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0920 EST Friday January 27 2006

Good Morning: As we suggested over recent days Silver finally broke upwards through that critically important resistance level around $9.30 and how critical that level has turned out to be as Silver soared 50 cents higher already as we proposed it might as the magnetic pull and attraction towards 23 year resistance at the $9..88 level began to manifest itself exceedingly strongly. $9.88 could potentially be the ultimate waypoint on its journey towards the next major resistance level at $14.93 registered in February 1983. Beyond that lies $25.

George Soros, speaking from Davos is extremely concerned over the developments out of Iran, describing them as worse than the cold war and potentially threatening to our very existence and believe that he is foreseeing some very bad developments in all between the more hostile forces in the Middle East that are unlikely to back down, versus the more friendly Governments over there, but what was telling is how he feels that there is a kind of Global preparation and hoarding going on that is putting increasingly upward pressure on oil, which has resumed its uptrend overnight and is really only a few dollars away from setting new all time record highs, which could extend prices towards $75. The danger of reaching such levels might be that the magnetic pull of $100 oil might serious begin to kick in also.

We have talked about the possibility of a Limit Up move in Silver $0.50 cents and Gold $25 developing sometime soon and it is important to understand that the higher we go, the more likely some limit moves might actually eventuate because the limit moves are a decreasing percentage. Overnight Copper surged to new all time record highs yet again and Platinum looks set to close at a new all time record.

Yesterday we suggested that the Equity markets might again follow through to the upside taking out important resistance levels and they did just that with the Dow soaring 99 points, but that is only half the story: Readers will know we turned rapidly and manifestly bullish at the beginning of the week as World markets began to rebound and even forecast in what may be a World first, the Nikkei Index soaring to new multi year highs unexpectedly for most and we did not have to wait long: Overnight the Nikkei soared 569.66 points to 16460.46 in one of its largest ever moves in decades and nearing New Century highs in the process. This morning, virtually all of the World's stock markets are sharply higher and this may mean many new all time records are either being set or close to being set. In what may be a big surprise to many, in spite of last week's sharp selloff, some US indices are already setting new all time record highs. Most notably, the Russell 2000 is literally soaring as is the IJS S&P 600 and there is a strong likelihood they will be joined today by the S&P 400 MidCap.

As we predicted might occur, Mexico's IPC closed at a new all time record high yesterday as the best performing market in the World of the past few years and 20,000 may not hold it back, it has so much power behind it, for now it looks unstoppable. We'll see. At the same time Brazil and most of its Latin counterparts are in the same unbelievably strong upmodes, that don't look like quitting soon either, still, naturally this mornings shockingly lower than expected GDP report coming in at a measly 1.1% is cause for concern on one hand, but on the other, it may mean that Greenspan will not raise rates next week as we have now suggested for some time and even though the Fed may have succeeded in architecting a mid-decade pause, the markets response to a cessation of rate hikes might still be very surprising.

Again our thoughts of a few days ago with our title 'Important Days Lie Ahead' was a forbearer of how the end of January might play out both for Equities as well as Precious Metals and other important markets such as the Energy Sector and now many other markets, is shaping up as one of the most riveting and important month ends in some time especially with the Fed changing of the guard next week.

Trade Well
From the Desk of Savant

Good Morning
I continue to field the same question regarding our chosen Gold Strategy. "How high can it go?" The answer is "I don't know". Fact is it can go as high as Headwaters up 95 times ~ 120 ~ 180 times fairly easily - Using proprietary forecasting techniques the guy who made $1.5 M off our advice last year long before Azco even took off predicted a $74 share price based on the fundamentals of full production at the Ortiz alone and he thinks we could hit $16 this year - I tend to agree with him, but again that is simply my opinion.

Trade Safe
From the Desk of CT

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