Should silver fail to hold support at $4.92, then the next level of support would be at $4.80.
Looking for bottoms soon in the grain, energy, and metal markets.
Soybeans may have already bottomed. The energy markets may be at a bottom now. Strong reversal day up in the XOI, the oil index, at a retest of major support. Last week was very interesting. Saudi Arabia, Venezuela, and Mexico announced that that they are going to cut back production by 450,000 barrels. The market went up for about a day and a half and came right back down. Previously when they announced a cut, in March, the market went up $3.00 per bbl.
This week Iran announced a production reduction of 100,000 bbl.
and the traders basically said" yeah, we've heard that before." Qatar announced a 20,000 bbl. reduction. The next OPEC meeting is on June 24. We may put in a bottom prior to that and see some real cutbacks by OPEC. Nobody believes that will happen, and that is usually when we see bottoms come in. Today we saw the first inklings that we are in the process of bottoming, but will need more confirmation, more follow through. If we see that then possibly going into the OPEC meeting, we will put in a bottom and start moving higher. Martin Armstrong is calling for $40 oil by next summer. We've been to that level twice before; during the Shah of Iraq's regime in the late 70's, and before the gulf war. |
