Wednesday, July 20, 2011

Laser-alarm alert

1:28 pm (Hawaii) Been away from the computer most of the day. The moves in silver (and gold) have been interesting, once again. AGQ opened down at 198, but ran to 216. This recent range of roughly 195 to 220 has been boring to traders who have ignored the market, but for the hyper-sensitive, it has been either lucrative or destructive. My guess is the swings have done more damage to those on margin, a feature that I never recommend.

In hindsight, it was good to get out of AGQ at 205 yesterday, but I was not around to re-enter on the bounce this morning. I didn't expect it, not with the CME mafia's history of driving silver into submission whether it requires a blunt takedown on a thin-volume day overseas ... or five margin hikes in less than 10 days.

Still holding DGP, XG and a sliver of GSVC. All were up, as was 78% of my Metals list. GSVC touched 16 a few days ago on the announcement of the sale of $100 million in stock, but is nearing 18 again. That was quick. When XG and GSVC dipped on these stock sales, smart traders added more at cheaper prices. I didn't. I'm content to stay at roughly 50% cash for now.

Note: VOLUME WAS LOWER for almost all metal stocks today. Not massively lower, but lower nonetheless despite a broad number of issues being higher in price. This is not a bullish signal, not by far.

AAPL dipped, as expected, and is at 387 afterhours. This is close to the 50% retrace level from yesterday's price before shares were allowed to resume trading after the earnings report was released. Maybe 376 is the new support level. Maybe it's 387. Who knows? For now, AAPL is in a rosy garden and a lot of traders are behaving as if the global debt crises will not take the price down. Again.

Back to the PMs, this is an inadequate place to be if you want more physical metal or want to go long. Silver was at 35 just days ago. 32 wasn't that long ago either. I'm not in the camp that believes the Comex will ever be taken out if and when silver inventory goes to zero. That's just not how JP Morgan and the govt operate. They will take what they need and stomp on peon traders like us without hesitation. You think they thought twice about attacking Libya or Iraq after the two nations attempted to trade oil for gold without using the US Dollar? Of course not. Yet there are a lot of us who think the Comex is days or weeks away from "defaulting".

Not gonna happen. If it does, so be it. But historically, there is no way to realistically expect a govt-funded entity to "lose", not like that.

Maybe if I abandon all caution to the winds, I'll make a lot more fiat in this environment. But I'm not doing that. Not yet.

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