Thursday, May 26, 2011

Making sausage

3:37 am (Hawaii) Another morning begins with me lying in bed for an hour or two. No TV here in the bedroom, just the laptop and me. Trying to figure out how EXK has remained green through this morning's pullback in Spot Silver. likes the technicals on the chart.

Silver still trying to get untracked, but the process is not pretty. Same goes for gold. AGQ, EXK, XG all losing ground bit by bit.

Marketwire: Endeavour moving forward (May 25 2011)

Update 4:04 am (Hawaii) My suspicions were right. This is no time to be trading long on PMs, and I cashed out of AGQ at 191.38 (small loss), EXK at 9.47 (tiny gain) and XG at 10.38 (small loss). Back to 100% cash. I wanted to hold these positions through a bounce, but there is simply not enough buying pressure right now, which means Spot Silver could easily return to 36 and below. I think traders and investors look at what happened this morning and realize the friggin bogeyman CME is out loose in the woods again.

So, being up a nice (paper) profit yesterday and selling at a solid loss today, that was a swing of about $850. When I awoke during premarket and my positions had rallied off their early lows, I was at break-even, thinking that odds were low that prices would go back to those lows. The fear factor in the PM market is widespread, though. I didn't take that into account enough.

ZSL now at 17.49, off its high of 17.70, up 4.4%. Turns out that selling AGQ above 200 yesterday was the right move whether you hate CME or not. Selling AGQ and/or buying ZL, which was 16.73 at yesterday's close.

Update 4:21 am (Hawaii) Spot Silver reaching 38.75 overnight turned out to be the turning point, it appears. What's almost impossible to figure out is whether the central bank in China is willing and able to short Spot Silver and Gold. China is still in accumulation mode of physical, so higher prices aren't what they want. Yet. To that end, I won't mind getting more myself once the price goes below 35. 33 would be nicer. 30 would be great.

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