Tuesday, April 17, 2007

The Devil Is In The Details

Economic Data = Market Noise. When the market gets noisy, the ride gets bumpy. Dem stinkin Rat Bastids are going to throw everything they've got at us to try and keep Gold below 700 and Silver below 15. Their short positions in both are giving them more bad gas than an entire box of Pepcid AC could neutralize. The US Dollar got ZERO help from the weekend's G7 meeting and continues to hang by a thread. Suggestions, once again, that the IMF sell its gold, only speaks to the desperation of dem Rat Bastids. Dem Rat Bastids are quite close now to being caught with their pants down with a pack of hungry pit bulls staring them down from a block away.

Let's briefly look at yesterdays Economic Data points:

US Mar Retail Sales Exceed Expectations
+0.7 vs. +0.4

Details: March gasoline station sales surged 3.1% last month, probably reflecting higher prices at the pump. Gas sales increased 1.5% in February. Stripping away sales at gas stations, demand at all other retailers rose 0.4% in March.

LOL! Obviously, with gasoline prices up about 38% this year, consumers are forced to spend more and more of their hard earned income on gasoline for their proud fleet of gas guzzling SUVs. Absent gasoline costs, retail sales were as flat as a pancake.

US Empire state manufacturing index rises 1.95 points in April to 3.80
3.8 vs 7.5

Details: The details of the survey showed that while new orders held steady, the shipments index fell to its lowest level since mid-2005 and the index for unfilled orders slipped further into negative territory, it said.

This was another bad number for the manufacturing sector...'nuff said.

US Feb net portfolio flows rise to 94.5 bln usd in Feb
94.5 vs 80.8

Details: Net foreign acquisition of U.S. securities was $43.2 billion in February, down 51.6% from $83.7 billion in January. Net buying of long term securities totaled $58.1 billion in February, down 58.8% from $98.8 billion in January.

A double negative? Little positive can be derived from that, though the headline number looks good.

The Devil Is In The Details. I can't find anything in yesterdays economic data that lends any support to the US Dollar. As each day passes the global investment community distrusts it ever more. Now the US Dollar is not going to zero next week, or next month for that matter. It probably is not going to zero at all (well, ...), but it is and remains weak. It will have flashes of support, but they will be fleeting. We may see one this morning if the CPI data is horrible and the "FED's gonna raise rates" crowd throws the US Dollar a bid. I think we all know by now that that blah blah is just that...BLAH BLAH. The US Dollar is going down, over time, a lot further. And Gold and Silver, over time, are going a lot higher.

And, it's wise to not over analyze. It too often leads to trading mistakes. We continue to sit in a potentially powerful position in Precious Metals here. Let's let the noise come and go this week. The markets, much like a plane ride through the clouds, may get bumpy when it hits a little turbulence. But once we pass through...it's smooth sailing once again.

The sun is up and the wind is blowing again here in North Carolina...I think I'll go fly a kite.

Silver Resistance: 14.04 / 14.12 / 14.30
Silver Support: 13.95 / 13.85 / 13.67
__________________________________ All Prices are SPOT
Gold Resistance: 686 / 691 / 699
Gold Support: 681 / 677 / 672

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