So What's Going On?

What a load of crap. Bullshit if you prefer. I join you all in a string of expletives.

If today is not proof that the Gold Market is manipulated, then we will never have any proof.

If today is not proof that the US Government is the World's greatest criminal entity, then the world has no criminals.

The Blanchard Economic Research Note says it best:

This morning, post-Fed decision where there were no changes made to the statement of any significance, we've got a raft of data hitting the market that should all be precious metals positive, but silver and gold are taking it on the chin again this AM.

http://news.goldseek.com/GoldSeek/1178809620.php

Please read their entire post for FIVE fundamental reasons why Precious Metals should have been popping on the upside today. Below I will offer some detail to these FIVE reasons...

Trade gap widens sharply in March
Bigger drag on first quarter growth than first thought

http://www.marketwatch.com/News/Story/us-march-trade-gap-highest/story.aspx?guid=%7B7BBED803%2D2067%2D4B25%2DB7A0%2DC3261ED27E43%7D

The nation's trade deficit widened by 10.4% in March to $63.9 billion, its highest level since last September, the Commerce Department said. It marked the largest increase in the deficit since September 2005.

As a result of the deterioration in the trade balance in March, the deficit will be more of a drag on first-quarter growth, already at a low 1.3% annual rate, economists said. The government had previously estimated that the trade sector subtracted half a percentage point from growth in gross domestic product for the January-through-March interval.
Economists said that after accounting for the March trade and inventory data, first-quarter growth would be cut to a slim 0.5%-to-0.8% range. This would be the weakest since the fourth quarter of 2002.

What a rosy picture...perhaps I should sell my Precious Metals and buy some US Dollars.

Chain U.S. retailers suffer worst April since same-store-sales records began 37

years ago

CHICAGO (MarketWatch) --U.S. retailers posted the weakest month of same-store sales on record Thursday as an early Easter holiday and chilly weather April dampened shoppers' desire for spring merchandise.

Of course it's the weather's fault...it always is. Trade in your Gold for US Dollars.

However, Thomson Financial's Jharonne Martis warned investors not to take the month's results to heart, urging them instead to combine March and April -- what some analysts call "Mapril" -- for a clearer picture of how consumers are spending.
"April's negative [results] are not necessarily an indication that consumers are not spending or that the economy is going down," she said. "They are simply the result of the shift in the Easter calendar."

Yeah right, "Mapril"...that's the ticket. Is that not the lamest excuse you have ever seen. This woman has redefined spin...as in "I am a dumb ass, and you are too if you belive this."

ECB and BoE meeting Review

http://www.fxstreet.com/fundamental/analysis-reports/central-banks-special-coverage/2007-05-10.v02.html

From the FX price action point of view the USD got initial support from the two Central Bank decisions, but moves remain suspicious as the events were not that bullish for the Dollar, rather the opposite.

Oil prices rise on concerns about inventory report

http://www.shanghaidaily.com/sp/article/2007/200705/20070511/article_315496.htm

WITH gasoline prices poised to break records at the pump in the United States, energy futures prices jumped yesterday as traders noticed a gas supply imbalance in the fine print of Wednesday's government inventory report.

Though the Energy Information Administration reported that gasoline stocks rose an average of 400,000 barrels last week, the first increase in 13 weeks, a closer inspection shows much of that increase is due to a 1.1-million barrel increase in inventories on the West Coast, said Kevin Saville, an analyst at Platts Oilgram News, according to The Associated Press.

"When you back out that 1.1 million build, you really get a draw (or reduction in inventories) of 700,000 barrels in the rest of the country," Saville said.

The West Coast is relatively isolated from the rest of the country, meaning an increase in gasoline inventories there doesn't do the rest of the US much good.

Oh, the fine print! Look..., the price of Oil IS going to keep going up through the entire summer. Wishful thinking and ignoring the fine print are not going to change that in the least.

Copper Falls Most in Three Months on Signs of Slowing Demand

http://www.bloomberg.com/apps/news?pid=20602013&sid=ai3cAIPBTHGg&refer=commodity_futures

May 10 (Bloomberg) -- Copper futures in New York tumbled the most in three months on signs that demand may slow in China, the world's largest user of the metal used in pipes and wires.

Stockpiles in Shanghai Futures Exchange warehouses have more than doubled this year to the highest since December 2005, indicating that China may buy less copper from overseas. Futures had climbed 32 percent in the two months before today as China's imports surpassed last year's pace for four straight months.

``We're expecting to see a deceleration in Chinese imports,'' said Mark Liinamaa, a metals analyst with Morgan Stanley in New York. ``It's likely that they got a little ahead of themselves in the first part of the year and imported more than their overall need.''

As reported by Bloomberg as told to by Morgan Stanley. Signs? It ceases to amaze my how "signs" move the markets. Especially when the "signs" are pointed out by the likes of Morgan Stanley...a mouthpiece for the PPT. If Bloomberg isn't "making up the news" their spreading the lies and disinformation provided by the PPT. The PPT would love for you to believe that China is overbought copper. China is buying all the copper they can get their hands on while it is cheap, and they're going to be a lot more of it in the month and years to come despite the "maybes" the like of Morgan Stanley want you to believe.

South African gold production drops 10.8% in March

Resource Investor, VA - 13 hours ago

Yesterday, Peru's Energy and Mines Ministry reported that gold production in the country was down 14% in March at 15.1 million grams compared to the same ...

Peruvian gold production falls 14% in March

Resource Investor

Obviously things are bad and Precious Metals should be kicking sand in dem Rat Bastids faces. The cronies at the PPT who engage in rigging the markets 24/7 are at the height of desperation. The rate at which they are dumping gold onto the market to avoid the inevitable is astonishing. They are about to be overrun, and they know it.

Today was a loud noise. Try and ignore it. Listen to the folks at the Blanchard Economic Research Unit:

...keep an eye on long term trends like mine supply and bank sales, not daily action described as profit taking, book squaring and fund activity. Precious metals are a medium to long term trade, not a day trade. Keep your eye on the London close where the physical metals are sold. While certainly not true every day, 84% of the last 35 trading days have seen prices bounce back considerably once the London market shuts down. Additional supply from banks is keeping prices bottled up, but we strongly believe this is a temporary phenomenon and that this should be greeted as an opportunity to add to positions .

Silver Resistance: 13.10 / 13.15 / 13.30

Silver Support: 13.03 / 12.92 / 12.73

_________________________________All prices SPOT

Gold Resistance: 668 / 672 / 676

Gold Support: 666 / 664 / 660

Bargain Hunting

Fed Speak comes and goes. Again, NOTHING they "do" or "don't" say changes anything.

"The Fed said we're not going anywhere," Larry Smith, chief investment officer at Third Wave Global Investors. "They're not saying inflation is going to the moon, they're not saying it's a huge problem right now, but they're concerned that inflation won't come down to their comfort range."

Like the Fed is ever going to tell us the truth. The truth hurts, and the peeps can't handle the truth.

Though some investors were hoping the Fed would raise the possibility of a future rate cut, they weren't surprised by the committee's stance. Moreover, they were relieved to hear the Fed is not more inclined than it has been to raise rates, a move that would make access to capital more expensive and potentially hurt the stock market.

http://biz.yahoo.com/ap/070509/wall_street.html?.v=33

Is that meant to imply that cheap and easy money is driving the stock indexes to historical highs? Shocking!

Have you been adding to your Silver positions this week? The past two days have offered excellent buying opportunities. Silver gave an intermediate buy signal on May 3 at 13.28...Traders take note: The last time silver had a similar buy signal in March it went up $1.50 an ounce off the prior low. Tails on the candles the past two days are signs of bargain hunting. Silver has traded in a tight range between 13.14 and 13.50 for the past 10 trading days. Bouncing between the 61% and 38% Fibonacci Lines, the spring on Silver winds ever tighter for the next assault on dem Rat Bastids wall at 14.04.

Please click on the chart to enlarge.

Silver Resistance: 13.32 / 13.42 / 13.52

Silver Support: 13.27 / 13.17 / 13.10

____________________________________All prices Spot

Gold Resistance: 681 / 686 / 691

Gold Support: 679 / 676 / 672

Interest Rate Blah-Blah Ahead

Gold And Silver had sharp reversals today at 11AM est. 11AM est is always a pivotal hour in the metals markets as this is when the London LME closes for the day. Movements in the markets are often "surprising" after 11AM. Today's "surprise" may have been the result of the hammer of more ECB gold selling being lifted as the market in London closed. I'm only speculating, but the idea seems plausible. We've often seen prices tank after 11AM as well, as dem Rat Bastids at the Comex in NY to take advantage of the thin market after the LME closes in London. Oh, the games these Vermin play...

A reverse head and shoulders bottom has formed on the one hour chart of silver...a close above 13.55 could be just the technical catalyst we need to attempt another assualt on dem rat bastids wall of resistance at 14.04.

More often than not lately, reversal days like we had today are followed by several up days in the market...with little to put wind in the US Dollars sails and hold the metals in check it would not surprise me to see rising prices into the end of the week.

Tomorrow the FOMC will offer to us their decision on interest rates. It is expected that they will remain the same and all ears will be open to the FOMC's post meeting statement as it pertains to the "possibility" of future rate cuts or increases. Crude oil inventories will also be released tomorrow...OIL was back above $62 today, a close above $67 remains our target.

Little talked about "event" tomorrow: ...three subcommittees in the U.S. House of Representatives announced plans for a joint hearing on May 9 to examine foreign currency manipulation. The panels said they would focus on China and Japan, although they did not announce a witness list. http://today.reuters.com:80/news/articleinvesting.aspx?type=bondsNews&storyID=2007-05-02T225435Z_01_N02430362_RTRIDST_0_USA-CHINA-PAULSON-UPDATE-3.XML "News" coming out of these hearings could potentially have a big impact on the US Dollar.

Thursday the Bank of England will have an interest rate decision to share with the world...many believe that it will be an increase to 5.5%. That is higher than it is here at home. The ECB also will have a rate decision of their own to share with the world. No increase is expected, but a statement indicating a rise in June is. The ECB is determined to keep Euro Gold under 500, and are gradually losing their grip on that idea.

And we get a look at Retail Sales for April in the good 'ol USA on Friday. It's is doubtful anything we here or read about these data events for the balance of the week is likely to be US Dollar positive. Any buying being done in the US Dollar these days is limited to short covering. The US Dollar is doomed and it is only a matter of time when it will slip into the abyss below .8050 on the USDX...not IF it will.


Silver Resistance: 13.55 / 13.61 / 13.75

Silver Support: 13.44 / 13.39 / 13.30
_______________________________All prices SPOT

Gold Resistance: 686 / 691 / 694

Gold Support: 681 / 676 / 672

Trading Gospel

Unless, or until, you have read Reminiscences of a Stock Operator by Edwin Lefevre the markets will remain a mystery to you no matter what you may think you "know" about them. This one book will teach you more about yourself and other investors than years of experience in the markets ever will. Crowd psychology and market timing have never been better explained than within the pages of this timeless classic. It is recommended reading for ANYBODY that wishes to be succesful trading or speculating in ANY market.

I have read the book several times, and reread portions of it often when I begin to question my convictions. The following excerpt from this "bible" of speculating, I have seen posted many times on the internet. It is one of my favorites, and the point this excerpt makes is no more valid than right now in the Precious Metals Markets. Frustration would be an understatement when describing today's market. Many, unfortunately, have recently thrown in the towel out of frustration and left the Precious Metals Markets. Those that have will have a lifetime of regret to look forward to.

Please take the time to read this short narrative. The wisdom it contains is priceless.

It's A Bull Market, You Know!
By Edwin Lefevre

In Fullerton's, there were the usual crowd. All grades!

Well, there was one old chap who was not like the others. To begin with, he was a much older man. Another thing was that he never volunteered advice and never bragged of his winnings. He was a great hand for listening very attentively to the others. He did not seem very keen to get tips – that is, he never asked the talkers what they'd heard or what they knew. But when somebody gave him one he always thanked the tipster very politely. Sometimes he thanked the tipster again – when the tip turned out OK. But if it went wrong, he never whined, so that nobody could tell whether he followed it or let it slide by.

It was a legend of the office that the old jigger was rich and could swing quite a line. But he wasn't donating much to the firm in the way of commissions; at least not that anyone could see. His name was Partridge, but they nicknamed him Turkey behind his back, because he was so thick-chested and had a habit of strutting about the various rooms, with the point of his chin resting on his breast.

The customers, who were all eager to be shoved and forced into doing things so as to lay the blame for failure on others, used to go to old Partridge and tell him what some friend of a friend of an insider had advised them to do in a certain stock. They would tell him what they had not done with the tip so he would tell them what they ought to do. But whether the tip they had ways to buy or to sell, the old chap's answer was always the same.

The customer would finish the tale of his perplexity and then ask: "What do you think I ought to do?"

Old Turkey would cock his head to one side, contemplate his fellow customer with a fatherly smile, and finally he would say very impressively, "You know, it's a bull market!"

Time and again I heard him say, "Well, this is a bull market, you know!" as though he were giving to you a priceless talisman wrapped up in a million-dollar accident-insurance policy. And, of course, I did not get his meaning.

One day a fellow named Elmer Harwood rushed into the office, wrote out an order, and gave it to the clerk. Then, he rushed over to where Mr. Partridge was listening politely to John Fanning's story of the time he overheard Keene give an order to one of his brokers and all that John made was a measly three points on a hundred shares and of course the stock had to go up twenty-four points in three days right after John sold out. It was at least the fourth time that John had told him that tale of woe, but old Turkey was smiling as sympathetically as if it was the first time he heard it.


Well, Elmer made for the old man and, without a word of apology to John Fanning, told Turkey,

"Mr. Partridge, I have just sold my Climax Motors. My people say the market is entitled to a reaction and that I'll be able to buy it back cheaper. So you'd better do likewise. That is, if you've still got yours."

Elmer looked suspiciously at the man to whom he had given the original tip to buy. The amateur, or gratuitous, tipster always thinks he owns the receiver of his tip body and soul, even before he knows how the tip is going to turn out.

"Yes, Mr. Harwood, I still have it. Of course!" said Turkey gratefully. It was nice of Elmer to think of the old chap.

"Well, now is the time to take your profit and get in again on the next dip," said Elmer, as if he had just made out the deposit slip for the old man. Failing to perceive enthusiastic gratitude in the beneficiary's face Elmer went on: "I have just sold every share I own!"
From his voice and manner you would have conservatively estimated it at ten thousand shares.
But Mr. Partridge shook his head regretfully and whined, "No! No! I can't do that!"

"What?' yelled Elmer.

"I simply can't!" said Mr. Partridge. He was in great trouble.

"Didn't I give you the tip to buy it?"

"You did, Mr. Harwood, and I am very grateful to you. Indeed, I am, sir. But"

"Hold on! Let me talk! And didn't that stock go up seven points in ten days? Didn't it?"

"It did, and I am much obliged to you, my dear boy. But I couldn't think of selling that stock."

"You couldn't?" asked Elmer, beginning to look doubtful himself. It is a habit with most tip givers to be tip takers.

"No, I couldn't."

"Why not" And Elmer drew nearer.

"Why, this is a bull market!" The old fellow said it as though he had given a long and detailed explanation.

"That's all right," said Elmer, looking angry because of his disappointment. "I know this is a bull market as well as you do. But you'd better slip them that stock of yours and buy it back on the reaction. You might as well reduce the cost to yourself."

"My dear boy," said old Partridge, in great distress–"my dear boy, if I sold that stock now I'd lose my position; and then where would I be?"

Elmer Harwood threw up his hands, shook his head and walked over to me to get sympathy: "Can you beat it?" he asked me in a stage whisper. "I ask you!"

I didn't say anything. So he went on: "I give him a tip on Climax Motors. He buys five hundred shares. He's got seven points' profit and I advise him to get out and buy 'em back on the reaction that's overdue even now. And what does he say when I tell him? He says if he sells he'll lose his job. What do you know about that?"

"I beg your pardon, Mr. Harwood; I didn't say I'd lose my job," cut in old Turkey. "I said I'd lose my position. And when you are as old as I am and you've been through as many booms and panics as I have, you'll know that to lose your position is something nobody can afford; not even John D. Rockefeller. I hope the stock reacts and that you will be able to repurchase your line at a substantial concession, sir. But I myself can only trade in accordance with the experience of many years. I paid a high price for it and I don't feel like throwing away a second tuition fee. But I am as much obliged to you as if I had the money in the bank. It's a bull market, you know." And he strutted away, leaving Elmer dazed.

What old Mr. Partridge said did not mean much to me until I began to think about my own numerous failures to make as much money as I ought to when I was so right on the general market. The more I studied the more I realized how wise that old chap was. He had evidently suffered from the same defect in his young days and knew his own human weaknesses. He would not lay himself open to a temptation that experience had taught him was hard to resist and had always proved expensive to him, as it was to me.

I think it was a long step forward in my trading education when I realized at last that when old Mr. Partridge kept on telling the other customers, "Well, you know this is a bull market!" he really meant to tell them that the big money was not in the individual fluctuations but in the main movements – that is, not in reading the tape but in sizing up the entire market and its trend.

– Extract taken from Reminiscences of a Stock Operator Copyright © 1994 By Edwin Lefevre.


Silver Resistance: 13.55 / 13.61 / 13.75

Silver Support: 13.44 / 13.39 / 13.30
____________________________________All prices SPOT

Gold Resistance: 686 / 691 / 700

Gold Support: 681 / 676 / 672

Third Time Lucky

Before any discussion on the Metals, I must make note of the recent "decline" in OIL prices. The reason behind this decline has got to be the either the dumbest excuse I've ever heard or one of the US Governments most desperate acts to manipulate the markets...OR BOTH.

THIS IS RIDICULOUS!

May 2, 2007, 4:58PM

DOE Halts SPR Crude Oil Purchases

NEW YORK — The Energy Department said Wednesday it rejected as "too high" all bids for the purchase of up to 4 million barrels of crude oil to have been shipped in June to the Strategic Petroleum Reserve.

DOE also said it will "suspend direct purchases of oil for the SPR until at least the end of the summer driving season."

DOE had previously rejected all bids for purchases of up to 4 million barrels of crude for the SPR in a May solicitation for the same reason.

"Both solicitations resulted in no awards because the department determined that the bids were too high and not a reasonable value for taxpayers," the DOE said.

http://www.chron.com/disp/story.mpl/ap/fn/4769698.html

Let's make fun of this and point out some fundamental facts. On Friday I gave this link: http://seekingalpha.com/wp-content/seekingalpha/images/oilseasonal.png to a chart of Seasonal Oil Price Trading Patterns. This chart clearly shows that the price of OIL rises annually from June thru August. But the DOE has determined that OIL at today's prices is "...too high and not a reasonable value for taxpayers...". Only the geniuses in the US Government could come to such a conclusion. Why would the DOE "suspend direct purchases of oil for the SPR until at least the end of the summer driving season."? Do they want you to believe that their purchases of oil for the Strategic Petroleum Reserve are disruptive and affecting supply and thus putting upward pressure on prices this Spring? They've held off purchasing a measly 4 million barrels of oil in the hopes that it will rein in OIL prices? LOL!!! 4 million barrels of oil is equivalent to spiting in the ocean. IT IS INSIGNIFICANT relative to the big picture. THE USA consumes in excess of 20 million barrels of OIL each and every day of the year. http://www.infoplease.com/ipa/A0922041.html

Just in the month of June ALONE the USA will consume 600 million barrels of OIL. LOL!!! Like not siphoning 4 million barrels of OIL off the market is going to make a damn bit of difference to available supply. The entire planet uses OVER 85 million barrels of OIL a day. Clearly the DOE is trying to "talk" the price of OIL down. The fools in the trading pits fell hook line and sinker for it too. Silver closed off it's highs Friday because of the drop in the price of oil. Fundamentally there is EVERY reason for the price of oil to go substantially higher...and by the end of this week it will again be north of $64 a barrel. Ignore the noise!

SILVER and GOLD

What a crazy week. In the end Gold closed at an 8 week high. And on Monday closed at an all-time monthly high. Gold tested it's 50 day moving average successfully, retraced 38% of it's recent leg up and worked off it's "overbought" RSI in the process. Gold is gathering strength for a third try at breaching resistance around 691 (SPOT) since January 1st.

Silver on the other hand... Someday the moves up in Silver will be as dramatic as the moves down. And those days may be closer than we think. Silver's slide stopped right at our Rat Trap at 13.03. Dem Rat Bastids either didn't want to press their luck or weren't up to the challenge. Silver has some serious "investment demand" building in it's ranks now:

Silver ETF has tied up 15% of world's silver supply

http://www.resourceinvestor.com/pebble.asp?relid=31479

The silver ETF currently holds over 136.5 million ounces, after launching in late April last year at 1.5 million ounces. This implies that the silver ETF has now tied up nearly 15% of the world's silver supply.

Any froth in the Silver market has been worked off and our troops appear to be massing for another assault on resistance at 14.04 (SPOT). The gap down on April 26 should not be as difficult to work back thru as the gap down on March 2 was as this recent gap down was on relatively light volume.

Silver and Gold have established lows at the beginning of months 1, 3, and 5 now. And they have established intermediate highs in months 2 and 4. Is this a pattern? Recall that I said the next runs in Silver and Gold would be to new highs around June 8th or 15th... Time will tell if this has become a pattern and those new highs are reached. $756 Gold / $16.80 Silver = 45 Gold / Silver ratio.

The US Dollar

Technically the US Dollar is poised for a bounce...a bear market rally. Unfortunately, for the US Dollar, nobody is much interested in buying it except for those wishing to cover their shorts. Any "bounce" in the US Dollar should be short lived.

Please click on charts to enlarge.

Silver Resistance: 13.55 / 13.61 / 13.75

Silver Support: 13.44 / 13.39 / 13.30

____________________________________All prices SPOT

Gold Resistance: 686 / 691 / 700

Gold Support: 681 / 676 / 672