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Saturday, May 7, 2011
Friday, May 6, 2011
Thursday, May 5, 2011
Gold drops into a very strong support level and bounces
The market has found good buying just above $1460 and continues to push higher off of this level as it enters very early trading in Asia. The drop of nearly $110 has stimulated value based buyers of the metal who have been waiting on a pull back.
If the market can push through $1500 and hold that level and not sink back below it, it will be friendly. Some will depend on the payrolls number out tomorrow. If it is a stinker and comes in below expectations, we might see more risk aversion and potential selling as the unthinking, knee-jerk reaction will be to rush to the "safety" of the US Dollar ( I have to gag when I write this). The Yen also will probably benefit although the Japanese monetary authorities are probably already saying things unfit to print over its recent climb back up to its last whipping level.
Even at that, the market has fallen, so far, so quickly, that any short who wishes to actually realize their gains is going to have to ring the cash register before long if they are wise. Bulls make money; Bears make money but Pigs get slaughtered.
If the market can push through $1500 and hold that level and not sink back below it, it will be friendly. Some will depend on the payrolls number out tomorrow. If it is a stinker and comes in below expectations, we might see more risk aversion and potential selling as the unthinking, knee-jerk reaction will be to rush to the "safety" of the US Dollar ( I have to gag when I write this). The Yen also will probably benefit although the Japanese monetary authorities are probably already saying things unfit to print over its recent climb back up to its last whipping level.
Even at that, the market has fallen, so far, so quickly, that any short who wishes to actually realize their gains is going to have to ring the cash register before long if they are wise. Bulls make money; Bears make money but Pigs get slaughtered.
HUI sinks further under the weight of collapsing silver prices
So much for a potential bottom having been formed in the mining shares based on the performance yesterday where the sharp spike lower was followed by a strong rebound and high range close. That low near 542 gave way early in the session and the index never managed to seriously threaten it since.
We are back to watching for a sign of a bottom. A substantial amount of buying came in near the session low at 526 but as to whether or not we get a pop higher tomorrow across the shares is unclear.
I find it difficult to believe that even with the margin hikes silver has that much more to fall but a lot depends on the willingness and financial means of the large specs left in the market to maintain their existing long positions. A drop of this magnitude cannot last much longer and I would be surprised to see silver fall below $32. If it did, it would meet with enormous demand on the physical side of things.
Even at that I will want to see the HUI stop going down and find a stable bottom before I am confident that the rout in silver is over. Reports indicate that demand for the physical product is very robust on this huge price drop. if that is the case, then it will not be long before the Asians swoop in and clean up the remains of the exchange-killed silver longs.
We are back to watching for a sign of a bottom. A substantial amount of buying came in near the session low at 526 but as to whether or not we get a pop higher tomorrow across the shares is unclear.
I find it difficult to believe that even with the margin hikes silver has that much more to fall but a lot depends on the willingness and financial means of the large specs left in the market to maintain their existing long positions. A drop of this magnitude cannot last much longer and I would be surprised to see silver fall below $32. If it did, it would meet with enormous demand on the physical side of things.
Even at that I will want to see the HUI stop going down and find a stable bottom before I am confident that the rout in silver is over. Reports indicate that demand for the physical product is very robust on this huge price drop. if that is the case, then it will not be long before the Asians swoop in and clean up the remains of the exchange-killed silver longs.
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