The Yellow Metal attracted some short covering and some buying related to bargain hunting in today's session as apparently buying was of sufficient size to convince some of the shorts that the market was through going down for right now. After a drop of $85 in a few days, some decided that it was time to ring the cash register and grab a few profits.
It looks like a few light stops were run once the market took out $1660 but after those were filled, price retreated a bit lower and is currently below that level.
For me to become convinced that a short term bottom is in this market, we will need to see the price close back through the $1680 level once again. You might remember from yesterday's charts posted over at King World News within my recent interview, the 200 day moving average comes in very near that level.
For the time being I am hesitant to read too much into a single day's action.
The Dollar is moving lower today and I want to see whether or not this is a one day wonder or if it is going to try to mount a push back towards 82 on the USDX.
The S&P 500 continues on its near one-way trek higher scoring another fresh 52 week high in the process. I do not know about you, but I for one am glad that it was so easy to fix everything ailing the US economy by keeping interest rates near zero. I am waiting for the day when the Fed announces it is going to distribute checks to all taxpaying citizens in the amount of $10,000 each as part of its efforts to combat deflationary pressures.
The HUI continues getting beaten up as it is lower on the day even while the rest of the equity market leaves it in the dust. The sector is so undervalued against the broader market that it screams for someone to buy it but the discouragement is so strong that hardly any want to touch the miners for fear of further losses. The ratio of the HUI to the S&P 500 touched a nearly three year low today!
"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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