Silver had quite a day today careening quite wildly as it soared to $19.34 and then faded back to unchanged. I suspect some of the longs who had some very nice paper profits decided to ring the cash register and go home for the week feeling pretty good about themselves. Bulls make money; Bears make money but Pigs get slaughtered. Morgan probably showed up above $19.20 anyhow. Even at that, it is very impressive at how shallow yesterday’s dip lower was and how short-lived it was.

We’ll see what kind of light this week’s COT reports will shine on the goings on in both pits. If I note anything of significance, I will post something up. The moves in silver in particular over the past three days unfortunately are not going to be detailed internally in this report but we will catch Tuesday’s action and that might provide a clue as to what occurred in there the remainder of this week.

The HUI, while not showing quite the gains of the broader S&P 500, is slightly higher today. Bulls are fighting to close the index above 480 which would be quite a technically impressive feat. Should they be able to hold their ground, such a close today would set up a strong possibility of a run towards 500 next week. It all depends on just where this thing closes this afternoon. A drop back down towards 470 would embolden share shorts who would try to take them lower in the early part of next week. A strong push past 480 gives the bull the clear advantage heading into the same time frame. The battle is joined.

Bonds got the snot beat out of them today as the steepeners were put back on with flatteners getting forced out. Judging from the ferocity of the downdraft, it looks like too many got caught leaning too heavily on one side of the market and were snared. Someone made one helluva lot of money today in the bonds if they decided to sell when Bernanke decided to start yakking. Even with the strong move lower, the bonds remain in an uptrend. We will see how they fare if and when they approach the 20 day moving average near 131^31.

The highest monthly close in the bonds was 138^02 back in December 2008. They spiked about one point shy of this at 136^31 this week but ran out of momentum. This area seems to be offering significant resistance. I shudder to think of the implications for all of us should it have given way. AS it is, bond bulls now have to take this level out in convincing fashion to continue the relentless rise in this market. Next week, and in particular next month, are going to be key to the future direction of this pit.

Once again the Dow mystically moved back above the 10,000 level. It seems that level has now become somewhat of a national security matter.

Courtesy: www.jsmineset.com

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