Monday, March 7, 2011

It's late Sunday night, and with bullion up and index futures down, both moderately, it would be tempting to think all is right with the world -- or at least, for those not having to buy crude oil or products derived from it, since the April futures contract is within easy striking distance of the 107.01 target that I proffered a while back.  After that: 110.90, and then...

Late Sunday night, May Silver was giving up little of Friday's sharp rally, hinting of a renewed thrust today to as high as 37.300. That's a Hidden Pivot, and it has evolved to look more compelling than other rally targets given here earlier; as such, it should supersede them.  A lesser pattern could produce a stall at exactly 36.490, so be alert if and when the futures reach that level.  Camouflageurs looking for a safe way to board will probably need to use charts of three-minute degree or less.

April Gold appears to have averted a shakedown below 1400 and now looks bound for at least 1459.10 over the near term.  Odds of this were improving Sunday night as the futures backslid moderately to the 1434.90 midpoint associated with the target.  The evening high so far has been 1438.70, a point 'B' that can be used for camouflage. If the 1433.60 pullback 'C' that has followed it endures, the long-entry trigger would come at 1436.25 (15-minute chart, A=1428.20).

Two weeks of tedious, albeit volatile, dithering has produced a mildly bearish pattern that would be nicely resolved with a drop to exactly 1286.50.  That's a buy-able Hidden Pivot (stop 1285.75), and its sibling midpoint at 1311.50 came within a single tick of containing Friday's fall.  Alternatively, a rally target at 1356.00 has been in our crosshairs for so long that its appeal has eroded.  In any event, it remains shortable either via camouflage or with a 1358.25 stop-loss.

Senate minority leader Mitch McConnell said on Face the Nation over the weekend that President Obama wasn’t serious about the budget. Lest anyone mistake this for partisan sniping, here’s an interesting factoid that drives the charge home:  The $4 billion in spending cuts that Congress just approved to avoid a government shutdown amounts to about ten hours of government spending and less than a day of Treasury borrowing. This calculation comes from Bill Buckler, editor of the Australia-based Privateer. Mind you, the cuts were ginned up by a Congress that supposedly is in the grip of austerity-crazed Tea Partiers and Republicans. What it suggests is that the paltry sum hacked from federal outlays may be as good as it gets for anyone hoping The Government will somehow get its act together.  Meanwhile, if either a Democrat or a Republican claims to be in favor of reducing the deficit, keep in mind that the sums he or she will be talking about will be in the billions, whereas the deficit itself is mounting into the trillions.  As Buckler has noted, “This year, the official budget for the U.S. government is $3,700,000,000,000.  That means the government will spend $10.13 billion every day – weekends and holiday included. The latest official figure for the fiscal 2011 deficit is $1.65 trillion. The U.S. Treasury will borrow nearly 45 cents of every dollar it spends – a total of $4.52 billion every day – weekends and holidays included.” That’s the reality of it. But when our best and brightest on Capitol Hill attempt to reconcile these numbers with tax revenues, you can bet it will play out as slapstick. The looming Punch-and-Judy show between the big spenders on one side of the aisle and the even bigger spenders on the other side was framed by