Sunday, August 7, 2011

Steady and slow

11:49 am (Hawaii) Just a few minutes before Asia markets open and I have to be out the door and on the road. I'll keep updated online as I make pit stops along the way. A lot of anticipation, but slow and steady will rule in the long run.

After making some gold and silver purchases over the weekend, my plan is this: 1) Do not buy more physical before Asia opens, 2) wait for the US market to open in roughly 14 hours, 3) if metals remain bullish, open a new position in AGQ and/or add to DGP (I'm expecting XG to pull back with the rest of the market), 4) sell out of any new metal positions before the close, 5) anticipate the probability of the CME mafia kneecapping gold and/or silver afterhours (before Asia re-opens), 6) use profits from Monday's paper trade to buy more physical on the dip, however temporary it will be.

(Why not go all in for gold and silver now? As I mentioned last week, AGQ is an example of what can happen for paper metal in a percentage gain. It went from 220 to 382 (all-time high) in a month for a 72% gain while spot silver "only" went from 40 to 50, a 25% gain. It could be totally different this time, but until I see evidence of a change in that ratio (72% vs. 25%) in silver, I'll lean toward trading AGQ before I buy more physical silver after the trading week begins.)

I could be wrong. Maybe the markets all lose 10% in the coming week and metals get liquidified (my word) no matter what. Then I'd step back, no paper trades, no physical trades until a bottom is somewhat established in gold and silver. No rush here. The unwinding will be ugly, but it will not happen in an instant. This is one sick patient, completely overdosed. The toxins will take a long time to undo.

Off to the road.

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