James Turk: Dollarn hänger vid ett stup, short squeeze i silver fortsätter
I en intervju med King World News noterar James Turk att dollarn hänger vid ett stup just nu och att om vi bryter ner genom 77 på dollarindex så kan det gå riktigt fort utför och givetvis det motsatta för guld och silver.
Turk påpekar att dollarn alltid varit en tillflyktsort under perioder av osäkerhet, så med tanke på att den knappt lyckats lyfta efter den allvarliga situationen i Nordafrika och Mellanöstern är det så långt ifrån ett styrketecken man kan komma. En dollarkollaps kan vara nära förestående.
Här är intervjun med James Turk:
The dollar right now is hanging on the precipice. If we break below 77 on the dollar index, look out below. I don’t think people really appreciate how scary the dollar chart is here, or how ominous the implications really are. There’s no predicting how far the dollar could plunge if confidence breaks.”
You’ve got civil war breaking out in North Africa and you have rebellions happening in the Middle-East. In this kind of geopolitical situation, in the past the US dollar would always rally, but this time it can’t even bounce. You know Eric the other side of this coin is that if the dollar falls off the edge of a cliff, precious metals are going to skyrocket.
Om silver: During the most illiquid time of the trading day, somebody decided to take out all of the stops in silver. If you were not following during business hours in the Pacific Ocean you missed it. I woke up this morning and looked at the chart and couldn’t believe what happened while I was sleeping.
The important point Eric is that no technical damage was done and in fact the situation has become even more bullish because that little smack down overnight took out all of the weak hands.
With this month’s important options expiry now behind us, I’m looking for higher prices next week. Even though the March/May spread has flattened a little, the backwardation continues to grow to 2015 and has ballooned further to $1.16. The short squeeze is continuing to develop. The shorts are trapped and whether the trap springs this week or in a month or two I don’t know, but we are getting very close.
Om guld: While silver did get hit in overnight trading, gold hardly moved and then snapped right back. Remember I said last time that the gold chart is beginning to look really strong, that is what the event last night displayed.
Gold is incredibly resilient and looks coiled for an explosive move higher. We started our initial probe of the all-time high this week closing in on $1,430 before backing off. Look for another probe of that $1,430 level very soon. It won’t be long Eric before we take out that all-time high, particularly if the dollar falls off the edge of a cliff.
Här är en graf över dollarindex med kommentarer från Dan Norcini från i onsdags:
I mentioned yesterday in my comments that the Dollar was very weak even in the midst of what was most certainly a day in which risk trades were being pulled off and a rush to safety was underway.
Normally during such events, the Dollar along with the Japanese Yen, tend to be the beneficiaries of such activity. All that the Dollar could do was to end up a few points after spiking initially almost 100 points higher. That sort of activity was very telling and indicates that the safe haven bid for the Dollar was practically non-existent.
Today, with crude oil soaring, the broad equity markets, particulary the Nasdaq, getting slammed, and increasing unrest in the middle East as fear grows about the stability of Saudi Arabia, the Dollar is actually getting sold off. That is most remarkable.
I am thinking that the market is looking at the fragile state of the US economy and voting that rising oil prices are going to hit the US harder than most others. Keep in mind, that this is an “economic recovery” built almost completely around the Fed’s massive liquidity injections through its QE program. That liquidty is being eaten up by rising crude oil prices as if by a munching PacMan.
It is as if the Fed is pouring water into a container full of holes punched in it by a awl with the words “crude oil” engraved on the handle.
As I am writing this, I am also noticing that the long bond is fading quite dramatically from its best level of the session. That too will bear watching.