2011.

No, this is the Fed FREAKING OUT about the financial system again. And it's a freak out on par with 2008.

So if you think that all is well "behind the scenes" you're in for a rude surprise. Something BIG is going down and I think it’s this:

This is the 31-year weekly chart of the 30-Year Treasury. As you can see, since 1988, the 30-Year has respected the above trendline. Every time we touched up against it, the 30-Year bounced hard and continued its long-term bull market.

The last time we nearly took out this line? The very beginning of 2011:

Remember, the interest-rate based derivatives market in the US is $196 TRILLION. If the Fed lets interest rates get out of hand, then the entire system breaks down even worse than it did in 2008: 2008’s crisis was triggered by the credit defaults swap market which was just $50-60 trillion in size (less than 1/3 of the interest rate based derivatives market).

Small wonder the Fed is going nuts pumping $500 billion into the system in the last three months alone. After all, once the Fed loses control of interest rates (and it will) we’re going to see a market 4-5X bigger than the credit default swap market implode.

Are you prepared?

Graham Summers


ps. For all that can't see the chart above, here it is again:

and this is for "Larry":
http://www.youtube.com/watch?v=FRgtvYw6t_A

and here is more Graham Summers via ZH:
http://www.zerohedge.com/article/are-you-prepared-another-2008-part-2

and the hits just keep on coming:
http://www.youtube.com/watch?v=cuFoMgP4IPo