Tuesday, March 15, 2011
Gold This Morning: Selling, As in Panic. --Jonathan
Overnight turnover is the heaviest I have ever seen (~80,000 contracts) with persistent waves of selling pounding on everyone's hardwired $1400 line in the sand until it grudgingly gave way. The facts as of the moment have GSR slightly elevated at ~40.50, RSI under 50 for the first time since early February, open interest up ~4,000 contracts, basis Friday, and option vol clearly elevated. On any reasonable day none of these numbers collectively could provoke the trembling media tsunami currently engulfing our simple golden store of value. I have already digested the pretense and artifice of talking-head claims of the evacuation of Tokyo and QE 15 and we shall just have to stand aside and wait for the reality of our facts. Today: expect continuing mercurial volatility particularly with the active April option series expiring next week. The put/call ratio for the expiration anecdotely is heavier to the put side but only whimsical fantasy at the moment could imagine a squeeze play. Be careful out there.