Whew! Tfmetalsreport

OK, it appears that the coast is clear. The entire MFing Global fiasco had the potential to seriously pressure the commodity markets but...at this moment...it looks like we're going to survive.

It had the potential to get ugly. Yesterday, when we were getting the waterfall declines in the metals, I feared that another September rout was on. Silver could have dropped $5 again and gold could have dropped another $100. This would have ultimately led to more margin hikes and...well, you get the picture. Why, you ask? Simple:

1) MFing Global clients are restricted to "liquidation only".

2) This seriously disturbs the normal, fragile equilibrium of buyers vs sellers.

3) Knowing this, other paper silver holders attempt to "get ahead" of it all by selling.

4) This prompts MFing Global clients to sell.

5) This leads to more selling pressure.

6) Maybe JPM helps things along with a few, new shorts.

7) Down it goes. No buyers means no bids. Serious, cascading waterfall.

This is what I feared yesterday morning as I helplessly observed the action through my Iphone. Miraculously, however, silver and gold both stopped and reversed, right at critical support. This is very encouraging. Maybe silver is finally at a point where fundamentals are being recognized. Instead of waiting for even lower prices to develop, buyers stepped in and turned the tide. Again, this is very encouraging.

Now, by no means is this over as the MFing Global situation appears to be a rabbithole of corruption. However, the moment in time where the imbalances existed that could have crashed both silver and gold has passed. As the title of this thread states: Whew! One caveat, though. I'm going to be out and unavailable all morning again tomorrow. Yesterday marked the second straight panic-type event that has occurred while I was away from my post, the other being the selloff of 9/22. Let's just hope that tomorrow doesn't make it 3 in a row!

As mentioned above, things look encouraging. You can see it on both of these charts. IF these rallies can continue, both metals will move through their highs of last week and will be set up for further extensions of the gains. I'm still expecting $1810 in gold and $37 in silver sometime this month. A move through last week's highs will make those goals look easily attainable.