Tuesday, September 27, 2011

Cheer this

11:15 am (Hawaii) Yes, I'm totally overboard on megaphone patterns. But in these incredibly adrenaline-laced swings up and down, they give me some sense of perspective. No way do I ever think they are predictors. Headline risk out of the ECU, various Euro nations and the Fed do that for us all.

Here's a look at the banksters (FAZ), silver (AGQ) and gold (DGP). I added another pennant/flag to the FAZ chart, going back almost to the start of this latest push higher. It doesn't include the parabolic move to 81, but the general pattern(s) are there, and they are each a bit higher than the previous one.

FAZ: Hovering in lower range, nearing the latest pennant

I was hoping to see 50 or 55 today, but it rallied off 56+ 55.86 to 60+ in the final hour. I've tended to buy on a move off a near-term dip rather than actually trying to time the actual low of the day. If the rumor is true that the latest ECU-Greece deal is getting wobbly (again), FAZ gobbles its way back to 65 and 70 like Pac-Man on screen 1.

FAS: Fiat Assets Stuck

A few years back I traded FAS up and down for huge (by my peasant standards) gains and losses in minutes. Since then, I've avoided it and never thought to really trade it until this week. Then I remembered that the banksters are backed into their office corners and have no escape route unless or until the Fed rolls out the red carpet for them with another QE/what have you. This chart shows a long pennant (my description) longer term and a short pennant in the past two weeks. FAS has moved up an above both the near-term pennant and the longer-term trendline, but there's no conviction from the bankster bulls. This does not look like a 3x ETF at all. The stadium is half-empty for one of the worst teams in the league. Nobody's buying tickets to get in. The popcorn is getting stale and the hot dogs are getting cold.

 AGQ: Promising for silver bugs? Not exactly

I've got my little sack of physical silver and I don't need it to be worth $100 an oz to like this fact. But AGQ ran out of steam today. Nothing that's up 13-14% can really hold that through the closing bell, but losing half that gain was not bullish in my eyes. If AGQ had kept more than 60% of today's gain - a bit Fibonacci-ish - or more, or at least closed higher than its morning price of 128.67, I could've scaled in a bit. But at 120.46, AGQ looks and smells like a dead fish. It was fresh and ready to consume, some great sashimi. But it's now starting to rot. Demand tapered off. I'd like to see the recent gap downs filled, but today's final few hours were totally unconvincing. 

I think I luv the Redskins

People can go back and forth about whether the puppeteers are evil or just horrible. It doesn't matter whether spot price is engineered by devil dogs or not. The reality is that silver goes up and down like a roller coaster and if you try to get on while it's at full speed, you get what you deserve. That's why I prefer to wait until it slows substantially and get in with some relatively low risk. That may sound preposterous with a 3x bull ETF, but you get my drift. Used to be a buy below 180 was a good entry point for AGQ. Now? Is it 100? 120? I'd rather wait to see how this newest box settles. If the price action resembles the earlier box (after the fall from 382), it's likely the puppeteers have no plans to unleash the silver puppy and this range is here to stay for awhile. I'm fine with that. My physical stash is not about AGQ at 382. It's about safety in a possible worst-case scenario. 

DGP: Oh no, you di-int...

Oh yes, it did. Gold's parabolic move higher was met with (koff koff) a free-market move back to the latest launching point. Whatever. Maybe it really was central banks unloading the pretty yellow metal to free up desperately needed fiat to offset the sovereign debt chaos. I bought a little DGP yesterday, sold it today in premarket for a solid profit (+5%) and went to sleep. I woke to find DGP lower and it's going to stay at 54.53 in after-hours trading since it's lightly traded this time of day (wide spread). So any re-entry is going to have to wait until tomorrow.

When DGP has traded above or below the four megaphones I lined up in this chart, gravity has pulled it back in soon enough. Is the newer box action similar to the earlier box action yet? The machines could easily interpret this gap up as a reason to buy up more more more in the morning, but the lower closing price vs higher opening price clouded my eternal optimism about guh-guh-golllllld.

Isn't this the buying season for gold? Where's India and China? I doubt anyone puts much stock into that, no pun intended. Maybe they've stepped in and become the primary reason (aside from hedge funds) why spot gold bounced hard off that 1520ish level yesterday. One of the down trendlines (not drawn) puts a lid on DGP at about 62. I don't know what to think about that, just watching the action and levels.

I think I luv the Dolphins

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