Gold Daily and Silver Weekly Charts - July Metals Futures Option Expiration Next Week

There is an option expiration for the precious metals on the Comex next week. It is for the month of July which is not a particularly lively month.

Gold and silver both paused today, after their big move higher yesterday. I still have not quite figured out the reason for the move, except for the obvious technical boost it had from the short squeeze.

 

I will let you know if I see anything to either confirm or add to the usual suspects, Argentina and rehypothecation unwind.

Have a pleasant weekend.

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - Complacency - Quiet Quad Witch

Today was a quad witch in stock option expiration and the day was very quiet with low volatility.

Next week there is not much in the way of new economic news, with the third iteration of 1Q GDP coming out.

I suspect that macro world events will tend to dominate an otherwise dull market with a bias upwards to sideways in the absence of some exogenous bad news.

Have a pleasant weekend.

Gold Daily and Silver Weekly Charts - Hi Ho Silver!

There was intraday commentary about the metals rally here. 

 

There is also a Summer assignment for those of you who wish to have a framework for the unfolding tragedy that is the Anglo-American financial system.  I suggest you scroll down for it.

I had taken my trading account down to effectively zero cash on this last move lower in the metals, especially in the last two weeks.  That was how sure I was that these market were grossly oversold. 

 

So this multiday move higher has been rewarding, and I thank God for it. I did take some trading positions off the table today to get back to a more 'comfortable' trading position. I do not touch my long term positions and try not to even think about them.

So what next?  Follow through is everything here. We have taken out some good resistance levels and some important moving averages as I show in a gold and silver technical chart below.

But we still have not taken out the big downtrend in gold. Silver as well.

Today was nice. It would have been nicer to have known why the metals moved so violently higher today, in what certainly turned into short covering. I have picked up almost no rumours from trading desk chatter today. That in itself is some information.

Price movement makes market commentary. I don't think the Fed's statement yesterday is what caused this, but it is the go to plug for those who have to say something. Anyone who thought the Fed would do anything else must be a tourist.

 

Tomorrow is stock option expiration.  The miners had a significant move higher today.  

 

There was no meaningful action in the Comex warehouses.  It is like watching a portrayal of some market in Madame Tussauds' Wax Museum.

I am leaning toward the unwind of commodity rehypothecation in China as is ZH, but it bothers me that so far it is all base metals being discussed. We know there is a lot of leverage in the precious metals. And as you know, these latest antics by the Pigmen and their Merry Pranksters with the sovereign debt of Argentina was a real stick in the eye for the BRICs.

So let's see what happens tomorrow. And let's enjoy today.

 

I include a closeup of the gold chart just below so you can more easily see exactly where we are with respect to the longer term trends.

Have a pleasant evening.

 

 

 

 

SP 500 and NDX Futures Daily Charts - June Stock Option Expiration Tomorrow

Unusually low VIX, shaky world stage with bullets flying, lofty equity valuations just stuck below key resistance. 

And tomorrow is the June options expiration.

 

I have not yet if and how I want to play the markets tomorrow, so I have not yet done anything with it.  But I have some dry powder ready.

 

These quiet summer markets are tough to play.  Just ask the gold and silver bears.

 

Have a pleasant evening.

 

 

Why the Big Rally in Precious Metals Today?

I am not taking any victory laps just yet, because we have seen these big one day gains fade in the past, and we do not yet know exactly what prompted this massive short covering, which is what triggered this breakout through 1300.  It is certainly technical in nature, at least in part.

But I thought it was interesting to get an early cross section.  I have posted excerpts below.

I follow the trends, and if this rally can extend itself, and take out some of the more intermediate term resistance and downtrends, then I think we will know much more about it.  These big one day moves up on no news are just a corollary to the big moves down on heavily selling in quiet periods.  They are not a sign of a healthy market providing solid price discovery.

 

If it does extend, and the trend changes, then there will be a number of factors, but perhaps one defining 'trigger event' that by itself could not do it, but given the confluence of events, was the snowfall that started an avalanche.  But we do not have enough information to say that yet.

 

As you know I have an eye on the BRICs, and on Argentina. "...let me just say that it is looking like the first lightning flash in what could become the Perfect Storm."

 

I also have a very open mind for silver on this, which has been a 'stonewall' over the past week or so.  Hardly anyone is talking about it except for a few professionals. 

 

I no longer hold my 'modest position in SLW.'   It was for a trade and was not large in relation to my portfolio.  But the gain was nice, too good and quick to pass by.

One day at a time. Follow through is everything.  Here is what people are saying so far.  As Bill Murphy says, 'price movement makes market commentary.'

"Gold prices were on track for the biggest daily gain in nine months Thursday, driven by investors who were caught flat-footed by the Federal Reserve's outlook for continued low interest rates...

Prices rocketed past the psychologically important $1,300-an-ounce level, breathing new life into the market and luring momentum-chasing funds in as buyers, brokers said. Gold futures had crossed above their 50-day and 100-day moving averages in quick order, sending buy signals to investors who follow such technical indicators."

Wall St. Journal

"Intriguingly, just as we warned, gold and silver have been on a significant tear since the Qingdao CCFD probe began (as synthetic hedges are unwound - which dominate pricing in PMs) while copper and iron ore and so on have all fallen (as the reality of no real demand leaks into these commodities)."

ZeroHedge

"Gold prices pushed above $1,300 on Thursday, propelled by continued tension in Iraq and signals from Federal Reserve Chairwoman Janet Yellen that short-term rates can be held steady for a while longer."

Marketwatch

"Gold price on insane surge after massive trade. The gold price scaled $1,300 an ounce for the first time in more than a month, after comments by US Federal Reserve chair Janet Yellen yesterday and a huge buyer lit a fire under traders."

Mining.com

"Gold rose above $1,310 an ounce on Thursday, gaining almost 3 percent as a drop in the dollar and a lack of commitment by the U.S. Federal Reserve to raise interest rates sent metal investors rushing to buy back their bearish bets...

Gold's rise to a 1-1/2 month high was boosted by the U.S. dollar index's tumble a day after the Fed signaled it will stick with a near-zero interest rate policy to support the economy, disappointing traders who had bet on hints of policy tightening. Analysts said that market participants in droves aggressively bought back short positions that were placed earlier in the week on expectations that a stronger U.S. economy would dampen bullion demand."

Reuters

"Gold surged the most in nine months and silver jumped to a 13-week high as the Federal Reserve said U.S. interest rates will remain low, driving the dollar down and boosting demand for the metals as alternative investments.

Gold topped $1,300 an ounce and silver rose the most in four months, leading a gauge of 24 commodities to the highest since August. The greenback fell to a four-week low against a basket of 10 major currencies. Yesterday, Fed Chair Janet Yellen said rates will probably remain low for a considerable time after debt purchases by the central bank end."

Bloomberg

NAV Premiums of Certain Precious Metal Trusts and Funds

"...let me just say that it is looking like the first lightning flash in what could become the Perfect Storm."