Today is the First Notice Day for Silver and So We Have This Shameless Bear Raid on Metals

Feb. 29 Comex March silver futures first notice day
Feb. 29 Comex March copper futures first notice day
Feb. 29 Nymex March palladium futures first notice day


Last night Harvey Organ said:

"This is the first time in quite a while that gold and silver rose big time a day before first day notice. The bankers try and influence our longs not to take delivery so they generally raid. Today was different."

Well, Harvey spoke too soon; it really wasn't different. The metals rallied higher yesterday, and then were smacked down in a very calculated and violent bear raid today.

I was expecting something like this, and here it is. These fellows have their backs to the wall in silver.

I have seen reports that 225 million ounces of paper silver were dumped on the Comex in less than thirty minutes.

The last time I checked there were less than 35 million ounces of silver registered with the dealers for delivery in at the Comex.

First day notice is when holders of paper futures give notice to the exchange that they intend to take delivery the silver claims they hold from the Comex warehouse. The amount of paper held is multiples of the bullion that can be delivered at current prices.

The 'tell' is the lack of a serious sell off in equities. The yawning divergence in the risk trade is hard to miss.

This notion that gold and silver are selling off because Bernanke is not going to do QE3 is ludicrous.  He does not need to do QE3.  The Fed is all over these markets in Operation Twist.  Jim Rickards has explained this scenario many times that I have linked here.

What is the answer? Unless you are a full time experienced trader playing with 'cool money,' stop trading. This market is far too thin and given over to gimmicks for the average person to participate. It really is.

Take long term positions that suit your investment situation, and then ignore the noise that the trading desks throw out to shake people from their positions, painting pictures on the charts to shape perception.

Bernanke is still powerful, but the trends in the longer term are even more powerful.

The volatility and gaming in the markets will only get worse, as they are thinly traded and dominated by a few big trading houses that act as they choose, almost with impunity. And if a major default is coming, the volatily will go through the roof.

You have three choices. Buy, sell, or stay out of the daily trade.

And for the vast majority, the last choice is the best, especially while the markets are given over to such inefficiency and corruption. I'm sorry, but that is the way it is. And its a shame on the government, but unfortunately these days the powerful and the elite have none.

If you have the overwhelming urge to gamble with your money, take a trip to Las Vegas or Atlantic City.  The food is better, the drinks are cheaper, and the games, although still stacked against you, are at least relatively honest.

And you don't have to worry about the Casino looting your accounts and safe deposit boxes to cover their own personal gambling losses.

Long Term Dow Industrial Average Chart

A failure in this broadening top could, if activated, take the DJIA down closer to the bottom of the long term logarithmic trading channel.

The Federal Reserve will do all it can in order to create liquidity to prevent this sort of major market crash.

I can also that resulting in a sideways market, within a fairly broad range of 7,000 to 15,000 on this log chart, until 2020, as we see happened in the 1970's after the 1960's stock bull market. That also fits well with the stagflation forecast.

As a reminder, when looking at a very long term chart like this it is important to remember that it is not adjusted for inflation. 

However this all works out in nominal terms, the Dow/Gold ratio is likely to touch the 1.5 or lower level at some point in the next eight years.

Gold Daily and Silver Weekly Charts - Silver Roars Higher

Silver roared higher cracking up to the 37.00 level as the shorts were on the run.

Let's see if it can hold these levels through the end of the week. There will be very serious resistance around 41 if it should break higher from here.

Gold may be forming a massive skewed W consolidation formation on the daily chart. The neckline is around 1800. From the daily low close at 1550, on a breakout the minimum measuring objective is roughly $2,050.

SP 500 and NDX Futures Daily Charts - Dow 13,000

The Dow Jones Industrial Average managed to eke out a close above 13,000 as the big cap techs roared higher.

There was a bit of a divergence with notable softness in the broader stock averages.

Jamie Dimon today said that JPM would not be buying back their stocks 'at these lofty price levels.'

As a reminder, this is a Leap Year and February will have 29 days. So we may have another day to go in the end of month appliqué.