Gold and Silver had decent bounces off deeply oversold levels on this Comex expiration.
Stocks slumped hard, largely on renewed recognition that the sequester and Europe are still a problem.
There was really nothing new said, as VIX spiked, but the bubble in stocks had simply run its course for now as the last of the big caps reported their earnings.
What next? Keep an eye on the sequester in the US and on Europe in general. There are some signs of a growing problem in greatly overpriced Chinese real estate.
I am looking at this bounce to see how gold handles the 50 percent retracement level of this big waterfall decline, which was stage managed by the funds and probably the bullion banks.
Will this be a v-bottom, a multiply tested bottom, or no bottom at all?
The metals bears have come far and fast, and are paying little attention to their ability to supply the market at these prices. This is an expedition of opportunity, intended to set up a wash and rinse. But there are a lot of buyers out there, and they are seeking actual bullion and not a paper promise.
The levels of open interest on the Comex during this decline, as well as who was doing the selling, were remarkably significant. And likely to be ignored by the market 'regulators.'
