SPX Recap

The futures are up a bit this morning. Yesterday we had what on the face of things looked like a ho-hum session however if you dig deeper the internals were very good. session began without a significant gap and printed the low of the day during the opening minute. The entire session was range-bound chop until about 1:30 when the market started moving higher to close up almost 5 points. The breakout is confirmed and healthy, one caveat is that the McClellan Oscillator is overbought and the Summation Index is near 2000, an area of resistance in the recent past.

Looking inside the market: For the SPX Index there were 292 components advancing and 184 components declining. On the NYSE 3,159 issues were traded with 1,872 advancing issues and 1,169 retreating issues, a ratio of 1.6 to one advancing. There were 355 new highs and 13 new lows. The volume was lower than Wednesdays but on the up move later in the day volume picked up. 69.2% of the SPX are above their five day moving average, 80% are above their 10 day average, 71.4% are above their 20 day moving average, 73.8% are above their 50 day moving average, and 88.2% are above their 200 day moving average.

Target 1440 

Small position in BGU (for a trade only)

Peter Schiff: Must Watch Video

MUST WATCH VIDEO

Some highlights:

"The way you know inflation is not transitory is that Bernanke thinks its transitory. Since he is always wrong you can take it to the bank. Inflation is gonna get worse".

"We are spending more borrowed money, digging ourselves into a deeper hole, we may never get out of it.

"Dollar may collapse, maybe by as soon as this fall".

"Bernanke basically gave a speech, interrupted by questions".

"Bernanke had a successful press conference, only if you think the Titanic had a successful voyage ".

Our government has never spent this much money" The problem is that the spending isn't from our taxes its all borrowed or printed money, which is causing inflation, and we are exporting inflation all over the world . "The whole world is suffering because our governments spending".

Silver Prints Cup & Handle

Hourly Silver Chart: There was a huge raid in silver yesterday as the Comex raised margins requirements twice in a week. I don't know if that has ever happened before. Obviously JPM/Timmy G not very happy about the ascent in the prices of both gold and silver. They are going to defend that fifty level with everything they got. However; yesterdays move by Comex shows how really desperate they are, they (the JPMorgue et al or Timmy) seem to be running out of ammo. Also just a heads up, this is a nice little cup and handle formation if there is a breakout it will take us to 53.  But Silver is getting so much attention (manipulation) so I don't know if TA works here anymore. 

The red line chart is yesterdays print. See the sell down below 47.6, that occurred when the margin hike was announced. Right now its trading at 48.75. There will be another raid today, the volatility is to be expected its gone up too far to fast. We are getting to an inflection point where something has to give. Bernanke has signaled that the dollar isn't really his department, he is mainly focused on the bonds. He told you inflation he isn't worried about inflation, he says its a temporary phenomenon. Short-term though on a technical level, watch 72 in the DXY defended, if they don't defend 72, 70 will follow rapidly and Silver will be over 60. 

Dollar Index (Update)

USD continues to slide this morning and its getting dangerously close to where the government is going to do or say something to defend that 72 level you see on the left. This will be a cue for all to get out of the metals (temporarily). And do not think this is a coincidence but we have the bogus jobs report due next Friday and metals sell-off right before that announcement. They will most likely manufacture a report showing some sort of improvement in the labor markets, the dollar will rebound (probably to the 75 level) and metals will sell-off over the next few trading sessions. Mind your wallets, you have been alerted!

Defending 50: Silver Raid Starts Again

Looks like they are going to make a stand here. We are off 1.20 from the high of 49.60.  The next likely support is at 47. But the most strength is at 45. I don't think we see 45 before 52. I am sticking to it. The dollar is catching a bid as well, a little dead kitty bounce.

S&P 500 Recap

Well the GDP came out at 830 and it showed the economy slowed sharply in the first three months of the year as high gas prices cut into consumer spending, bad weather delayed construction projects and the federal government slashed defense spending by the most in six years.

The government says the economy grew at a 1.8 percent annual rate in the January-March quarter. That was weaker than the 3.1 percent growth rate for the October-December quarter and the worst showing since last spring when the European debt crisis slowed growth to a 1.7 percent pace. The futures are down slightly off of that and continuing claims data. 

Yesterday, the S&P 500 finally took out the 1344 high it first printed in Feb 2011. April 12th I pointed out the inverse HNS pattern in the SPX and that is now playing out. This should take it up to 1440. Support is now at 1344.

NYSE: 04/27/2011

	issues		volume
Advances	1974		626903
Declines	1064		281032
Difference	910		345871
10% Trend	390	. 579	92050
5% Trend	278	. 449	56570
McC OSC	112	. 130	35480
PRIOR McC OSC	87	. 656	22504
SUMM Index	2775	. 319	246377
PRIOR SUMM Index	2663	. 189	210897
A-D for OSC UNCH	503		128 *
A-D for OSC=0	-1740		-582

Metals Update

Gotta trade this white hot paper. Will take 10% off the table this am after the huge move yesterday. Would have sold 75% of it by the time we get to 52.

After the major sell-offs in both gold and silver we are back to business for now. Silver is up 40 cents or so this am and should hit 52 by next week. For now we have strong support at 45. I think we see 52 before we see 45 again. Not selling any physical Silver period.

In early march I pointed out that gold had printed an inverse HNS pattern  and that we should see a break out to 1520-1540. Well we printed 1526 yesterday and its on to 1540 by next week. No position in gold.

Don't Worry Be Happy

Ben Bernanke, chairman of the Federal Reserve, made history today when he held a press conference and fielded questions from reporters (one economist/reporter, Steve Leisman). He spoke about his interest rate decision and other matters like inflation, quantitative easing and how the Fed plans on dealing with an economy that still struggling despite two rounds of massive money printing.

This was Bernanke's opportunity to fight back against criticism from some lawmakers (Ron Paul), economists and foreign officials who say that the Fed's efforts to prop up the U.S. economy with more than $2 trillion in stimulus has caused inflation, weakened the dollar, and has not improved the labor markets. He failed to deliver on all counts.

The Bernanke was visibly nervous, his voice was tremulous, which was odd to me because I'm sure he knew there were no tough questions coming. They hand-picked the reporters and were all too polite towards Ben (it made my teeth hurt). No one got in "the Bernank's" face when he gave shall we say less than adequate answers(in all politeness). 

Here are some of the highlights:

• Central bank is in no rush to scale back its support for the economy with the labor market still in a "very, very deep hole." 

• The forecast for 2011 economic growth has been lowered due to inflation, blamed the high price of oil on global growth (demand). Regarding economy, changed language from "firmer footing" to moderate growth (less than two percent).

• decided it will complete the purchase of $600 billion in bonds in June to support the economy's recovery, and said it would keep its balance sheet, currently at $2.67 trillion, steady for a time to ensure its support does not fade. The moment he said that Silver and Gold shot up. They had already reversed after the 1230 statement release, but I think this statement of support not fading was a big nod to QE3. Ask yourself, will this Titanic sized economy recover by June. What will be different in two months. Nothing, expect more of the same.

• We plan to keep overnight interest rates, (held near zero since December 2008) for "an extended period."

• "It is a relatively slow recovery,"The combination of high unemployment, high gas prices and high foreclosure rates is a terrible combination. A lot of people are having a tough time."

• The Fed lowered its projection for unemployment but said it would stay elevated over the central bank's three-year forecast period. The jobless rate stood at 8.8 percent in March.

• "The pace of improvement is still quite slow and we are digging ourselves out of a very, very deep hole," Bernanke said.

• raised its estimate for 2011 inflation to account for a surge in oil prices. However, it bumped up its core inflation forecasts only marginally and expressed confidence the jump in the cost of oil would not spark broader inflation. 

• on the issue of the falling dollar, deferred to currency policy as an issue for the Treasury Department, Bernanke said a strong, stable dollar was in the interests of the United States and the world economy. 

Here is what I heard today, "don't worry about inflation because is a temporary phenomenon". Action: everything inflation related went up

Don't worry about the dollar, we want a strong dollar (wink, wink). But what about the loss in the value of the dollar, "its not my yob main". Ask Tim. Dollar went down to furthest level since 08 financial crisis.

Mr. Bernanke, whats your plan for jobs, keep interest rates low and keep printing money. But Mr. Bernanke is that really going to work, Ben, "sure it is". Action: Sell dollar, buy commodities.

But Mr. Bernanke what about the debt issue, "well I told the folks in congress they have to take a hard look at it". But Mr. Bernanke what about all these folks selling our bonds, who is going to lend us money with the dollar going down everyday?  Ben: don't worry be happy, don't you know my computer at the federal reserve has special powers to make more money than you can imagine.

But Mr. Bernanke won't that hurt the dollar, Ben" Don't be ridiculous, didn't I just tell you I want a strong dollar, Reporter "Oh, okay, my bad". 

So what do we do based on this information: Nothing different. Everything is playing out like I wrote on January 3rd. Stick with metals, oil, soft commodities (Ag), short bonds. Let the good times roll. Things that haven't worked out Uranium miners and Japan both were doing great before the earthquake. 

Silver Update

As you well know yesterday's raid was a well planned one orchestrated by the banksters with the help of the regulators. How nice, they work together. They planned the combined short paper trade with a hike in margin requirements at the CME.

And it wasn't entirely at the comex. China decided that the demand for silver was getting too hot so they decided to raise their forward margins (Reuters). At the height of the tech bubble china lent the US billions in Silver in exchange for bonds. Now they want their Silver back. US says, Nah! So they have to buy it back. They dump the bonds, raise cash and are buying silver hand over fist. Except Silver prices are getting way too hot,  so they knock silver down only to buy it cheaper.ah games people play! 

What is crazy is the demand for the metal is so white hot that a day or two is all they get in. So like I have been saying, follow the checklist when the raids come.  

You will thank me when Silver is 80/oz. Remember I am one of the only guys out there who called 50 dollar Silver by June 2011 on Jan 3rd, see my post. Now 80 looks absurd to you. 50 is gonna look real cheap in a little while.

Enjoy this day! Remember to take some profits on the way up so you can buy on the way down.

MISSION ACCOMPLISHED

Not by The Bernanke, but by Mr. Secular Trends (yours truly)

Told you Silver will sell off and to protect your self yesterday (&Monday) then I told you this raid is almost over, Silver was down this morning, I bought on Monday and Tuesday I hope you did too. Silver is up over 2.5 and we'll soon see 52 (We need to hold 45 and we did)

We survived the raid! Mission accomplished

BTW Bernanke was lobbed some batting practice grade questions, he did very well to help silver and gold rise
thanks Ben

AGQ up 40 dollars on 4million shares WOW

All commodities are down

Dollar continues its slide against the pound and euro ( as the chairman speaks), but gains against the yen
Bonds are selling off
however all commodities are down, Agriculture, Steel, Copper, Coal etc
S&P is up
Gold is at 5000 year highs
Silver almost up 2 bucks AGQ up 11% on huge volume

Treasury quietly plans for failure to raise debt ceiling

The White House is warning that catastrophe will strike if Congress fails to raise the limit on the national debt: With too little cash to pay creditors, the U.S. government would default. Interest rates would skyrocket. And the economic recovery would collapse.

But behind the scenes, Treasury Secretary Timothy F. Geithner has already begun juggling the books to conserve cash, draining a special account at the Federal Reserve. And with the debt forecast to hit the legal limit of $14.3 trillion in just a few weeks, he has a range of tools at his disposal, including borrowing money from a pension fund for federal workers(is he kidding).

read full article

Bernanke on the Dollar

Steve Leisman asked the Bernanke on the Dollar" The Bernanke quickly punts to Geitner"

Then give lameass answer on how to keep dollar strong. Bernanke to Leisman "keep the dollar strong by keeping inflation down" How is that? I'm no economist but WTF. Dollar promptly heads down, AGQ till up 8 percent

AGQ up 8% on big volume spike

Silver is now up 4% on the day, this on the back of the Fed comments. I'm not going to get too excited, the press conference may dampen the short covering/buying enthusiasm 


Just watching CNBC aka Comedy Central or the Comedic News/Business Channel or Comedic Business Commentary: The Bernanke excitement is palatable. I wish they would have sent Rick Santelli (not Leisman) to press conference. 


Love Rick Santelli, Erin B asked him what would you ask the Chairman, he said" what would you tell an average middle class family making 50K a year and they see their disposable income going on higher commodity how would you explain the distinction between the economic definition of inflation and the fact that they are still spending the money on higher commodity prices". Why is the average american feeling much poorer. After that there was just Silence. 

Just put on comedy central I mean CNBC

Fed Quotes:

Labor markets improving, unemployment still elevated

Household spending continue to rise (is that a good thing)

They are going to keep rates exceptionally low.

Economy improving, at a moderate pace

Inflation: They say the effect is transitory

Market reaction: hey guess what dollar sold off
Yields remained steady
Stocks moved up a bit
Silver and Gold reversed course and are now positive

CNBC is really talking up the Bernank's Press Conference

Heads Up

The Ben Bernanke will be holding a press conference today. A couple of things can happen. One is that he talks up the dollar, and talks up the economy like they did last time when he said it was on firmer footing. He may talk about ending QE2. What I can tell you is that it will be all talk (lies). The markets will react negatively, you will have a broad temporarily sell of in everything especially commodities. Yes temporary! Because its just talk.

The Bernanke must maintain the size of the Fed’s balance sheet and try to keep interest rates low for a long long time. Why? Housing and Finance sectors not doing well. Remember all those derivatives and bad mortgages all that has to be worked off. The S&P/Case-Shiller home price index of 20 cities fell 3.3% from February 2010, which is the biggest year-over-year decrease since November 2009. Home prices fell 0.2% in February from the prior month on a seasonally adjusted basis and on an unadjusted basis dropped 1.1% from the prior month. The 20-city index fell in February to 139.27, which is dangerously close to its post-bubble low of 139.26 reached in April 2009.

The Commerce Department reported yesterday that new home sales were down 21.9% from the year ago period and that prices fell by 4.9% in the twelve months prior. The National Association of Realtors reported that sales were down 6.3% from the year ago period and that prices also fell 5.9% from the March 2010 period.

Creating inflation in the housing market is thought of as the only permanent solution to bailing out the big banks and the economy. So the idea that the Fed is close to a significant increase in interest rates and substantially selling assets is a joke.

And I almost forgot, jobs. No real job creation, initial claims are rising. So they really have no choice but to keep QE going. Then there is the overwhelming debt issue and with current real inflation around 7% foreign creditors are running from bonds. The FED has no choice but to keep POMO going, how else could they fund the 1.5 trillion/yr to keep running government. 

"Actions with words
Told the truth, see the truth, speak a truth
Your own mistake, your own fault
Point fingers at innocence
Find the truth, hide the truth, deny a truth
Cover-up lies, cover-up tracks"~ They lie to hide the truth, Soilent Green

UUP (USD ETF) down 7.56%  YTD

The dollar hit another 52 week low, falling 0.3%.  Meanwhile Secretary Geithner was offering a familiar song and dance.

• Treasury Secretary Timothy Geithner fought back criticism that the Fed's policies have weakened the dollar, giving a boost to U.S. exports.  "I want to make it clear that our policy has been and will always be...that a strong dollar is in the interests of our country," Geithner said in remarks Tuesday to the Council on Foreign Relations in New York. "We will never embrace a strategy of trying to weaken our currency to gain economic advantage at the economic expense of our trading partners."

I hate when people fart in your face and say they didn't

SPX Break Out

The S&P futures are up a little over 4 points this morning. Yesterday we had a nice 11 point move on decent volume. The volume was especially brisk from 10am to 1130 and remained steady there after (this was during the major intra day up move). So far it looks like we'll get a follow through today which obviously is very bullish.

NYSE: 04/26/2011

	issues		volume
Advances	2222		636238
Declines	852		269600
Difference	1370		366638
10% Trend	332	. 866	63847
5% Trend	245	. 210	41343
McC OSC	87	. 656	22504
PRIOR McC OSC	31	. 619	5981
SUMM Index	2663	. 189	210897
PRIOR SUMM Index	2575	. 533	188393
A-D for OSC UNCH	421		86 *
A-D for OSC=0	-1333		-364 *
*million shares
DJIA Close		12595.37
PRIOR Close		12479.88
DJIA CHG		115.49
DOW Price OSC		100.50
PRIOR DOW Price OSC		91.65

Silver Update

Silver back down again this morning, holding 45 is very important. If it doesn't hold today then we'll see 43.5 to 43 by tomorrow. Thats when you load up the truck. Hang in there, I did a little buying yesterday, bought some AGQ and some physical. Interesting story to share with you. The place where I buy the bars is now has 5000oz but not selling anymore. I had to find an out of state dealer and pay 2 bucks over spot. The sell-off in the AGQ has hit very hard, I hope today is the last day.

down 50$ a share in 2 days. Hope to buy more at 300. 

Silver Hammer-ed

I had no idea we'd get to 45 so quickly (over night), I now anticipate a move to 43-43.5. Picked up some AGQ right before the close. Its going to be down big time (hammered) this morning. Time to buy some more, its discount Tuesday. This raid is almost over. Remember what I wrote yesterday about the point of this shake out the front month contract holders, they have been running scared.

Thank you all

Lately since my prolific calls on silver I getting a lot of great emails. Since I dont have a lot of time to thank all of you individually. Thank you all, all of you for your kind comments. Special thanks to trading goddess, stephanie33, maria2345 and roberta1112.

I did try to warn you

Yes owning this thing is not for the faint of heart but you gotta play it right. And as of late I have been right on the money. Time to buy some AGQ! This isn't depressing this is an opportunity. 

Fair Warning: Did I Not Give

Silver now being slammed big time. I gave you a heads up, No?

Fair Warning

Come on down, down to mean street! Looks like Blythe has begun her attack. It would be nice if we could get to 45. But I seriously doubt it. This raid is orchestrated to convince and nudge as many front-month contract holders to roll as possible. Delivery time people. The higher the price the greater her losses. The greater the fear she need to put in the heart of the weak holder. Hang tough, you will be rewarded.