Silver closed out cash trading little changed at 12.18. Open:12.20 High:12.31 Low:12.04. Two month high continues to be Friday's 12.52, and Monday and Tuesday both traded inside the Friday's intraday range. There is still positive momentum in the silver price with prices advancing >10 cents a day for the past three weeks.
The Fed announced a pause today, but their accompanying language was viewed as hawkish-that is to say-they continue to hold the possibility of further tightening over the market's head. http://www.marketwatch.com/news/story/Story.aspx?guid=%7B0FEF68F2%2D6156%2D4BCB%2DB903%2D8B2D44C2E2EB%7D&siteid=
I view this statement as being unusually opaque. It will not give the market any new information beyong today's pause, and I think that more than anything the market wanted future certainty from this meeting. This is why the equity markets sold off even though they originally jumped at the news. My view on equity markets is that they are exceedingly vulnerable.
In the oil market, oil did not follow through on yesterday's price advance leaving a rather noticable chart resistance at $77. When hurricane Rita hit New Orleans last year, oil was trading at $70 dollars. In the days following the hurricane, gasoline ran up almost a dollar per gallon-a 50% rise. In that same week, crude oil was unable to rise above $71. I remember being shocked at this since a huge amount of crude had been taken off the market indefinitely, and watched in fascination as a "sell-the-news" phenomenon occured. Crude oil proceeded to sell off to 55 dollars and didn't manage to make a new high until 7 months later. I would not be surprised if the BP announcement on the Prudhoe Bay closure provides a similar top in the oil market.
Given weak price action in PMs both yesterday and today, and my outlook for Crude and equities decidedly bearish, I am going to advise to be out of any silver longs at this point. If you have not managed to close your silver long in today's trading, I recommend you do so immediately. My recommended target for anybody who is short silver is $10.70.
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