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We voted in the cooks in Washington. They make the rules and we let them do it. To fault the banks for doing what they do is like beating a horse for eating hay. It is what they do. Our problem is the federal government. From the prez on down to the freshman congressmen. They cannot spoil our economy without our permission. The American public has been fooled by their servants. They have "promised" us into a corner. it has been happening for almost 100 years, full time. Selfish human nature has given the federal government power over us. The lunacy of it all is that we are all sitting around complaining about our world-wide financial problems and using the same logic to fix the damage that was used to create the problem in the first place.

I think we are the ones being baited.

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Silver continued to fall on the open today closing down from Friday's close. Gold and silver did rally as Ben Bernanke assured an audience he spoke to today around noon, that he had no intentions of raising the key rate in the near future. You can see the immediate turn in the dollar and precious metals as he completed his speech. This puts the price action back to the foreign currencies and the fundamentals. The carry trade will continue. The pullback gave us nice 7.55% decline in silver and offered a point to buy a little. Gold weakened a bit less at 7.17%. The non farms numbers on Friday is what spooked the market into thinking that rates might rise sooner than expect, so for now that has been put to rest. I will be interested and looking forward to any remarks made by other central banks, specifically the ECB. We do not have any economic data coming out tomorrow. The next major data will be initial claims on Wednesday. I have switched from watching the dollar, to the Yen and the Euro. Bullion gold at the moment is going for 1164 and being bought at 1151.



SI

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Silver started falling at the open, only to stop at the major support of 61.8 for a moment, and continued down. All commodities lost ground as the dollar strengthened again other currencies. The S2 stopped the drop and for now is holding, this is off the daily pivot numbers. The downgrades of Greece and Dubai by credit agencies put a shock into the markets. The US and Britain were also put on credit-watch. The weakness in fiscal institutions and policies were a sign of how fragile the system is. The Euro (along with other currencies) fell giving strength to the dollar. Also, the move in the Yen/USD gave some support to the yen carry trade returning and taking pressure off the dollar. The dollar is a very tired trade and this short term correction may have given a spark to profit taking before the end of the year. There is also a run to the dollar as a safe haven play, the major shorts have not covered. There is no doubt that risk appetite was shredded. The rise in the dollar also put a grip on Corporate investment as a stronger dollar makes exports more expensive. Oil fell for the fifth session. As I said yesterday, I was going to focus on the the Euro and Yen more than the dollar. It did not take long to get a move out of the Euro and the Yen, and was unexpected. If the worry continues we will see silver @ 17.21, our next support level. We really do not have much to give investors tomorrow in the way of economic data. It will be interesting to see which tack they take. Europe and Britain central banks will be hard at work tonight. Germany did not help with bad manufacturing numbers.



December, 9th

10:00 AM Wholesale Inventories Oct
10:30 AM Crude Inventories 12/04

SI

It is becoming obvious that our altruistic government can't hold the dollar down for ever. The farce is becoming apparent. At least I hope so.

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Silver continued it decline today breaking below today's S2 level. However, it did find support at the 38.2% Fibonacci level. Daily volume was up on selling from yesterdays level. The dollar also declined for the day closing below yesterday's open, selling was also up on volume from yesterday. Gold also recovered as the dollar declined to hit the 68.1% Fib. Gold's volume was above yesterday daily volume, with buyers coming into the market. The daily candle for gold shows indecision. I am still cautious as long as we see price declines on high volume. I do not believe Sovereign credit worries are over, as I believe Monday is the deadline for Dubai's default on loan debt. The debt moved from $26 to $41 billion, along with losing ownership of W Union Square New York hotel yesterday. Greece vows to cover it's debt as banks continued their fall. Fitch also downgraded the lenders in Greece. While we in the US continue to look at short term fixes rather than a sound system. All of this hot money running around is how this all started to begin with. I rant. Tomorrow we have a bit more economic data. Many will have their attention on the Bank of England, key rates are expected to remain low, the focus will be on QE.




December, 10th

8:30 AM Initial Claims 12/05
8:30 AM Continuing Claims 12/04
8:30 AM Trade Balance Oct
2:00 PM Treasury Budget Nov

SI

You said it yourself Woodie, the American people are drunk on their greed. And, it is not only Bernanke pouring in the alcohol into the punch bowl, it is all our elected officials.

And that's wood alcohol, by the way. They are trying to kill us!

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Silver closed above yesterdays close at 17.42 on the March contracts on falling volume. It followed today's pivot for most of the day, dipping only to recover at the end of the day. Even though the price moved up sellers still took it off of it's high for the day. Whether the fast money is going to pull more of their positions in gold/silver is yet to be seen, also if investors are still in the sell US dollar based assets mood. Equities did rise and are still holding above their 50ma on a day chart, at least the S&P. Easy money is expected to continue to pour into the market as the Fed tries to support a recovery. The problem may be that it is also causing a runaway equities market and possible causing a bubble. The 30 year bond auction was a bit less than expected. If we do not see any more major debt crises from other countries and our economic remains weak, the long specs will reenter the precious metal markets. If you have the bucks, the US mint will stop selling the 2009 Ultra High Relief Double Eagle Gold Coin(UH1) Dec. 31st, for the numismatist among us that's a deal at $1,539.00. Of course the less who buy will be better for us. Tomorrow there is a lot of economic data coming out. I will be watching for retail sales and the Mich Sentiment.



Dec 11

8:30 AM Export Prices ex-ag. Nov
8:30 AM Import Prices ex-oil Nov
8:30 AM Retail Sales Nov
8:30 AM Retail Sales ex-auto Nov
9:55 AM Mich Sentiment-Prel Dec
10:00 AM Business Inventories Oct

T.

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Silver dropped for most of the morning session but recovered on today's S1 support and moved up to flat on the session and with yesterday's close. It is now below the 50ma on the YTD day chart and today's candle shows indecision as it holds right at the 38.2% Fibonacci support. The dollar still has strength as it has moved above it's 50ma and today it moved up and formed a base. I could easily see it go higher, if any negative global credit news comes out this weekend. The market is in a mix and next week should be volatile with triple witching options expiration. Everything is very close to it's edge, so I will not be surprised by any moves.



The dollar gained on the day forming a base. However the interesting thing was that the S&P moved in tandem with the dollar. Which lately is unusual, even though this is normal in a good market. We have been totally turned on our heads this last year. It will be interesting to see if this slowly forms into a flip in what has been an inverse relationship. There is no economic data scheduled for the US until Tuesday. The financial reform bill passed in the house by a 223 to 202 vote. The talking heads will be out in force this weekend.



I wish everyone a great weekend!!
SI

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Silver closed above Friday's close and above the 17.20 support level. It was a slow, sluggish day in all markets on lower volume and the lack of any economic news. Abu Dahbi's move to cover Dubai's debt did not move prices all that much, most thought that Abu Dahbi would come to the rescue. The G77 withdraw it's co-operation from the climate summit, which pretty much closed that down. The dollar was up a bit on a rising Euro, it was somewhat capped by the Euro zone's Industrial output numbers. Greece and a few other countries are hardly out of the woods. So I am still looking for some buying opportunities. Volume should continue to go down as we close in on the holiday's and investors begin to depart. Volatility is expect to be higher on options expiration, the VIX strengthened today. We still have the Fed action on Wednesday. If the Fed for any reason should hint that it is prepared to risk higher inflation as not to harm the recovery, the precious metals will continue their march higher. For the time being I see them range bound. Starting tomorrow we will have a stream of economic data this week, including producer and consumer prices, industrial production, FOMC Rate Decision, housing starts and the Conference Board's leading indicators index. Tomorrow we start out with PPI numbers, speaking of inflation.



December, 15th

8:30 AM Core PPI Nov
8:30 AM PPI Nov
8:30 AM Empire Manufacturing Dec
9:00 AM Net Long-term TIC Flows Oct
9:15 AM Capacity Utilization Nov
9:15 AM Industrial Production Nov

SI

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Silver closed above yesterday's close, today's pivot and yesterday's high. You can see on the chart that silver has moved sideways since Dec. 9th with a bit of a weak liquidation correction in between, possible forming a base. The dollar took a breather today as well. Silver is at a tipping point on the technicals. It will be up to the fundamentals this week as to direction and velocity of silver's price.



You can easily see what has happened to the Euro. And for those in the inverse Euro / Dollar camp it is not looking great for the euro. It is under stress from Austria and Greece as well as some fundamentals in the economies. Something to keep a close eye on for the direction of the dollar, and in turn precious metals. Tomorrow we load up with economic data and will give direction. No one expect a key rate change, but the devil will be in the details and comments. CPI looks mixed. Permit and starts may surprise.



December, 16th

8:30 AM Building Permits Nov
8:30 AM Housing Starts Nov
8:30 AM CPI Nov
8:30 AM Core CPI Nov
8:30 AM Current Account Balance Q3
10:30 AM Crude Inventories 12/11
2:15 PM FOMC Rate Decision Dec 16

SI

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Silver closed above yesterday's close and is heading for resistance at 17.88. Silver gained for most of the day where as the dollar dropped this morning on crude oil inventories and then recovered back to flat in the afternoon. I was out for most of the day, I am having to catch up. It looks to me as the dollar still has a bit of strength. The dollar is still on it's uptrend from the 9th after the major rise on the 4th. At this point it looks like the drop in crude inventories was the primary mover. Funny how demand works. It also looks like the dollar turned on the Fed statement after the key rate announcement, and their plans to remove excess liquidity from the market down the road. The core CPI inflation data was flat. The euro is still mired in some financial debt problems within it's zone. Other than that it looks like a flat day on the equity markets which shows there's no panic in the works as the VIX moves down. Tomorrow initial claims should drop and continuing should rise, by how much will be see as better to less worse.



December, 17th

8:30 AM Initial Claims 12/12
8:30 AM Continuing Claims 12/5
10:00 AM Leading Indicators Nov
10:00 AM Philadelphia Fed Dec

SI

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Silver fell for most of the day closing at 17.17 dropping below support at 17.20 and the 38.2 Fibonacci. At first glance at the Silver COT for the 11th, It looks like the long specs have come off by some -3,223 contracts. I have not had time to go over all the reports yet. The commodities fell while the dollar and treasures gained strength. The Euro debt problems continue as the German and Greek 10 year bonds spread widens. Italy and Spain are not out of the woods and Euro stocks fell before the market US open, gapping up the dollar. Initial claims rose to 480,000 which economist had expected would fall. However, continued signs of growth via manufacturing and leading economic indicators gave some support. Citigroup had a lot to do with the direction of financials today. The material sector fell as investors look at safer sectors in the market. The closer the dollar gets to 80 the larger chance of a swing out of the dollar and back into trending down. This is prefaced with the shorts not covering any of their big positions. Again it is year end as well as option expiration, profit taking and volatility are normal. The VIX did rise most of the day. Tomorrow will be a frenzied Friday as there is no US economic data. Actions in Asia and Europe will determine the open.



SI

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Silver closed above yesterday's open with less than a 1% gain. For the week silver closed pretty much flat. Again the primary reason is the dollar movement. The FOMC stating that the special liquidity facilities will expire on Feb. 1st helped spur the traders to thinking interest rates may come sooner than later, just the thought of them moving to stem liquidity helped. Either way it was good for the dollar and is putting a squeeze on precious metals. Gold sales have dropped in the middle east and gold in Russia showed it's biggest weekly fall since June. The one commodity that gained today was crude oil on concerns about Iran incursion into a portion of Iraq's oil field. Gold came off the low of the day at 1101 to close at 1113, as the dollar pulled back from it's high of 77.44. It was still the biggest weekly gain for the dollar vs the euro since January 09'. I still see some strength left in the dollar. I am looking for a buy point for gold around 1070. There may be more movement in the European debt problems as well. This accounts for more of the dollar strength than the economics in the US. One thing that is interesting is the comparison of the S&P vs the dollar, and the DAX vs the euro. The economic data will let us know next week starting with GDP and existing home sales, which is mixed on expectations, the data will continue to flow right up through Christmas Eve.



December, 22nd

8:30 AM GDP - Third Estimate Q3
8:30 AM GDP Prices - Third Estimate Q3
10:00 AM Existing Home Sales Nov

Everyone have a great weekend!
SI