Worthless Tuesday

Well, its clearly not "Happy Tuesday" today. More like worthless or boring or dull.

The recent pattern of the PMs trading off of weakness or strength in crude seems to continue. Its what you get when 80% of the market if the EE and a bunch of algo machines. It is what it is.
For what its worth, crude is rapidly approaching a point where it will signal its future intentions. It will either break higher on another leg UP which will take it to near $110 or it will break down. It won't stay hovering here between 104 and 105 much longer. Given the still-uneasy Middle East and the pending "Days of Rage", you have to expect that the break will be higher but, obviously, nothing is assured so watch crude and the headlines very closely.

Gold, for now, is simply consolidating above/near the old highs of last year. This is perfectly fine. It's ideal, as a matter of fact. The more time it spends in consolidation, the more confident and impressive the breakout will be when it begins moving higher again. On the flip side, it is also giving us some key support levels to watch. If these levels are broken, we can comfortably do some selling and look to buy back in at lower levels. For now, I would start trimming positions if we headed down through last Thursday's low of 1410 as that would indicate that we could be headed to 1395.

Silver looks much the same. It should find good support at 35.50 but, failing that, there should be very strong support near 35. Only a drop through 34 would cause me to change my short-term outlook to neutral.

OK, that's it for now. Like you, I have an overriding feeling that Blythe is lurking and waiting to put the hammer down on the Globex. Watch this afternoon's trade very closely. If she attacks, I'll be looking to buy some more silver at 35, and if she really gets it going like two weeks ago, 34.

Keep the faith. Have a nice day. TF