April 2011

Bullion buyers were giving the bad guys a rough time early Wednesday morning. Touts for both Gold and Silver contain specific buying strategies, so night owls should check them out if things perk up in the wee hours.

Now that I’ve got your attention, let me announce that, after tomorrow, I'll be exiting the Deflation vs. Hyperinflation debate for a while. I’ve concluded there is little to gain arguing on the one hand with a guy who turns rabid whenever someone contradicts him, even in a friendly way; and on the other, with a preening narcissist who comes to argumentation in the same state of sexual arousal that Jeffrey Dahmer must have experienced hovering over the fresh corpses of teenage boys.  These guys are bad news, as lacking in civility and manners as buzzards in a scrum, and you'd do well to avoid them both.  You might try tuning instead to the hyperinflation arguments of Steve Saville, Peter Schiff and a few others who seem less concerned with trouncing, slicing and dicing opponents than with presenting facts that might better prepare you for the financial crisis ahead. The very best of them, in my opinion, is FOFOA blogspot, where the essays are erudite, the discussion elevated and the arguments as knowledgeable as any you will find on the web. ZeroHedge can be pretty informative too, provided the hairy-knuckled provocateurs who hang out there have been fed red meat within the last 24 hours. Not that FOFOA -- or anyone else, for that matter -- has won me over; for I remain convinced that deflation, not hyperinflation, will do in the economy. To understand why, I’d suggest following the mile-deep discussion thread that my commentary on the topic generated last week at Rick’s Picks. You’ll discover that there is no point on either side of the argument that is airtight.  Hyperinflationists can make you doubt most anything I might say, just as I can stir doubts about anything they might say.  That said, my biggest doubt concerning their side

Yesterday's hard selloff in Silver generated some wicked impulse legs on the hourly chart, and so I've hung out the yellow flag for the first time in a long while.  Scalping should be done from the short side in both Gold and Silver -- the first time this has been so since early January.  Please note as well that T-Bond futures have bounced from a potentially important low and that the Dollar Index is very near a similar high-odds bottoming point.

For the same technical reasons I've suggested high caution in Gold, we should be even moreso in Silver, considering how steeply it has rallied this year.  Although the selloff would have to hit 36.430 to turn the daily chart even mildly bearish, the hourly chart is already bearish enough, having generated no fewer than three impulsive downthrusts yesterday.  The current and last of them has yet to play out and just moments ago rallied above its initial point 'c' high.  As this pattern continues to develop, we should monitor it closely.  The most bullish thing that could possibly occur would be an upward, impulsive (on the 60m chart) thrust off the 'p' midpoint of the pattern, similar to the one shown.

Although the 1502.70 rally target given here earlier remains valid in theory, we'll shift our bias to bearish and turn cautious, since yesterday's low exceeded a 1461.40 Hidden Pivot support by $1.40.  This is a negative development, and its implications would become still moreso if any minor, uptrending abc corrections fail either at their Hidden Pivot midpoint or at a 'd' target.  Sellers would renew themselves and take on additional energy if 1452.50 is exceeded to the downside today.

The June contract bulldozed the 1.4384 resistance shown in the chart, suggesting still higher prices to come.  Even so, we should be on the lookout for a possible stall at exactly 1.4496. That's the Hidden Pivot resistance of a lesser pattern, and it can also serve as a minimum upside projection for the next thrust.

I alluded to a 117^18 downside target yesterday, but it came from a tiny netbook screen that was difficult to read. Using my desktop monitor, I now find that the actual number is 117^31, a Hidden Pivot support that has been slightly exceeded. Accordingly, and for purposes of developing a useful forecast, we should allow for the possibility that this bottom at 117^28 could turn out to be an important one.  The inference would be further strengthened by a thrust today exceeding a 119^05 peak made last Thursday on the way down.  As of yesterday's close, the futures were working on a bullish impulse leg on the hourly chart with the following coordinates: A=118^01, B=118^20, and C=?  If you're looking to jump aboard at whatever 'X' may form, I'd suggest finding camouflage on the five-minute chart.

Two pivots just below the floor of Monday's modest damage suggest that bottom-fishing could be attempted with relatively little risk.  The hidden supports lie, respectively, at 1313.75 and 1313.25, so I'll advise bidding 1313.75 with a 1.00-point stop-loss.  Looking at a somewhat bigger picture, there is nothing to say -- at least, nothing that would allow for anything so bold or presumptuous as a trend forecast.  The futures have been flatlining for two weeks, unable thus far to push above either hidden or structural resistances near 1337. 1.00_______ UPDATE (10:28 p.m. EDT):  A 1313.75 low held tonight for more than an hour, but the feeble, 2.25-point bounce that ensued was not quite sufficient to "cover" the  1.00-point stop-loss we used to initiate the position.  Our theoretical loss was $50, but we've  at least determined that there is probably more weakness to come.

[The essay below by Cam Fitzgerald, a frequent contributor to Ricks Picks, is a stark reminder that humanity could soon be facing problems even more serious than the collapse of the global economy.  The alarming die-off of honey bees and other cross-pollinators may presage nothing less than the devastation of food supplies around the world.  A beekeeper himself, Cam warns that, unlike global warming, which is happening slowly, the death of bee colonies has been so precipitous that a solution needs to be found and implemented as quickly as possible, lest  the food chain suffer catastrophic damage. Although a pesticide called Clothianidin is suspected, we don’t have time for endless political debate, he warns. Time is running out, and that is why I would urge readers to spread awareness of the problem by disseminating this commentary as far and wide as possible. RA] Rick has invited me to contribute an article discussing my views of how the world will look in the coming years. I am afraid I have very, very bad news for everyone though. My story is not science-fiction nor is it conjecture and yet it has drawn me to a very sad conclusion following events over the past few years. The issue that follows has ramifications that may even suggest the eventual collapse of society itself. Let me explain. In the latter part of the 1800’s a novel new chemical was developed called DDT. This synthetic chemical’s true calling and use was not realized, though, until sometime around the Second World War when a Swiss chemist named Paul Hermann Mueller first discovered its properties as an effective insecticide. He won the Nobel Prize for his efforts. The chemical found widespread use in agriculture and in the control of malaria-bearing mosquitoes, and for decades was one of the major means of pest