Wednesday, August 10, 2011

Early in the mornin'

Make a profit, turn fiat into gold and silver

2:25 am (Hawaii) Got my two cans of Red Bull, ready to work. Sometimes that means being alert and doing not a thing. This was different. I let go of my small position in AAPL at 372 for a small loss. It can easily ride out a minor bump in the road and surge back to 380, 390, 400 and beyond. But this is no minor bump and I'm not willing to ride AAPL down as I have in the past.

Spot gold hovered between roughly 1740 and 1777 overnight, currently 1764. In other words, it's almost exactly where it was when I added more DGP at yesterday's close. I'm not expecting a rocket move today or this week. I am expecting consolidation and some range-bound moves. I don't mind a dip. I just want to be in as gold continues to gain traction and momentum. By cashing out of AAPL, now I have the option to get more DGP or, if the market tanks again, FAZ.

Good news for silver is that it has moved higher. AGQ is at 195 (off the high above 198). It's quite early and volume is light, but this is a plus to see both PMs moving up. Brother Turd Ferguson forecasted a move to 44 by silver. Maybe he's right. Maybe he's wrong. More often, he's right. As much as anyone, he explains his reasoning, his technical analysis and all the forces in the market.

Unlike other momentum movements I've seen in frankly cultish stocks (DNDN anyone?), he breaks silver and gold down in a simple way without losing all the details. That's great for peon traders like me.

AAPL continues to drift lower, bit by bit, now 371.78. Futures are all down — Dow Jones is down 123. Maybe this is just shifting sand; yesterday showed exactly how irrelevant 100 or 200 or 400 points are — in the span of one hour — when the algo devil machines are in control. So I'm taking it cautiously and I'm content to allow AAPL to get lower before I re-enter. Maybe it explodes at the opening bell. Neutral here. Not leaning in any direction with AAPL and the equities.

Update 2:47 am (Hawaii) AGQ above 197. FAZ nearing 64. Again, too early to tell where this goes, but with AAPL below 371, I may inch into a small position in AGQ and/or FAZ.

Update 2:49 am (Hawaii) Bloomberg TV reports that Apple is being sued over e-book price fixing, something like that. Might explain a bit why AAPL is down 0.9% in premarket, though the decline probably has more to do with yesterday's big run.

Update 3:01 am (Hawaii) French, Italian banks getting cracked in the nose. As Reggie Middleton has written and said, French banks are in a huge pile of manure. Just a matter of time before those inadequacies are revealed.

FAZ is still above 64 (+5.5%) in premarket. AGQ is up 5.7%. But is this a setup? Though Dow futures are nearly -200, are the algos prepared to take the market from 200+ points down to 200 up? I wouldn't doubt this possibility.

But one thing is simple in consideration: Euro banks stink today and FAZ has no choice but to rise. Small position, use a stop-loss? Perhaps.

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