Searching For Confirmation

The scenario I laid out last night in"Turd's #2" is very much intact and alive this morning. Therefore, instead of the usual gold and silver charts, today I give you some backup info to watch.

First, the POSX. We began looking for a dead cat bounce about four weeks ago. It has certainly come to fruition, even exceeding our goals for the rally. However, it has met its match at 76 and looks ready to begin rolling back over. Dollar weakness will clearly ease the pressure on the PMs.

Next, have you noticed yet the correlation between gold and the S&P? They've been moving almost in unison for about two weeks now. If you believe like I do that The Bernank will not allow stocks to head dramatically lower as that would be detrimental to his beloved "wealth effect", then you must expect stocks to turn higher again soon. Watch the 1315-1320 level in the ES for clues.

Ah, now here's a real interesting chart. Our old friend, DrC. IF it can move UP through 410...and I have a last of 406...there will be an undeniable reverse H&S on the chart. Without question, a bottom and a rally in copper will provide buying support for our PMs.

Lastly, here's crude. The damage inflicted buy the O'bottom Administration was large but it has left us with a clear chart pattern. A break above 100 and we can safely feel like the lows are in. A break below 95 and you need to be out. Given the political uncertainty and general unrest of the MENA region, a break down through 95 seems highly unlikely.

OK, that's it. Please go back and re-read "Turd's #2" if you're looking for levels to watch today in the PMs. I have lasts of 1493 and 34.70 so things continue to look up. Be on the lookout for raids but, more importantly, be on the lookout for FUBMs. The re-emergence of the FUBM will be your most certain sign that the storm has passed.

I'll be out for most of the day. I'll update through my phone if absolutely necessary otherwise look for another post this afternoon. TF

ps Gold at 1500 and silver at 35 are very encouraging. Also, July copper just tapped 410.
You can start getting excited above 1505 and 35.50. Until then, just stay encouraged.