I have a feeling that something very nasty is about to break news. The action in the commodity arena (which I chose to highlight because of the extreme leverage available there) is the antithesis of a short squeeze, it looks very much like unwinding of speculative money. What does that mean? In a nutshell, the Fed has kept rates between zero and .25% for an extended period of time. Ever wonder why banks earnings are pretty much garbage if you take away their trading desk operations? They take money which for all intents and purposes, is nearly free and invest it in speculative assets, some have been in stocks like PCLN, but the bulk has gone into the commodities complex. It looks like they are desperately trying to unwind that risk exposure quickly before "an event" occurs. An event could be the hiking of interest rates, at the leverage they're using a 25 basis point hike could be disastrous. It could also be a reserve ratio requirement being lifted, I don't know what the event is, but action like we see below is telling us something is coming. I keep falling back on the April 28th date that I showed you yesterday.
SLV is interesting in that not only is the CME hiking margins, but brokerages are putting in some of the fiercest hikes. I can only assume they're going after silver so aggressively because of its recent parabolic activity-the flavor of the month.
Interestingly, TLT is creeping up very quietly. For the price pattern involved, volume should be huge, it's not. It's almost as if there's a migration into TLT that's trying to go unnoticed, that kind of action or non-action is precisely what you'd expect to see in a quiet rotation. It' odd behavior, it's not typical at all and should be kept on your watchlist.
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