Friday, August 19, 2011

Buckle up!

12:59 am (Hawaii) Spot gold is $1,876. No, make that $1,879. Shoot. Shoulda gone all in on DGP yesterday. Asia has yet to let PMs down in the past month, really. Why did I imagine they wouldn't push gold and silver even higher tonight? Bullish as this is for physical metal owners, I hesitate to add more right here. Maybe for a morning trade, but over the weekend, I wouldn't be surprised if the Fed announces a coordinated new system that wipes out a large chunk of toxic debt from the US to Europe. Oh, that toxic crap will still surface somewhere, somehow eventually, but I can see the Fed making enough of a I Am Your Savior blather work in headlines and TV bytes.

Then Monday would bring a huge rally to the markets and PMs would take a major hit, albeit temporary. I would rather wait out the process and scale in on a dip of 10 to 30% than ride PMs here at a possible near-term top for just 5 or 10% gain.

Silver's blasting off with even more force.

Update 2:07 am (Hawaii) Futures are a bit up from their premarket lows, Dow futures -112. AGQ, FAZ, DGP all up huge in pre-premarket, but pulling back on profit-taking. AGQ at 232.00, up 12.75 (+5.8%). That's major and yes, I probably should've entered a small position at 220 yesterday. Oh well. 226-227 might be interesting if it can dip.

FAZ was at 74.50 in pre-premkt. Now at 68, up 2.21 from yesterday's close. Interesting, but again, as always, headline risk in play at any time. Still believe FAZ will hit 100 sooner than later.

SGP at 69.70, off it's early high. Spot gold hit 1881+, pulled back to 1863, but is now at 1871. Incredible move overnight in Asia and Europe. So much uncertainty in Europe's banks, so many rumors of insolvency. It almost makes no sense to be out of FAZ.

Not in a rush to do anything here, just holding my position in DGP. If AGQ does make a move with or without interruption from the puppeteers at CME, a run to silver's high (49.82) would likely take AGQ to its high of 382. That's a major gain to be had, if it happens, and entering at 220 or 233 would be fine entry points.

Or the Fed could crash the market again via the media (WSJ) and set it all up for a QE3 launch over the weekend. Then it would suck to be in FAZ in the near term.

Update 2:26 am (Hawaii) Rarely do I bother with Twitter, but some interesting stuff this morning.

• Doug Kass passing along a rumor that the Fed is planning an emergency meeting today, which is causing a rally in futures, he says.

• Zero Hedge tweeted that the CME is not planning a margin requirement hike for gold.

Kass has been dead-on with the bottoms in the past few years. This is no time to go to sleep...

Photo: Show magazine

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