DonL's option cube is a VERY instructive tool for keeping an eye on the new jerk filth. I have followed it for over 10 years and it is one of the best even if it is not in the public domain.

The current primary floor for gold is at $700. However looking inside the numbers theer is another floor starting to form at $860. This is very constructive!!

The primary ceiling is $1,000 however there are in the money calls all the way down to $770. I have never seen such a spread of in the money calls. There are over 40,000 calls at $1,000. This, in the past, would act as a ceiling as long as it persists. The structure is like that all the way out to the June contracts. As don puts it; "As you can see the 1000 dollar strike price is still the PRIMARY CEILING for gold prices (green shading with boldface type), and we still might have a tough time trying to punch through 1000 until that huge block of plus 40,000 net calls is eroded away, which should happen sometime after the June 2009 option cycle expires in late May, assuming of course that no new net calls are added in more distant option cycles."

The good news is that there has been a lot of recent activity placing calls at higher levels ( $1,100 and $1,150). don indicates the trend may be revealing a move by insiders to strengthen their long position with new contracts out of the money above $1,000.

The bottom line is that there is a lot of stress inthe gold OI. We will have a bit of a problem moving through $1,000 in any significant way and staying there. Next week could give a hint of how hard the filth will defend $1,000. If gold fails at this level we could see a pull back of $100 to $200.

Given the stress in global finances and the risk in all markets, I think the chance of a significant pull back is not that great, but this is only the second go at $1000 and we still see it as a resistance level. I see us hanging around this level unless we get some kind of "event" either market driven or political.

Silver will hang around and mimic the direction of gold, with a bit of + beta to gold.

As for paper (shares) the crooks still have too free a hand and I doubt that we will be very happy for the next few months. I look at the next few months as a popcoorn environment with a few companies experiencing a pop in price while the general trend is to lay around at depressed levels.

Here's hoping that ECU pops! It sure has the potential.