Silver Carves Out A Bottom And THEN MEETS THE HAMMER

SD Midweek Update: Silver may have finally carved a bottom from the latest price smashings. But silver just found out, yet again, what "Hammer Time" is all about. However, significant downside pressure from here will be hard to pull off...

Since the silver market opened on Sunday night, there seems to have been a bottom carved out on the chart:

The action on the daily supports the rounded bottom:

However, the fingers are at the ready, and as the lesser of the two jobs reports just hit the tape, this is the reality we face:

Yes, it is disgusting. It's not a song and a dance. Every opportunity is used to sell paper silver into the market. This week, they cartel has the upper hand with all markets in China closed all week long. However, let's put it in perspective. Silver was $19 just a year ago. Silver is severely lagging gold in terms of performance, and American Silver Eagle coin sales were abysmal last quarter, and all year really. If that isn't about as bullish as we could want for what we are served, then I don't know what bullish is.

There's even a GSR that is still screaming "buy silver":

Yes, we have to endure the Friday non-farm payrolls report (Jobs Report), and while that traditionally means "smash", it might not be wise to count on it this week. The ADP Employment report shows the slowest pace in 11 months, and now we start to get the effects of the hurricanes showing up in the official government employment lies statistics on Friday. Surely any weakness will be asterisked to indicate "transitory" labor market effects due to mother nature, and the MSM will be hyping the official report, so see a smash we may indeed.

But just as nobody is prepared for shocks in the employment report, and just as everybody is already set to dismiss a low number as temporary weakness, that is exactly the type of complacency that could come back with a vengeance. What if it's not temporary as shown in October and November. What if the retail stores do not see an major boost in hiring in December? What if casinos in Las Vegas have to lay-off workers because of a drop in business? At what point would reality catch up to the markets? February?

The outlook certainly does not look good for the employment situation, and no matter how the Fed and the BLS spin it, the consumer-driven economy at street-level does not lie. At some point we will be in an official "recession". How is the stock market going to keep going up in an official recession when the Fed is raising rates and selling treasuries (and not buying them)? The Fed is actively looking to devalue the dollar by 2% per year, which is another way of saying they want you to be able to buy 2% less with your currency each year, but if the stock market keeps going up, up, and away?

If that is not the sign the hyperinflation is about to take hold, it's hard to say what is. Besides, if we enter a recession without a severe correction in the stock market, will the vast majority of Americans who don't even own stocks anyway even stand for that? Think Occupy Wall Street meets Antifa.

And as of now, well, here's President Trumps favorite stock index, the S&P:

It just keeps going, and going, and going.

Gold looks better than silver, as it has all year:

Whereas silver has come down off the highs a year ago, the yellow metal is up off of the lows. We keep asking is gold going to catch down to silver or is silver going to catch up to gold? That chart on gold is still very bullish, and like silver, it looks to have carved out a bottom. Are they going to smash on Friday? They will certainly try. Will there be a price to pay come Monday if they smash too hard? We shall see, but by Monday, the latest decline will have started over a moth ago. Is gold on it's way down to $1,200? It is possible, but is the dollar really going to strengthen from here, are geo-politics really going to get better just as new tensions are adding fuel to the fire every day (see Catalonia), and will there be increased safety and security in the world and in the nation (see Las Vegas)?

We have been watching platinum because it has been in a correction officially:

Platinum is showing the same signs of a short-term bottom as is gold and silver. Are the precious metals really going to show continued weakness from here?

The dollar, just as the metals are bottoming, appears to be finding a short term top:

There is one significant difference, however. The U.S.dollar has been topping for the last five days, not the last three (like the metals have been bottoming). Is the dollar just going to consolidate in a sideways channel for the rest of the year from the looks of that chart?

We've played that consolidation game before:

And in reality, that consolidation played out over a very long time. From the Spring of 2015 to the Fall of 2016, the Dollar was in consolidation mode. Also notice we have had what look like four up weeks (we shall see how the week ends) on that chart. Are we going to see a repeat of 2014 from here just as the rest of the world can't handle a strengthening dollar yet again, much less President Trump wanting one?

In an interesting development on the U.S. Treasury paper market, it almost looks like the markets are going to front-run the Fed all the way until their balance sheet is unwound:

When the U.S.enters recession, or as the Fed's baby (the stock market) begins to correct, or as labor market conditions worsen, the Fed is going to reverse course. The Fed is long past the point of gradually raising rates over time to indefinite market bliss with no economic downturn in sight after 10-years of recovery.

It is important to understand that crucial difference. The Fed, President Trump, the stock markets and the MSM propagandists are at extremes in rainbows and unicorns as far as the eye can see. But the precious metals are just as extreme, only with pessimism. The bullish case for gold and silver just keeps building.

The VIX is starting to look like it wants to wake up:

Just another bullish indicator for the metals prices. The belligerent smashings may continue in gold and silver for the rest of the week, but it is getting harder and harder for the smashings to continue even without raising eyebrows in the mainstream. At one point, it becomes so totally obvious that the people simply grow-up. And when they do, they will come looking for the maturest asset there is: precious metals.

And if commodities are any indicator, copper looks to have turned the corner as well:

That is not just a simple three day bottoming like in gold and silver either. Or a five day topping like in the dollar. That is a several day bullish consolidation. In the face of all the analyst who are calling the copper action a "fake rally". We'll see, but for those new to commodities in general and copper in specific, the entire internet is comprised of electric pulses being sent down copper wires. And that's just one tiny use for the base metal.

On Monday we asked if crude oil was going to take a trip back down into the $45 - $50 trading range it has been in for quite some time:

It is looking more and more like that is the case for crude. However, if the U.S. dollar is finishing up the bear rally, WTI could see a tap-and-bounce off of the $50 level.

So the bottom line for the rest of the week is one of continued pressure on the gold and silver prices. There are two main factors which can be used to smash price even further, and that is the Non-farms Payroll release this Friday, and the fact that markets in China are still closed for the rest of the week.

If they push too hard, however, they may just bite off more than they can chew.

Bonus Chart:

This Midweek Update bonus chart has been brought to you buy the ESF and the Fed, who would like to remind you not to buy the dip...