Update On Silver Mania 2

A few weeks ago I wrote a couple different pieces talking about the potential for another Silver Mania occurring. Silver had blasted up by 33% without the slightest hesitation along the way, something I hadn't witnessed in my 22 year trading career. Since then we formed a double top in the $25 area and tried to set back yesterday falling to just under $24 before Bernanke started talking.

Once again, Bernanke threw fuel on the fire and today all the gold and silver etfs are going through the roof. Let's face it, Bernanke is trying to use "trickle down" monetary policy to stimulate the job market the same way republicans used fiscal stimulus in the 80s. Whether or not that works one thing is for certain, it is fueling the fire in an already revved up precious metals market.

One thing I'm going to be watching is the latest release of the Commitment of Traders report, specifically the "Bank Participation Report" to see how much of the HUGE short position has been covered. In my opinion that has been the oxygen to go along with the Fed Fuel. The two combined have created an explosive combination.

Here is a reminder of what happened 30 years ago!