First of all and most importantly, as an American citizen, I am pleased that Osama bin Laden is dead. I am extraordinarily proud of the special forces and intelligence teams that carried out the mission that led to his demise. I am hopeful that this will bring some measure of closure for the families which lost loved ones nearly 10 years ago. Lastly, I beg you, please do not take this as an opportunity to pollute this blog with comments regarding 9/11 conspiracies and assorted CIA plots. If you strongly believe in that stuff, please vent somewhere else. As usual, lets try to keep this blog focused on PMs.
And there certainly is a lot to focus on this evening. Whether leaked news of bin Laden's death spooked some longs who feared a massive dollar spike, we'll never know. Whether the latest firm-specific margin hike freaked out some longs, it's hard to say. Whether The Cartel simply decided to massively raid the Globex because of the extremely thin volume associated with London being closed tomorrow, it's impossible to tell. We can only speculate. What we do know is that Globex silver sold off over $6.50, or about 15%, in 10 minutes tonight.
A move of that size can indicate a number of things and we'll certainly speculate on all of it tomorrow. For now, we need to immediately look for support levels so that we can decide where and when we might want to buy the dip. Also, there are levels above which we can begin to hope that the storm has passed.
First, look at this 3-hour silver. I thought that the coming, mid-May correction could take us back toward 45. As a worst case, I was thinking 43. I even drew those lines on the silver chart I posted yesterday. After tonight, the chart needs a closer inspection. Here's what I've found:
Onto gold, which had traded as high as 1577 before all the fireworks. The selloff stopped right at clear support near 1540. I'd expect a rebound now back UP toward 1560-65. From there, probably downward consolidation. Though the gold chart doesn't look as lousy as the silver chart, I'd have to think now that a re-test of tonight's lows, and even the lows of last week near 1525, is likely before a test and breakout above tonight's highs.
Well, that's it. What a crazy night. I must admit that, when we got back from dinner and I saw that the president was getting ready to "address the nation" at 10:30 on a Sunday night, I got a little nervous. I felt like I was watching an old episode of "24". I'm glad that those nerve-wracking 90 minutes are over and I can head off to bed. Tomorrow promises to be very interesting. Talk to you in the a.m. TF