Monday, September 19, 2011

FAZ is a spaz

FAZ: A bullish gap up? Or signs of quantitative puppeteering?

1:55 pm (Hawaii) Watching from afar, thought about scaling into FAZ on Friday. Decided to pass at 53-54. Today, with the usual gyrations from Europe, some panic is setting in, stocks sold off (though they rallied into the close) and FAZ is above 58 as after-hours trading is about to end for the day.

At 58.70, FAZ is in the midst of its lower megaphone channel/trendlines/zone. It bounced off its lower trendline of roughly 52 after falling from its pennant/flag formation. So now what? The FOMC's two-day meeting begins soon, and if the indications are correct, Helicopter Ben will push hard for more inflation via fiat currency printing. By the trillions.

How to prepare for this? I have my little sack of physical metals. I am all cash and have no equity positions. Yet. If I were long FAZ, I probably would've taken today's 6-7% overnight profit. I did it a couple of weeks ago when FAZ went from 54 to 60. Over the weekend, FAZ went from 53 to 58. The top line of this range is 66, which could be touched again (as it was two weeks ago). Beyond that? Who knows?

If Bernanke gets his way and the machines churn out paper currency and digital dollars by the trillions, FAZ will tank in the short term. 50 would not be out of the question. If that's the bottom, I'll start scaling in then. Probably. There's no happy ending for Euro toxic bankster crisis. Same here in the States. They're just going to eat the dust first. Before us.

No paper gold or silver trades for me. Not yet.

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