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.