2:07 am (Hawaii) Does it mean anything just 7 minutes into premarket trading (the peon market, that is) that AGQ (ultra silver bull), NGD (gold), GOLD (gold), AG (silver), and DBS (silver) are all 1.3% (or more) higher already? Crude Oil UCO is up 1.1%.
This could be tricky ... there's no data, nothing reasonable, to stimulate the market into being favorable to precious metals this morning. I say PMs churn in this channel up and down and up and down until something big comes down from Congress (debt ceiling) or the Middle East/North Africa.
Less than 24 hours until gold futures trade on the
Update 4:16 am (Hawaii) By the opening bell, the 2:1 ratio of metal stocks/ETFs/ETNs up versus down had turned upside down. It's still 2:1 in favor of the losing plays today. I tried ZSL twice, missing the boat at 21.40 before a big run to 22. I entered at 21.81, sold for a small loss. Re-entered at 21.99, sold again for a small loss. In both trades, I was above break-even, but bought in too high as ZSL became range-bound.
Though there's not much positive on the playing field for PMs today, even the bear ETNs can't carry through very far. There isn't a single play on my Metals List doing better than 1.5% up, and that includes the bear and double bear ETNs.
I haven't slept yet tonight. I would've been better off getting some zzz's. Or shopping around for some cheaper physical metal. Spot Silver touched 33 flat, but has rallied back to 33.64.
Update 8:32 am (Hawaii) Just woke up, still in bed, not a clue what's happening on planet earth. Well, there are a couple of charts. Spot Gold has stayed on its feet after that hammering early this morning. Nothing goes down in a straight line like that unless it was a billionaire pulling a "Soros." Spot Silver dipped below 33 and is bouncing off an intraday low again. The zig-zag lines are a bit too obvious, but I'm not going to bother going long or short (via ZSL). The choppy waters make mush out of guessers like me.
My Metals List is 38% green, 62% red. Only two plays are doing better than 1.5%: REE and GLL, the latter being an ultra-short gold ETN. The worst five performers on this list are silver plays: GPL (2.69, -4.3%), AG (16.66, -3.3%), SVM (9.85, -2.8%) , EXK (8.19, -2.2%), PSLV (15.27, -2%).
This is something a neutral observer can't fathom. From the outside, it's about revenue, profit margin ... and with miners, it's not exactly a small-ball kind of strategy. It's hit or miss in this world, so low stock prices are expected by those of us who don't know any better. For many of us, PM miners are mostly penny stocks.
The strange directions taken by PM plays in general today, yesterday, for the past few weeks, go beyond PE ratios and quarterly growth and debt, however. Silver is a stage where, more than any other, the script is altered midway through and not all the actors are told their lines have changed. But knowing that, as a trader, is why I can never go buy-and-hold in silver.
All the jeers and accusations of CME Media's selfish interests are so much DNDN a few years back, except it was the FDA panel in the role of Comex. It was a couple of people with great pull in the FDA who rejected Provenge, the life-extending treatment, rather than Blythe Masters and her puppetmasters. There was shareholders' hard-earned money lost easily, bleeding out into the gutters of a city with no mercy, taking DNDN down from 7 to 4 with one swift thrust of the dagger. What seemed to be a 99% certainty proved, in hindsight, to be overconfidence, even arrogance, if not ignorance of Dendreon longs.
How did we not see the possibility of failure? Most of us simply didn't, and those who did not hedge with puts were severely wounded. A great, great majority of us weren't just long; we put most of our portfolio into a single stock, and the naked shorts played our emotions and our human nature — wanting to help patients, greedily counting the profit possibilities at $xx,xxx per patient, etc. — to perfection.
Sure, a few years later, DNDN rewarded its long-suffering longs with an improved Provenge that was finally approved by the FDA, but I was out of the trade ... until that first day when approval was almost imminent. It was at 21 and the entire DNDN community was ready for liftoff. But just at that point, DNDN had what I consider the first true flash crash. It rose a dollar a minute for several minutes. I'd seen nothing like it, then suddenly DNDN spiraled off a cliff. I panicked to get out, losing most of my profit, but scared like hell when the stock froze or was halted. The machines got stuck. Nothing worked. Not a buy or sell. Fortunately, a good soul at my broker took my phone call and secured me a sell order at a point prior to the flash crash.
DNDN later recovered and began its run to 50-plus, but I had nothing to do with it by then. And now, years later, I still smell similarities with Silver. The accusations. The conspiracy. The manipulation via naked shorts. In some ways, it's playing out exactly the same way.
So I watch, mostly, and dabble now and then with a quick trade. Precious metals are in a different spotlight than Dendreon was. Instead of a drug, PMs are in the middle of a complete breakdown and street brawl involving incredibly powerful forces behind the curtain. There is no guarantee of a gold-based world currency, though all indications point that way. There is no clear strategy for the debt crisis, though it appears we as a nation are bound to our debtors one way or another.
Provenge had little competition in its developmental stages. Our Dollar is a pauper against not just the yuan, but the currency of many former small-time economies who are now far less debt-ridden than ours. The peso? Really?
But it's not my job to find answers for unprecedented times like these. It's my job to protect my meager, modest assets and to grow them at a rate better than inflation. This is not the time for a small fry like me to cling to losing blueprints out of pride or foolishness. I am, like it or not, a pilot fish with no desire to be in the way when this battle turns bloody.
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