Friday, May 13, 2011

Hustle and wait


7:23 am (Hawaii) An old ex-military friend once told me, "The military is all about hurry up, get there quick and wait. Wait and wait. All the time." He has a point there. What's the point of efficiency unless you're so good at it, you end up waiting a majority of the time. But to be there, armed and prepared, conditioned for any circumstance, that's the essence of success. The trophies and glory are byproducts.

I've been up since 4:20 am or so, which would be 10:20 am Eastern. I shined up an old coin I found among my pile of dirty pennies, nickels, dimes and quarters. I took in the morning light, which was obscured by light gray clouds over our green mountain. It's good here.

The market? It's stuttering. It's meandering. It has no real direction, just a head fake here and a head fake there. AGQ looks good for a few minutes, then ZSL takes the ball and runs, but before it can turn the corner, it tanks.

I'm still all cash here. Greece and other Euro zone spots are getting media excited. But all in all, things are somewhat calm with crude oil at 98 or so. Spot Gold sank from 1515 overnight to 1492 this morning as the Dollar gained. Spot Silver is at 34.73 after dipping to 32.20 early yesterday. It went to 36+ overnight. We're just five days away from the debut of Hang Seng's Hong Kong's gold futures, an 18-hour/day market that may challenge Comex.


Yesterday, in a post that was stolen and sent into the Blogger.com Bermuda Triangle, I noted that AGQ and ZSL were both in the red at the same time for a long stretch. Made no sense until I revisited that this morning. The reason both ultra ETNs were down big? Outflow. Traders were taking their money out of the market. They were frustrated and decided to get the eff out, as I have done for months. That explains today's lethargic activity. That explains a lot. Liquidity is drastically different. It's not bone dry, but traders are mentally worn out and fatigued. They cashed out. Can't blame them.

Today, AGQ is up 3.9% to 172.10 even though 64% of my metals list is red. Silver in general is red: AG, EXK, PAAS. But some are positive: SLW, PSLV, SLV. ZSL is off by 8.1%.

I still want much more physical silver, but the thesis here is to make as much fiat as possible (without major risk), then collect physical when spot prices decline. Maybe that's later this month, or maybe in early June if the Fed doesn't indicate a bias toward or against QE3. But it's coming, and if the Fed is successful in driving down commodities (especially crude oil), the equation to justify more easing becomes acceptable (?) to the general public and its shills in D.C. They're going to do all they can to stave off the austerity movement.

So what does that have to do with physical? A lot, no doubt about it. So I'll play it as we see it, and if they drive down the price of Spot, I'll come along for the ride. But that means resisting any tempting price today. Example: Scottsdale 10-oz stacker got down to $385 last night. I almost pulled the trigger. It went back to $395 later. But this morning, it's back down to to $385. If Spot gets back to 33, then 30, I'm probably shopping. Shiny metal. So pretty.

No comments: