Just like in the cinematic masterpiece that is Armageddon, the rocket (Congress) is about to land on the approaching asteroid (US debt) and blow it up (extend the debt ceiling).

Certainly our growing debt load is worrisome to say the least - but this fiscal armageddon is a relative game and there's still a few asteroids with precarious trajectories hurling towards our friends in Europe.

Judging by how the precious metals market has responded this week to whispers of resolution in the debt debate (quick pockets of weakness) gives traders some insight as to how the currency markets, and by extension the precious metals market, will likely respond once the issue is resolved.

The euro hit its 61.8% fibonacci retacement level Tuesday from the early July low and has pivoted sharply back through the descending triangle on the daily chart. Judging by the momentum oscillators it has a ways to run back towards the bottom of the formation ~ 140.

I believe silver (and likely gold this time around) will follow the euro sharply lower as in early May. How the euro handles the bottom of the formation will likely tell if silver's weakness is just transitory or a more serious concern. With a relatively loose formation such as this, a bearish descending triangle can quickly become a bullish descending wedge.

Stay frosty traders.

Further bias - War is Hell

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