Calvin

When I was a kid, my sister had a cat named Calvin. Its been so long ago that my memory is fading but I remember Calvin looking a lot like this:

And this was on a good day. Ole Cal was mangy guy. He got that way from too many nights on the town while we slept but my sister sure loved him. I used to tease her, as all little brothers should, with: "Calvin and Re-Pete sitting by a volcano. Calvin fell in. Who was left? Re-Pete! Calvin and Re-Pete sitting by a volcano. Calvin fell in. Who was left? Re-Pete!" This could go on for hours and, frankly, it's making me laugh again right now as I type. One day, not long after my sister had gone off to college, ole Cal was sitting on our front porch. I recall seeing him begin to labor in his breathing and, the next thing you know, he just keeled over right there. Hard livin'll do that to you, I guess. As he rolled over, he fell off the porch, landed in the grass and, whaddayaknow, he bounced a little bit. Not much, just a little, and a young Turd was introduced to the concept of the "Dead Cat Bounce".

Fast forward to today and look at a 2-hour chart of the POSX:

Holy cow, this thing looks terrible. It looks ready to break the lows of November 2009 and head to critical support between 71 and 72. Because it looks so awful is precisely why it will reverse here and give us a Dead Cat Bounce. Something will be said or something will happen and the dollar will spring higher. Newer shorts will be forced to cover and the bounce will move higher still. The bounce won't be much...maybe 0.60-0.80 taking the June index back up toward 75.20-75.40. This move will be enough, however, to put the breaks on the PM rally and give The Cartel a little breathing room as we head into May silver option expiration and first notice day. This also trends perfectly with the trading points I gave you last evening. Please re-read this and give it your full consideration.
http://tfmetalsreport.blogspot.com/2011/04/something-to-consider.html
Taking my own advice, I have now sold all of my May silver options at an extraordinary profit. I've also unloaded my June 1500 gold calls. The only PM option position I currently have is a measly 2 June gold 1550s.

OK, here are your PM charts. First, here's a 2-hour June gold. This needs to move higher right now or it risks a brief, consolidation move. On the back of the anticipated POSX bounce, I expect gold to fail here and trade down over the next few sessions to the support level of 1480-85. The move will look almost identical to the down move on the chart right above the word "June".

IF I can get gold to cooperate, I will be an aggressive buyer sometime early next week at that 1480 level.

Silver has a similar look and I've given you two charts to consider. First, here's a 15-minute. Note the $1.00 downdraft from this morning. Usually, this is an indicator of more to come. We'll see. Like gold, if it doesn't move to a new high near 45.50 very soon, chances increase that sellers will begin to outnumber buyers and we'll get a brief pullback.

On this 2-hour chart, you can again see the area where I'll be looking to buy back in...somewhere between 43.50 and 42.50 or, more specifically, around 43.

Giving the metals great support is WTI crude. We noticed the breakout of the downtrend yesterday and speculated on a move to 110.50-111.00. Well, we got it! From here, you could see a pullback to 110.50 but a retest of the highs earlier this month looks like a virtual certainty. As discussed then, IF crude can trade through 114, it looks like clear sailing all the way UP to $122 or so. Yikes!

Lastly, I'd like to thank all of you who have recently shared some of your largesse and windfall through the "Feed The Turd" button. Every "donation", regardless of size, is greatly appreciated and I am truly grateful to receive them. That so many have apparently profited by visiting this site gives me an enormous feeling of personal and professional satisfaction. Soon, I will reward you with Turd's World version 1.0 and we will all set out to share our collective knowledge and help as many as possible to prepare for the uncertain times that lay ahead. Thank you again for your generous contribution of fiat, knowledge, experience and wisdom.

Turd out.


9:45 pm EDT UPDATE:
Well, I could just about barf. I feel like I've got a hairball like ole Calvin used to have. Only my hairball is made out of silver that Scotia Mocatta just announced they are effectively removing from possible delivery status.
http://www.zerohedge.com/article/45-scotia-mocattas-registered-silver-transferred-eligible-status
Combine this with the fact that May and July silver are now trading in "Backward Asian" to September and December...
http://www.cmegroup.com/trading/metals/precious/silver_quotes_globex.html
And we may finally be on the verge of a serious, serious delivery problem at The Death Star.

And I'm out. I wasn't out yesterday at this time but I'm sure as shit out now. Nuts.
I'm still expecting a "Calvin Bounce" out of the POSX but it hasn't happened yet.
I'm still expecting The Cartel to try to gin up some selling to frighten the May longs but they haven't yet.
I'd love to be long May calls but they expire in three trading days.
So, I'm out. Made a boatload of money but I'm still out. And it hurts. Killing me, in fact. Near death.
See you in the a.m. TF