Good day! It's been a very rough week for commodities, but the exhaustion move I wrote about in Thursday evening's column held prices into the weekend, creating a narrower session as the panic abated (at least temporarily) into the weekend. Silver was particularly hard-hit last week. As those of you who have been reading me for some time have seen, I've been cautious on silver over the past several weeks, but the catalyst for a larger correction came on the heels of an increase in reserve requirements across a number of major exchanges that went into affect following Friday's close a week ago on May 29. Silver is down 27.39% so far this month at $35.287 an ounce as of Friday's close. Gold, which also took a beating last week, is down 4.16% this month to $1,491.60 on Friday.
Dow Jones Industrial Average
Oil took a dive with the precious metals. It had also been showing signs of exhaustion with the daily pace shifting at highs heading into last week whereby it was having a more difficult time making new highs and was experiencing a great deal of price overlap from one day to the next. This is one of the things I always look for as an indication that a corrective move is on the horizon and we saw this take place in gold last month as well. Crude oil ended last week under the $100 a barrel level once again at $97.18 with a loss of 14.70% so far this month. We can easily see it continue to slip this week into 200 day moving averages.
The trend action in all of the strongly-moving commodities from last week can expect to slow in the week ahead with greater chop once again from day to day. The added volatility in this market will keep it active, but the best time frames for trading it at present will be intraday using 5-15 minute time frames for pattern development.