Worldwide Bailout

We had an absolutely amazing week for the US and world indices as news that joint central bank action was going to be taken. Many indices rose over 7% on the week which is nearly unheard of.

It's akin to a worldwide bailout with coordinated central bank action as they debase their currencies now together.

Nothing has been solved by this action, in fact it's going to hurt those who save in paper currencies the most.

Europe is still deciding to come up with some sort of plan and has a short deadline, but we just had a deadline come and go in regards to the super-committee and now there isn't a peep about that wasteful bureaucratic process.

This week I'm inundated this Saturday morning with my brothers awesome 1 and 4 year old boys and later today I'm taking my sisters wild and awesome 4 and 6 year olds to the Muppets movie so I'll be trying to keep this short and do most of my talking before we check into the precious metals charts for the week.

Luckily I did the charts and some writing last night and I've snuck away from the family at the moment, but I can hear them bearing down on me soon enough. Got to love them and spend as much time with them while they are young.

I see Jon Corzine is finally being subpoenaed and should be testifying or should we call it testilying?

In the wake of this the SEC is hoping to see fines for individuals who violate securities laws rise to $1 million from $150,000 while the limit for firms would rise to $10 million from $725,000. While this is a step in the right direction I think jail-time would be a much more effective deterrent since most times crimes are committed the money pocketed far exceeds even these new fines.

How about they just pay back all they made off the violation? That would make more sense to me, but common sense just isn't so common these days as you're well aware.

What was somewhat fishy to me this past week was the downgrading on several of the largest US banks and financial institutions which came on the even of the coordinated central bank announcement. Markets would have not taken kindly to this but the "good" news of central bank coordination annulled that bad news and stoked markets to the extreme.

Here's a good article to finish off this section detailing just how cheap mining companies are on a historical basis but that doesn't mean they can't fall further if we see mass liquidation in markets and I'm not sure what to expect on that front at the moment, but if currencies weaken globally, shares should rise to compensate for that to one degree or another.

Metals Review

Gold rose 4.06% on the week and finally looks poised to breakout much higher after nearly breaking down the previous week.

The large triangle pattern could persist a couple more weeks or so but not much longer. I have a sneaking suspicion though that next week when I pen these words gold will be above $1,800.

Volume in the GLD ETF was mediocre at best which is great for where we are in this trading range. If we break one way or the other out of this triangle we need large volume to confirm the move.

Silver bettered gold and rose 4.53% for the week and while it's impressive, what's more impressive is the rise in the S&P which rose 7.39%! We don't see moves like that very often.

Silver is in a sort of triangle here as well although it's not nearly as well defined but if gold breaks out higher silver will in all likelihood follow and outperform.

I mentioned not long ago that there is a massive $1.5 billion soon to be bought of physical silver and while charts and patterns matter, they won't once that type of money is put to work.

The SLV ETF volume wasn't anything to write home about but is typical of building a base or pattern. We need volume once we move one way or another, most likely up.

Platinum rose only 1.20% for the week but held the important uptrend line at the $1,150 area. We're in a descending channel here and while it's a tad long in the tooth it looks like it could still be resolved higher soon.

We need to see a good move with nice volume out of the channel and above the 21 and 50 day moving averages that sit around $1,580. Time will tell.

The heavy volume on Thursday in this futures chart is very encouraging as bulls simply did not want the chart to breakdown and ran the price back above support by the end of the day. Very nice action that foreshadows a nice move higher is imminent.

The PPLT ETF saw god volume Wednesday but not a lot the rest of the week. It's not telling me much but as I mentioned above the super volume reversal in futures above support is very telling.

Palladium was the out-performer this past week and soared 8.68% on the week. A solid break out of the bullish descending channel was perfect -- and saw resistance at the downtrend line tested but not yet bested.

Solid volume on this chart accompanied the breakout as it should have. We're now slightly above the 50 and 21 day moving averages to close out the week and that is super encouraging.

I'd say we could see a few days or so trading between the moving averages and the downtrend line before we see a nice move above it and a true breakout if volume is there.

The PALL ETF didn't see a heck of a lot of volume on the move up. Obviously as with the case of platinum as well, the real action was in the futures pits which means the real deal is what matters, not the paper ETF shares that can't be redeemed for physical metal.

Maybe we're seeing a switch here away from ETF's and into physical metals -- but it's still too early to say as one week does not make a trend.