Wednesday, July 13, 2011

Coffee, cream and METAL MANIA! (updated)

8:24 am (Hawaii) It rained overnight in Honolulu. Weather was cool for a July night. Perfect sleeping weather. I just got up after a productive workout last night, and it's almost the end of the session. Did I miss anything?

Hell yes. I remember Turd Ferguson noting yesterday that, technically, he expects gold to break out to a new high, and if that happened ... fully bullish. Turn on the TV. Turn on the computer. I sorta dread this. If gold breaks out, good. My XG and DGP will do nicely, even at small quantities. But I sold out of AGQ two days ago at a loss of $12/share. Small, small position, but still.

The Metals list I keep is almost all green (79%). It's a wipeout day for Metals bears. Only the bearish ETFs and ETNs are red. The indices are all up. XG is up 5%, DGP up 1.3%. AGQ is up 10% to 195. I sold at 172. Again, my timing ... not so good. I'm glad I held some gold stocks. It's like selling FAZ last Friday instead of holding until Monday. That cost me some. But the AGQ sell just cost me roughly $600. That's on a small position, really small. And if silver continues to rise, AGQ keeps going up at double warp speed, who knows, maybe to its all-time high at 382 (April 28).

I can imagine it's been a wonderful day so far for metal bugs. But Turd's site is down. Has it been overwhelmed by all the excitement? I need my Turd & Turdites fix.

James Turk, in his consistent, almost monotone voice, has been pounding the table for gold for a few months. He keeps repeating that this will be (not could be) a breakout summer for gold. Yesterday, he said it would be like the summer of 1982, when Mexico's default led to a golden rocketship. Holy cow, Mr. Turk is probably correct.

Everything at the top of my Metals list gapped up and is already enjoying bigger volume than yesterday: AGQ, AG, NUGT, EGO, SVM, SIL, DBS, XG, SLV, PSLV, GOLD, GDXJ, SLW, PLTM, EXK, REE, GDX, COPX ... wait, I take that back. PLTM hasn't matched yesterday's volume yet. It's all almost too good to be true. Like a setup. But on this kind of volume? I doubt it. It's usually a thin market that gets toyed with and peon traders like me get puppeteered.

Is it this simple? Obama threatens to yank Social Security, and the market reads it as a desperate threat and confirmation that QE3 is on? Or what's-his-face on Capitol Hill, the Republican who caved in and compromised on the Democrats' offer yesterday ... that's what's driving this? I haven't had time to check yet. Maybe after a bowl of cereal.

Update 8:51 am (Hawaii) On the 15-minute chart, AGQ has never exploded like it did this morning at the open. There was major volume two days ago, when shares sold off. But this morning was to the upside in a gap up. Trying find an entry point is difficult here. After closing yesterday at 177.68, there's a lot of room to pull back.

Has the CME mafia and the govt lost control of the price? Is the manipulation over? Probably not on both counts. But yesterday and today show that even in the middle of what's supposed to be the summer doldrums, the market may be too powerful to shackle 100% of the time — especially when it comes to gold. That is where old money resides. Old BIG money.

Update 9:07 am (Hawaii) Excellent post at by guest writer SRSrocco about commercial shorts losing grip on silver. I'll add it to the library reading list later today. I got to eat some cereal. Kept watching AGQ but couldn't find a suitable point of entry. Now it's pulling back below 196, it looks like ... feeling desperate to get in near the highs is never a good feeling, and rarely leads to good results. I like the feeling of buying cheap, it's just that I really don't expect AGQ to go back near 177 any time soon.

Only a rocket ship loaded with 10 trillion ounces of gold and silver from another galaxy could save the US economy here. And that would be bullish for PMs. Production/GDP/jobs aren't about to spike high in the next several months. Not even space aliens can repair that.

No comments: