"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


Wednesday, March 30, 2011

Silver - 8 hour chart update 10:15 PM CST

In Asian trading, silver is continuing to push higher building on its gains from the New York session in what appears to be further confirmation of the metal carving out a new consolidation zone at a higher level.

The top of this new zone is shy of $38 with the bottom down near $37 and slightly below there. Upside volume is picking up which is positive but until the market can strongly clear $38 and maintain that, the new leg higher is elusive.

Note that the indicator is moving into giving a buy signal

No Mercy for Chocolate Lovers

A new war in Libya, a Spring that delays coming and now the ultimate in distressing news, Hershey is raising chocolate prices. There needs to be a 5 minute break in the trading session sometime tomorrow for a moment of grief.
This from Dow Jones....

DJ MARKET TALK: Hershey Makes Not So Sweet Price Hike

Wed Mar 30 16:28:10 2011 EDT

 4:28 (Dow Jones) Hershey (HSY) is raising wholesale prices 9.7% in response
to cost pressure, including cocoa and sugar. It'll be interesting to see how
bitter the increase will be for retailers as they enter the prime Easter candy
season, though many of those orders have likely been placed. The price
increases go into effect today, but HSY doesn't expect a material impact to
finances this year, as it backs FY11 guidance. HSY says it will help with trade
promotions and in-store merchandising to keep candy sales growing.

(END) Dow Jones Newswires

Gold - 8 Hour chart update - general comments

Rollovers are continuing in gold with traders moving out of the April as it enters its delivery period and into the June. Some are also moving into August and December. Open interest continues to decline as end of the month and quarter pressures continue but the bulk of that should be over today.

How this market behaves Friday and Monday of next week will be a better indicator of what we can expect in the immediate near term. Trying to get too much of a read on a market that is being jostled by book squaring and low volume is generally not wise.

High oil inventories at Cushing were being blamed somewhat for gold's weakness today but I do not agree with that reasoning. Oil is still above $100, high inventories or not, and a mere blip lower in crude oil is not going to dissuade those who are focused on increasing price pressures throughout the economy. Besides, even though crude was weaker today, unleaded gasoline is higher and it is gasoline prices that more directly impact consumer perceptions of inflation anyway. 

The Dollar is experiencing two-way money flows today but for whatever the reason, it has been stopped dead in its tracks near 76.70 on the USDX chart. It has been drawing a bit of recent strength from the verbal intervention campaign being engaged by several FOMC governors who are talking hawkishly about ending QE. One went as far as saying that the last $100 billion of the scheduled $600 billion might not be necessary. That was enough to pull the rug out from under the bond market yesterday so it is hard to believe that we will see too much more of that sort of talk if the Fed wishes to keep bond speculators from blasting the long bond into the nether regions and sending rates higher in the process.

As stated many times here already: If they attempt to talk the Dollar up by sounding hawkish, they will send the long bond into the toilet. If they try to talk the long bond back up again by expressing reservations about the strength of the US recovery, they will send the Dollar into the toilet. Pick your poison is a good motto at this point.

HUI still in a Range Trade

Yen Gold knocking on the door of its all time High

Silver - 8 hour chart update

Before we get to the chart, the March contract has gone without much in the way of any fireworks. The remaining 41 contracts in that month are all accounted for in tomorrow's deliveries so that is it for any short squeeze in that month. To be honest, the market has performed admirably without any such event anyway.

We can now turn out attention to the May contract as the open interest in the thinly traded April is too small to be of any significance. May is trading at a 2 cent discount to the July so there is no backwardation in the front months' structure at this time.