Sunday, August 7, 2011

Waiting game

4:49 pm (Hawaii) No surprise since that rocketship-blast surge at the open of overseas trading. Gold slightly off its high at 1693 and silver off its high at 40.14. My plan remains intact, no additional physical purchases, but possibly trade AGQ and/or add more DGP, maybe FAZ, when stateside trading begins in about nine hours. Ride either higher until before the close and use the profits to buy more physical.

However . . .

I nearly forgot that the last couple of sessions were marked by noon-time (Eastern) selloff/puppeteering, so that might be the best time to unload any short-term position. Had I thought of the real possibilities to the downside — beyond what destruction we've already seen to our economies — I would've held that small position in FAZ on Friday and used it as a long-term position. Thinking in terms of long- and short-term positions is key here, and so is completely emptying out of positions that are completely dead money.

I could define my GSVC position as dead money, but when QE3 arrives, it will lift back to previous levels, possibly to its high (near 20). But that's not a concern right now. I don't expect a lot of chatter from Helicopter Ben on Tuesday. Instead, I think there will be stimulus via new routes. They don't want the market rocketing right here, not yet, and they don't want it to completely crater, either. My guess is BB and the puppeteers want the market to go sideways until Jackson Hole on the 26th.

I doubt that picture will be drawn, though. If and when QE3 kick in, I've got my dry powder and I'll put it right there in the fire and fuel for a short-term profit, if I'm nimble.

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