2:55 am (Hawaii). At some point, with March Madness here, the rotation out of precious metal and oil will flip to retail, in the estimation of the notorious genius Le Fly. I tend to trust his word.
For now, silver is still king. SLW is already up nearly 2% in pre-premarket. Eight minutes until us peons can start trading in the retail premarket and SLW is up 84¢ to 43.39. Rarified air, this all-time high territory. All because silver futures are kicking ass.
While the major indice futures are lagging this morning, metals are up. Silver sat at 34.40 less than 30 minutes ago and is now at 34.31. It could lose all of this morning's gain in mere minutes. I can't say probably or possibly. It just could and that wouldn't shock me or any of the silvernados (silver afficianados).
I was hoping for a pullback in SLW for a sensible entry point. Looks like I'll have to wait some time.
AAPL is up some this morning. What a simple play that would've been, just buying below 340 in anticipation of the next catalyst. Short of global destruction, AAPL is the one stock that is practically guaranteed to go up this year. I felt that way when I bought at 214 awhile back, watched it drift to 190, then enjoyed the ride up before selling (oops) at 257.
SLW or APPL. Maybe both. I like my chances.
AAPL pre-premarket high was 356.10, 2.89 above yesterday's close. A 50% retracement would be 354.65.
SLW pre-premarket high was 43.48, a gain of 93¢ from yesterday's close. A 50% retracement would be 43.02. It took a long time yesterday, SLW eventually pulled back and provided cheapskate traders a huge opportunity to get on board. I was asleep. Got my sugar-free Red Bull by my side this time.
Update, 3:24 am (Hawaii). New high (again) for SLW: 43.65. Relentless. Merciless. People are being squeezed. No other way to explain it. Major gap ups yesterday and today, at least in premarket. The new 50% retrace price is now 43.10. The higher SLW and silver go, the wider the pendulum will swing as traders take big profits and any dip is swarmed by new buyers. StockGuy22 always said psychology always factors into price, so I'm guessing SLW doesn't really slow down until 45. That's sort of a good number for traders to anchor to. Or maybe it should be 42, since that was the previous (intraday) high. More so, silver and 35, now that's the wall right ahead.
Thinking about it last night, the run from 18 to 42 was incredible, and the return to 30 (29 actually, but I'll round it off for my own dastardly purposes) helped solidify new ground for more recent investors/traders. The gain from 30 to 42 is 40%. The previous run from 18 to 42 was 233%. Mirror that to these levels, for imagination's sake. A 233% gain from 30, the new floor/support is ... 70. A 40% gain from 42 would put SLW at 58.80. Of course, it's almost unfathomable what any of the potential "end-game" results could do to silver and SLW. It could be beyond anyone's projection. Or it could be the worst-case scenario should the national debt get so much worse that confiscation become edict.
For this morning, I just want a nice entry point and a smart trade, whether it's SLW or AAPL.
Update, 3:40 am (Hawaii). SLW hit another high, 43.80. Don't know why I'm so fascinated when I have no position. Now trading at 43.75. If it pulls back to the pre-premarket lows (43.19) right before the bell and silver futures are still moderately strong, the timing wouldn't be bad for a partial position. Nosebleed levels, though, and difficult to lose a sense of caution. I'd consider entering then much more confidently if the stochastics and MACD lined up positively. At some point, the profit-taking will overwhelm momo buyers, so it's key to wait for a pullback before the opening bell rather than pay up here.
New 50% retracement price for SLW is 43.17.
Update, 4:22 am (Hawaii). Opening bell just minutes away and SLW is at its HOD again, cracking through 43.80 to 43.87. It bottomed at 43.40 after hitting its earlier high. It's not an earth life form anymore. This has taken on epic proportions known only to outer space. Anything up 2.96% before the bell ultimately has to sell off immediately after the opening bell — unless an unprecedented short squeeze is on and/or it's all pure manipulation to lure in greedy daytraders. Then there would be blood, the blood of longs, in the streets of silver.
I think it's just the Chinese buying up all kinds of physical and paper silver that has finally tilted the JP Morgan wagon over, and Blythe Masters may not be able to keep the thing on all four wheels anymore. Who knows ...
Update, 4:30 am (Hawaii). Holy sucker punch. SLW traded up to 43.92 in the minutes before the opening bell, then there was a HUGE selloff and in the blink of an eye, shares were at 43.50 as the bell rang. Climbing back up, but exactly the kind of manipulation I am cautious and wary about. Still 100% cash, watching from Section AA, Row 1, 50-yard line.
With the new HOD at 44.00, the 50% retrace price is now 43.28. When the big boys dump their shares for nice gains, SLW will dip, no question. Lot of buyers here, though, mostly in smaller increments (less than 1,000-share lots. Not the usual 20,000-plus lots I've seen in SLV (ETF).
Update, 4:37 am (Hawaii). UCO doing nicely, +2.8% to 50.50 probably because CBS filed a report saying that Saudi Arabia will allow the price of crude to hit $120 no matter what.
AAPL struggling to stay near 354. Bit of a surprise, but traders have other options, so to speak.
Update, 4:52 am (Hawaii). SLW retraced beautifully, down to 43.24 (four cents below my 50% retracement price). However, the MACD did not look healthy and I passed. SLW now at 43.65 and rising. Come on, maaaaan!
Update, 5:06 am (Hawaii). That MACD saved me a tidy sum, no question. Sure, SLW gained about 40¢ after I took a pass in the 43.25 area, and I would've made a small profit. But the MACD did not lie, and with SLW unable to get above 43.70 or so, it fell rapidly (stop-loss orders, probably) to 43.01 and is lingering at 43.10 right now. Just traders taking their profits. I remain 100% cash.
Update, 5:48 am (Hawaii). Entered a small position at 43.21, sold at 43.16 for a miniscule loss. I'm talking the cost of dinner for four at Burger King (including commissions). Why not wait more than 2 minutes? I had doubts the minute I clicked on the SUBMIT button and tried to cancel. By then, part of my order had been executed. The stochastics and MACD had seemed clear, but now couldn't get a clear read on SLW at this point. It is simply a dead log splashing along the shore right now. Any seeming buying pressure doesn't last. In other words, SLW is tired, for now anyway.
Or maybe I sold too soon. The MACD is trying to get above water. SLW just can't get over 43.30 right now. Back to the bleachers for me. No sense trying to get cute here.
Update, 7:28 am (Hawaii). A bit droll, but anticipation is there for a big move. Which direction? How should I know? I see silver plays like EXK and PHYS and SLV very close to (or at) their highs of the day. SLW blew up too high and traders finally cashed in. SLW stable (?) at 43.22 after hitting HOD 44.00 earlier.
Now 70% of my watch list is in the red. QID making new HOD at 52.29 while AAPL plummets below 350. Wider view spectacles provide this observation: we're in the doldrums with earnings season mostly behind us. This isn't unusual activity, really.
Also, UCO not far off its high, trading at 51.24. But retail stocks are stuck in the red, a buying opportunity for seasonal timers maybe. I'll believe when it happens. No need to be the first on board that ship.
Update, 11:19 am (Hawaii). DJ -168 points (-1.38%), Nasdaq -44.86 (-1.6%) and S&P 500 -20.89 points (-1.57%). All the positive gains at the opening bell, most of them got squished. 71% of my watch list is in red, including AAPL, which sank below 348, but is now at 349 in afterhours trading. CNBC keeps referring to tomorrow's big media event and the likelihood of the unveiling of the iPad 2, but that alone isn't enough of a catalyst right now. Maybe if the iPad 2 can do things absolutely nobody expects, but otherwise, the good and bad news is already priced into the stock.
Opened a position (again) in SLW. Getting out earlier at 43.18 wasn't bad since it dove below 43 for awhile. I stayed out through the next few hours. At about 1:54 Eastern, shares jumped from 43.20 to 43.60-plus. Later, SLW touched 43.75, but traded in that range the rest of the day. I got in at 43.63. It's only a partial position, so getting out at this level (43.57 AH) would be another miniscule loss. I'm willing to dart in and out, but I'm also willing to hold for a few sessions and let supply and demand do the work for me. SLW may need a breather here for a few days, but if the Saudis allow crude oil to spike to $120 as that CBS report indicated, gold and silver will probably go up again.
If some conservative estimates are correct (re: Jim Rogers), Saudi Arabia won't have the supply to meet global needs should Libya's oil fields shut down. Rogers says they've come up short every time. That they've lied over and over. Time will tell.
Note: EXK was untouchable today. During dips for other silver plays, EXK barely lost any ground and finished up huge. Now at 8.30 after hours, a 12% gain on enormous volume. The chart reads BREAKOUT so clearly. One of the gems in the portfolio of Le Fly and he was in early, 15 or 20% ago.
Other runaway fiends today were TVIX (46.27 AH, +16.4%) and UCO (52.75 AH, +7.37%). I've liked UCO for awhile, but today's move is astounding. Seems like money rotated out of most stocks and into a few commodity-driven vehicles. The run will end at some point, but when? For oil, not so soon.
QID is up 3.9%, riding the floundering day in AAPL (-1.45%), BIDU (-3%), NFLX (-1%). Seems like the up and down days are alternating, which makes TVIX, VXX and QID incredibly hard to hold overnight.
Tuesday reading
Reuters: Eric Sprott (video) (Mar 1 2011) "I won't be surprised when silver goes to $100."
Zero Hedge: Saudi Arabia will let oil reach $120 (Mar 1 2011) "According to CBS ... Saudi Arabia won't take 'significant steps to bring down the price of crude oil until Brent ... reaches $120 a barrel.' "
Turd Ferguson: It's Happy Tuesday (Mar 1 2011) "It's called Happy Tuesday here because of the obvious fact that the EE does NOT like to raid on Tuesdays. ... Typically, the EE does not like to add to short positions toady because the weekly CoT survey is this afternoon."
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