Sunday Nigh Musings
credit tobinator00
Hi folks, I've been in Arizona seeing my kids. Now after 6 cancelled flights, I'm trapped in Chicago hoping to make it to North Carolina tomorrow. The airport there ran a story just a few days ago how they had all of this snow and ice clearing equipment. It was a real feel-good piece. Unfortunately, the airport has been closed for a couple of days. The area has been barely affected by the massive storm. So much for their equipment!
My last few posts have been some charts and a piece worried about the Japanese bond market. Well, their bond market melted down swiftly (huge surge in rates) last week. The World's central banks intervened, and it has had a huge negative effect on the US dollar Index. I lead tonight with the Yen's chart and the USDX. The one shows clearly the intervention and the other is close to breaking a 15-year uptrend support line.
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We have rampant and unhinged buying in our favorite precious metals, Gold and Silver. Old Yeller is still constrained by a resistive trendline flowing through $5450. I had to go way back to draw that one. Gold hasn't reached a mania phase but if we see that trendline break, it will. Mania in my view creates an unstable price environment and is generally harmful for our mining stocks. Miners are being cautiously dragged higher by Gold's surge. The HUI/Gold ratio still hasn't eclipsed the swing high in 2020. I'm afraid a 10% pull back in Gold, after entering the mania phase (> $5600) could lead the miners to fall 20% or more.
Silver has gone Super Nova with two white dwarfs colliding. The white dwarfs being the panic buying of physical silver, colliding with the other white dwarf, trapped shorts cover buying to limit hemorrhaging. I agree with Ron's assessment that Gold's wily sibling market Silver, looks like it's breaking. Expect some real, awe-inspiring volatility in the foreseeable future. As an Engineer that uses Silver and a precious metals enthusiast, the fortunes made on this historic run are well earned from many years of malaise. However, I also mourn having an orderly market from which mining equity buyers can enter without deep, sudden losses when prices inevitably pull back.
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