"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

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Tuesday, June 7, 2011

Silver - 4 hour chart update

There seems to be some risk type trades coming back on in today's session as many of the commodity markets are seeing good inflows of speculative money. In this environment silver will generally outperform gold. I should point out however that the buying is not broad based but seems to be selective in nature. Cotton for instance is sharply lower and copper is having some trouble maintaining any gains. On the flip side, sugar, cattle, hogs, corn and soybeans are higher. The weakness in the Dollar along with a generally higher US equities market has encouraged both short covering and new buying in some markets. Ironically, gold is moving lower as the move toward risk has some selling gold with its safe haven role being minimized somewhat.

Try not to read too much into any given day's price action as tomorrow can just as easily bring risk aversion to the forefront in this fickle environment.

The long bond is lower but has still not broken down through any major support levels indicating that bond traders are not convinced that the risk trades are warranted to any sizeable degree, at least for today.

The Dollar is inching closer to that critical 73 level on the USDX chart. Support seems to have evaporated from beneath the greenback. It has not been able to recover ever since FOMC governor Bullard first pulled out the rug from under it. As stated previously here, the voices of the hawks at the Fed have gone silent and I expect them to remain that way until the economic data numbers begin to improve.

The HUI and the XAU are weaker but continue to hold above their recent lows. They too look rangebound. The summer doldrums are approaching for the precious metals markets. They will need a catalyst to arise to generate some strong excitement.


  1. IN SPEECH FROM BERNANKE: Although it is moving in the right direction, the economy is still producing at levels well below its potential; consequently, accommodative monetary policies are still needed.

    I'm surprised commodities didn't start moving much higher after that little tidbit. Strange.

  2. Arkel and Hubert - Bernanke will have to actually commit to another round of QE3 before we get the CCI to rally sharply. If we do get a definitive announcement, I would look for the Hedgies to come back into the commodity trade once again and push the CCI higher. Everyone will then wait to see if the economic data improves to see whether or not they will yank the stimulus. It is too early to say right now.


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