Tuesday Charts

Sorry for my tardiness this morning. Mrs F is opening another yogurt store next week and the details are requiring considerable attention. I’ll dispense with some of the usual text and give you the main points to watch.

The main show for the rest of this week will be the dollar. It seems to have found a temporary floor around 73 on the June. Next will come some “surprisingly optimistic economic data” to give it the necessary fuel for a bounce toward 74. ADP tomorrow will be first. Regardless of the number, the keynesian shills will spin it as a positive. The big deal will be the BLS BS on Friday. After the revelation last week that the Fed has made their choice to sacrifice the dollar at the expense of the long bond, any and every opportunity will be taken to squeeze dollar shorts and manipulate the dollar higher. I expect this on Friday. The POSX could even extend through 74 and toward 74.50.

Dollar strength will certainly have a negative impact on crude and the metals so we need to plan ahead so that we are ready to do some dip buying. In crude, any move below 111, toward 110.50, looks like a great buying opportunity. What’s nice is that you can comfortably have a very tight stop, too, as a move down through 110.50 would signal a move toward 108.

So, where am I looking to buy the PMs? First as an update, I sold half of my June 1550 gold calls at almost the top yesterday morning, so I feel pretty good about that. I also sold two July 52 silvers, thereby creating a spread against my July 50. Feel pretty good about that, too. This has left me with a wad of cash that is burning a hole in my pocket. But, I wait. In gold, I’m waiting for a dip toward 1525.

In silver, I think its pretty clear now that a test of the Sunday evening panic lows of 42.20 is coming. Maybe as soon as later today. I expect a bounce there and that may be it but I doubt it. Momentum now is to the downside in silver so it looks like even further weakness is coming. Combine that with the short-term dollar strength that I expect later this week and I think we’re going to get a look at 40. If you miss it, don’t dismay. Next week, we’ll probably get a re-test of whatever the bottom ends up being before basing and heading higher into the end of the month and early June.

OK, that’s it for now.
Be patient.
Don’t despair.
Time and fundos are on our side.
We are still winning. TF

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