Hi Pic!

This looks to me like another covert intervention supported by many countries to try and restrain spec interest in commodities. I think its clear that the bull move for all commodities is fundamentally driven, but one must also agree that ETFs and spec participation has contributed to the higher prices. This wave of investment demand is driving up prices for real goods and creating economic strain and inflationary pressure. Since the G8 and G20 have already documented intervention in other sectors, such as supporting the worldwide banking entities, and recently in suppressing the Yen, it is not something that can be ignored that they may also be quietly working to drive oil lower, and precious metals. By dumping huge contracts into the futures market they can create short term weakness and trigger profit-taking by the big hedge funds. That would account for the big downside moves we are seeing. It will NOT change the longer term trend and as I always point out, the action in the paper markets does not create one new real barrel of oil or ounce of silver. The hot money that is driven out of these sectors are just as quick to get back on board once the intervention loses steam.

I take this kind of action as a buying opp. However I am more timid right now because I think we are also seeing seasonal weakness: sell in May. So we could have lower lows ahead before the bottom is in. I am going to trade some of the market leaders that are most likely to rebound sharply within a couple of days, and hold off on the real bargain basement shopping. I have neither bought nor sold any ECU in the last week.

cheers!

mike