Time for some reflection on the price action on 2/4. The backdrop to events were the high EUR, AUD, and also copper correcting higher - propelled further also by the Chilean Quake. I mentioned about this time yesterday after it appeared there was little damage that this was a setup in Copper for a price reversal of sorts - and sure enough that is what we got. Crude has also been slowly coming off (which I also foreshadowed was possibly a lead up to US SPR sales by our Saudi friends). So after the stops went off in Silver particularly, (after the GOFO figures seemed to be saying that Gold lease supply was waning with EUR up at 1.38), there seemed to be some aggressive selling and the PM prices were pretty much capped for the entire session all the whilst EUR and AUD were looking a little uncertain about what is coming next - and with good cause, for today we have the ECB which according to some, (having failed to curtail the rise of the EUR with jaw boning) possibly seem set to announce some tangible action to bring it down via either interest rate or other means. So weighing all this up I see Risk for EUR as down on ECB, RIsk for Crude is Down based on SPR, Risk for Copper is down based on $2.87 retest, daily reversal, and china contraction, and Risk for PMs remain also down when considered in light of all these...Separate to this I can also count an ABC upward correction of sorts that is complete, so prior to Comex close I decided to climb back on the Short train. Will be interesting to see if this together with a good NFP and associated accelerated TAPER risk will start the run down as I have been expecting. Already we are some 25c off the highs in Silver - and now Gold seems to be going sideways whilst Silver is weakening - a flip in roles from the last 5 days. I note also with interest that Silver was unable to close over the $20.05 POC for OHLC data from 9/13. That means its still on the defensive. Gold is just Phaffing around this $1,287 POC - I expect we will be back there in a few hours...Chart has POCs in dashed purple and range boundaries in dashed brown. As usual this is not a recco to trade - and if you do you do so at your own risk. ;)
Posted on: Thu, 03 Apr 2014 03:22:16 +0000
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