Unearthing A Mountain Of Silver

September 20, 2001
Marc Dupee

Silver spiked in one of its best gains in years yesterday on violation of
technical resistance and on fear that there will be problems accessing the
veritable mountain of silver warehoused beneath the mountain of rubble at
the World Trade Center, the scene of America’s worst attack. Access to the
area is already extremely limited (traders are ferried to the exchange) and
the rally yesterday was on concern that the physical delivery of the silver
housed beneath the site — over 29 million ounces, or 5% of annual mine
output — would be impeded.

But the rationale for yesterday’s rally waned and traders took profit on
windfall gains today, driving the price down 21.0 to 453.5. Dec
silver
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session.

Blue chips led the assault on stock index futures, as Dow futures
December Nasdaq 100 futures
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Implosion-5 List, again mounted the biggest downside move. Dow futures are
still being dominated by the downside expansion “shock” bar that
occurred on Monday when stocks re-opened for the first time since the
attacks and the Dow Average suffered its worst point loss ever.
Both
Dow futures
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(
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The Blocks short entries, with the DJZ closing down 395.0 at 8338.0 and the S&Ps
closing down 32.50 at 984.30.

The Bank of Japan denied it issued orders yesterday to intervene in
currency markets to weaken the yen. The yen sank briefly Wednesday after newswires reported the BOJ intervened, allegedly with the intention of keeping
the value of the yen down in order to keep exports cheaper and stimulate
Japan’s economy. The yen came soaring back, closing .0107 higher at .8671.

The yen had already moved to the top of a six-month range in the
aftermath of the 9/11 terrorist attack prior to today,
as traders sought a safe haven from vulnerable dollars. The yen has also
been on the rise because monies are being repatriated from abroad to close
out the fiscal year, which closes in September. The yen has risen in four of
the past five years in September due to the end-of-the-fiscal-year effect,
but the move has been exaggerated this year due to new rules requiring firms
to mark-to-market financial assets, forcing firms with losses to bring home
even more yen to meet the new accounting standards and balance books that
may have losses from Japanese stocks which have hit 17-year lows.

The yen gapped to a seven-month high, triggering a Pullback From Highs
set up.

Despite the rally in the yen, December dollar index futures

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events in the US would negatively impact both economic growth and inflation
on the continent. This opens the door for another ECB rate cut. The ECB
followed the Federal Reserve in cutting interest rates .50% Monday, the
first day the stock market re-opened following the attack.

With so many markets falling due to the perception that a declining
economy will sap demand for commodities, not all of the contracts that could
be on the
Implosion-5 List fit on the list. But we have an unusually high number of
contracts on the
New 10-Day Low List, attesting to the perception of waning commodity demand
and also serving as a sign of downside momentum.

November soybeans
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PowerRating) dipped below well-defined support to
provide a
Turtle Soup Plus One Buy opportunity and closed up 4 at 473 1/2.

Unearthing A Mountain Of Silver

BUY THE FEAR, SELL THE GREED

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