Dear Jim,

Here is some possible evidence to support your thesis on Blasphemy.

I am forwarding along something that I have been monitoring which may be of interest to you as it supports your notion that the Euro may strengthen. I apologize if this is something you already know and are monitoring but if not I think you will want to keep an eye on this information.

Someone knows something and the big boys (Bankster Boys) are ahead of the curve positioning. I posted the last two Euro FX futures COT reports below, the newer one first for you to see and underlined the commercial long position numbers. Over the last two COTs $9.4 billion worth of new longs have appeared in that category. That is a lot of cash for pros to burn on a currency that we all know is going to fail, right?

Keep up your great posts I really enjoy reading your comments on the various news coming out.

Still long gold, silver & miners,

CIGA Roger

The Pursuit of Balance Finds Few Masters
CIGA Eric

How many investors motivated largely by fear and highly motivated misinformation campaign dumped their gold and silver positions last week?

Jim is absolutely right -  Please make an effort to stay balanced. Greed is a condition of lack of balance similar to fear.

Human behavior driven largely by evolution ensures that Jim’s pleas for balance of mind, body, and spiritwill go unheeded.  Emotion is the enemy of trading profits, but few traders ever achieve balance within a world that cajoles and encourages the instinctual responses such flight or fight (fear and greed).

Gold was first to record seismic activity that warned of an impending price eruption in 2008. This rumblings was followed by significant seismic activity in the silver market. While a similar pattern is unfolding in 2012, it will likely go unrecognized within a community currently unbalanced by fear.

Chart 1: Gold London P.M Fixed and Long/Short Concentration Index (CI): 1 = Bullish Setup, -1 = Bearish Setup

Chart 2: Silver ETF (Silver) and the Silver Long/Short Concentration Index (CI): 1 = Bullish Setup, -1 = Bearish Setup

How many those gold and silver sellers reallocated to bonds?  The message from the market says bad idea.

Chart 3: US Treasury Bond 20YR+ (TLT) And US Treasury Bond Diffusion Index (DI)

The invisible hand is repositioning against the fear in plain sight.  Why not?  Everyone is too busy screaming and bitching to notice.  The top ten inflows for the future and options markets which includes gold, silver, precious metals, Australian dollar (commodity currency), and copper reveals its true intentions despite the inane headline chatter.

Table: COT Futures and Options Money Flows

More…

Jim,

$1525 was pretty close. $1510 didn’t happen.

Still, that was close enough for me.

CIGA Stefanmo

Jim Sinclair’s Commentary

What about more Morgans, or is Morgan’s OTC derivative position totally out of control and still wide open?

Courtesy of CIGA David

I have been watching junk debt relative to nominal Treasuries (IEF/TLT) intraday. I began seeing some very wild intraday moves, with junk debt prices collapsing (yields spiking) while safer Treasuries were aggressively being bid up (yields dropping).The speed and magnitude of this credit spread widening on Wednesday was indeed meaningful. Thursday, that spread widened even further, in a way that suggests that a credit event may be underway in the U.S. and that contagion is here.

Here we are, 48 hours after the major movement began on Wednesday, and a look at the daily chart of junk debt and sovereign debt EMB -0.09% shows that a "crash" may actually be here in credit markets. I say "crash" in quotes because while the price decline may not seem like much, a crash should be defined by how far back in time an investment sends you in its decline relative to a short time frame.

Meanwhile, Treasuries have spiked, with 30-year Treasuries below the panic 3% level. To say that "credit leads the stock market" is too simplistic. It is widening credit spreads which lead risk-aversion, and vice versa. Credit spreads lead equities, not credit.

In the past 48 hours, the magnitude of the decline of junk debt and sovereign debt relative to Treasuries increasing suggests meaningful credit stress is occurring. If junk/sovereign debt doesn’t stabilize and improve shortly, the odds of a follow-through sudden break in stocks in the U.S. increase substantially.

Credit spread movement and improvement/deterioration is pretty much THE thing to focus on.

The move in debt spreads over the last 48 hours has increased the odds of something major to come.

Notice that this isn’t a prediction, but a statement about how such a scenario could occur if indeed junk debt deteriorates further beyond the last 48 hours, and under the assumption that the magnitude of a decline could lead equities lower.

The most important question in the world may end up being answered soon after all. I remain defensively positioned in bonds and still short the US and European stock markets with an emphasis on short financials. All positions held since March 14.

Stay Balanced And Employ Discipline of Thought CIGA Eric

I absolutely agree, Jim. The Federal reserve has not failed any sitting Administration as long as I can remember. Unfortunately, I cannot remember much past Jimmy Carter. Jim is right, the Fed’s ability to stare down the market is finite.

The steady decay in the

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