Monday, February 28, 2011

Silver Wheaton's ride to the moon



The ancients called the metal "tears of the moon," which is apt the way silver stocks ran away from cheapskate traders, including me, in the final hour today. SLW, PAAS, EXK, even SLV put on a show for bulls that left bears in tears. The interesting thing is it didn't make sense.

SLW 42.70 (after hours), +5.1%
PAAS 39.27 AH, +3.2%
EXK 7.47 AH, +4%
SLV 33.20 AH, +2%

Silver futures were spotty in that late run. That leaves a series of passionate blogs across North America about the impending doom facing Comex and JP Morgan, which allegedly have nothing close in physical silver to what has been doled out on paper. All "end game" scenarios and conspiracy theories aside, what does it mean for traders in SLW? Should they unload at the all-time high (now 42.57 after hours)? Or hang on through the drama and danger of a battle against the big boys? After all, if there is scarcely any physical metal in those vaults, SLV (ETF) holders could A) be in for a huge gain, or B) be left holding empty bags.

In case of an implosion, does anyone really think Uncle Sam would let JP Morgan get buried? Wouldn't the Fed bail "the Morgue" out, a la all the banksters in the financial/mortgage/subprime crisis?

So here's a look at silver futures. The close was strong, but strange.

Silver futures 5-minute chart

Today's trading in SLW. Smell like a short squeeze? I missed the 50% retracement of today's gain when shares went to 41.32.

SLW 1-minute

SLW's gap up to an all-time high looks like SLV's chart two Friday's ago. That turned into a timely buy and positive trade for me. 

SLW 1-year, breakout today
18 to 42 followed by a 50% retrace of the gain
down to 30 ... then another  rocket ride up

It must say something about fear when I had so little of it during that SLV trade a week ago. Now I'll never trade SLV again, knowing the facade of its prospectus, the lack of physical silver to back it. I really like SLW ... but the newfound fear remains. It's healthy to an extent. I don't expect SLW to retrace (the new level is 41.66), but I may enter a half-position if it pulls back in after hours.

My favorites before the weekend remain hot: CRR, SLW, AAPL. I'm not convinced AAPL has enough fuel (catalysts) right now to continue this advance (354 is nearly a 5% gain from the recent low of 338). CRR got its boost from Cramer and is up 3.7% today (123.97 afterhours). SLW, up 4.7%, too hot at 42.55. It retraced once already today to a buyable level. It will do so again. Just a matter of patience.

Note on Silver Wheaton's earnings report, which was pushed back a day to Friday: Generally, positive reports are released early in the week. Not-so-positive late in the week. Doesn't mean that tendency applies to SLW, necessarily.

Caution is mandatory. I remain 100% cash.


Update, 10:21 pm (Hawaii). Silver futures are flat, but traded above 34 until the past 15 minutes. Trickeration or not, there is volatility that won't leave this metal. DJ, S&P 500 and Nasdaq futures are up, too. I'm still convinced that someone will pull the plug on this silver run, if only temporarily. I don't intend to be long when that happens, and my guess is that it will happen in the dark while most of America is asleep. 


Monday Monday

Emerald green up and down the watch list(s) so far with a few in the red like AMZN, APC, NFLX, OIH, QID. Small stuff.

But AAPL hit 355.05 in the first 15 minutes. Is it a buy here at 354? Hard so say. AAPL is roughly 5% off its recent low (338), which for me is a warning sign. Is the hype over iPad 2 really worth more than 5%?

SLW is also up nicely, bumping over 41 earlier (41.80) and retrenching back at 41.45 now. Sure, I wish I'd committed to a position over the weekend or even back on Thursday when shares dipped below 39 momentarily. But now is now. This is Monday. Still all cash on the outside looking in.

Other silver plays are doing fine. PAAS (38.43, +0.97%), SLV (32.77 (+0.64%), EXK (7.34, +2.23%). This morning's optimism is broad: BIDU, C, DIS, F, GLD, GOOG, LULU all up. LULU was on the brink of a selloff last time I gave it a look two weeks ago or so. When LULU is at insane levels, it remains one of the first signs of a market ready to pull back.

For the rest of the morning, not really feeling bullish or bearish. Just watching SLW for a possible 50% retracement of today's gain. That would put it at 41.21.

AAPL 50% retracement (today's gain) would be 351.60.



Update, 5:17 am (Hawaii). SLW exploding above 42. Is this truly the day of reckoning (delivery) for silver? Appears so, at least in the past 30 minutes. New retracement (50%) level is 41.37.

Update, 5:31 am (Hawaii). Turd Ferguson notes that silver has touched 33.75 three times in four days. Today is another instance of escalator up, elevator down from that level. SLW leveling off at 41.70 after touching today's high of 42.12. It did come down to 41.46 briefly, just above my retracement level. Still 100% cash here.



Update, 10:21 am (Hawaii). Back up from slumber. Silver sold off in the past 90 minutes from 33.85 to 33.35. However, SLW has gained from 41.45 to 42 in the past 30 minutes. Amazingly unexplainable. As I slept, SLW actually dipped and retraced today's gain 50% to 41.32 — just 5 cents below the price I was looking for (2:29 pm Eastern). It was a quite a bargain in hindsight. I can't make out the reason for the current surge though, now 42.05 as I type. I considered a limit buy order before I fell asleep, but decided against it in case the takedown was due to a brutal flash crash or global crisis.

This could be related to upcoming earnings or breakout-type buying, but it's reasonable that somebody knows something.

EXK, PAAS and SLV have also rallied. The rest of the market has meandered. More than half of my watch list is in the red now, though AAPL has stayed at the 353 level.

Update, 10:45 am (Hawaii). One of those rare moments when a stock can't stop going up. SLW just rocketed to 42.55, then sold off to the 42.30s. The MACD and stochastics lined up just as the stock began that launch from 41.45 or so. But my guess is this was a major short squeeze and/or somebody knows something about the coming earnings report. New retracement number (50% of today's gain) is now 41.59. Not expecting to see that in the final 13 minutes. No way.

Update, 10:58 am (Hawaii). New all-time high is now 42.69 for SLW, which is selling off a bit (now 42.55) shortly before the closing bell. New retracement price for today's gain is 41.66. Can't touch this here. It sells off so quickly, losing a nickel or dime within seconds once the sellers cash in on today's mammoth gains.

Monday reading
Jason Hommel: Storm has passed (Feb 28 2011) "How will they prevent silver from going to $500/oz.? They can't. ... If they let silver run fast to $500, say over six months, the dollar will be perceived as collapsing, and could continue to collapse to zero. But if they let silver continue to go up 'slowly' at only 30% per year, for the next ten years to take us to $500, this would create a worse problem."

Harvey Organ: Silver deliveries 21.25 million oz (Feb 28 2011) "... the situation at the silver comex is quite dire as they must resort to customer inventory to settle on the first day. Ladies and Gentlemen: the silver comex has no silver in the dealer category to settle upon our patient longs."

Zero Hedge: Jim Rogers says Saudi Arabia is lying again and silver is going to $50 (Feb 28 2011) "Gold will certainly go over $2,000 by the end of the decade, and silver will pass $50."

King World News: Ben Davies (Feb 28 2011) "Positive silver lease rates at this point are more a function of credit risks ... than egregious metals shortages. ... it is unlikely that we will experience commercial signal failure. ... it only takes a few short contract holders failing to deliver to set off a short squeeze."

Zero Hedge: Today's precious metal close banging moment brought by the fine people at the Comex (Feb 28 2011) "This blatant attempt to dump PMs into the pit close and have silver and gold trading on the books near the lows of the day merely confirms that 'someone' is truly desperate to avoid an avalanche of margin calls."

Turd Ferguson: A wild ride on the Globex (Feb 28 2011) "I'm more inclined to believe that today's Globex craziness is more directly related to this being 'put up or shut up day' in the March silver contract."

Dan Norcini (Trader Dan): CCI notches another new all-time high (Feb 28 2011) "There is a complete contradiction between the movements in the bond market and those of equity markets."

Kitco: Easing of Mideast turmoil could pressure gold prices (Feb 25 2011) "Seasonally, Epstein said gold and silver are going into a weaker period. ... in the last 15 years, gold prices from March 1-24 fell an average of $10 an ounce. Silver prices from the end of February to early April fell 13 out of the last 15 years."

King World News: Turk: Dollar ready to collapse, silver squeeze to continue (Feb 25 2011) "With this month's important options expiry now behind us, I'm looking for higher prices (this) week. Even though the March/May spread has flattened a little, the backwardation continues to grow to 2015. ... The short squeeze continues to develop."

Mac Slavo: US government will confiscate gold when it touches $2,000 (Feb 18 2011) - This allegedly involves a "red alert" e-mail posted by a blogger claiming that the Fed will take gold and silver to back a new world order currency. Yes, alarmist and fueled by conspiracists. But I read it anyway.

Saturday, February 26, 2011

Weekend library

   

Isn't it just a bit funny that the word library begins with the prefix 'lie'? Are we subject at a young age (and old) to a bunch of deadwood pages pressed neatly, numbered and simply, outlandishly full of fibs and untruths? Naah. Anyway...

Weekly Telegram (video): iShares Silver Trust (SLV) scam exposed (Feb 26 2011) "They can change  things anytime that they want, change the rules, end the trust."

Jeff Clark: What you need to know about buying silver (Feb 25 2011) "Could (SLW) have a big correction? Well, it recently dropped as much as 28%, but sure ... it could easily fall more than that in a major correction. But if that happened, I'd consider it a big buying opportunity."

Jason Schwarz: 6 investment ideas for the Libyan market correction (Feb 23 2011) On AAPL: "Tuesday's selloff began with what has turned out to be a bogus, hedge fund rumor suggesting the iPad 2 was facing production delays. ...We anticipate Apple will hit $370 sometime prior to the iPad (2) release in April, getting the chance to buy at $350 is good ... $345 would be even better and ... below $340 would be a gift."

Philip Elmer-DeWitt: What the new MacBook Pros mean to Apple's bottom-line (Feb 25 2011) "...every 100,000 extra units adds 2 cents to Q2's EPS."

Philip Elmer-DeWitt: The MacBook Pros have landed (Feb 24 2011) "Although some critics are already complaining about the 13-inch models 1280 x 800 screen — lower-res than the 13-inch MacBook Air — we suspect that at $1,199 the entry-level MacBook Pro is going to sell like the proverbial hotcakes."

Philip Elmer-DeWitt: Apple issues March 2 invitations (Feb 23 2011) "...the cryptic reference is to what many are calling the Year of the Tablet."

Apple Insider: Apple may surprise with near immediate availability of iPad 2 next week (Feb 25 2011) "In less than a year, the iPad has rapidly grown from what was once thought to be a niche product into an asset that's on the verge of generating 20% of Apple's business..."

Jesse's Cafe Americain: Bear raid confirmed and silence of the lambs (Feb 25 2011) "The raid (of silver) yesterday ... was a cheap, tawdry affair... With the volume drying up in the markets making one's quota on the trade desks must be getting increasingly difficult."

Red Run Hot: Silver retraces entire post-crude margin-hike loss (Feb 25 2011) "...even in a tight liquidity regime, most investors now prefer to pursue commodities as an investment class..."

Turd Ferguson: Yesterday's BS selloff (Feb 25 2011) "The Evil Empire, led by the commodity desk of JP Morgan, screwed many again yesterday. Period."

King World News: Royal Canadian Mint now saying it's difficult securing silver (Feb 24 2011) "...you are going to see the premiums go up in order to secure silver. ...some players will be priced out of the market. ...there are a lot of issues going forward and this may be the new norm."

Red Run Hot: Rumor: Blythe rigging MAR SI contract (Jan 16 2011) "Guess what Blythe? Your former traders are advising everyone they know to put on this trade come the first week of February."

Bullion Bulls Canada: The myth of the 'primary silver mine' (date n/a) "...it is obviously necessary to classify mines according to revenues rather than tonnages. However, the fact that analysts in this sector never take the time to make their own reasoning explicit in this regard has caused them to misinterpret this data."

Bullion Bulls Canada: The Bullion Bulls basket (date n/a) - Favorite PM stocks from Chad McNamara, Brian Boutillier, Jeff Nielson.

Bullion Bulls Canada: Bullion confiscation: Paranoia or justified fear? (date n/a) "(Silver) is of great importance to both consumer and commercial markets. ... both global inventories and stockpiles of silver are nearly totally exhausted. Thus, we have in the silver market something which is entirely absent in the gold market: a legitimate motive for confiscating silver. ... (we have) not joined the growing internet clamor to 'take down JP Morgan.' To those parties who are actively crusading on this issue, I would hope they take the time to seriously evaluate the consequences of their actions."

Jeff Nielson: Silver Wheaton: The safe alternative to SLV (Sept 21 2009) "What is really attractive about Silver Wheaton is that it completely eliminates the risk of rising production costs eating into profits. Silver Wheaton has no production costs." (Worth a re-read.)

Friday, February 25, 2011

Sure bet?



Coming into this week, silver seemed like a good place to be. By that I mean SLV, the ETF. Then I learned that SLV is great for a daytrade, but horrible as a buy-and-hold for any time period because there really is no proof that there is actual physical silver in the vaults of JP Morgan and Comex to back the paper. Chances of Comex defaulting on paper silver ... who knows? Worth the risk? Never. I made a decent profit on a weekend-hold trade and ran for cover. (Watching a potentially large profit via silver futures get whittled down — purely manipulated by JPM? — before Tuesday's open was too crazy for me.)

I also learned how cloaks-and-daggers that whole world is. All good-guys-vs-bad-guys, conspiracy theorists and evil doers. Could be true. Probably not so extreme in reality. It all just feels too much like Dendreon (DNDN) a few years back, when uber- and hyper-bulls and unproven products faced deadlines and highly questionable FDA decisions cost longs half their DNDN value ... only to win five-fold a year later. The numbers supporting the longs' argument are undeniable ... but the twisting daggers of Big Brother via corporate parternships, i.e. naked shorting — unbeatable for peons like me. I don't want to deal with any of that kaka ever again. Too much drama.

So SLV is scratched off. SLW, on the other hand, still a possibility. The metal itself in physical form just doesn't lie. And SLW, like myself, has built-in advantages in play. (Mine is that I refuse to lose money more than ever, even at the cost of missing some opportunities.)

SLW 5-year weekly

SLW vs. SLV, Gold/Silver, 6-month daily

Or is this a bubble in silver? 

Then there's oil. It's going up whether we like it or not. Our dependence as a nation on importing the crude stuff is well documented. That's why Cramer was quite timely with his Bakken Shale recommendations today. How poignant was he? Each of his four recs have boosted in past half-hour since. Here's a quick look at the four.


Note the after-hours boost to each after Cramer's recommendation/pump/boost/et al.

NOG (Northern Oil & Gas)
Closing price, Feb. 25, 2011: 31.70 (31.99 after hours)
float: 45.66M
revenue: 42.6M
quarterly earnings growth: -37.8%
total cash: 39.5M
total debt: 400k
trailing p/e: 149.53
forward p/e: 29.91

HAL (Haliburton)
Closing price, Feb. 25, 2011: 47.03 (47.49 after hours)
float: 910.7M
revenue: 17.97B
quarterly earnings growth: n/a
total cash: 2.05B
total debt: 3.82B
trailing p/e: 23.35
forward p/e: 13.55

NBR (Nabors Industries)
Closing price, Feb. 25, 2011: 28.34 (28.90 after hours)
float: 273.4M
revenue: 4.17B
quarterly earnings growth: n/a
total cash: 801.19M
total debt: 4.44B
trailing p/e: 85.62
forward p/e: 12.38

CRR (CARBO Ceramics)
Closing price, Feb. 25, 2011: 119.57 (121.05 after hours)
float: 16.16M
revenue: 473M
quarterly earnings growth: 65.3%
total cash: 46.6M
total debt: 0
trailing p/e: 35.17
forward p/e: 21.66

Source: Yahoo Finance

Of the four, the most interesting is CRR because of 1) tiny float, 2) no debt, 3) moderate P/E. Doesn't mean the stock will continue to rocket. But it's definitely appealing. I'll do homework this weekend as time allows.

Back to precious metals for a sec. Here's a cool video I just came across. If you're a silver or gold afficianado, this video won't help you. But for the rest of us, it's good stuff. 


Fantastical Friday



Gold up. Silver up. Oil up. Stocks up. Everything (almost) is up, and mostly up big with less than 20 minutes left in the session.

I haven't made a trade since Tuesday early morning (premarket). I don't feel satisfied, but I don't feel greedy, either. Good place. Still feeling the ailment, still achy and headachy and it sucks. When I woke up, the market was already 90 minutes in (almost 6 am Hawaii time) and everything was green. I've had some long naps since and there is simply an abundance of buyers and a shortage of sellers. Who would've figured that for a Friday. It's almost like a parallel universe, or an opposite world. Instead of the sell-into-strength tendencies of Fridays, it's almost a fantasy.

The first price that had my eyeballs boinging out of my cranium was UCO, which was listed at more than 300% up. I was drowsy when I saw that and immediately thought, 1) must be a typo, and 2) it's not a typo, so maybe Libya just got turned into dust. Holy crude! But no, it's a reverse split in UCO, the one I'd heard about earlier in the week. QID also did a reverse split.

But generally, the top of my watch list is ruled by silver entities. EXK (+5.1%), SLW (+5%), SLV (+4.1%), PAAS (+3.7%). AAPL, BIDU, other momo names like CMG and LULU all up roughly 1% or more. But on the red side, CSTR and NFLX can't get out of the hole. Even AMZN is fractionally down; as the No. 1 contender to usurp NFLX's throne in streaming movies, AMZN should be rolling today, right?

VXX and TVIX are the bottom of my list. Did they actually stop bombing unarmed protestors in Libya today. If so, how can oil stocks still be above water for the day. Weird. Fantastical. Everybody (but the shorts) is happy.

The only negative? Volume is low.

Thursday, February 24, 2011

Skittish you are



The market is looking quite uncertain this morning. It began with crude oil futures spiking over 102, then brought back to 99 by the opening bell. I'm looking for a retrace by UCO to 12.87 (50% of today's premarket gain) before I dip in. I got lots of rest overnight, even with the aches and threat of a bad flu. Show must go on.

There are equities in the green — MOS, GLD, X, FCX. Also some big NASDAQ names like AAPL, AMZN, BIDU. An AAPL retrace to 343.98 is interesting (currently 343.53). And UCO is bouncing off 12.80 now.

SLW got knocked down this morning as silver futures took a big hit just before the opening bell. Funny how that happens.

Update: 5:20 am (Hawaii). UCO nosediving a bit here, now 12.74. Immediate support at 12.67, also support at 11.60, but if this fills the gap from the past week, it could sink as low as 11.

Update, 1:26 pm (Hawaii). Just woke up a few minutes ago, catching up on today's moves. Holy crude. UCO hovered in the 12.80s until 2:01 pm Eastern, then fell off a cliff and didn't stop until 11.91 90 minutes later. (Now trading at 12.22 AH.) Brutal. I'm thankful that I stayed out of the market. Again. Fast Money saying that margins were increased, that this made a huge difference, more than the terror in Libya, the assurances of the Saudis, etc.

Also amazing to see SLW drop even lower than it was when I fell asleep. LOD was 38.38, now at 38.60 AH. SLV, which I no longer trust, began its decline at 2:13 Eastern — 12 minutes after UCO nosedived — and went from 32.44 to 30.95 by 3:18 pm Eastern. Now at 32.55 AH.

Market finished generally flat. DJ -0.3%, S&P -0.1%, NASDAQ +0.55%. AAPL, AMZN, BIDU fractionally up. AAPL was lingering at its LOD 338 when it began its rally — roughly 2 pm Eastern. So, as oil and metals went down, AAPL soared to 343 in almost a straight line. AAPL is at 342.98 in AH.

Wednesday, February 23, 2011

Powdered up



3:55 am (Hawaii). This premarket is quite green, a good thing no matter what a certain celebrity frog once said decades ago. Does it last? Hard to say, but it appears that the initial signs of illness, yesterday's chills, fever and barfage, have passed.

UCO is up 2.6% to 12.07 already as the mess in the Middle East continues. SLW, my preferred play on silver, is flirting with the 40-dollar mark, up 2.5%. Still more than a couple of bucks from its all-time high. I don't want to be out of this if the market goes positive after the opening bell, but chasing is not good, either.

No way I'd open a sizable position here with premarket's thin volume. I'll wait to see how the first 30 minutes shake out, but I can't help feeling like SLW below 40 is a major discount price. Either way, glad to be 100% cash.

50% retracement on this morning's gains: SLW 39.56, UCO 11.93.

Not messing with SLV any more. The earlier trade was a one-shot deal. Don't trust the banksters and the faux silver they claim to hoard in their vaults.

PAAS, another silver play, is now up 2.1% on tiny volume. Prefer SLW.

AAPL moving up quickly (+0.7%). Succession plan revealed today?

Update, 4:33 am (Hawaii). Two oil plays top my watch list: UCO and USO. Everything else that was up nicely in premarket has nosedived. SLW, which was above 40 for awhile, tanked and is now 39.14 as futures fell just before the opening bell. This is exactly what I'm always extremely cautious about dipping in during PM after a day like yesterday. UCO is moving up, though, and it's doubtful it'll retrace much at all. Just a matter of time, though, before oil slows up.

Update, 6:33 pm (Hawaii). Wow, what a day. It's a shame I missed the ride. Yep, I was all set, figuring out entry points for SLW and UCO in the wee hours ... then slept for most of the next 10 hours. Woke up achy all over, little bug in the throat. Probably because I stayed up through the night and morning on Tuesday. Made money that day, no complaints, but my fatigue cost me today.

Now that I'm done with work and resting (finally), it's important to look back and see what could be done better, and what was done well. Then move on. I had entry points mentally for UCO and SLW, and sure enough, in the first, second hours of the session, oil and silver retraced. UCO pulled back just a bit more than 50% of its early gain. SLW pulled back all the way to 39.20, then worked steadily back over 40. I was asleep, then up, then asleep. Tried my best to keep track, but the body wouldn't cooperate.

So, while most of the market was in red, my watch list wasn't so bad, roughly 42 percent in the green, and those were mainly oil and metal stocks. Even after the initial explosion for SLW, the pullback gave me plenty of opportunity to enter below the 50% retrace level (39.56). However, my caution overwhelmed my logic, and I stayed asleep and didn't enter. SLW finished the day near its high at 40.92. What a miss.


Then UCO, which has very little in its way, used its ultra-crude oil fuel to rocket almost nonstop to the upside. No real chance for a pullback there, so I was disciplined. However, all factors considered, this was a no-brainer to buy with oil extremely bullish. However, I sat this out and missed the run to almost 13. UCO closed at 12.67. Another miss.


All in all, I'm glad I'm still 100% cash and made no negative trades today. I'm glad I didn't blindly open a position after hours, even in UCO, which was up 7% after a 9% gain yesterday. Due for a pullback, of course.

Thursdays, at least lately, have leaned more toward flat markets. I'm not expecting a big move up or down. I am looking forward to following through on strategy and exercising discipline. Making money in a down market ... it doesn't matter how much I was ready to push the buy button and make money. I simply did not. Good thing there will be another opportunity.

Doug Kass: Sideways market similar to 1953, '60, '94. Year will end where  it started. Good for opportunistic traders. Not so much for the buy-and-hold crowd.

Tuesday, February 22, 2011

Pretty candles

Short-term candlestick interpretation view. The charts I like, I'll take a close look in the morning and see how they open. Won't be buying any gap downs in this climate.

These look quite attractive on paper, plasma, LCD, what-eh-vurr...
QID, TLT

These are worth a look, but not as promising.
UCO, USO, SLV, PHYS, GLD, PAAS, SLW

These charts, not so much. Dislike!
HAIN, CSTR, NGD, GMCR, VZ, SPY, DIS, EXK, OIH, RLOC, TBT, IPI, QQQQ, CMG, GOOG, AMZN, F, SBUX, AAPL, MOS, LULU, APC, OPEN, LVS, PSUN, VCLK, C, BIDU, FCX, NFLX, X, GNK, FAS

These are nice, but I don't trust them overnight.
TVIX, VXX

Aaaaaaaannnd ...

Here's some stuff that finished strong in the final 15-45 minutes, if you're inclined to believe that the big boys dive into the sea and scoop gems at dirt-cheap prices late in the day.

TVIX, VXX, QID, TLT, SPY, VZ, OIH, DIS, EXK and ... that's it. Everything else sucked at the close.

100% cash here. Someone else can try and be a hero. I'll save all my bullets for the right time, maybe in the morning.

Back in orbit?



12:38 am (Hawaii). New day, new post. Will silver (and gold) continue to pull back after last week's parabolic move up? Was yesterday's action in silver futures — a wild surge above 34 and a drastic pullback below 33 — enough to prompt concern for holders of SLV? Escalator up, elevator down action, indeed, as Turd Ferguson says.

Silver futures are now bouncing off the 32.40 level, now at 32.74. How long will this last? I have my doubts. Futures could not stay above 34 or 33 after hitting 34.40 or so yesterday. I'm not looking for an instant grand slam or even an extra-base hit. I just don't want to be left holding the bag if silver and SLV crash.

Never trust the banksters and diabolical shorts, especially those who manipulate silver prices. NEVER.

As for crude oil, Turd Ferguson (see link below) insists that a break through resistance at 94 is bullish. However, do we agree that the Fed would allow that? $4 gas in February or March? I have my doubts. After all, there is no logical reason why silver isn't already at 35 considering the demand and shortage of the physical stuff. Yet, there it is, sitting at 33 (32.89 now) as it continues to be manipulated, even as it gains ground day by day, its bulls crawling forward and the shorts retreating.

I see no reason to hold SLV or any paper silver for the long term in these conditions, positive as they may be compared to years past. In fact, the volatility, higher lows and higher highs convince me that trading in and out is sensible and reduces risk significantly. Same deal I had with AAPL recently, and I sure am glad I wasn't stubborn about holding AAPL down to 350 and below. Not when I can get back in sooner or later.

Update, 1:50 am (Hawaii): Jeff Nielson explains the folly of silver ETF SLV (link below). Can't say I'm surprised, considering the massive global demand and the dwindling supply held (supposedly) by Comex. Detractors and unbelievers. The numbers don't add up. Numbers don't lie. Again, SLV is simply a trade. I am married to nothing.


Update, 3:33 am (Hawaii). Sold all SLV at 32.40. Not the most gratifying trade, but it'll do. Locked in profit of 93¢/share for a 24-hour* hold. Why sell now? This is my first trade in a precious metal-related vehicle, so it's a plus psychologically no matter how I may try to intellectualize anything. Also, I don't trust anything about Comex, JP Morgan and the Fed when it comes to backing paper silver with the mirage of silver supposedly in those vaults. I missed a chance to sell at the premarket HOD (so far) at 32.63 and at first, the MACD (1-min) looked promising. Once it turned negative, I was ready to sell at 32.28, but my own error prevented a sell (forgot to sell at extended hours). SLV rallied to a new high (32.63) quickly, but sold off quickly, too. The large lot sizes told the direction on either side going up and down. Then the MACD failed to get positive. Divergence down (double bottom?) and I got out as a precaution to a possible breakdown. In the face of a flat open, the profit was a nice 1.6% gain for my modest bankroll. If the environment remains constant this week — Middle East/oil stress, overbought stock market, rotation to precious metals ... I'll use silver again. Weapon of choice, however, will be SLW, not SLV.

Update, 4:12 am (Hawaii). Kooky behavior in SLV, which sold off to 32.33 (still way up from Friday's 31.79 close), then ran to 32.50 within 4 minutes. Yeah, a WTF moment, indeed. The kooky part is that bid sizes were moderate, which tells me that though volume in that 4-minute span was rather high, there was a shortage of sellers as it bid up higher. Same thing on the way down; shortage of buyers. If I had to guess, I'd say the big boys are trading to each other just to manipulate the price. How shocking.

SLV now at 32.55. It's not so much seller's remorse for me. It's more my desire to understand the ebb and flow of this new (to me) vehicle. Not for the faint of heart. Though SLW is fundamentally superior, dealing in real silver as opposed to propped-up, probably non-existent silver for SLV, it is SLV that has the volatility that makes for a more frequent trade. While SLV has rolled up and down in 20 to 40¢ swings, SLW stayed within 5-15¢ of its high of the day before busting higher to 40.94 (premarket). SLW is up 4.5%; SLV is up 2.2%. Both nice, but SLW traders/investors are resting much better. After all, who wants to be holding SLV if and when JP Morgan is on the hook without the bullions to back up the paper?

Update, 5:01 am (Hawaii). SLW still unwilling to retrace 50% (40.54) of today's gain, fell to the 40.80 area and bounced. SLV, on the other hand, was on cue and sank to 32.20, right about at 50% retrace (32.24). I stayed out, though, with the MACD deep underwater. Economic numbers released on CNBC a couple of minutes after the SLV bounce and the market rallied, carrying SLV to 32.46.

UCO, which topped my watch list most of the morning, is still up nicely (8.8%). Nice bullish play on oil, but it's too hot to touch here (11.80) with the MACD underwater. Hard to gauge how oil and metals will respond to the new consumer numbers. An unusual thing here: on the daily chart, UCO's gap up today is enormous, but the candle today (so far) is red. On the 1-year chart, all of UCO's gap-ups have been green candles. Either today's candle turns green or we have a real oddity in the midst of geopolitical strife.

Update, 5:23 am (Hawaii). Silver selling off en masse in the past 5 minutes. SLW. PAAS. EXK. SLV. Looks like big boys are in play, unloading by the truckload. 50% retrace levels are moot here. SLW dipped to 40.34, well below the 40.54 (50%) level. SLV dragged to 31.90, far below the 32.24 halfway retrace. The silvers are bouncing a bit here, but the coast is far from clear. Need to see a little consolidation before I dip in. UCO holding on at 11.75, just above the day low, still up 8.6%. Market rally stalled out; DJ down 63 (-0.5%), NAS back to 30 points down (-1.1%).


Update, 5:37 am (Hawaii). Still 100% cash since the premarket sale of SLV. As SLW, arguably the most potent of the physical silver plays, dips to its low of the day (40.12), I'm reminded of the wisdom of StockGuy22. Traders are human, and psychology kicks in often. Round numbers do more to kick-start buys and sells than we might think. If SLW can't hold 40, it could get real ugly. A lot of stop-loss orders are likely at that level or just below. I want a position in SLW, but only if the price is right.

Update, 5:51 am (Hawaii). The last bastion of positive momentum this morning, oil, is holding its ground. UCO retraced 50% to 11.49, then bounced and is now at 11.57. Strength. At 11.49, there was little selling pressure left and buyers are stacking big bids. A juiced-up ETF, always extra risky. Can UCO finish the day at its high (12.16)? Tempting to enter here as the MACD starts to push out of the bottom of the ocean here.


Update, 9:29 am (Hawaii). I have to let you know, the one or two of you who actually skimmed down this low in this post to see if there was anything worthwhile (and I'm not being falsely humble), that I don't know jack about precious metals, options, COMEX, deliveries and contracts ... but I do know this: When 'it' hits the fan, you better be able to smell it and run like the wind. Has 'it' already hit the fan?

All the scuttlebutt about silver deliveries being due in six days (February 28), how there's no possible way COMEX can deliver, how they are lying sacks of 'it' ... it makes me worry. And I don't even have a single share of SLV or mining stock or actual bullion. (Though having a few bars would make me feel quite kingly.) I've been watching the market since selling SLV in premarket, seeing SLV hang on above 32, which is a bit of a surprise considering the real deal(er), SLW, lost most of its gain and can't stay above 40 anymore. For today, at least.

But say COMEX doesn't deliver on delivery day. What happens then? Does the Fed bail out J.P. Morgan and COMEX? Why does that seem remotely possible? Yeah. It's actually possible. That's what is effed up about things nowadays. They could be lying their ass off. Silver deliveries could be a big whiff. Who would lose? Yeah, the average Joe, you and me, S.O.L. So that leaves only one commodity with a fair chance of rising tomorrow.

It's oil that still floats on water while the rest of the market is sinking. UCO was up 8.6% most of the day. Now it's +9.1%. I would love to have some UCO, but +9% is shark-infested territory. I had my chances, though. Twice, UCO dipped to the level I was watching: 11.50, or 50% retracement of today's gain. I failed to pull the trigger for various technical and having-no-forking-balls-of-steel reasons. I don't regret staying risk-free and profitable for today, though. But I am watching closely. Maybe UCO sells off into the close. Maybe UCO explodes again tomorrow in lieu of any selling pressure. One thing for sure: Gaddafi will not change his stance overnight. There will be convincing* phone call from the White House. His son says they'll blow up the refineries before they let go of power. I don't doubt these guys one bit.

So why isn't UCO up 25%? Or even 50%? It probably will take some time, but if things stay like this for days, weeks ... it'll happen. But once the correction is over and AAPL and MOS and BIDU rally — you really think the West and China will allow America to pay $5 for gasoline? — UCO will stall out and fall like a pigeon that flies into a glass window four storeys up. (I saw that once. It was bizarre. The pigeon didn't move for 5 minutes. Then it came to life!)


It comes down to advantage/disadvantage. Edge or no edge. No edge? Stay out. Edge? What are the percentages in my favor? 51-49? 60-40? 90-10? At this point in a scared market, it's about managing risk and calculating how much I can handle, which isn't much. A buy of UCO at my beloved 50% retracement would be at 11.50. From there, my guess is that UCO has a 75% chance of seeing 12 before it sees 11; a 25% chance of not doing so. So my confidence level equals a +50%. That's a healthy stake I'm willing to put on the table, whether that's 50% of my bankoll (on a tight stop) or a risk factor that allows up to 50% risk cost or any other strategy that equates to my risk allowance. It's different for every single person. For me, it's probably not actually 75-25 considering the climate of the market. I'd be 75% happy to stay neutral and in total cash. That's a factor I embrace. Things cancel out if I'm honest about today.

What if Gaddafi has a change of heart overnight, goes on Libyan state TV and says, "Well, I changed my mind. I'm out. Have fun managing this mess, y'all." That would fork up any UCO long. It's a 1% chance he walks away. But it's there. It's possible.

So there you have it. I want an edge. I had one with SLV, got a little lucky, managed to leave before the storm hit. But I am not going to surrender. I still want my edge. Fully loaded, hands on both weapons. It's the only way to win. The only alternative is to walk, or run, far away.


Post-presidential reading
Shan Saeed: Why you need to be bullish on silver (Feb 22 2011)
Turd Ferguson: You'll only be right once (Feb 21 2011)
James Turk via Run Red Hot: 'New buyers are willing to take on the silver shorts' (Jan 15 2011)
Run to Gold: Potential COMEX gold fail (June 18 2009)
Jeff Nielson: Your ETF-silver is for sale (Sept 14 2009)
Trace Mayer: A problem with GLD and SLV ETFs (Dec 13 2008)
Bill Haynes: 100-oz silver bar shortage developing in US (Jan 27 2011)
Eric King: Embry - Short squeeze in silver, manipulators getting overrun (Feb 22 2011)
Jason Hommel: Silver default looms?! (Feb 20 2011)

Sunday, February 20, 2011

Gravitational pull?



Sunday, 9:59 pm (Hawaii). Or is silver simply out of this orbit? Silver futures have been climbing tonight. Saw it at 33.06. Then 33.10. Now 33.28. Friday's close was 32.30, with SLV at 31.79.

At that ratio, silver futures at 33.28 translates to (maaaaaybe) 32.72 for SLV. That would be a gain of 2.9% for SLV. Of course, between now and Tuesday morning, things could reverse. But it is interesting to track.

Update, Monday 3:28 am (Hawaii). Just returned to the home office. Silver futures now at 33.40, which would translate to SLV at 32.86 if Friday's closing prices/ratio holds. Not getting too excited over something that could easily reverse by Tuesday morning. I've seen much stranger things happen before, especially when banksters and naked shorts are involved.

Update: 9:06 am (Hawaii). Silver led commodity futures today with a gain of 7.25% to 33.86. The HOD was 34.00. At 33.86, it translates to 33.32 for SLV, which would be a gain of 4.8% if it holds into tomorrow's session. Gold (1,407.1.6%) and crude (91.54, +6.26%) also up. Here's a look at commodities.

Update, 3:01 pm (Hawaii). Silver futures now 34.08, translating to 33.53 for SLV. Caution still prevails here, though. Never trust the banksters and diabolical shorts, including those in silver.


Update, 3:17 pm (Hawaii). Correction. The link I was looking at (Bloomberg) is a 15-minute delay. Over at Finviz, it's live and silver futures are listed at 34.29 (HOD was 34.33). ... All right, the page just refreshed and silver futures are now at 34.22. (Gold futures at 1,408.) Never traded futures, have no plans to. Interesting, though.

Update, 4:07 pm (Hawaii). Silver futures finally pulling back, now 33.95. If it retraces 50% of today's gain, that would be 33.31 or so.

Update, 5:13 pm (Hawaii). The dollar rallied starting around 8 pm (Eastern), which was 3 pm here, and hasn't stopped. Gold and silver futures plunged as the dollar rose, and silver dropped huge in the past 15 minutes, from 33.90 to 33.27. Slightly below that 50% intraday retracement. Now back to 33.36. Still a nice gain from last Friday, but this is the classic example of the market's unpredictability.

Update, 11:35 pm (Hawaii). Well, well. Can't say I didn't expect this. Silver futures, and gold, too, went poof like a balloon pierced by a pin. Great for futures players who bought early in the day and sold above 34. But what's perplexing is how the dollar soared at 8 pm Eastern as silver and gold futures began to plummet. Then, as of a little after 3 am Eastern, the dollar began to sink, but silver futures continue to sink, now at 32.56 — slightly off its low of the day.

No complaints here. If SLV opens above Friday's close of 31.79, I've got a fair shake and can get out with a small profit. However, if the big boys and/or Big Brother decide to spite Silver, they can and the little guys like us are S.O.L. That's the risk of jumping on the bandwagon at the hot, fiery top, if that's what this is and was. Worth the thought to consider the possibility of trading futures in the future. 24/7 trading ain't for everybody. It might be for me, not trading constantly, but having that access since I am normally wide awake while most of this nation sleeps. There are opportunities worth exploring.

Done observing the 5-minute chart for silver futures. Pointless now that silver has given back all its gain since Monday morning. Just watching the daily for much better perspective (non-futures).

Even more presidential reading
Tyler Durden/Zero Hedge: Ongoing overnight short squeeze takes silver to fresh 31-year high (Feb 20 2011)
Benzinga: Picture of Steve Jobs at Obama dinner (Feb 18 2011)
Jake Gint: 'If we are turned before breaking new highs, we may find ourselves right back at Friday's close' (Feb 21 2011)

Friday, February 18, 2011

Weekend reading, presidential style

Beacon Equity Research: Silver Market: King World News mysterious London source could be telling the truth (Feb 18 2011)
SilverGoldSilver: J.P. Morgan manipulation of silver video (part 1)
Greg Ho: Macro factors show a lot of room to run for silver (Feb 19 2011)
Jesse's CAFÉ AMÉRICAIN: Gold and silver weekly charts (Feb 18 2011)
James Turk: Watch the gold/silver ratio (Feb 12 2011)
> note: Turk insists the historic 17:1 ratio will be achieved 2013-15
> Gold is now 1,387/oz, so a 17:1 ratio = 81/oz for silver
> Current ratio is roughly 43:1
Turk: Unanswered questions about the Silver ETF (Apr 9 2007)
Turk: SLV is a trading vehicle, not an alternative to owning physical silver (Jan 28 2008)
Robert Sinn: Is silver in a speculative frenzy video (Feb 19 2011)
> Sinn: Turnaround on Wednesday or Thursday?
Jeb Handwerger: Projecting SLV to 34 (Feb 20 2011)

Freaky Friday: Options Expiration



Watch list preview for the day. It's options expiration and the market is teetering at a level that could lead to a healthy pullback. In other words, any trader not exercising caution could get shredded.

If you like candlestick charts, here's the status of my watch list, courtesy of American Bulls.

AAPL — hold
AMZN — buy if
APC — buy if
ARMH — sell if
BIDU — hold
C — sell if
CLR — buy confirmed (Thursday)
CMG — hold
CSTR — wait
DIS — hold
EGPT — buy if
EXK — sell if
F — sell confirmed (Thursday)
FAS — hold
FCX — sell confirmed (Thursday)
GLD — hold
GMCR — wait
GNK — sell if
GOOG — hold
HAIN — sell if
IPI — buy confirmed (Thursday)
LULU — buy if
LVS — hold
MOS — hold
NFLX — hold
NGD — sell confirmed (Thursday)
OIH — hold
OPEN — buy if
PSUN — wait
QID — buy if
RLOC — hold
SBUX — buy if
SLV — buy if
TBT — buy if
TLT — sell if
TVIX — n/a
UCO — hold
VCLK — wait
VXX — wait
VZ — buy confirmed (Thursday)
X — wait
XVIX — n/a





Update, 5:44 am (Hawaii). So dependent on Red Bull. I kept an eye on the "buy if" watch list (six stocks only) and SLV really intrigued me. Always has for many reasons. But it was trading above its opening price of 31.08 on up to about 31.17, in that range, while the rest of the market was flat. Then I nodded off. It was a few minutes at most. Woke up and SLV was at 31.25 or so. Kept right on going, big run and settled into the 31.30s. I opened a position, with the stochastics swinging low, saving a lot of powder for other opportunities.

SLV has made a massive run from 26 in the past three weeks, and with equities peaking short term and so much uncertainty in the Middle East (oil), metals are so shiny and attractive. For now. I still don't trust the possibilities on options expiry. I think SLV holders are ready to cash in profits after holding from 26, 27, 28, 29. It's human nature to collect that beautiful bounty before the weekend begins. So I hope to be out of this trade before lunch hour hits the East Coast.

My position is small, so even another big run today won't make a huge profit for me, but I am aiming to get familiar with the price movement and rhythm of SLV. It could be a nice, steady trading vehicle for some time, especially with AAPL in the doldrums (355).

Update, 6:18 am (Hawaii). Added more SLV at 31.56. Hesitated on stochastics (low) and MACD at 31.51, but no regrets. Huge buys came in moments after my addition, now at 31.68. This is too hot and I don't assume anything about where SLV will close today, but the news surrounding the physical metal is bullish, bullish, bullish. For today.



Bob Kirtley: Silver prices just starting to warm up (see Chinese demand)




Update, 11:27 am (Hawaii). It's been so long since I actually stayed up through the night and morning to follow the market. Normally, I sleep in or get a decent nap. This time, Red Bull and a position in SLV had me buzzed and stoked. That's where I have to deal with this plain fact: once emotion enters the realm of any trade I'm in, good goes bad. 

It was roughly 7:30 am when SLV was hovering at 32 and I had a decent paper profit, far more than I expected that quickly. I'll take a 1.2% profit for just three hours of "work" any time. But I took a phone call that was lengthy and the topics were both sad and happy. Emotion. By the time I hung up, SLV was still slightly above 32. Knowing that I entered midway through today's momentum, exiting at lunchtime (Eastern time) was the game plan. 

But I realize now that emotion clouded my thinking. I was shaking off the effects of the conversation, but also feeling a bit high about the fun of a daytrade. I haven't bought and sold anything on the same day with a solid profit in a long time. Most trades cover a few days. So I sat there and watched. And watched. And eventually, right on cue, the selling began after lunch. I held and held all the way down to 31.55, a shade above my cost basis.

I knew it was too late to get out. The old adage, Get out fast or don't get out at all, so true, true, true. My mental stop was right above my cost basis. If SLV froze at 31.55, I wouldn't mind holding it over the weekend, either. But the game plan was in and out, and I failed. I couldn't stay locked in that failure, though.

The market remained somewhat robust, closing in the green. SLV picked up, dropped off, repeat ... eventually, buyers returned, i.e. traders going long rather than the shorts who got squeezed royally in the morning. SLV is at 31.85 afterhours. 

The retrace today from its high of 32.13 down to 31.55 is EXACTLY 61.8% (going back to yesterday's closing price of 31.03). For you Fibonacci devotees out there, this is proof that you are geniuses. 

Watching SLV trade for hours was quite an experience. The MACD is undeniably indicative of direction of price. That never failed. I didn't want to believe, but I don't matter to MACD. Also, by the final hour, I gave up watching the 1-minute chart. It was exhausting. The 5-minute did just fine for a position like mine, which is not huge, not tiny. 

Another observation: Once the lots on the Ask side become smaller than the Bid size, SLV goes poof! Early on, during the run to 32+, lot sizes of 20,000 and more poured through on the Ask side. After it hit is high of the day, the Asks shrank until the final 45 minutes. Numbers just don't lie. 

So, I screwed up. Maybe I should turn off the phone during market hours (3 am to 3 pm Hawaii time). Maybe I should tune out human existence in my life 12 hours a day. But if I'd sold at half of 1 percent or 1 percent flat off the top, I'd have my pocket-change profit. I'd have satisfaction. I would probably not have reestablished a position, though. 

I'm prepared, though, to roll with this trade and see it through to Tuesday. Unless SLV does something unexpected in AH. Note to self: write up every possible scenario and have a solution.


Update, 12:47 pm (Hawaii). A look at how today's "buy if" stocks turned out. The market opened flat, so the buy-if mandate is to see how each stock fared after the opening bell. If it stays above opening price, potential buy. If it opens lower, no deal. 

All "buys" listed here are in theory only.
SLV — previous close 31.03; open 31.08; 31.95 afterhours (+2.8% since opening bell)
SBUX — previous close 33.50; open 33.37; not a buy (but turned out +1.9% since opening bell)
TBT — previous close 39.97; open 40.28; 40.14 afterhours (-0.03% since opening bell)
LULU — previous close 82.44, open 83.24; 82.13 afterhours (-1.3% since opening bell)
APC — previous close 81.30; open 81.15; not a buy (dropped to 80.96 in afterhours)
AMZN — previous close 187.76; open 187.55; not a buy (dropped to 186.31 afterhours)
EGPT — previous close 18.99; open 19.00; not a buy (18.73 afterhours)
OPEN — previous close 92.89; open 92.52; not a buy (89.96 afterhours)

So, the only two buys based on the candlestick approach would've been SLV and TBT. The best performers were SLV and SBUX. Aside from theory, I actually did open a position in SLV, still holding here.


Update, 2:49 pm (Hawaii). Some charts of SLV. First, a one-year chart with comparison to GLD, AAPL and the S&P 500. Then a two-day chart. Note: there are some concerns that short attacks may arrive next week. I may still unload my position in the next 10 minutes before the AH session closes. 




Thursday, February 17, 2011

It's all about a cheapskate mentality


12:00 pm (Hawaii). Isn't it? Haggling for a great, not just good, but great price. Sure, there are breakout strategies, which is akin to betting on football teams that throw 10 or 15 bombs per game. Not all breakouts lead to touchdowns, unquestionably. Why should any of us overpay?

There are always indicators that lead to profits. Clues. Little hints in between earnings reports and fantastically great (or horrendous) catalysts. I like a good book real cheap. Used is fine with me as long as it's almost new. Paying 2 bucks online for a slightly worn 20-dollar book is great. So with Borders shuttering a third of its stores, will we have brand-new books at yard-sale prices? Probably not so much. CNN.com reports that most books at Borders will be moved to stores that will remain open.

Boo.

What else might be cheap? Le Fly indicated, uh, well, something about PSUN. A quick check showed that Pacific Sunwear shares went from 24 to below 1 buck in the past five years. Now at 4.44, it still has ugly numbers, but manageable debt. Float is just 41.4 million shares and short interest as of January 31 is 26.6%. Are sales about to go gangbusters? Does Mr. Fly know something neat-o about California clothing retail? One fact: Greek Investments made a $1.55 million investment, buying 350,000 shares recently. That's an average price of 4.43.

During the same time span, Carl Icahn invested $1.16 mil in HAIN, and HAIN shares have been explosive. Maybe if Icahn would invest in PSUN, it would shoot to the moon. A little digging, a little interest, but nothing constructive enough to make me open a position. Well, maybe a teeny one.

The reason I go into the notion of being a cheapskate, spendthrift, haggler, etc. is simple. I am so NOT a haggler. Sure, I look for cheaper prices when I buy groceries or gas. But the lack of extreme cheapskateism probably hurts me more than helps me in trading. Why else did I walk into that AAPL trade yesterday afterhours at 363? Was it buyer's remorse for not entering (as my technicals indicated) at 362.35 early in the day? (It quickly rose to 364.90 before reversing.) Or was I fatigued, impatient and/or bored? It made me think and think and think. If I were truly a tighwad willing to accept ONLY the best price at the best time, how much better off would my trading account be?

So I need to study and adopt more techniques and, more so, the mentality that being cheap involves. I'm not saying being cheap means being stupid or stubborn. But it goes back to the most basic of market mantras: buy low, sell high. I did this to an extent in the past month, but not well enough.

Update, 12:28 pm (Hawaii). SLV up almost 20% since late January, from 26+ to 31. Just can't get bubbly and excited over a position here.

Updated, 2:55 pm (Hawaii). Afterhours market closes in five minutes. Amazing to see PSUN, which was mentioned by Le Fly earlier today, up quite a bit. PSUN closed the session at 4.44, but is now at 4.58. Sure, it's AH and tiny volume, but this is exactly why I don't touch anything flying this high at this time of day. Watching PSUN closely, though. Something might be up, and with such a heavy boat of shorters, it could sink or soar.

Taking a closer look at metals — SLV, EXK, GLD, NGD, even X — though I probably won't touch anything tomorrow (options expiry).

AAPL at 358.50. Twitter search for "Steve Jobs" is getting 15 to 80 new tweets per minute right now. Would love to see a photo of him and the prez at their dinner meeting.

Turnaround Thursday



10:03 am (Hawaii). Got up an hour ago and the market has bounced back moderately. Manufacturing numbers out of Philadelphia, CNBC says, were the catalyst.

AAPL still hovering at 358, but metals continue to rock. SLV (+3.5%) and EXK (2.3%) are up big thanks to chaos in the Middle East (Day of Rage). SLV up almost in a straight line since January 26.

VXX (+1.4%) still up. Won't be touching that due to overnight contango effect.

LVS is up again (1.2%), now 48.82. I remember it trading to the low 46s after its earnings report two weeks ago. AMZN, VZ, CMG all up.

AAPL was actually at the bottom red end of my watch list early in the session, but has been replaced by RLOC and GMCR (-4.5%).

I've come to accept that the protests and rioting of the Middle East have become a combined catalyst that will not cease for weeks, if not months. That makes oil, gold and silver prominent, almost on par with a former "safe haven" like AAPL. Not interested in chasing SLV here, but I'll stay tuned for the next news event. Will there be another Day of Rage? Of course. People there are pissed.

EXK has traded in a range of roughly 5.50 to 7.50 for since November. At 7.20, it may be ready to break out. I wrote last year that speculators and traders had pointed out silver as an unappreciated vehicle, that there was massive hoarding going on. Whether that's true or ever was, the extremes of the past few months in the price are a great opportunity. EXK has a  float of 68.6 million shares and miniscule debt ($337K). The numbers are positive up and down, but this is a tiny company ($82.3 million revenue). At 5.50, a great buy in this environment. At 7 plus, watch out. Is it worth the risk? Will the rubber band yank it back when it touches 7.50?

SLV is also almost too hot to touch by most indicators. Traded between 26 and 30.50 since November and today is at a threshold (31) on increased volume. Tempting. I've always liked physical silver — looking at it more than owning it — so the appreciation of the metal is something to handle. As a piece of paper, it will always be a risk. Any government can seize paper assets of metals. It's happened before (long ago). But right now, SLV and EXK are alluring.

AAPL might be a great buy here at 357, but even without any Steve Jobs health issue, it always has pullbacks after earnings. I'm not willing to park into a position and wait for a catalyst. I'm willing to wait for a great price. But clearly, this is not just about Steve Jobs or app subscriptions. It's also about our personal issues with diseases like cancer. If we're comfortable enough with how the disease is treated, how it has affected our families and how we've dealt with it, the media circus around Mr. Jobs matters less. But there are still many traders and investors with panic buttons when it comes to anything negative or perceived as negative about the CEO. 

One nice healthy photo of Mr. Jobs and Mr. Obama tonight could set shares on fire again. 

NFLX, LULU and other momo movers are fun if you can take the heat. I prefer something cooler with a P/E I can trust. Doesn't mean I won't touch momos. But I know my preference and I'll work with it.

Thursday tabled?

This morning's market: a noble gas, indeed

4:29 am (Hawaii). You knew it. I knew it. Everyone knew it. The market was due for a breather. Maybe a correction, but more likely, a rest. Nothing goes up forever, especially at the rate of the past several months.

In premarket, metals and I-hate-this-world ETFs like VXX and QID are up. Nothing extreme, mostly up to 1% or less. Almost everything else is in the red, including AAPL. which apparently rallied over 360, but is now back below 358 even though it seems Steve Jobs is going to meet President Obama for dinner. How sick could he be if that's the plan? It comes down to investor confidence and the need to register profits. AAPL is taking a pit stop.

If this is strictly a buying opportunity, I don't want to miss it. And with the opening bell, AAPL is already over 359. Zoomzoom.

Remember, tomorrow is options expiration. The usual weirdness will likely prevail until then.

Wednesday, February 16, 2011

Purely momentus


3:25 am (Hawaii). Is the pit stop already over? In lieu of a real pullback of 5 or 10%, the market is awash in green numbers on my iMac screen. It's stunning, confounding ... I'm all cash and happy to be there, but sans bad news, the market is possibly ready to take flight once again without me.

AAPL is set to gap higher if it holds here at 361.44. A 50% retrace from today's premarket high to 360.74 or so, would've been a nice entry point for a short-term trade, but it wouldn't even come back to 361 even. I may be a whore for this stock, but there's a limit to how much I'll chase. Must maintain a shred of dignity and discipline. Or not.

A gap here could be a runaway freight train, a cliche that invites an image of a perilous crash. Whatever. I just think that above 360 AAPL could run several more dollars higher. Pull back. Run again. Pull back. It's a fund manager's must-have. Who can blame any of them? The world's reigning filthy-rich megastock with a ridiculously low P/E, 75% growth YOY and $59 billion under the matress.

Yesterday, AAPL touched 361 in premarket and never got close after the opening bell. But with 3/4ths of my watch list green, is it reasonable to assume that all of these stocks are being played by the specialists? Don't think so.

What else is green in premarket? VCLK (+12.9%), POT, LVS, NFLX, EGPT, on and on and on. More like, what's not green? That would be HAIN (big run lately), TBT, OPEN, QID, ARMH, VXX, RLOC.

Update, 4:33 am (Hawaii). Missed the 50% retrace of AAPL. Came all the way down to 360.50 or so but I was cautious about such a steep drop after the opening bell. Then it moved back to 361.50-plus within a minute. Volume is definitely there. This may be liftoff, after all.

Update, 5:20 am (Hawaii). AAPL to the moon, now 362.68. Major buying pressure the past 10 minutes, from 361.20 almost nonstop higher. The move came along with positive divergence in MACD. Missed my chance at the opening bell on the 50%-plus retrace from yesterday's close. Oh well ...

Next retrace (50%) entry is 361.35. Not expecting a pullback to that level, but I won't chase.

Update, 5:26 am (Hawaii). 50% retrace would be 361.45 now. HOD is 363.00. Likely was a short squeeze. AAPL longs having a party.



Update, 8:36 am (Hawaii). Somewhere, the angel in charge of stock moves is shaking his head and giggling at me. Really. As I drifted into slumber — hey, it was early morning and even two Red Bulls overnight couldn't keep me up longer — Newton's Law took effect. AAPL came back down to earth after touching 364.90. In fact, AAPL retraced even mote than 50% (of the day's gain) and bottomed at 361.42. (Retrace was nearly 70%.)

Maybe I should've put in a limit buy order, but falling asleep wasn't in my plan and I don't care for hard orders of any kind. Anyway, after hitting that level, AAPL ramped up and rose to 363.44, a gain of $2. In the past hour or so, shares have meandered around 363 and change.

So, I've been in cash all day, amazed by the spike in AAPL, not a penny made. Not a penny lost either. The market remains in the green, but gains are not as broad as they were earlier.

Update, 9:21 am (Hawaii). The two major drops in AAPL (and to an extent, the general market) were at 11:21 am (Eastern) and 12:01 pm (Eastern). There aren't many steady declines in the stock nowadays. It's gradual, no-selling pressure climbs that peak and get sold off violently. Whether they're activated by robots or retail stop-loss orders is not the issue. AAPL is top-heavy, a big dude who can bench press 700 pounds who also has pencil legs and tips over at the slightest breeze of 1-2 mph.

Shares are still up more than 3 bucks for the day (almost 1%). Without a catalyst, the guess here is that late-arriving funds have established their positions since Monday. There's no edge to buying here at 363 as a retail trader unless a final-hour buying spree kicks in. I'll be much more willing if shares get below 362 again.

9:55 am (Hawaii). So, Disney and Apple drawing new lines in the sand today. Disney tells Netflix and Coinstar wholesale rates are going up for its films. Apple making that 30% cut the anchor rate of sorts across its app store. Anyone still think Steve Jobs really isn't working behind the scenes at both companies? His prints are all over this. Good for profit margins at DIS and AAPL.

11:01 am (Hawaii). Opened a position in AAPL before the closing bell. Today's volume (16+ million shares) and the short-term base at 363+ provided an opportunity off the HOD (364.90). Not a perfect entry point (sub 362 was ideal) and shares could trade down to 360 (options expiry in two days). Rumor on Boy Genius Report about Verizon and Apple disappointed with iPhone 4 sales.

12:52 pm (Hawaii). Out of AAPL with a small loss (-2.83/sh). I saw shares dip excessively from 363 to 362 in a flash, then head lower and lower. Finally saw links on Twitter about Steve Jobs being spotted leaving Stanford Cancer Center. Instead of waiting around, I just stepped out of the trade and took the small loss. (Half of 1 percent of bankroll.) Figures that no matter how cautious I am, trying not to hold overnight most of the time, the slightest bit of negative news can send AAPL off a cliff. Soft landing, at least this time. Shares bounced off sub 360 and are now at 361+. Back to 100% cash. Best wishes to Mr. Jobs.

9:59 pm (Hawaii). Free time once again. Nice to see that Steve Jobs is meeting with a bunch of techies and a certain individual named Barack Obama tomorrow night for dinner. Looking back, I don't regret erring on the side of caution and getting out of my AAPL trade. That was no mistake. My concern about the public's perception of Jobs going to the doctor was the only factor, and I was right to get out in case AAPL went off the rails (far lower than 360+.

My position did not give me an edge of any kind. Longs who got in at 50 or 100 easily brushed the Enquirer and Daily News stories off like nothing. But those of us who are trading AAPL now are probably much more sensitive to unexpected news and price movement because our position is far more vulnerable. Therein lies the rub. I chased AAPL afterhours, and in the end, I paid the price. It was an odd set of circumstances, but the crux of it all is it was my own fault. The trade itself didn't cost me much, but the execution and price point were mediocre. There's much to learn from today's trade gone bad. It's not about the dollars. It's about discipline. I'm still learning.

The lack of discipline goes back to the opening bell, when AAPL sold off after gapping up. I had my entry point in mind, but did not follow through. Soon enough, AAPL ran from 361 to almost 365.

Two examples of a lack of discipline. To trade AAPL requires a modicum of faith sprinkled on solid discipine. I need both, really.