Commodities: ON

Tyler Durden's picture

And just like that, without rhyme or reason (well, technically the draw down in crude was substantial with crude inventories dropping by 3.8MM barrels, on expectations of a 1.7MM build, not to mention gasoline dropping from 1.275MM to 119K) the entire commodity complex explodes, after the market tired of today's 3 hours of contractionary speculation and rotates the dial from Max deflation to Max inflation, bypassing anything in the middle. Expect the ramp to continue until the robots, which have now made commodities their latest stomping ground, tire of lifting every offer and go into full sell off mode, since it appears that once again nobody knows how to trade the end of QE2 and/or start of QE3. In the meantime, silver is up over 6% since yesterday. "Price Stability."

The driver: always and only the dollar. As the relative dollar strength value chart shows, while silver was underperforming the DXY by almost 6% through yesterday, it has now caught up as another round of dollar weakness has materialized.

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rocker's picture

What's up with it.  Risk on day.  Or Bear trap.

Arius's picture

thats what I dont understand about all this business of investing...everyone from Soros, Rosie, Buffet (of course), Blankfein tells you time to sellll commodities and all of sudden the opposite happens....hmmmmm....may be just bet the opposite...makes sense actually why would anybody tell the truth for free???

Pepe's picture

Or: the famous lying/profit correlation tha Bob Pasani always forgets to mention

BobPaulson's picture

What's not to get? Insiders say sell, drones sell, insiders buy. Reverse. Wash, rinse, repeat. The only way to always make money regardless of price is to be in front of every trade. cf. P.T. Barnum.

Clorox Cowboy's picture

Just  increased volatility associated with all the pressures building worldwide...nothing to worry about.  You'll know when it's time to panic.

Cognitive Dissonance's picture

One last run higher for all risk assets before the gutting that opens the door to unlimited printing.

Overheard in the Feds chief executive bathroom: "Make me stop writing bad checks."

ZeroPower's picture

One last run higher for all risk assets before the gutting


Absolutely. Notice the huge put OI in the equities (SPY) and everyone's beloved SLV across the coming near months. For long physical i suppose youre fine (though why not buy back at a lower price?) but for any paper longs id def be uneasy holding any sort of long, equity or otherwise, after today and the eventual (unsuccessful) test through 1349s ES or so.

firstdivision's picture

Bull trap is more like it.  Get people to start buying in as traders are trying to unwind so that they can put a down payment on a rental in the Hampton's, hookers....err Ukrainian models, and coke.


If this does continue into July, then we will have a possible repeat of '08 on our hands. 

Calculated_Risk's picture


Hold on to your pants... it's gonna be a wild ride.

Not sure about Ukrainian models.. got some American business ladies though..

bernorange's picture

dollar cost average and sleep well at night

tmosley's picture

Exactly. This has been the winning strategy for years.

tmosley's picture

When I get a large sum of money like that, I usually subdivide it, and cost average that amount, depending on the bullishness or bearishness of the market If highly bearish, like now, I will buy in fewer increments (I did this in 2008), but if it is highly bullish, I will buy in more. Usually, my minimum for non-monthly allocations is four steps(minimum of a month between, absent a massive spike downward), with 6 as my max.

So basically, if I were in your situation, I would divide up the dollars and buy a pile every month at options expiration, or on a major dip like this one. Should sentiment turn bullish again, you are getting paid often enough that you can still do it monthly.

Do your best to keep some dry powder. I got caught without any on May 1st. It turned out alright, since it kept going down on margin hikes, but still--if it hadn't been for those, I would have missed the move.

BobPaulson's picture

ROTFL. You will note that not everybody is born with the sarcasm lobe fully developed.

Robot Traders Mom's picture

It is always a good time to buy metals if you believe in the end game...

dexter_morgan's picture

Hey, where's your kid at - no posts in this one?

Robot Traders Mom's picture

my kid is in juvie until saturday. the cops caught him molesting neighborhood cats again...he is a fucking weirdo.

Strider52's picture

Well, I didn't time the bottom perfectly; silver was at $32.50 or something like that, but Sunday night I got me a dog-choking load of 10-oz Englehard .999's from Apmex, for $34.68 spot. I actually paid a bit more for the preemo, shipping, gotta-make-money charge, expenses, fees, dog-choking fee, etc, but I bought while spot was under $35, so I feel pretty good about it.

  I'm amazed that it's still possible to buy silver and gold, and it's quite easy. Somehow, I don't think this will be the case forever.

Gotta love Robo's Mom's avatar. Too corrupt to prosecute fer sure.

InconvenientCounterParty's picture

it's simple now.

Wait for a margin increase, then BTFD.

kushmere's picture

Exactly, the plan seems to be:

 Use margin hikes to keep Silver under $36, Gold under $1500, and Oil under $100. Those appear to be the official government "prices" for commodities. Absolutely insane to see this level of price manipulation in a free market.

tmosley's picture

Coincidentally, $36 was supposed to be the level at which JPM started feeling large amounts of pain from its silver derivatives. I thought it was non-sense when we blew past it, but when the price got knocked down to this level, and not much lower, it seems to lend credence to that theory.

kushmere's picture

We hear a lot about $36 Silver, but I you have to consider the actions of Oil. I'd love to see some good research about why keeping oil artificially low is so vital. These market fluctuations are very dangerous, and TPTB know that. Such high volatility drives good money out of the market.

Calculated_Risk's picture

Because high oil prices will keep the jobless recovery from happening!!!


DosZap's picture

With 100% Margins now, what's the wait for?........LOL

tonyw's picture

Look on it as a long term protector of your wealth if you can't stand the thought of it going down by 30% then don't buy. Buy only what you can afford without needing to cash it in for a small emergency, put it away and forget about it. Don't try and second guess how the banksters will screw the market, remember they have all the knowledge and lots of fiat and will screw you over without a second thought. I bought most of mine at the end of '08 and have just sat back to wait, I'm tempted to buy some more now that my wealth has gone up.

Get all your other stuff sorted, loans paid off ...


Gordon Freeman's picture

On like Donkey Kong, baby!

TruthInSunshine's picture

It's moving too fast.

I'm still on the phone with the SEC trying to get my BEE.PR.C profits reinstated.

Target blamed the weather for poor sales, and Richard Koo said QE2 had no positive impact on money supply.


TheTmfreak's picture

It is the cool thing to do nowadays. (Blame weather).

TruthInSunshine's picture
Gas prices, energy prices, food prices - NOT hurting American Consumer (nor almost all retailers. Got it, people? The Bernank says there is too little inflation, but that even if there were inflation (wink), it wouldn't be a bad thing.


TheTmfreak's picture

Thanks. I will make sure to keep repeating that to myself ad infinitum so that it may stick.

Use of Weapons's picture

They're technically correct, in that way a broken clock is correct twice a day.


The science is still being done, but fairly sure that's a black swan of epic levels coming to a hemisphere near you; we'll see what next winter brings (50% to 25%? no-one knows at this point, barring the fact "having an atmosphere is a good thing"). Note: at this point there's no danger of anything more than sunburn, so don't press the panic button quite yet.


AladdinSaneGirl's picture

Moby just tweeted: Turns out that there is a new breed of artist in lower manhattan 

Artists, sure ... 

BTW this post is NOT junk, if you actually read the link properly! 

augie's picture

I'd junk you just for following moby.

GottaBKiddn's picture


All inethical market manipulation aside, shortages = higher prices.



dcb's picture

you guy are really bad at technical analysis.

Tyler Durden's picture

True. But more importantly no DeMark indicators and MACD oscillators were maimed in the charting of the above HFT-inspired pandemonium.

buzzsaw99's picture

He should borrow your crayon and ruler?

SheepDog-One's picture

Someone still thinks this is all about 'technical analysis'? Too funny....may as well just throw chicken bones and read em.

BobPaulson's picture

I notice you didn't say sheep bones. Your icon reveals your bias...

RockyRacoon's picture

I prefer pigeon entrails.  More accurate when done at high tide as well. 


Cognitive Dissonance's picture

Fresh pigeon bones don't have the correct feel or bounce and should be avoided.

JW n FL's picture

are you saying tha logic and fundementals have no place in buying or selling stocks or commodities or anything for that matter that the Government is manipulating on a daily basis?


well you sir are just a negative nelly! there is nothing wrong with the FED moving any and all markets at all times while anyone with a clue instide thier head sells and gets the fuck out of dodge!

***** Wall Street Insiders Sold 565 X’s MORE Stocks than they bought! *****


The FED is doing Gods! Work!! You are just one of those internet terrorists who by spreading the truth and numerical facts.. would like to destroy the Lies the FED has worked so hard to put into place!


There is NO! Constitution anymore and there has not been a working Constitution in a good lil while now!  Bush 2006! Thanks Republicans! Great Job ruining the whole fucking Country!


Have a Political View? Share this view on Twitter or Blog? **YOU!** are a Terrorist PER Homeland Security See Link(s) and Official Report(s).


Job Well Done Republicans!! Job Well Done!!

Howdan's picture



"The FED is doing Gods! Work!! You are just one of those internet terrorists who by spreading the truth and numerical facts.. would like to destroy the Lies the FED has worked so hard to put into place!"


Hahaha love it sir - I haven't read a comment that made me laugh this much in ages! Too true...

DosZap's picture

Not that it matters, but THE KING has done more damage in a shorter period than any Republican.(Both are complicit).

Him aside, I cannot believe the Congress is hand in glove with the destroyers of what was the greatest nation on earth.

Something has to be in the water.

tellsometruth's picture

do not want to get into a political pissing contest here as that is want is wrong, too much pissing around while actually doing nothing, but I think a logical person can step back and easily see both parties are a lie

rocker's picture

We need a new abbreviation.

JBTFP = Just Buy The Fucking Physical

fuu's picture

You can always try Slope of Hope and the Evil Speculator if you want TA.


Or xhamster.