Gold Daily and Silver Weekly Charts - In the Silver Pit No One Can Hear You Screaming

The Bankmistress and her merry band of pranksters threw a major hissy fit this morning, smacking down the precious metals sector and related trades, like the miners, to such an extent that I put out a special notice about what I was seeing in the markets.  In fear and trembling I actually stepped in and bought position in size and leverage more than ordinary, since the miners had been discounted so badly, even given the decline in the equity markets which also seemed like a trading gambit.  It seems like a no-brainer now, but let me assure you at the time it seemed a bit wanton, falling knife-wise.

As I said, I took quite a bit of that risk back off the table in the afternoon through some sales and hedging as the news from Japan appeared more grim.  All too brief, but sweet nonetheless, as the Blythemaster 2000 had the metalheads backed up against the wall, and then succumbed to their uncouth charms, and gave it all up, and more.  Thanks again for breakfast, sugar buns.  

So now what?  This is delivery time, and I will be reading the information from the Comex and also from experienced commodity traders and commentators in this area like Dan Norcini, Bill Murphy, Denver Dave, and Harvey Organ along with my own efforts to try and puzzle out where we stand with the March delivery process, and how things are shaping up for April. 

It seems to me that the shorts are just trapped, and there are no two ways about it.  The bullion banks are hoist on their own petard in silver, because the central banks cannot lend it to them as they can with gold, and they are down to scraps and shell games with existing supplies.

And with this movement to take physical bullion off the market, it appears that things will only get worse for the shorts before it gets better. I would imagine that unless they can bluff their way out of this, someone is going to try and stop their twisting in the wind, as it causes too much attention to be paid to all the other antics going on with equities and key commodities.

Someone might actually demand legitimate reform. Oh, they already did. Well, perhaps they might actually do something to force the issue, like pick a key vulnerability like the silver market, and take these jokers to the wall. Oh, they're doing that as well. This is going to be quite the ride then.

This is shaping up to be an interesting year to say the least, and we may as well enjoy it while we can, because I remain very concerned about what will happen this summer in the West, if the pigmen start losing their grip on the masses, and  reach for the forbidden excesses of the powerful.

SP 500 and NDX March Futures Daily Charts: Weekend at Bennie's

Neither snow, nor rain, nor riots in Saudi Arabia or once in a hundred year earthquakes shall deter these markets from rallying into the close. Good old Benny, always can depend on him to turn a frown upside down.

Seriously, although the major US indices had a nice bounce off their lows, they are far from out of the woods, and we cannot yet be complacent about this correction.

Defensive positions are recommended until the uptrend is re-established. While it was heartening to see the SP 500 climb back above its 50 DMA which is now around 1299, the NDX tech sector is still lagging withits 50 DMA around 2317, and this is the chart that I watch, in addition to financials and the Russell 2000, to judge the quality of any rallies. Too often they will jam the SP 500 futures higher and try to drag the rest of the market along with it.

I will be keenly interested in seeing the full extent of the damage in Japan, and any follow on problems to a quake of this magnitude, especially with regard to their nuclear infrastructure. I am sure they will handle it as they have done so many times in the past, rising as one people to the challenge. There will be many comparisons to how the markets reacted to the Kobe earthquake in the 1990's.

In terms of the US economy, there is no real recovery yet that I can determine. The earthquake of the financial crisis has left the country divided, its economy sputtering. Repairs have not been made, and those who created and benefited from the crisis are seeking conscripts to take their pain.

John Williams of Shadowstats had this to say:

"Markets Are Flying Blind.

In terms of meaningful economic reporting, the financial markets continue to be flying blind, at the moment. Economic data of questionable significance continue to flow from the government’s statistical bureaus, including this morning’s (March 11th) report of February retail sales. There will be a full review of the economic outlook in the Hyperinflation update, and the constant-dollar February retail sales will be assessed in the March 17th Commentary, following the CPI release.

On its surface, the February retail sales report was positive on a nominal (not-adjusted for inflation) basis, as well as likely in real (inflation-adjusted) terms. The reporting-quality problems remain in unstable monthly seasonal-factor adjustments. Seasonal patterns have been warped by the depth and duration of an economic downturn that is unprecedented in the post-World War II era of modern economic reporting. The retail data will be revised in a pending annual benchmark revision, scheduled for April 29th.

At that time, retail sales levels and growth of at least the last year should be subject to major downside revisions, showing a weaker economy than has been recognized previously. As with the recent, major downside revisions to payroll employment, and the pending downside revisions to industrial production later in March, the retail sales downgrade will be a precursor to major downside revisions in GDP history of the last several years, which are due for release in late July.

While there also are seasonal-adjustment issues with the trade data, the reported January 2011 deficit has set up a potential dampening of growth to be reported in first-quarter 2011 GDP, at the end of April."

Weekend At Bennie's - Looking Good!

A Message Received From a Friend In Japan

As a side note I have taken profits and/or hedged out some of the risks on the somewhat oversized mining trades I had placed this morning in the precious metals complex when the Bankmistress and her crew threw their daily hissy fit over being trapped in a rather large silver short, with the plebes daring to demand delivery.

The news from Japan is not good, and Saudi Arabia is eerily quiet. But at the end of the day, all these US based markets are a hologram remotely related to economic reality anymore, just the dream of a Bernankesque butterfly.

"Just got home 3 AM.

The problem is that most trains are not running. People walking home, streets were packed, traffic really slow. Then they get to Shinjuku, Ikebukuro, Shibuya, and can't go farther, so are packing karaoke boxes and restaurants and sleeping in the station until morning. Ikebukuro station had people lining the walls napping.

So, for the most part, for most people in Tokyo, it was a big nuisance. Had that quake happened off the coast of Chiba or Tokyo Bay, it would have been unbelievably bad.

I have never seen this before. The megaquake seems to be setting off secondary quakes all over, from central Honshu to east Honshu... up to 500 miles from the megaquake.

These are not aftershocks. The secondary quakes are magnitude 4, 5, 6 and are happening so frequently, say every 5 to 10 minutes, that the newscasters can't speak fast enough. No sooner does the alert go off and they describe a quake, then the next one happens somewhere else. I can feel all these quakes even though they occur hundreds of miles from Tokyo.

Basically, there has been a quake you could feel every 10 minutes or so for the last 14 hours."

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