The feeling I have today is something akin to being long crude when war flares up in the Middle East. You're making money but since its on the back of such sad and tragic news, a lot of the fun is sapped out of it.
Though many of us are rejoicing as the naysayers and permabears are once again proven wrong, the fun in being right has its limitations. I'm sickened by what has happened to The United States of America. I'm nervous and, frankly, a little scared of what the future holds. However, the mental image of Mister Die-mon, The Wicked Witch and Ruprecht, all screeching from having a giant golden auger shoved up their collective butts for once sure makes me smile. HAHAHAHAHAHAHA!
As you know, gold and silver are screaming higher. There is a high likelihood that they will not stop here as the gloom of a truly lousy BLSBS number on Friday will overhang the markets for the next two days. That said, the best way to make money in the PMs is to always sell a little when everyone is buying and you must always buy a little when everyone else is selling. IF this rally continues into the morning, I'll be looking to lock in gains on my December gold spreads and then use any weakness to re-establish the same position, though I'd like to move my strike prices up to 1700 and 1800.
Here are a couple of charts. First up, take a look at corn! As you know, I've been dying to buy corn but I haven't had the liquidity to do it. Then, all it did was go down to the point where, by last Friday, it looked terrible. (Again, the key is to buy when everyone else is selling.) Now, corn stands within pennies of an all-time high. IF it trades through the highs of early June, look out! Remember, too, that corn is by far the most important grain. Yes, it's food, like wheat, but it's also a very important as a sweetener (think high fructose corn syrup) and as animal feed (think chickens and cows). Corn at all-time highs is very inflationary. Watch it closely!
Next is your silver chart. It's had a great day and I have a last of 40.86 as we head to intermission before the 6:00 Globex re-open. Watch the action around $41 very closely overnight. IF it can get through the highs of last week at 41.46, it will accelerate toward expected resistance between 42 and 42.50.
Gold is far and away the champ today. This is great news and proves us all correct again. However, it is terrible news for the U.S. and the world as gold at 1660 is signaling that the end of The Great Keynesian Experiment may be approaching even faster than we might think.
What I really want to focus on, however, is the weekly gold chart. Do you recall this chart I posted over the weekend?
I've been thinking about this chart all day...wondering if I could draw it accurately enough to draw some conclusions based off of today's action. Thankfully, Trader Dan posted almost the same chart this afternoon so I just lifted it off of his site. Thanks, Dan! I hope you don't mind. 
The only thing I would change is that I would take off the red lines. Look at the longer-term, blue lines, instead. IF gold were to penetrate and rally through that top blue line, currently near 1680, its advance will accelerate and the effect will be breathtaking. Conceivably, gold could rapidly move through 1700 and 1800 and maybe even make a run toward 1900 before pausing. Again, I'm not saying it will happen, I'm saying it could happen. The more likely scenario is that gold approaches the top blue line and then flattens out for a bit before making a run toward 1800 by late October/early November. However, watch that top blue line very closely as it will be a clear indicator of future price trend in the near term.
OK, that's it for now. I'll be watching things closely this evening and if I see something interesting, I'll be sure to let you know. Also, this site is growing rapidly but please continue to spread the word. The world is rapidly changing and we all need to affect/help as many folks as possible. Thanks again for all you do! TF
