SP 500 March Futures Overnight: A Rough Ride for the Bulls As Japan Fears Intensify

The Central Banks and the US Exchange Stabilization Fund will have their work cut out for them judging by the overnight futures action.

If the market does find a footing after the first hour of trade, watch for a snap back relief rally. I look for this to happen around the key support level at 1251. Watch the action to see if it can regain the pivot around 1278.

This is barring any further deterioration in the situation in Japan with their reactors.

I understand the crisis and catastrophe are very real. Having said that, the media is a prism of a world dominated by the monied interests, and persuasion and deception are key elements in their game of domination. And their hypocrisy knows no bounds.

"Japanese stock futures prices plunged 16 percent on Tuesday as the country's prime minister said radiation levels at a stricken nuclear plant had become high, deepening concerns about the disaster and its likely economic toll."  Reuters

"Japan faced the likelihood of a catastrophic nuclear accident Tuesday morning, as an explosion at the most crippled of three reactors at the Fukushima Daiichi Nuclear Power Station damaged its crucial steel containment structure, emergency workers were withdrawn from the plant, and a fire at a fourth reactor spewed large amounts of radioactive material into the air, according to official statements and industry executives informed about the developments." NYT

"Reuters quotes French Embassy saying 'Low level nuclear wind could reach Tokyo in 10 hours.'" - BBC

"In a nationally televised statement, Prime Minister Naoto Kan said radiation has spread from four reactors of the Fukushima Dai-ichi nuclear plant in Fukushima province, one of the hardest-hit in Friday's 9.0-magnitude earthquake and the ensuing tsunami that has killed more than 10,000 people.

'The level seems very high, and there is still a very high risk of more radiation coming out,' Kan said. 'We are making utmost efforts to prevent further explosions and radiation leaks.'" AP

Gold Daily and Silver Weekly Charts

This is an options expiration week for US equities including miners.

The option expiration for Comex gold and silver will be near the end of the month on March 28.

There did seem to be a fairly obvious effort from the US to keep gold and silver prices from breaking out with the natural disaster in Japan. They can try to keep doing this, but as we have seen, eventually the upward buying pressure becomes too great and they must retreat to defend some higher price level. And so we get this stairstep trending move higher.

SP 500 and NDX March Futures Daily Charts

Keep an eye on the VIX.

As a reminder this is an options expiration week for stocks.

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.