Net Asset Value of Certain Precious Metal Trusts and Funds

Although it is slightly less visible to those who only look at US equity markets, there is a liquidation sell off in the world markets especially Europe. This is helping to steepen the correction in the metals markets.

Notice from this chart that the gold/silver ratio is back over 50 again. And so I have become interested in silver again today for my short term interests.

It is important to keep this retracement in context, as alarming as it might be even for those who hold positions for the long term but watch their portfolios in the short term.

Comex expiration is next week. This is always an occasion for mischief, and I think the metals were hit particularly hard because of the delivery situation shaping up on Comex.

But the key driver is the European selloff and the search for liquidity amongst traders and funds. So if you wish an indicator of the future watch how that situation develops.

Once the short term players have raised their cash, the selling will abate and reverse, even if the situation does not remarkably improve. That is how markets work in their different time frames.  Treasuries are getting bought to insanity as investors seek to flee European related risk. 

And this is why I have two sets of portfolios: short term and long term. And I use two very different sets of strategies and tactics in them. And truth be told, despite some amazing ups and downs in the short term, I make most of my lasting gains in the long term portfolio where I sit and wait on the fundamental trends.

So I have to ask, 'is the gold bull market over?' And so I have added the second chart which shows the market in a longer term context. So far we have had a fairly typical Fibonacci retracement, and the longer term trend lines are intact.

If Europe 'collapses' then we might see a greater selloff similar to that of the Lehman moment in the US. Will Europe collapse in a liquidity panic even deeper than we have seen thus far? I cannot forecast the unknowable, except to say that it is possible, but not probable unless the currency war intensifies and both North America and Asia begin to beat the Europeans while they are down. And if Europe falters, then the UK is next, and then Asia. The financiers have no loyalties, but they need the US dollar at least for now.

Talk is cheap. Europe has to find itself, and decide to DO something. This is one of the darkest hours in their ongoing identity crisis. And the financial wolf packs are taking advantage of their indecision.

Gold Daily and Silver Weekly Charts - La Douleur du Monde - Sexy Sadie Masters

Big Sell Off today in US markets as cash was being raised over renewed fears of a Euro-meltdown and a US recession.

The long gold - short stocks trade provided balance into this correction, but as of today the stock shorts are gone.

Let's see if the short term trends have bottomed. Unless this is the big one Elizabeth, I think they just might be.

If you are not in it, wait for it. But it is coming, like a freight train.

A selloff. Oh my what a surprise! Yo Blythe, these moves in the metals in front of options expiration are getting way too obvious, and even a bit old.

You will top Kweku Adoboli's $2 billion loss at this rate.

SP 500 and NDX Futures Daily Charts - Rough Seas and Investor Vertigo

Big drop in the US stock market on European jitters and recession fears.

Markets are starting to look for support here, with biggest tell in the NDX. Let see how that develops.

Potential 'island top' in the Vix.

Then again, things could continue to deteriorate. But the probability is that unless we are going to hell in a handbasket, the wiseguys are already starting to buy back in.

Gold Daily and Silver Weekly Charts - Flight to Nowhere - Bravo Masters, Shall We Dance

The Fed did what was expected, announcing Operation Twist which will buy Treasuries in the 6 to 30 year range to pull down rates. They will also continue to roll over their balance sheet assets.

The unexpected perhaps was the strong language in describing the economy in terms of 'significant downside risk.' This language, coupled with the bank downgrades in Italy and the US, had trading flying to buy Treasuries and sell stocks.

Gold and silver retreated off their highs and closed lower for the day, perhaps on the stronger dollar which rallied as additional capital fled Europe and emerging markets. So we had no resolution of this chart pattern, how disappointing was that!

Typically the day after the Fed takes a policy action, if the stock market sells off it rallies the next day. Let's see if that pattern holds.

I think the support gold has here is important, and many have cited the strong physical buying support that gold is finding in the 1700's.

Option expiration next week, and so no peace for the metals bulls perhaps.

JPM stages major bear raid, encounters determined resistance. Bravo Masters, shall we dance?