Friday, September 23, 2011

Last time, this time, next time

9:25 am (Hawaii) This is the kind of morning when it's just easier and wiser to lay here in bed, enjoy the cool breeze and watch price movement from afar. Emotionally afar.

The last time AGQ sold off this drastically was from 382 to 178 over a five-day span. 53% from the high last spring. The recent movement in the chart is different. There was no parabolic rise and fall. AGQ had traded in a range before the selloff of the past two days. Since Wednesday's intraday high of 214, AGQ has dropped 45%. I'm not expecting more, as in 53%. But if we got that 53% decline, that takes price to 100.

When AGQ went from 382 to 178, there was little talk of a second recession* and the movement was built largely on speculation by traders and manipulation by banksters. This time, the speculators are largely removed from the equation and manipulation remains constant. Add to this a fugly economic climate and silver really has no upside in the near term aside from a technical bounce off this extreme move lower.

I still prefer the possibility of trading paper gold in DGP rather than AGQ (paper silver). But above both, I like the edge of FAZ. The banksters here may stave off repercussions for some time, but this will no be so in Euro land. Paper gold and silver will probably rally at some point, but holding the physical will always reign supreme.

Time and timing is the key factor. FAZ will move tremendously over time, but is dependent on headline-level action or inaction. All the chart can do is modify and challenge my notion of a good or bad entry point. The EU in conjunction with US banksters can drum up another batch of bullcrap measures to boost their morale, but nothing short of cleansing the toxins in the system will fix things. Until then, they'll keep begging for dollars by the trillions. The White House has indicated that these banksters have defiled their WH's by hoarding the trillions while issuing fat bonuses to themselves.

In other words, the pressure to keep shorting silver is massive. Gold will be contained for only a limited amount of time, just enough for central banks to continue accumulating at bargain prices. But there is no long-term safety net for banks in Euro land for much longer. I believe that enough to dabble in FAZ, but not enough to go long it here at 69-70. I want a better price.

Denise Milani

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