Gold up. Silver up. Miners up. Bonds up. Stocks down (sorry paperbugs). As we begin what will be a very interesting and volatile week, it's finally getting fun to look at the charts again.
Just a quick snapshot as I begin typing...
Gold is UP $14 at $1291.
Silver is UP 13˘ at $17.88.
The HUI index is UP seven points at 208.
The S&P is down seven points. The Dow is down 93.
WTI Crude is down $2 at $47.13.
And bonds are rallying hard again with the 10-year note falling to 1.77% and the 30-year Long Bond making new all-time lows at just 2.37%...an incredibly FLAT spread of just 60 basis points.
This is all very exciting so lets start with the good news.
I mentioned last week that the area around $1260 was a critical and important resistance point. Not only was it the trendline connecting the two highs of March and July 2014, it was also about $60 above the long-term, primary trendline from 2013 that we've been following so closely for so long. Back in March and June, The Cartel had attacked at these levels...failure to do so now would/could/might indicate a failure and final breakdown of their current suppression efforts.
We all know about negative GOFO, the physical floor at $1150 and the closing triangle. As I mentioned in that interview last week with Rory, could the Swiss de-pegging be the "first cracks in the central banking facade" and "might this every man for himself" idea take hold and shatter the cooperation to suppress gold, too? Whether or not The Bullion Bank Cartel put up a fight at $1260 could very well be your first real indicator of systemic change. Well, well, well...look what has happened since.
Not only has gold surged through $1260, it has also surged through the always-significant $1280 and now is pressing toward $1300! Silver has also surged to new "recovery" highs and has already printed a few trades above $18! And the week is just beginning!!
And the weekly charts are really exciting. IF/WHEN this rally continues and presses through the lows set after the massive, contrived selloff of April 2013 ($1320 in gold, $22 in silver), it will become abundantly clear to anyone willing to objectively look that a massive floor and reversal has been set.
And the HUI looks good, too. It is back above 202 at 207 and a couple of close here might really begin to light a fire under things.
OK, all of that said (typed), here's the bad news (sort of)...
You KNOW that, in the short term, they're going to come after us. Even though prices have sprung from incredibly low and over-sold levels, the rallies have been steep and sharp and The Banks have had to issue paper like crazy in their attempts to manage the ascent. In the last CoT period (1/7-1/13), The Banks issued 14,000 new naked shorts for a total NET change of 15,000 contracts. And, again, this was through last Tuesday with price at $1234 and open interest at 402,108. Well, Hells Bells! As of right now with another CoT survey looming this afternoon, price is $60 higher and open interest has grown by at least 22,000 contracts. Those new 22,000 contracts are almost entirely Spec buying and Commercial shorting so the CoT, as of this instant, is very likely the most negative and "bearish" that it has been in over a year.
Additionally, any new Cartel shorts applied to raid price back down after the close today have a full week to get covered back up as the next CoT survey won't be taken until next Tuesday.
And here's the deal....ECBQE is no longer a Turdville secret. Yes, we connected the dots pretty early with the Swiss NIRP announcement back in December but now EVERYONE is expecting some form of ECBQE announcement on Thursday. Oh sure, there will almost certainly be one but can't can't you see what's coming next?
- "Yes the ECB announced their own QE but it wasn't as much as anticipated..."
- "The ECB disappointed the markets today by only announcing a QE plan of $XXXB euro..."
- "Draghi said this was only temporary and the plan will be ended even before it begins <sarc>"...
Or, heaven forbid, we're all wrong and the ECB does nothing. In any event, attempts will almost certainly be made to smash and raid price back down....away from $1320, below $1300 and back under $1280...in a "buy the rumor, sell the news" type of mindset. Don't you just know that this is what's going to happen? Just don't be caught flat-footed.
Now back to the good news...
This is all short-term stuff and it means nothing in The Big Picture. We still have:
- Euro and central banking defections
- Extremely tight physical supply
- Ongoing repatriation movement spreading all over Europe
- Incredible, surging Chinese demand in the new year
- Hot War resuming in Ukraine
- Crumbling commodity and equity markets
- Worldwide free-falling interest rates
- ZIRP and NIRP
So let The Forces of Darkness writhe and struggle in their death throes. They are fighting a losing battle and their ultimate destruction is assured. Instead you and I will patiently continue to stack and prepare for the eventuality of a new global financial paradigm. As I've stated repeatedly, your physical metal may be down in "price" but it has never been more valuable. This statement has never been more true and appropriate than it is at present.
Go now and prepare for a very interesting week ahead.