Thursday, September 8, 2011

Much ado

Sophie Reade

9:12 am (Hawaii) 45 minutes to the close. Then a long wait until President Obama delivers a much-anticipated speech on the economy. Is this the first official step of commitment toward an infrastructure bank? If it operates like municipals or bonds or whatnot, what will it mean for 1) the market, and 2) the economy? Unless there's some breakthrough commitment to real assets rather than digital currency, wouldn't any so-called infrastructure entity just be a new branch of the Fed, ie fractional/fantasy units?

Whatever the case, I've been watching for a couple of hours. Since Bernanke delivered his non-speech an hour or so ago, AAPL has gone from 384.12 to 383.69, AGQ from 233.68 to 234.10, DGP from 69.72 to 70.75 and FAZ from 57.70 to 58.33. It's interesting that the market was slightly bullish during Bernanke's speech, with AAPL slightly up, AGQ, DGP and FAZ slightly down. That changed with the end of his speech, which had no hints whatsover of QE3.

I'm willing to scale into DGP here, but only on an intraday dip. Might stay all cash until Obama's done talking. But if spot gold bottomed at 1800 yesterday, it's got some work to do going back up. Asia bought the hell out of gold overnight, which has been the common behavior over the past month. Price gets knocked down by the puppeteers of the West, and then Asia steps in with full buying force. Or maybe it's far less than full force. Wouldn't surprise me that the biggest buying from the East is yet to come. We still don't have PAGE open just yet. That operation will allow China bank customers to buy gold directly. No bullshit or flim-flam from the power elite. With inflation a major issue in the Middle Kingdom, savers will keep flocking to hard, golden assets.

AGQ closed at 225.39 yesterday, opened today at 235.49 and has kept most of those gains so far. With puppeteers like JP Morgan bullish on gold ($2,500 forecast), I still believe they are short silver with all the ammo they can grab. I'll touch AGQ only on a severe dip and ride that out. 233 is a bit high for now.

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