Saturday, April 30, 2011

Weekend library

10:15 am (Hawaii) The coming week will be another fascinating one. There are few things on earth that can get me up at 3 a.m. on a daily basis like the market and the opportunity to profit. Spot Silver will be a roller coaster again, in all likelihood. Trading silver stocks makes more sense than buying and holding at this point unless you were in early. Nothing will beat owning physical gold and silver from a risk vantagepoint, but again, this is true if you were in early. Now? I'm starting to collect/stack/acquire physical. I don't expect to ever sell it. Just something I know that must be done, and it provides some peace of mind against a punchless dollar.

Gold miners were explosive yesterday. Can silver miners be far behind? My thesis that energy costs may sap the strength of all miners is being tested. Streamers. Silver Wheaton (SLW). Miners. Endeavour (EXK). Extorre Gold Mines (XG). Ultra bulls. DGP. All considerable for the picky palate.

Harvey Organ: We should see gold break 1600, silver in excess of 50 (Apr 30 2011)
(video) Robert Kiyosaki: Called dollar decline, oil/gold/silver explosion a year ago (June 6 2010)
(video) Mike Maloney/Robert Kiyosaki: The dollar's fall (May 19 2009)
The Journal: NATO airstrike in Tripoli kills Gaddafi's son and grandchildren (Apr 30 2011)
(audio) Turd Ferguson on Time Monk Radio Network (Apr 22 2011)
Don't Tread on Me: The Silver Bullet and the Silver Shield (Feb 25 2011)
Dr. Antal Fekete: Silver and Opium (Feb 17 2011)

Friday, April 29, 2011


4:12 am (Hawaii) Spot Silver opened strong in premarket (49) but has fumbled away those early gains. I'm out of silver, but watching. I like AGQ, though it truly moves like an athlete on steroids and coke. 20-cent moves in an instant, but generally up, now at 375. It was 372 when I started typing this paragraph. The MACD was changing course in a positive direction when I decided to just watch and get acclimated to the pulse of this beast.

Gold is rising above the 1540 threshold that Sir Turd wrote about recently. GLD, my little stocking of fun, is now at 150.50.

The market is generally okay. 51% of my watch list is green. AAPL is in the green, up 1.1%, but many of the miners are treading water or in the red.

I'll keep watching the PMs. Obviously, the movement in AGQ makes it more conducive to daytrading, but once it reverses field to the downside, there's no catching up. Locking in small, quick profits is key. Think Franco Harris or Larry Csonka, churning out 3 or 4 yards at a time, not trying to break it 80 yards in one play. That's right, Csonka and gold in the same sentence. Hey, those 1972 Dolphins were perfect, you know.

Update 4:21 am (Hawaii) What's interesting here is precisely what I've been reading about gold's action. While silver (AGQ, SLV) will gyrate up and down dramatically, gold tends to move more slowly, and lately, when it goes up, it stays there without the big pullbacks. That's what GLD is doing right now. Went from 149.80 to 150.30, then to 150.50. And now 150.58. Nice. Basically a staircase.

AGQ and SLV have basically identical charts. I like AGQ a little better, but there are certainly dangers there with anything that can drop 10-15 bucks in a split second. 

Update 4:40 am (Hawaii) Took a quick trade in AGQ and got smited. In at 373.44, out at 369.44 for a small loss. There was a pause, a strangely quiet few moments where AGQ was at 373+, and just as I bought, down it went. The MACD is now solidly below 0.0 and spiraling below 369 now. Lesson learned. 

My small GLD position remains positive with Spot Gold at 1541.90. It's not much of a (paper) profit so far, but it's as steady as AGQ is wild. (Now 366.86.)

Update 5:57 am (Hawaii) Can't say I'm a big fan of CNBC, even as it is the one channel that remains on here, muted 99% of the time. No question that today and in recent days, the swelling momentum against silver has been massive. Twice already this morning, traders, fund managers, whoever have been on air calling it a bubble. Maybe this is CNBC's "public duty," an attempt to protect mom-and-pop traders from sinking their life savings into a disaster waiting to happen. It would be admirable if only CNBC had its facts right. When a bimbo anchor spouts out crap off the teleprompter like, "There's no shortage of silver," I have to wonder if she's as dumb as she looks. Seriously. 

I wish that every single time an anchor or reporter or guest talking head claimed this, they'd also confirm numbers from Comex/JP Morgan and simply do their jobs as "journalists." But nobody on CNBC is willing to deal with that issue. They have to get paid, they have to keep the big wigs happy, and they don't want to piss off the wrong people. Unfortunately, their interpretation of the "wrong people" is turning upside down and they just don't realize it. The general public wants to know what is in those vaults. Why doesn't CNBC want to explore this, too? Every time the marijuana special airs, it's another triumph for sticky journalism and another defeat for CNBC as a true financial journalism entity. So much focus on "greed" and safe topics like Facebook, but not a trace of investigation of the vaults and the invisible silver that is naked shorted by JPM. 

So be it. I have no position in silver. But it's certainly annoying to face the baloney. Thank God for the mute button. 

Update 6:08 am (Hawaii) Gold exploding in the past several minutes. NGD went from 10.98 to 11.04, flatlined, then erupted to 11.17. I'd about given up on scouting it after it dropped below 11, but heavy buying ensued at noon Eastern. China effect in play? 

Spot Gold at 1546.80, all-time high. A 19-cent swing for NGD. Amazing. 

Boing boing!

Update 6:43 am (Hawaii) Spot Gold hit (it appears) 1550 and has pulled back a bit to 1548+. Nice. I'm watching NGD (11.20), UGL (ultra 2x), GDX (gold miners). There's also NUGT (miners bull 2x) and lot more, but I'm leaning toward liquidity. 

Update 6:56 am (Hawaii) Looking for NGD at 11.12 (retrace level of 38.2% from its low/10.98 to high 11.21). Not expecting it. Came down to 11.14, now 11.16 again. Might try a stink bid next time it drops. That selloff to 10.98 before the run was pretty surprising. 

Update 7:42 am (Hawaii) Spot Gold now 1558+. Yes, the economy is in dire straits, and yes, it's tough to see a great company like Apple struggle to get back to its high on the market. But in the world of precious metals, there's something assuring about gold reaching these kinds of highs. Looking at a new watch list of PMs and a few currencies, I'm in awe of some gold miners and ETFs. DGP is up 2.8% and still climbing. XG is up 2.2%, but the lack of volume spooks me. NUGT, a 2x gold miner ETF, is up 3%. NGD is consolidating intraday at 11.21. It has room to run to 11.30. 

Both NGD and EXK, at least in my mind, are brothers from a different mother. Small gold, small silver that have run hugely in the past several months. A breakdown would be scary. But for now, they're both appetizing. 

I refuse to buy on the way up. I want to buy on a pullback, which may not come today. 

Okay, Spot Gold now 1559+. Professor Turd was 100% correct on this call. 

I like NGD more than XG, but in this gold rush, DGP makes more sense after a pullback. It broke out at 44 on April 5, now at 50.46. Much more movement (2x ETF). Looking for DGP at 49.99. 

Wish list
DGP 49.99 (currently 50.45)
SLV 45 (currently 47.31)
AGQ 350 (currently 366.03)

Planning to hold that small position in GLD for awhile. 

XG was at 9.30 when Bernankepalooza began on Wednesday, even with this 2% gain today, it is only at 9.66. Compelling. The company is rather transparent (re: video on YouTube). 

Update 7:57 am (Hawaii) A double bull gold ETF, DGP, is up 2.6%. GLD is up 1.4%. Either DGP is undervalued or GLD is over. 

Update 8:18 am (Hawaii) Liked the MACD bounce possibility in DGP, so I entered at 50.63. It has already blasted through 50 and the possibility of a gold selloff/profit-taking is there, but it's a calculated risk, as always. Spot Gold now at 1562.70. 

Update 8:38 am (Hawaii) Spot Gold breaking out to 1569+, taking DGP up to a 51.13 HOD. But it still appears DGP is slightly "trailing" GLD. DGP was up 4.1% to GLD's 2.1%. If this holds much longer, I'll chalk it up to a conversion glitch. 

Update 8:53 am (Hawaii) I know Spot Gold is not done going up. DGP is flatlining at 50.89 and I've already lost half of the gains in this position (albeit just one hour long). But a trade is a tarde. 

Spoke too late. DGP now at 50.86 and bidding down to 50.83. Long term, I doubt China quits buying gold and silver. For now, though, might be time to get out of DGP. 

Update 9:12 am (Hawaii) Out of DGP at 50.76 (most at 50.77, then the last at 50.70). This was a little unnerving. I wasn't comfortable while DGP sat in the 50.60s, but it shot up to the 50.80s, then leveled off before going above 51 for 2-3 minutes. I didn't pull the trigger there because of greed? Fear of losing on a bigger gain? It wouldn't have been a big profit, but it would've been nice for a 1-hour trade. But I waited and waited and sure enough, DGP dropped below 51, below 50.90 ... and below 50.80. After opening at 49.15, the selloff had to come sometime. So, out of a potential 50¢ profit, I made 13¢. That's really bad. The profit was negligible. Should be easy enough to use a stop-loss order. Question is why I have trouble opening a gift-wrapped profit. 

I like the price action in DGP. Still holding a small position in GLD. If we get a dip before the bell or afterhours, I may add. 

Update 9:44 am (Hawaii) Sometimes it's best to just keep it simple as possible. A 4th grade kid could see I had a decent profit out of a really late trade. In and out. Over. Instead, I hang around too often, too long in some trades. GLD is good to hold, no doubt, but a double bull like DGP has to be ridden like a wild bronco: briefly and carefully. 

A closer look at DGP shows that I bought in on the fifth up leg of the day. It had FIVE legs up without declining. In hindsight, I'm lucky it wasn't worse. Must learn to recognize legs. They don't go on forever. 

Update 10:30 am (Hawaii) I wanted AGQ at 350 and I might get my wish. Doesn't mean I'm buying. Currently 353.70 after hours, low of the day. SLV is at 46.56 and slipping. Still prefer that at 45, but with all the negative press (catching up to the blogosphere), SLV's best days are probably limited. 

Still like DGP on a pullback. A near-term retrace from today's high (51.13 to recent resistance-turned-support at 47.33) would be at 49.68, or a 38.2% Fibonacci level. That's my interpretation of a bullish stock/ETF in a bullish sector. 

Update 10:46 am (Hawaii) Brother Turd's take on today's CME shenanigans, Spot Gold's explosion and more. Thanks to his reasoning and experience, a lot of us have made money this week. My understanding of precious metals was nada zilcho until the past few months, reading his words of wisdom along with other bloggers and video bloggers. I left a decently stupid sum of money on the table by not exiting trades quickly enough, but that's my own problem. For his gracious sharing of knowledge, I thank the Turd!

Thursday, April 28, 2011

Vulgar mofos

This explains why Spot Silver hit the skids at mid-day. Zero Hedge reports that the CME instituted a second margin hike in just three days. Today's hike is 10%. Monday's was 9%. I'd like to blame those fuckers for my premature sell today, and though I made a nice profit for a 24-hour trade, I lost a chunk of it when all of today's gains dissipated. (SLV rallied later.)

The good news is CME is probably out of magic bullets tomorrow and Friday. The more they dig, the closer they get to crumbling. I'll have plenty of opportunities to make some money again.

Update Friday, 10:11 pm (Hawaii) In case you missed this earlier, the two margin hikes (9% and 10%) this week by the Comex isn't the end of the blatant crappoli going on. Zerohedge reports that MF Global has raised its silver margin to a rate that is 175% that of the CME's silver margin. MF Global is run by former Goldman Sachs bankster Jon Corzine. 

Pretty shiny yellowey

2:03 pm (Hawaii) Opened a very tiny position in GLD for the first time (149.69). Last-minute decision before afterhours trading closed and only half of my position was filled. I'll take it. Until the dollar strengthens and China stops buying precious metals, I'm fairly comfortable here.

Technically, GLD's chart looks nice, broke out to a new high yesterday. Today's volume was strong, but didn't match yesterday's. It's not a perfect entry point, but it's better than the closing price (149.82).

There's a lot to like about Spot Gold right now. Probably always will be.

London bridges and beyond

8:40 am (Hawaii) So are we to believe that the closing of London's exchange tomorrow and Monday for some royal wedding is enough to stifle Spot Silver (and Gold) for a few days? I'm not even close to a guess on that. I do know that there will be speculation now that Spot Silver has entranced traders. Whether Spot Silver tops out at 50 or not, there will be renewed interest beyond silver and gold. Platinum has its share of bulls. And now, so it seems, so does copper. This story by The Canadian Press claims that copper will become the new gold and be more profitable.

Pure hogwash? Doesn't matter. All that matters is whether enough people believe it and whether enough traders buy it. Making a market has less to do with complete truth and more to do with momentum, emotion and belief. Right now, I believe Spot Silver and SLV are a tough place to be. In fact, any return to SLV for me will be strictly for scalping. (Why do I doubt that will hold true?)

Looking ahead and exploring will help. If copper is going to be the next king, I want to be in a favorable position, to be ahead of the crowd, as Jim Rogers often says (words to that effect).

Update 9:07 am (Hawaii) SLV gives me the willies with its empty vaults and all. So I'm leaning toward daytrading AGQ from now on instead, but that's no piece of cake either. Though AGQ rallied huge yesterday from 320 to 380 this morning (Bernankepalooza effect), it fell to 345 mid-day today. Even with a small position, that's a huge range that requires micromanaging. That's the nature of an ultra-bullish ETF. AGQ vs. SLV. I know the biggest advantage for AGQ, but the speed is blinding in either direction. Currently at 364.47.  

Silver vs. Gold vs. Platinum vs. Copper. Gold seems poised for a big move, and both gold and silver remain in high demand by China and, to a lesser extent, the public at large (for investment). Platinum and copper may be interesting, but are they worth trading on dips? Or are prices stuck in the mud because of energy costs? 

Precious metals vs. Cash. No contest. Inflation is eating us alive, whether it's gas prices or food prices. That's why the right PM was the place to turn fiat into a growth vehicle at the start of this year (and last year). Right now, the environment is tricky. I think Spot Silver will consolidate here in the 40s after that huge surge recently. I'd rather buy on the south side of 45 than north. Simple as that, though it might not happen again for a long time. AGQ would be a nice start at 350, and it dipped below there during today's selloff. I wasn't ready for a trade at that time, not after getting out of SLV just before that. I need an algorhythmic tradebot to overcome my emotional state. 

UCO vs. Cash. Again, no contest. A buy in UCO (ultra crude oil ETF) just two months ago would've netted any trader a 50% gain. Even a modest gain in UCO is better than cash. I still want a small position just to hedge against rising gas costs. We pay $4.50 a gallon here. I'd like a piece of UCO below 60.50. 

Silk Road

Update 11:35 am (Hawaii) Right on cue: SLV was trading at 47.25 after hours with a tiny ask lot size and a large (35k) bid when Fast Money starts talking Spot Silver and SLV. A guest talks about the 160M that came into double-bear silver ETF ZSL yesterday compared to the 230M that's been in SLV year to date. Then Pete Najarian talks about the options activity on the bear side, spells out the name of the ETF and instantly, SLV plunges to 47.16. The big bid disappears. SLV is down to 47.10. 

Small fries like me can't beat the big boys. The space-alien machines rule. I'm still not ecstatic about selling my position too low, but I don't miss having to wonder about SLV blowing up sooner or later. 

All news have a silver lining

4:01 am (Hawaii) Yesterday's Bernankepalooza was a yawner in general, a status-quo non-move that kept the Fed on that proverbial tightrope between survival and doom. Today, economic numbers aren't positive, and it doesn't matter to Spot Silver. Though spot price was basically unchanged overnight — Hong Kong did nothing to really lift it after seeing last week's run above 49 falter — it's above 49 now. Spot is 49.17, making an enormous run on massive volume shortly after the bell (9:35 am Eastern) that felt like an algo move. SLV reached a high of 48.18 after yesterday's close at 47.00.

I'm glad I stayed with that precarious SLV position, and with AGQ up $17 to 379, I'm wondering why I didn't start at least a small position. Then I realize that my taste for risk is what it is. I'm comfortable, more or less, at this level (32% cash). The market was lukewarm earlier, but now 64% of my watch list is green.

US Dollar: 73.21 (LOD 73.06).

Early winners include EWJ, EXK, RLOC, PSLV, EDZ, NGD, EXK and CRR (+10.3%). Also XG, AZK, MCP, CLNE.

5:22 am (Hawaii) Trying to stay awake has never been so pleasant. SLV is up to 48.20, shooting parabolically a few minutes ago after ranging at 47.80-47.90 for some time. Spot Silver shot to 49.41 before pulling back only slightly, and Spot Gold is at 1534. Turd Ferguson is watching 1540 as a threshold. Anything above that would launch it (and Spot Silver) and bring more volatility to new shorts. 

I've got a drive to make back home before the early-morning commute kicks in on our main freeway here in Honolulu. Wish there was a live audio feed. This beats play-by-play of the Super Bowl. 

Spot Silver approaching 50

Spot Gold approaching 1540

Update 6:09 am (Hawaii) In the amount of time it took me to get on the freeway and get home, SLV went from 47.73 to 46.93. Actually, it took only 2 minutes. That's what the span of price was during a big dumpage by some big seller. Since then, SLV has ranged between 47.55 and 46.95. A lot of buyers came in at 47 or so and it's now at 47.25. Opportunity to buy here? AGQ looked tempting at 362. A stop-loss before I hit the road would've been prudent. After all, this is a trade, not a marriage. I could've re-entered here at 47.25 or lower. 

I just didn't anticipate a 3% drop (from 48.35 HOD to 46.93). And all because London closed and the royal wedding is closing down the market there tomorrow? I don't think so. This selloff didn't strike until after London closed. In fact, Spot Silver shot up during the close in Great Britain, so this is simply profit-taking by the algos and traders and fund managers. After all, at 48, this was $4 profit for a lot of people and machines. 

In fact, this might not be a bad time to take half off the table. That was something else, to see all of today's gains disappear. Moving on...

Update 7:14 am (Hawaii) Well, one day's paper gains (and then some) slipped out of my hands. It's the reason why the subtitle of this blog is "Hammering out the impurities of dumb trading habits." After all, not matter how logical and solid the argument for fundamentals in any stock, what goes up eventually comes down. Today was and is, apparently, a short-term top for Spot Silver and SLV. 

SLV gave me a chance to cash out when it rallied back to 47.80 just 45 minutes ago. That would've given me more than a $3 profit per share, something I could be gratified with. Instead, it sank as the NYMEX entered its final minutes of trading for the day. SLV putzed around 47.50 and I had thoughts of getting out. But within a few minutes, it was on its way to 47. In a blink, it was at 46.80 and I hit the sell button at 46.75 or so. After the earlier selloff while I was on the road, I can't say I'm shocked. But the magnitude of the selling is always impressive. 

To go from a nice paper profit to a loss for the day (-25¢ is no good), but as SLV plunged down to 46.40, I felt just a teeny bit better. Stop-loss orders are a huge part of the momentum in SLV, just my guess. A cascade with almost no end. Overall, though, I did all right with SLV (+2.00 per) so I will not complain. I'll just remember to lock in profits earlier by selling half or more of the position on a gain that strong in just two days. (Up 8% at today's high; I finished with a 4.4% gain.) 

SLV now at 46.22. No rush to re-enter, not for awhile. Have the machines jumped on ZSL? Probably.

Wednesday, April 27, 2011

Is the coast clear yet?

Denise Milani

7:35 am (Hawaii) Apparently so. The Fed's minutes are generically status quo. I saw SLV explode from 44.20 (pre-minutes) to 44.85 or so with seven or eight minutes. During that time, when SLV pulled back, I kept thinking 44.24 as an entry point, which is precisely where it came back to. (Why 44.24? I did quick math in my head and a Fibonacci retrace of 38.2% of the gain between 44.20 and 44.85 was roughly 44.24.) But I didn't pull the trigger. And of course, SLV ran back up and continued to 44.85. I eventually entered at 44.75 and sat through a dip below 44.50. SLV now at 44.90 (HOD 44.99).

Yup, Spot Silver is benefiting and GLD is up, too (+1.1% to 147.96).

Bernankepalooza has made happy traders of bulls, not so much of bears. The market's response has been lukewarm. 54% of my watch list is green, but of the winners, they're big winners. RLOC (+31.3% to 23.63), EXK (+6% to 11.31), AMZN (+5.9% to 193.29), SLW (+4.2% to 40.83), CLNE (+4% to 17.07), PSLV (+4% to 20.97), ACQ (+3.7% to 330.22).

Yep, the miners are finally coming home to roost. PAAS and PHYS are also up. AAPL is still down for the day, while X (-4.3%), AMRN (-3.4%), WNR (-2.7%) and RIG (-2.6%) are plodding.

It would be a shock to the market if Big Ben said anything beyond what the minutes offered. Nothing is guaranteed. It's a 90% lock he'll be neutral and stick to the minutes script. That 10% is, of course, spooky for newly minted bulls.

Silver train

Update 9:29 am (Hawaii) As expected, Bernankepalooza went without a hitch. Big Ben assured planet earth that there's no real inflation, all systems are status quo/go and the market responded as such. Spot Silver and silver plays fluctuated during the 40-minute speech, but with the coast very clear now, it is trading at 47.72. SLV has been racing higher, giving back, racing higher, giving back and is now at 46.78, right about its HOD. YES, SLV is trading higher than the -2.5% conversion to Spot, but I'm not complaining.

The only thing that remains close to a 90% guess is that BM/JPM will not issue a bear raid for now. As in the next hour. After that, who knows...

Update 10:06 am (Hawaii) Still 32% cash in my little roll. SLV hit a high of 47.15, currently 46.91 after hours. Might deploy some cash into AGQ (ultra silver ETF) and/or SLW. If there ever was a green light for Spot Silver, now would be the time. I'm 99% positive Asia will push Spot (currently 48.04) higher. What happens after Asia closes and New York opens at 7:30 am Eastern, that's another scenario.

SLV just dropped from 46.85-46.90 to 46.65. Never a dull moment.

Silver with attitude

Update 2:56 pm (Hawaii) Not feeling incredibly confident at this point, but I made the decision and there's nothing that can be done. I'm sticking with my position in SLV overnight, which means 1) Hong Kong could buy it up like crazy, and so far Spot Silver is up to 48.40 in the first 30 minutes or so of trading there, and 2) New York could take Spot tomorrow morning and mutilate it. Odds are in favor of a rise overseas, but I'm not comfortable. I could've sold afterhours for a tidy profit; at SLV's high of 47.56, I could've banked roughly 2.80 in profit. Instead, it's time to let a winner run. In fact, I almost opened a second position in AGQ, which went from 358 during the doldrums of afterhours trading to 370. A small position would've been a nice trade. But I stayed put. 

Busy afternoon and evening ahead, so I won't be able to watch Spot run. Just as well. Nothing I can do about it until 2 am Hawaii time. My leanings and beliefs are only stronger because of the wealth of knowledge out there regarding Spot Silver, SLV (always iffy), the Fed, Spot Gold, etc. This trader is in need of some stress relief, like exercise. A long walk. 

Hong Kong

Tuesday, April 26, 2011

Teetering Tuesday

AMZN kookiness: earnings report reaction

10:42 am (Hawaii) Somewhere between today and tomorrow, bets will be placed. Educated guesses. Misinformed hunches. All that stuff. Somewhere, Spot Silver will re-establish 44-45 as support and launch into unmarked territory, price adjusted for inflation (1980 spot at $50 would be $138 today) or not. OR SPOT will wobble with any talk by Bernanke tomorrow about a stronger dollar, and plunge to 40. Those scenarios are okay with me, since I'm completely out. But those are just two possible scenarios. 

The market is skittish. Traders are as coiled to panic or exude bliss as ever. Look at AMZN, which traded up to 183, then down to 171 and back up to 184 within minutes after releasing its earnings report after the bell. 

Does this make any sense? I almost opened a small position at 172, taking the StockGuy22 approach to bounces after a selloff. I talked myself out of it, but the spectacle that followed was incredible nonetheless. That would've been a quick, sizable profit. But I'm not a big AMZN fan, so it didn't happen. (Being a fan should have nothing to do with a trade, but that's something I'm working on.) 

Spot Silver is trading above 45, and I don't know what time PM options expiry actually comes due today. If it's pegged to 45 as it appears, it's crunch time.

Update 11:06 am (Hawaii) Spot silver now at 45.50. Turd predicts a selloff before tomorrow's Bernakepalooza. Just watching for now.

Update 11:13 am (Hawaii) Though China is the driver of Spot Silver's rise, I can't help but wonder what happens as paper silver traders — who have been a big part of the metal's appeal and allure, just look at SLV move while miners flop — start to turn "fiat" into physical. Over time, as Spot rises, paper traders will opt for physical. That will add to demand, no question, but as physical silver/spot begins to behave like physical gold, in a sense — something to hoard and store away — the trading element that has driven this market short term will be diminished. That's one thing I can't help but wonder about. Of course, if China keeps buying and buying, paper trading will matter less and less. Or will it?

China vs. JP Morgan/Fed. It's the heavyweight battle of the year.

Update 12:05 pm (Hawaii) SLV stayed below 44 until a few minutes ago, when Globex reopened and Spot Silver remained above 45.50. Immediately, at 6 pm Eastern, Spot surged to 44.30 and has gone to 44.60 since. Currently, Spot is 45.65, which converts to 44.50 for SLV, and that's what's happened in the past minute. SLV has come back down and is trading at 44.47. This conversion has been consistent, with SLV trading at -2.5% to Spot.

Update 2:27 pm (Hawaii) Spot silver rose above 46 from 45.50 as Sydney opened. With Hong Kong opening, as well, if there's going to be an orderly bounce from the selloff low (from 49.81 to 44.80 or so), this would be the time. However, I agree with Turd Ferguson, who expects another takedown in the works overnight. I'd love to play silver via SLV if spot can get down to 44 or 43.50 or lower. Can't say I'm totally expecting it.

The market ran upward today as if to say, 'We expect Bernanke to leave things alone.' Which he could. But I'm content to stay out of the game 100% for now. A small position in silver would be okay, too, but I'm more leery here than I was over the weekend.

Update 2:56 pm (Hawaii) Sydney and HK are keeping Spot above 46. It was interesting to see SLV jack up above 45 earlier while Spot was at 46, meaning SLV was above the conversion level, running higher into the close of afterhours trading in the US. Momentum. The market has spoken and it believes whatever happens tomorrow is bullish for the market.

Whatever happens, China holds the trump cards, and that's good for gold and silver.

Turrbll Tuesday?

8:27 am (Hawaii)
Got a good night's rest, woke up an hour ago to see Spot Silver trapped at 45. Makes sense, this being precious metals options expiration. A month ago, 45 seemed out of the stratosphere, but attainable. Well, 49 was penetrated, and this pullback to 44, and back up to 45 is within reason — all manipulations and agendas included.

From where, we have Bernankepalooza tomorrow. If all things remain status quo and the slightest hint of QE3 is uttered from Benjamin's lips, the bull stampede resumes. For now, I'm content to stay in 100% cash. Trying to time Spot Silver here is too much. I can see a small entry position at 44.50 or 43.50, but nothing more. This could dip to 40 in minutes. Then Spot becomes very buyable; global demand won't allow a drop below 40. I'd put chances of a bounce there at 99%.

Meanwhile, gold miners are spiking. XG (+6.8% to 9.41) and NGD (+2.4% to 10.74) are among the big gainers on my watch list. On the other hand, silver miners are eating dirt. EXK is down 5.4% (10.72), SLW (not a miner, but trades with them) is down 4.5% (39.17). PHS, PAAS and PSLV are all down substantially.

Crude oil? UCO is up fractionally, but WNR is down 4.3% (17.88).

Other news include Facebook getting more into coupon/deal service to challenge Groupon. IPOs in Groupon and Facebook are going to be massive one day.

Monday, April 25, 2011

Spot vs. Shorties & Bernankepalooza

11:48 am (Hawaii) Spot Silver climbing off the mat, now 46.98. A couple of notes: For a third (or fourth?) consecutive session, Spot has rallied after the London market closes. Today, London was closed all day, though, and Spot erupted during the usual time frame. Just a couple more hours until Hong Kong opens for Tuesday trading. How can HK/China not be bullish of Spot Silver when it is practically economic policy to invest in it? A tough call here, but worth considering. Ultimately, the specter of PM options expiry (Tuesday) and Bernankepalooza (Wednesday) are two big guillotines to face. 

Update 12:03 pm (Hawaii) As Turd Ferguson predicted, a margin hike spared the big money that bet against Spot Silver. Here is his post about manipulated (or manipulative) media, the Cartel and more. This explains the big drop from 49 to 46 earlier today. 

I still think that the highest likelihood probability is for silver to head down again tonight and tomorrow and retest the lows of this morning, near 45.50. It may even make it all the way down to $45. Again, IF that happens, I will be an aggressive buyer of July calls as I expect a move toward $50 or even $52 by late next week.

I wouldn't bet against the Turd. Ever.

Update 7:39 pm (Hawaii) Work is done (I think) and it's time to check Spot Silver ... which is tanking. I didn't expect Hong Kong to send Spot into the gutter, but hey, it won't be forever. In fact, this dip to 45 is healthy as long as you cashed in that short-term position on Thursday or early this morning.

Thirty-six long hours until we're done with PM options expiry and Bernankepalooza. Then, maybe then, the Silver Rocket takes off past 50. For now, just like King Turd predicted, the evil forces have taken Spot Silver downward. It won't last.

Update 11:01 pm (Hawaii) Spot Silver climbing back up down under and in HK. Traders who access the currency markets ... I'm a wee bit jealous. Spot may touch 45 again sometime on PM expiration Tuesday ... but maybe not. Note how the price levitates once Sydney closes, leaving only Hong Kong to trade spot. They ain't forkin' around in East Asia. The Chinese have Big Brother "encouraging" the purchase of silver, silver and more silver. 

Here's a clip of Peter Schiff, who was on Fast Money on Thursday. He's spot on, of course, pun intended. 

Update 11:08 pm (Hawaii) Just a wild guess on whether we see QE3 or not. A few days ago, I'd have leaned against it happening. But with all the chess moves made by China recently, plus Japan's pension situation, plus kookiness in Euroland ... I'm guessing 65% we get QE3, 35% none. 

Doesn't mean I'm diving into the shark pool headfirst before Bernankepalooza on Wednesday, but I'm trying to get a better feel for the climate. 

Update 11:39 pm (Hawaii) And finally as midnight approaches in the islands, a word from Harvey Organ

In silver: the bankers are not covering yet which is a big surprise as they are still adding to their short position. The large specs continue to pile it on hoping for the end game to be played out. The game is between the large specs vs the commercial bankers. The large specs have enormous amounts of dollars to play long.
The bankers have enormous amounts of lent dollars from the Fed placed for collateral against billions of paper losses. Without a doubt there will be an epic battle on this front.
Spot silver now at 46.05. When I get back home in a couple of hours, it could be right back at 45. Spot's traded higher in Hong Kong than London, the latter being open for a few more hours and the former just closing shop. 

Gold bug vs. Silver bugs

10:05 am (Hawaii) I don't know who Bob Moriarty is. He writes with conviction about what he perceives to be fabrications about physical silver shortage. He takes on Ted Butler and Eric Sprott. He admits he was wrong about Spot Silver at $38. But he contends that certain silver bulls are lying. Of course, he writes for a site called

Always interesting to see conflict between precious metal nerds.

Bob Moriarty/321gold: Facts on silver (Apr 25 2011)

Spot's pit stop

2:30 am (Hawaii) I managed to get up after a nap to prepare for the 2 am peon premarket (when us mortal retail traders can enter) and saw SLV struggling to stay above 47. Not that I'm complaining after it closed on Thursday at 45.53. But Spot Silver had traded as high as 49.81 overnight (Hong Kong). The price dangled, then fell below 47, where I exhibited a trace of patience. After the price kept falling and showing no strength, I opted to take a little profit and move on, selling at 46.70 for a $1 gain.

This was a partial position, very small — one-fifth of what I normally trade in SLV — and I thought about leaving it alone for at least another hour, or the entire day. But there's a lot of work to be done; I'm doing a bunch of it right now, even at this hour. And I won't get much chance to fiddle with distractions like the market this morning. So, I'm out. Having a very small position was good; less risk means less stress. Of course, a fuller position would've netted a much nicer profit, but I was comfortable over the weekend. Where Spot Silver goes from here is probably a two-way answer: up and down. I'd be a little surprised if there wasn't another run at 50, but there are going to be a lot of profit-takers here near that threshold number.

What a circus Spot has become. But it might be time for a breather.

Update 9:30 am (Hawaii) Last check, roughly 45 minutes ago, 25% of my watch list was green. It's been bearish all day heading into 1) Tuesday precious metals option expiration, and 2) Wednesday's Bernanke press conference. Fear lurks. 

Spot Silver is hanging above 47, though the furious action earlier abroad and in the states has slowed significantly. What was a blur is now somewhat of a bore. Mind you, I'm following just for entertainment purposes, not having a position. Had I kept the first buy in SLV at 31+, I'd be up 50% in a month or so. But who knew? SLV is, in my eyes, as risky as it gets in PMs. I do not believe JP Morgan will ever go under due to lies about physical silver and vaults and such. But crapola could definitely hit the fan at some point, and SLV would be hung in effigy. SLV bagholders would be left without a cent once the pinata is revealed to hold no actual silver, but just hard candy nibbled on by ants. 

Not looking to re-enter SLV. AAPL traded between 350 and 353. Overall, though, just a slow market waiting for reckoning day.

Spot Silver trading at 47.38. Will Asia send Spot back to 48 and 49? 

See the real deal at Turd Ferguson's blog

Sunday, April 24, 2011

See Spot Run!

1:58 pm (Hawaii)
This is why I allowed myself a small position in SLV before the close on Thursday. If I were truly a genius, I would have held my full position from 31+, but hindsight's a bitch and best left in the rear view.

The news about China is huge, obviously. Coming off the heels of the U. of Texas news. Japan's pension situation doesn't help the US Dollar either. Just about nothing going right for the ol' dollar and everything going right for PMs.

There will be wild, schizo jolts as seen on Richter scales sitting over tectonic plates and hotspots. But the overall move for Spot Silver is up. Up. Up. Down. Up. Up. Up.

Some gurus like Turd Ferguson anticipated a pullback by Thursday, or at least by Monday (tomorrow). I would not disagree. Any parabolic move stops or stalls eventually. But the view has changed and it seems Spot Silver will keep rising at least until the Fed speaks up on China, which may or may not happen until Wednesday. Is a bull trap forming with precious metals expiry on Tuesday? I don't know and I don't plan to stick around even with a small position to find out.

Reuters: Japan GPIF to withrdraw $78 bln from assets-Nikkei (Apr 24 2011)

Update 2:03 (Hawaii) Spot now 47.82 and Hong Kong has yet to open.

Update 6:37 pm (Hawaii) Just got home from a busy day of Easter festivities. Lo and behold, Spot Silver is at 48.16. 

Update 6:57 pm (Hawaii) Spot Silver at 48.50.

Update 7:09 pm (Hawaii) Spot Silver 49.19. Have never really seen a graph like this. Ever. This could be insanely extreme short covering, but it has to be more than that. If China is both 1) in major hoarding PMs mode and, 2) done buying US Treasuries, then maybe we have some logic here.

Update 7:12 pm (Hawaii) Spot Silver now 49.81. This is going to surge well past 50 or completely break down at 50 and plunge. Something is strange here...

Update 7:21 pm (Hawaii) Tumultuous to say the least. Spot Silver back to 47.91 now. China may start new sovereign funds to invest in oil, gold: reports (Apr 25 2011)

Update 8:32 pm (Hawaii) Hong Kong closing in several minutes, then it's quiet with London closed, and Sydney will be closed, which leaves just the good ol' US market to do what it will with Spot Silver ... which is now 49.20 and heading higher again.

Came across this video tonight. He puts things quite well, very much easy to understand for regular peasants like myself.

Update 11:18 pm (Hawaii) And finally ... the final Spot Silver price from Hong Kong, which just closed for the day (Monday), is 49.07. So strange to be no longer shocked at how easily Spot tore through 46, 47 and 48. It could sell off back to 45 and that wouldn't shock me. But, for now, all is well for silver longs and physical silver possessors. Stateside market opens in a few hours.

Thursday, April 21, 2011

Weekend library

Have a safe, joyous Good Friday weekend!

Al-Jazeera: Obama approves drone strikes in Libya (Apr 21 2011)
Trader Dan: A brief consideration of silver's open interest (Apr 21 2011)
Michael Maloney/Resource Investor: How the Hunt brothers capped gold... yes, gold (Apr 18 2011)
(Video) Fast Money: Spot silver hits 31-year high (Apr 21 2011)
Afraid to Trade: Before calling a top in silver (Apr 21 2011)
Carl Swenlin/Financial Sense: Silver still soaring (Apr 21 2011)
Eric Sprott/Zero Hedge: Expect gold to silver ratio to hit single digits (Apr 21 2011)
Jesse's Cafe Americain: What I think the fluctuations and trends in the Comex silver inventory mean (Apr 21 2011)
(Video) Peter Schiff: Bearish on the dollar, bullish on PMs, oil (Apr 7 2011)

Jim Rogers (Apr 18 2011)

SLV-miners-ultra short ETF (ZSL) 6-month chart

Noise in the Library

Keeping that mojo in place

1:13 am (Hawaii) Hong Kong is done for the day, but now it's London that's buying up spot silver, which is now 46.19. After watching the 24-hour quote often as possible before, during, after work, and even as I napped, it's nothing short of a phenomenon. I mean, I've seen stocks rocket like crazy for years. But 24 hours a day? That's new to me. This is going to end in an unhappy way for the most persistent longs. Silver has its place and the case for a high price on it is legitimate. But this smells much like irrational exuberance, and maybe that's going to kick in fully soon. When it sells off, it'll be like the sudden dip we had on Wednesday, except bigger, faster and far more painful. Until then, what a freaking freak of a monster.

No mojo can contain the unleashed momentum of this beast. Enter at your own risk. My favorite silver play is SLV, fake physical and all, because of the liquidity. Sheer volume. SLV is at 45.05 in pre-premarket.

Then, there's something less alien and clearly not on steroids. That would be AAPL, which is trading at 358.32 in pre-premarket. I missed it at 350 afterhours yesterday. Then it spiked to 354, then on to 357. When it came back to 355, I decided to wait until this morning. It's run from a low of 320 (Monday). I can't help but realize it's due for some profit-taking after a run of nearly 10%.

Crude oil is trading above 112, so UCO is already up 1.6% to 62 even. With the US dollar barely able to stay above 74 and Brazil raising interest rates to 12%, this could be a blowoff day for gold and silver.

Update 2:29 am (Hawaii) AAPL dipping below 358 ... Not sure if it'll retrace 50% of the gain since yesterday's close. (That would bring AAPL to 351.) SLV is at 44.84. Strangely becoming used to spot silver at 45-46. All in all, gray area opportunities, not prime at all. Best to be a shrewd, cheap trader looking for that one golden opportunity rather than chase and pay the highest prices.

Traders on the ancient Silk Road

Update 8:53 am (Hawaii) Back up after some much-needed sleep. Even Red Bull couldn't keep me up after the opening bell. That's life in the islands. I can't stay up through every night and morning, missing sleep ... but I try. Spot silver drifted below 46 today and it would've been perfectly sane for it to stay there. However, London closed shop and the post-London spike ensued. AGAIN. How I forgot about this ... well, I was asleep. But spot went from about 45.75 just before London's close to 46.33 now, another all-time high. Incredible and totally daffy. 

Volume in SLV, which is at 45.22, is down from yesterday's memorable run, but still robust at 67 million shares. How many shorts are trying to set up for a gravy train over the weekend, with global markets closed (Good Friday, Easter Sunday) into metals option expiry (Tuesday)? Much as I like to see the contrary side of things, I can't fathom going long over the weekend in any silver play. 

AAPL. I cancelled my buy order after hours yesterday at 355.83. AAPL went up to 357 at the time and was in that area early today in premarket, but hasn't been there since. It pulled back, as expected, to 351. Then lower to 348+, and is now at 351.85 with an hour left in the session. 

GLD is up fractionally (+0.2%) while spot gold is up nicely to 1,506.60. The reaction to Chinese inflation/rise of the yuan (vs. dollar), Brazilian rate hike, a faltering dollar (74.31) and robust crude oil (112) work in silver's favor for another day. The bubble will pop some other time. 

Update 9:26 am (Hawaii) Almost stepped into a quick trade in SLV at 45.30, but opted not to. Oh well. Either mania or short covering is pushing SLV higher, now at 45.39 as spot silver zooms to another new high. For awhile spot was a 46.49, which converts to 45.32 for SLV (-2.5%), but SLV kept trading up to 45.39. Mania. Short covering. 

Stochastics are out of buying territory. A buy here, now at 45.41, is pure risk. SLV held that 44.40 area early today and inched higher with higher highs and higher lows. What happens after hours? Global market is basically closed until late Sunday night. I'd like some SLV shares at 42.50 or so, as Turd the Genius projects. For now it's all lecherous hand-to-hand combat with scissors, razor blades and sharpened spoons in this alley. 

Update 9:44 am (Hawaii) The DIABOLICAL fiends who have traders thinking China will devalue the yuan by 10% ... geniuses? It has shorts in a frenzy. SLV dipped from its high down to 45.41, and now it's roaring higher again. I passed on a quick trade again. Okay, now it's at 45.50. 15 minutes left in the session and shorts are screaming as they sprint to the exits. Thing is, is the Fed going to allow the dollar to fall on its face? Is JP Morgan going to call for the mother of all naked short sales this weekend? 

Questions, questions. 

Update 10:03 am (Hawaii) Market is in afterhours trading. Spot silver is healthy at 46.69 ... or is it running on fumes? Global markets are now closed with one exception: Tokyo opens soon. Can Tokyo carry spot silver here or even take it higher? I have no idea if Tokyo has any impact on commodities any more. This weekend has all the makings of the Big Bad Wolf making carnage out of the Three Little Pigs at that lonely house in the woods, BBW being the puppetmasters and the pigs being peon retail traders (us).

10:06 am now and SLV has cratered a bit. Tried to stay at 45.55, but plunged to 45.48. Am I still wishing I walked into that buy at 45.30 roughly one hour ago? That would've been pure risktaking. A billionaire can afford to toss 100K into a risky trade. A little guy like me has to manage risk to the nth degree. 

Update 11:20 am (Hawaii) This is why I stay home late mornings instead of running errands, getting exercise, etc.: Chatter on Fast Money about silver took SLV from 45.45 (after hours) to 45.65 within minutes. They went on an extended discussion — it wasn't a real debate because everyone agreed long is strong right now — that fueled more and more price action. Discussion ended and SLV came back to 45.55. 

It's entertaining and ludicrous. Spot silver was and still is 46.61, which converts to 45.44 in SLV. Shares are now at 45.58, very overpriced. That's mania momentum. Please consult with your doctor if your erection lasts more than 4 hours. You've been warned.

Update 11:39 am (Hawaii)
Sure enough, SLV just fell through a cloud or two. After trading up on CNBC hype and a few thousand shares after hours to 45.70, SLV fell to 45.58 in an instant. At 45.70, it was trading 26¢ off its actual conversion (mine) price (45.44) relative to spot silver (46.61). This is high-end goods and oily swap meet bartering at its finest, only after hours.

Update 11:52 am (Hawaii)
This was the first time I can recall Fast Money talking this much about SLV during the current run. It's been almost always about spot silver, but not specifically SLV. The response in price action was wild. Once we're at the top of this hour, though, I expect spot and SLV to drag down. Cramer loves hyping gold, but never silver.

Update 1:10 pm (Hawaii)
At 11 am Hawaii time, when Fast Money began, SLV was at 45.48. By noon, when the show ended, SLV was at 45.68.

Then Cramer began, and when he was done an hour later, SLV was at 45.73. It remains at that level right now, up from 45.55 at the closing bell. SLV is now at 45.74, or 30¢ above where it should be. Short covering and mainstream adulation, indeed.

Update 1:35 pm (Hawaii) One of the most perplexing patterns this week was the disconnect between spot silver (and SLV) and miners. Silver Wheaton (SLW), Pan American (PAAS), Endeavour (EXK) and other miners waddled far behind spot and SLV. Maybe the miners are providing an omen of where spot silver is heading. Or maybe the increased energy costs of mining (crude oil is at 112+) are scaring traders. But SLW was a home run for the past year, and maybe it was just time for a pause.

I don't like SLV, but it trades with great liquidity and volatility, and I don't need to like something to make a profit. In a perfect world, the best miners move up with spot.

Update 2:02 pm (Hawaii) Chances are a spot silver (and SLV) pullback is coming. Until then, I've decided to keep a small position in SLV rather than be 100% out. Most who follow spot silver knew that it was on its way up at 20, 30 and 40. But I sold at 32 and other levels since. Spot will hit 50 sometime soon; I put an 85% chance of that. But the chance of a near-term pullback by Monday afternoon or Tuesday morning (PM options expiry) is very high, too. So my position is only 1/5th of what I usually trade. (I was aiming for 1/4th, but time ran out on me.) And a small part of that wasn't filled with my order before afterhours trading closed.

It's partly philosophical, partly strategic and mostly common sense. Keeping a half of quarter position in since 31 would've racked up substantial profit despite the ins and outs of my trades. So I'm approaching with more recognition of gray-scale positions than sheer black and white. The current partial position represents just 13% of my roll. The remaining 87% is cash.

Unless China announces this weekend that it no longer wants its citizens (or its federal bank) to invest in silver, there is no point fighting Big Brother.