Need rain to get rainbows

7:43 am (Hawaii) It's a cloudy morning in Honolulu. No. I'm not sure. I haven't looked yet. It's just a little dark for this time of day and I'm guessing it's cloudy. No fricking unicorns or rainbows though, unless you're Keynesian to the core and can't see how Europe and the US could ever falter in this monopoly-money printing scheme.

Doesn't matter to me. I'm staying in, watching the market. Waking up at this time of day, seeing the market slightly up (0.1% to 0.4%), seeing gold up from its low of 1760 or so ... and seeing financials down - that's an eye opener.

FAZ dipped to 52+ but is now hovering at the 55 level. Is there one more dip coming to 50? The current dip is on fairly strong volume, and finnies are down modestly. SCGLY is actually up 1% while everything from AIG to BAC is down 1-3%.

AAPL is up 1.5% to 398, near its high today. BIDU flopping around, barely green. Same with GOOG. Not a believer in this equities rally. Near term, they could all rise and I might play a quick trade here and there. But gold's rally tells the obvious: paper money is not worthy of our trust in the longer term.

Game Plan Redux

9:43 am (Hawaii) Now that I'm back to cash, what to do? My gut says stay put and see how things unfold leading into and right through Jackson Hole on Friday. Doing less will be doing more. So I remain bullish on physical gold and silver. I have all my coins superglued to my arms, legs, basically my extremities. Not really. But you get the idea.

I. Long/bullish physical PMs.
II. Cash, no equities.
III. Possibly will go short PM paper via ZSL, DZZ.
IV. Pending more Eurocrash news, short banks via FAZ.
V. By Friday (Jackson Hole), prepared to go long via QQQ, AAPL, BIDU, FAS.
VI. After QE3 momentum slows to a halt, riding DGP again. Maybe AGQ.

It'll be interesting to see, if Bernanke speaketh quantitative easing on Friday, how the miners do. They usually trade in tandem with the market, but this could be different. Maybe. I won't touch miners anymore, but I'm watching for entertainment value.

If BB does speaketh of QE3 Friday, I give it a week max of a rocket ride for the market. But it could fizzle out much sooner, maybe even in hours. Maybe on news that SocGen falters, triggering a domino effect across the continent. It's coming. Just a matter of time.

Like nothing ever changed

7:57 am (Hawaii) Just closed your eyes, breathe deeply and this could be a month ago, a season ago. LULU up 10%. GMCR up 9.4%. BIDU up 6%. NFLX, oh, Netflix, up 5.5%. AAPL up 2.5%. Just beautiful, mindless moves higher. YOKU up 5.1%. GOOG 3.5% higher. The effect of free monopoly money, printed to no end by Helicopter Ben.

Problem is, the market is up today without provocation. It was due for a bounce in the midst of this 2 or 3 week slow-motion crash. Gold is down into the 1860 area after flirting with 1915 or so overnight. Silver has backed up to 42.50 after visiting 44.00 again. All natural, as they say. I don't suspect CME mafia involvement this time. It feels like normal profit-taking. Come on. AAPL shouldn't be below 350 anyway. It's up more than $10 to 366+.

When Helicopter Ben alludes to any form of QE3 on Friday, the indices will race higher than today's gains (DJ +1.8%, Nas +2.5%, S&P +1.8%). It could be good for 1,000 points on the S&P 500 (currently 1,142). But there probably won't be another run like QE2. The general public is past the point of fantastical whims and lies. More people know the fractional reserve banking system is the real bubble. Video of riots in major cities across the globe do not lie. So I expect plenty of turbulence and roller coaster action.

I'm trying to leave my modest position in DGP alone, whether it hovers near its high (72.25) or today's low (69.15). I got up around 7 am Hawaii time, so it was much too late to ride today's momentum on the bullish route. Keeping my eyes on AAPL, FAS, DZZ, ZSL. Also QQQ, BIDU. More than likely I do nothing. With DJ up 180 points, maybe it catches fire into the close, or maybe it fizzles a little.

Update 8:08 am CNBC reporting that an earthquake hit Virginia and was felt as far as headquarters up near New York City and far west as Detroit. Market remains near its highs for today. It was a 6.0 quake.

So ... now what?

11:47 am (Hawaii) Just a look at some ideas, possibilities for tomorrow and the rest of the week.

• A lot of big, fat companies are sitting on big, fat cash. Is this when they start to buy back stock en masse? Or are they anticipating a market meltdown through the end of the year? Would you buy these stocks at these levels?

AAPL 389
AMZN 211
BIDU 153
GOOG 593
LULU 59.10
NFLX 256

I can't imagine touching any of these here, even after the post-earnings pullbacks. I still love AAPL, but you know 50-dollar swings are the norm between catalysts. AAPL could return and retest 376 (pre-earnings price). BIDU would also be interesting at a cheaper price. Not touching NFLX or LULU. No way.

Playing the downside:

FAZ 53.22
QID 51.45
TZA 42.23
TVIX 22.70
VXX 24.37
ZSL 12.91

I liked FAZ in the 40s but didn't have the nuggets to step in last week. If it pulls back below 50, I'm looking. ZSL I threw in here only because spot silver is always subject to puppeteering by the CME mafia. But now's not the time, not with the possibility of elephants stepping in for the parade higher.

TZA, TVIX and VXX are off my menu. TVIX (+17%) and TZA (+10%) were up huge today. Too hot and due for a drop. QID is interesting now that the techs are almost done with earnings reports.

What's going to stay hot in a cold market? These were hot today in metals.

AGQ 222
DGP 56.60
EXK 10.22
GPL 3.67
GSS 2.70
GORO 26.49

I don't plan to add more mining shares, period. I'd rather play the ultra bull metal ETFs like DGP and AGQ when the timing is right. I'm prepared to acknowledge that it may be too late to pile back on the gold and silver express trains. I might have to be content with small positions in DGP and XG.

Note: Brian Kelly's "first trade" tomorrow is SLV, he says. There are nearly 20 silver plays that were up at least 3% on my Metals list today. That's unprecedented. In all, almost all of the 30 that were up at least 1.5% were silver plays. The Metals list was only 56% green; MCP, REE and AVL were among the bottom dwellers. Silver and gold left the other commodities far behind.

Note #2: Take a look at AGQ at the end of March. Traded from 225.95 (opening price, Mar 24) down to 217.75 (close, Mar 29). AGQ was down three times in a span of four sessions. From there, volume was up on that fifth session, starting a steady ascent to 382 by Apr 28. Then the astounding fall caused by the CME mafia's five margin requirement hikes in nine days.

In the four sessions prior to today, AGQ was down three times, dropping from 229.22 to 206.30. Today, volume was up. It's just something to note, and with a different tone and footing to the silver market, I hardly expect a one-month run to 382. But also note that the RSI crossed over with the slow stochastic during this period, just as it did in late March. Both scenarios followed months-long spans of consolidation. Unlike the springtime run, the market is teetering and on the verge of collapse this time. Does that create a more bullish environment for gold and silver?

Back on the Z train

10:00 am (Hawaii) It's been some time since I had a position in ZSL. Opened a tiny position before the closing bell. If the CME mafia raids silver and takes it below 40, to 38, 35, 32 or below, fine. I'll turn my ZSL profit into physical silver. If silver rallies, I cut ZSL off my line quickly. It won't make or break my roll, but it'll add up should the slide turn into a waterfall descent.

FAZ is the other bear play I like, but I passed up opportunities at 44/45. Just too many tricksters in the game. Long term, the banks are fucked, but I hesitate because those banksters have more pull than any puppeteers in the scheme of things. 44 would've been a calculated risk with upside. At 48, FAZ could go back to 50 or 52, but not much higher before the bank stocks rally on a debt ceiling agreement. Then it might be time to ride a little bit of FAS, though my preference would be to get a first-class seat on Air AAPL or the BIDU express.

photo: Kim Yu-Na, LocoInYokohama.com

They're taking turns flippin' the bird

9:20 am (Hawaii) So the White House formally flips another middle finger toward the GOP, and the GOP will do likewise within a few minutes or hours. Whatever. Fucking kabuki theater. On the other hand, I had a chance to re-enter AGQ at 223.39 as it began to rise on the news and CNBC stuffing the airwaves with this "breaking news." I decided not to enter the buy order and AGQ is now at 224.35. An agreement of sorts will come sooner or later. I prognosticated that it will come as soon as Wednesday and as late as Monday. But I doubt they go all the way to the deadline (Tuesday) on this. When it happens, silver and gold plays pull back, no question.

Interesting to see that the US Mint increased the price of its half-oz First Spouse gold coins from $929 to $954. I was shocked and a little pissed to see this. The premium had already been substantial. I passed on my plan to pick up a coin or two recently in hopes that the premium would be reduced as spot gold price declined. But with the price rising, the mint followed in accord. The next coin in the America The Beautiful series goes on sale Thursday: Mt. Hood. This year, the 5-oz coins have been going for $279. I won't be surprised when the price gets jacked up to $299 or something like that.

The American Silver Eagle proof is still "only" $59.95. I may pounce on that if I want to spoil myself again rather than pay up for the First Spouse coins. The key for the mint, imho, is that they limit the mintage on these issues, so they can do whatever they like. And there's nothing quite like owning a govt-issued coin for authenticity, even though I doubt I'll ever sell my proofs and I doubt I'd ever sell a First Spouse if I owned one. These aren't just bullion. They're fun to have and pass on to the next generation.

AAPL has stayed well above 400 in the 403 area today despite a flat market. BIDU has hung on to its huge gains from yesterday's earnings report. 66% of my Metals list is green, but only a small group has a gain of at least 1.5% today. The leaders have been rare earths (REE +8.1%, MCP +6.9%, AVL +7.2%) and palladium (PALL +3.3%).

GPL (-2.8%), ZSL (-2.6%), AG (-1.1%) among the bottom dwellers. Most are fractionally up or down.

My Regular watch list is 62% green, 37% red. US Steel (X) is down 8.7%, GNK down 6.8% and NFLX down 5.1%. CSTR down 4.2%. WFT (+9.5%), OWW (+8%), MCP, BIDU (+5.2%) and CHGS (+4.7%) lead the list.

It's interesting that AAPL keeps marching higher despite the shenanigans on Capitol Hill. What happens when the two sides come to an agreement? Will AAPL explode again? My guess is that the run is somewhat done for now and AAPL will yield to small and mid caps for that run. In other words, AAPL is a hold. A buy here would be low risk. Maybe it runs. That might be worth the buy.

BIDU? At 164+, it's down from its high of 167 yesterday after the earnings report was released. It's one of those stocks I should never have sold, knowing how Big Brother hates to share with those Westerners (Google). Think the last time I traded BIDU, it was around 70 after the split a year or two ago. Knowing it's a no-brainer and actually holding a position are two different things.

You could put 1 and 1 together and ride AAPL's growth in China along side BIDU's growth as China's de facto search engine. Life would be fairly simple that way. Maybe I do that, keep stacking physical metal, XG, DGP and perhaps AGQ and/or EXK, and forget about it for a few years. I'll definitely wait for the politicians to get that agreement done before stacking more metal. I want those discount prices.

(Some discounts may come if the CME mafia strikes tonight or early tomorrow before the open, per warning from Brother Turd Ferguson.)

Even if this turns into a plan of action, I still want a lot of dry powder. Will there be a market crash this year? I wouldn't bet against it. I want to be ready with at least 1/3 in metal, 1/3 in cash. If my timing is right, I'll empty out of all paper (stocks) and get more metal before a crash. I don't assume I'll time that correctly, though. Best to be as prepared as possible and it might be good enough.

Monday cinema & library (updated)

Video

CNBC: Talking Numbers: Another recession ahead? (July 25)

Fox: Why is market optimism outweighing debt ceiling concerns? (July 25)

TheStreet: They just don't get Apple (July 25)

CNBC: Fake Apple stores in China (July 25)

CNBC: Debt downgrade disaster ahead? (July 25)

CNBC: Fast Money final trade (July 25)

CNBC: Cramer: Market on debt's door (July 25)

CNBC: Netflix falls 8% (July 25)

CNBC: Baidu reports earnings (July 25)

Vlogs

(new) MoneyBags73: If $16 billion in secret loans isn't reason to buy gold, silver... (July 26)

(new) ukipmedia: Nigel Farage, Lord Liddel (July 25)

> Farage is blunt and effective, but it's the caller (Joyce) to this morning radio show who sticks it to the Euro apologists so, so well.

(new) chamaflauge: Why I chose gold and silver in the first place (July 25)

Jim Rogers: 'I'm shorting US debt. US has already lost its AAA rating' (July 25)

RT: Are you psychotic? Here's your dose of debt! (July 25)

RT: Germany will turn out light on Euro (July 25)

SilverGoldSilver: SLV manipulation caught on video, part 2 (July 25)

endlessmountain: The Silver Log - Fantasy football, multiple time frame XAG (July 25)

Bill Still: Debt ceiling debate (July 25)

Peter Schiff: Response to Geithner: 'He's making stuff up!' (July 25)

WakeUpToTheNWO: Homeland In-Security: Rise of the Global Police State (trailer) (July 25)

stellaconcepts: Stella does the USA (July 25)

Tony Sagami: 485 million Chinese internet surfers (July 23)

cleburne61: The Life of a Silver Hitman (July 23)

markiegreg: Edwin Vieira on the Fed's transfer of wealth (Sept 30 2008)

Audio

Reports

CNBC: Obama backs new debt plan that doesn't raise taxes (July 25)

CNBC: New US debt issuance - hot or not? (July 25)

Bloomberg: US can avoid default at least until Sept, Wells Fargo says (July 25)

CNBC: Baidu revenue beats Wall Street forecast (July 25)

Reuters: US bonds erase losses, traders cite DC bomb rumor (July 25)

Boehner: GOP effort will prevent job-crushing default (July 25)

FX Street: CME raises margin requirements on Treasuries (July 25)

Business Insider: Obama endorses Reid plan, Boehner says 'it's full of gimmicks' (July 25)

Chicago Fed: National Activity Index declines (July 25)

MarketWatch: Apple outperforming gold (July 25)

Michael Snyder: Broke: 10 facts about financial condition of American families (July 25)

AP: Netflix braces for growth slowdown, stock plunges (July 25)

Xinhua.net: Canadian Army soldiers bak home from Afghanistan (July 23)

Blogs

Turd Ferguson: (am) Headed to the airport (July 25)

Turd Ferguson: (pm) Dried out and ready (July 25)

> "The open interest numbers, particularly in silver, are still so low that it's going to be very difficult for a cascade/waterfall to develop."

Economic Policy Journal: Projection on when Treasury balance goes negative (July 25)

Peter Tchir: Bread, circuses, cake and markets (July 25)

Charles Hugh Smith: The dynamics of doom: Why the Eurozone fix will fail (July 25)

Peter Klein: There is life after default (July 25)

Daily Bell: China: Third pillar of a broken world economy? (July 25)

Daily Bell: Edwin Vieira on the power elite, police state, opposing authoritarian trend (July 25)

Vedran Vuk: Chinese interest in Canadian oil remains strong (July 25)

Merv Burak: Technically precious (July 25)

Larry Edelson: Who says the US has never defaulted? (July 25)

Jeb Handwerger: Miners outperforming bullion as investors fear govt defaults (July 25)

Sara Nunnally: No matter what, but silver (July 25)

Ryan Cole: The coming abundance of rare earths (July 25)

Martin Weiss: Countdown to D-Day (July 25)

Tim Seymour: Wall Street starts to come around to Petrobras (July 25)

Toby Connor: The real stock market ain't so pretty (July 25)

Chris Ciovacco: Leaders playing dangerous game with nation's debt rating (July 25)

Gold Report: Eric Lemieux: No gold bubble (July 25)

Don't Tread on Me: Fed's $16 trillion secret slush fund props up our way of life (July 25)

Harvey Organ: No news on US debt ceiling (July 25)

Eric De Groot: Food costs rising as Coke, Chipotle pass (July 25)

Jim Sinclair: In the news today (July 25)

King World News: Marc Faber: The 'Great Reset' will destroy cash (July 25)

Brandon Smith: Gold and silver: We were right, they were wrong (July 25)

Video Rebel: 25 reasons to absolutely despise bankers (July 25)

James Turk: Germany's gold: It's time for an accurate accounting (July 24)

Corey Rosenbloom: Cross-market compression levels to watch (July 24)

Don't Tread on Me: Another silver drive-by-shooting coming? (July 24)

Gary North: Counterfeit gold standards (July 23)

Dan Norcini: Trader Dan on King World News (July 23)

> "The key for the gold market is whether or not it can continue to attract fresh buying from both existing long holders ... and from those who are just coming into the gold market."

Vedran Vuk/Jeff Clark: An undercurrent to gold? (July 22)

Jason Jenkins: As gold reaches new highs, global super powers find new lows (July 22)

Kurt Schuler: Free banking and the historical gold standard (July 19)

George Silgin: The folly that is 'local' currency (July 14)

Blog readers commentary

Peace Silver: So then, how much is too much or not enough? (July 25)

ScottJ: Two double bottoms forming (July 25)

TheGoodDoctor: @Peace Silver I read Larry (July 25)

Metal porn

Steady, shiny and super

12:07 pm (Hawaii) As for those of us not ralphing due to large exposure to NFLX ...

I saw modest gains in my small positions in XG (+1.5% to 14.26) and DGP (+1.3% to 53.60). GSVC dropped 3.6% (to 16.57) and I'll look to add another tiny sliver if it falls below 16. The nature of dangerous, low-float stocks with robust potential can be spooky unless handled with the right level of exposure.

I slept through much of it, noticing AAPL's steady rise through a flat market. (All three indices were down.) AAPL touched 400 briefly and is at 399.20 afterhours. BIDU up 9.2% (+$14.25 to 168.18) today, up from 157 at the closing bell on huge earnings numbers. Somewhere, someone has a portfolio that is based exclusively on major growth numbers out of China. Apple. Baidu. China Mobile. Sina. That investor is making moola.

GOOG will never invade the Middle Kingdom. Big Brother will not allow it. The Baidu story has always been compelling, with its roots in US technology. But I wonder what Chinese company will copy Lululemon and explode through the market. Or is yoga frowned upon in China?

My Regular watch list is 42% green, 57% red. BIDU at the top, Orbitz (OWW) up 8% to 3.38. (I bought this at 3.45, sold at 2.35 months ago.) TVIX, VXX, TSO, WNR all up. TZA, too. FAZ finished up 2.4% to 44.86 after dropping from 45+. I don't have the will to buy FAZ here, even though I said I would like it below 49. Politicians are already dictating the price of precious metals. I guess I don't want to own another entity at their mercy.

Metals list is 42% green, 57% red. A rare occasion when both lists have the same numbers. No big gainers; SGOL (+3.1%), FSG (+2.6%), AGQ (+1.7%), DUST (+1.6%), XG (+1.5%). The bottom of the list: REE (-4%), PAAS (-3.6%), GPL (-2.8%), AVL (-2%).

Watched AGQ as often as I could between my zzz's. It was at 223+ before coming down to the 216-220 level for most of the day. The calm in the silver and gold markets after their initial gains early on was unusual. Not quite eerie, though. I wonder what Brother Turd Ferguson is surmising at this hour.

So, just 25 hours since I stepped forward and resumed my gradual buildup of PMs (I being the Falklands in terms of power and financial artillery), it's a slight win so far. My interest in silver is for the long term, but it never hurts to be ahead. I added more an hour before yesterday's Asia market resumed business (11 am Hawaii time) with spot at 40.17. It hit 41 today before pulling back to 40.39. I still see PMs rising at least until tomorrow, then pulling back when Boehner and Obama come to a compromise some time between Wednesday and next Monday (Aug 1).

Then, on a selloff in PMs, another buying opportunity will arise, possibly far below today's levels. If not, that would be fine, too. I'm not trying to get the exact bottom. That's too much to ask of any human being. It felt strange to buy physical in the 40s yesterday, but it was the right move for me.

As for Spot Gold, it hit 1622 early before declining to 1614, still at all-time high levels. Even Dennis Gartman admitted he stepped back into gold today after talking it down recently as an overcrowded trade. We're two sessions in since China's newest silver futures market opened shop. I wonder how much difference it is (or isn't) making.

Photo: 123rf.com

Sell low, buy lower?

9:31 am (Hawaii) It's no surprise that Extorre Gold Mines (XG) has sold lower today, a second session in a row of major decline. After hitting 15.42 on Wednesday, early in the session, it crashed on the greatest single-day volume of its short history. Today, XG is down 5.4% to 12.38 with a half-hour left. It dipped to a low of 12.00 even before bouncing, again on huge volume, though less than yesterday.

It's hard to say exactly when the fallout ends. On Tuesday, the company executed a secondary sale of 2.5 million shares, adding to its total of more than 80 million. It wasn't that the secondary was a surprise to most (it was to me!) or that the offering was at 10.50 (when the price of XG was 11.00). Shares were at the top end of their trading range and any excuse provided traders a chance to profit.

Volume hadn't been this big since April 19-21, when shares went from 7.80 to 10.08. My guess is that a majority of sellers yesterday and today bought in during this period. I just happened to buy at 14.25 two days ago. Had I kept the shares I bought at 11 or so, my mindset would be so different. I'd be happy to wait this decline out. My guess is that XG holds its ground at 12, perhaps 11.50, but no lower. But being down $2/share is not making a happy camper out of me. Yet, I'm willing to wait. It's a small position, but I hate losses, and I should've had a stop-loss order in. I'm not used to being down 14%. Fourteen frickin percent while 73% of my Metals list is green.

This is not the time to sell, however, not with gold pushing to all-time highs on both high and low volume days. Not with global debt crisis in our laps. Not with fiat currencies withering away. XG is a good company with a great PR team. I wouldn't be surprised to see XG's crew come back after the weekend with some new videos, perhaps the CEO talking about the importance of the secondary offering. It's a good problem when there's a mine that has better-than-expected potential, if that is really the case. It's not a massive offering, but enough to dig deeper, literally. Or wider.

And as I type, XG is rallying. Now at 12.51. Enormous volume, creeping toward yesterday's record. Sure, if I hadn't been asleep here in the islands while the sky was still dark, I could've sold XG for a profit on Wednesday. When I awoke, I could've sold roughly at break-even. But yesterday, I could've sold at 13+. Take the loss, move on, use the capital for another trade or just stay put.

But that was not the time to move in this trade. It was too late, and it's coming down to facts PLUS belief. Same with AAPL some time ago when I rode it from 215 to 192, never lost confidence, and shares eventually rose. (I sold at 257, much too soon.) So, a sell of XG at 15+ would've been ideal. A sell at 14+ would've been nice. Then buy back in at 12+ ... it appears. I'm not that good a trader, normally. I could double down here, but I'll leave it be.

After all, there's a weekend ahead, wacky things can happen as good stands up to evil. Just ask Harry and the gang. Can gold hold its gains? Will silver be whupped by the CME mafia? I plan to hold AGQ (up 7.1% today) and DGP (up 0.6%) over the weekend. The remainder of my trading roll will remain 50% cash.

AAPL has earnings out on the 19th. BIDU looks tasty. So does GSVC. I can stand holding AAPL for a stretch, but GSVC would probably give me as much stress as XG. Might hop in, though, for a tiny position. If tech continues to climb (thanks to Google's robust report yesterday), GSVC and its 3.34-million share float may squeeze more shorts.

Broad view, I tend agree with those who think default is off the table and the debt ceiling negotiations are all about posturing. But if shit does hit the fan at some point (Aug 2), I don't feel entirely comfortable with my stacks. I would need more of everything from physical metal to food to water to power. I can't believe I'm thinking about buying a generator, but if you were in Hawaii and somehow food and petroleum shipments were stalled for a month or two, what would you do?

Exactly. I hate to be unprepared.

The one aspect that does concern me technically is that most equities are trading on low to very low volume today. That's usually a precursor for a selloff, not necessarily a correction, but balance comes to the market eventually. That's why I hesitate to open more positions here. We may get better prices on Monday ... but if negotiations improve on Capitol Hill this weekend, the market will open much higher, and all the miners that were beaten to a pulp over the past few months will continue to slingshot higher.

Would the CME mafia dare to announce a margin hike late Sunday night? Think they might, but it's now 9:56 am and I have a small new position to start.

10:02 am (Hawaii) Tried to open a very small position in GSVC at 18.75, but only half the order was filled, so I'm left with a tiny position. Could be a blessing in disguise if there's a serious pullback on Monday, providing a better price. With its stake in Facebook, GSVC has mucho upside ahead. A week ago, after its second rip higher, I hoped for a pullback to 15.55. Never happened. Bad news over the weekend could give me that price.

No burying gold for long

photo: MSNBC

10:36 am (Hawaii) Gold continues to show a tendency to quietly draw attention from near and far, high and low. Spot is at 1567, slightly off its high of the day. Spot silver recovered some today after yesterday's butchery by CME mafia. It opened lower, giving friends of JP Morgan and the govt ample opportunity to collect more silver at discounted prices. Why offer your friends a gift at all-time highs (50+) when you can give them a price at a 30% discount (35)? Yeah, it's a theory, but until we straighten things out with our creditors, there's no quicker way to appease them than by keeping silver price low as possible without inciting deadly riots in every major American city.

It's one of the few mechanisms left to the puppet masters, so applaud them for their concerted, if short-sighted attempts. Thank them for lower physical prices.

The flight to gold helped miners, naturally. XG ran as high as 14.67 before pulling back a bit as daytraders cashed out. The presence of metal royalty like Eric Sprott in the stock only solidifies the foundation. Getting out of AGQ yesterday and holding XG didn't take much thought. They — the puppeteers — will bitch slap silver in a way that they would never do to gold for very long.

XG up 3.3% (14.50 afterhours). DGP up 1.5% to 50.79. I've held this through some minor ups and downs. No plans to sell in the near term.

After rallying to the plus side, the indices finished down. DJ -58.88 (-0.5%), Nas -20.71 (-0.7%), S&P -5.85 (-0.4%).

AAPL finished down by a fraction after being up most of the day. AMZN, also down fractionally. BIDU down 2.3% after a nice run. Also down just by a hair, NFLX (290.50).

As for the banksters: NBG (+2.5%), BBVA (+0.8%) were up. IRE (-3.8%), C (-1.8%), BAC (-1.3%), GS (-1.2%). FAZ swung from a big early gain down into the red before finishing at 46.80 (+0.8%). Moody's downgrade Ireland govt bonds today. Story in the NY Times.

This is the roller coaster of trading in — for or against — bank stocks. Anything can alter direction. I would love to be a zillionaire and bet on FAZ big time, not worry about a paper loss for a day or two. I don't have that luxury, so I sit here and whine about it on a blog. Though Obama is long treasurys, I still wouldn't bet on the banksters with my own money. There is no long-term solution to the currency/inflation crisis. Just a bunch of stop-gap tactics.

I wish I still had my shares of FAZ at 43.33. End whine.

Tuesday night library & cinema (updated 9 pm HST)

2:01 pm (Hawaii) I may surely live to regret not backing up the truck for some AAPL, BIDU, NFLX, XG, AGQ and EXK today. Volume was substantial in most of these shares, and if I'm wrong in assuming that each is due for a minor consolidation (or worse) after a week to the upside, then it shall sucketh that I waited too long. The only thing that made sense today — Portugal was downgraded to junk level by Moody's (only a few months behind the market) — was the financials all in red. FAZ was up, as it should be. Why it isn't up every day is a wonder. But the market is schizo, manipulated, yadayada, and that's why I don't take unnecessary risks.

Financials down, precious metals up. Now THAT makes sense.

Note: Pete Najarian says AAPL goes right to 400 from here. I'm not saying he's right or wrong, just passing it along. Then there's James Altucher, who was also on Fast Money, insisting that we don't really have any basis with which to judge QE2 yet, and that the Dow is going to 20,000 by the end of 2012.

I'm still a little surprised that the CME mafia didn't take metals to the woodshed over the three-day weekend. I probably wasn't alone and today was boosted in large part by a lot of short covering. Just a guess. I'm still deep in cash, small position in DGP and growing stack of metals.

Spot silver tapering off to 35.33 after spending the previous 24 hours below 34.50.

Update 3:36 pm (Hawaii) Apmex has another flash sale: 99¢ over spot for a 100 oz Johnson Matthew silver bar. Started this morning, ends tomorrow (Wednesday). The bar is a beautiful thing, no doubt about it. But why would I want something that huge? If I needed to sell it, I would get spot price in return, probably. Finding a buyer for something that costs $3,600 or so is TOUGH. I'd rather have $3,600 worth of American Silver Eagles, 100 in all, than one big brick of silver.

If I were a gazillionaire, it wouldn't matter. I'd actually line the walls of my playpen/mancave with thousands of silver bars, floor to ceiling. But I'm not a gazillionaire. Yet.

Reports & Blogs

(new) MarketWatch: The next, worse financial crisis (July 6 2011)

(new) (audio) Chris Martenson: Eric Sprott interview (July 5 2011)

(new) (transcript) Chris Martenson: Eric Sprott: Paper markets are a joke (July 5 2011)

(new) Examiner: RICO suits against two banks = metals to soar (July 4 2011)

Le Fly: Sell the debt ceiling news (July 5 2011)

Video

(new) Nigel Farage: Isn't the EU as bad as the USSR, Mr. Tusk? (July 6 2011)

(new) Peter Schiff: Christina Romer is wrong (July 6 2011)

(new) Max Keiser: Greece robbed and securitized (July 5 2011)

(new) James Altucher: Dow heading to 20,000 (July 5 2011)

(new) BrotherJohnF: Silver update - debt (July 5 2011)

(new) Turd Ferguson: Not excited yet (July 5 2011)

(new) stellaconcepts: Understanding the silver derivatives market (July 5 2011)

(new) george4title: The new economic paradigm for middle-class Americans (July 5 2011)

Mike Maloney: The Difference (July 5 2011)

Nigel Farage: The Worm has Turned (July 5 2011)

Jim Comiskey: Daily market insights - metals (July 5 2011)

drutter: 'You can't eat silver!' (July 5 2011)

(video repaired) bullorbearreport: How to buy gold at $10 over spot (July 5 2011)

chessNwine: Stock market recap (July 5 2011)

silverfuturist: Silver up! Newsletter writers makes millions (July 5 2011)

(new) stellaconcepts: SGTBull07 and Bix Weir '500:1' (July 4 2011)

(new) silverfuturist: Silver vs. mining stocks and ... a goat (July 4 2011)

(new) SGTbull07: Why Silver, Why Now? (Dec 7 2010)

(new) InflationUS: The Day the Dollar Died (Nov 24 2010)

James Altucher: Dow heading to 20,000

Greecian formula?

10:17 am (Hawaii) Major momentum swings today. Jobs report bad. Greece austerity good. Looking over several charts from AAPL to NBG to AG, could it be remotely possible that this bullish vibe — increased volume, heavy momentum from lows to highs by the close — is the real deal? I would find that preposterous to conceive. This is late June, QE2 is almost done and the Fed is in no rush to usher in QE3. In fact, the Fed seems content to see the market tank, even crash, to justify any further fiat currency destruction, i.e. printing trillions more US Dollars.

Yet there are massive numbers in some of these equities/etfs. Are they spurred by high-frequency trading? Probably, but some of those are direct from the hedge funds, and moves on big volume don't lie in the near term. Usually.

I got out of FAZ despite my long-term pessimism about the debt crisis. I am not going to wait around and get cut to pieces by market momentum to the downside. But I am willing to re-enter FAZ once the financials' true colors show up vivid and bright again. Like maybe tomorrow morning. If Spain and Portugal opt for more austere routes, like Greece, that does NOT help US banksters one bit. So it can be possible for NBG to rocket higher on austerity measures while financials stateside swallow another plate of poison.

I looked hard at NBG before the close and had an order at 1.41, but never got it filled. Bad timing. Or good, depending on how the market follows through tomorrow. It could easily pull back into the 1.30s after today's robust gain. A tiny position would be interesting, but a fast move up isn't in the cards. I can see NBG at 2.00 in a few months, but the constant downturns of other banks will keep it leashed. A move to 2.50 or higher could happen within a year. A double is never a bad thing.





Apple held high ground even when the market was still down big. AAPL closed is at 330.20 after hours (+2.3%). Today's candlestick is not exactly bullish, but it is not bearish either.

Baidu has been bullish, as well, with good news earlier in the week. It wasn't long ago that BIDU split 3-for-1 and was sitting at 70. If there's a "safe" play in China, this would be one. Big Brother protects its little brothers.

LULU and other stocks look bullish, but in this bizarro market, LULU could easily lose its recent gains. That small float cuts both ways.

Silver was a roller coaster ride today. Silver Wheaton, like AAPL, showed strength when it was a sea of red. Net-net, SLW had slightly more volume and is up 1% to 33.13 after hours.

First Majestic (AG) also had a positive day (+0.8%) despite the pummeling on silver. Like Silver Wheaton, First Majestic's fundamental numbers are impressive, particularly in profit margin. I think that gets tampered with as energy prices fluctuate, but AG is still a solid miner.

I still like EXK (8.49 after hours), which was down nearly 1% but is still among the stronger plays this week among silver miners. 7.50 is support, and some shrewd traders got in at about 7.60 recently for this elevator ride.










AGQ, GPL, PAAS, SLV for your viewing.

 

 

ZSL was a solid play on the short side, but was well off its intraday high (19.11). ZSL is at 18.49 (+6.4%) after hours.

If the CME mafia continue to pull strings on silver, a little ZSL would make good protection.

DGP (double gold bull) looked horrible on the chart, big gap down on increased volume. If the puppet masters knock gold down, as I expect, to further their argument in favor of QE3, so be it. They will not and cannot hold gold down for long, though. Eventually, the debt crisis will overwhelm all factors, and the US will have to take severe action one way or another. Every way benefits real money: gold and silver. So I will hold my little position in DGP and continue to accumulate hard assets.

Rangold (GOLD) was a rarity today, a gold play that finished green (80.03, +0.5% after hours). I don't trade it, know little about it.

There were a few gold plays that showed some strength, like NGD.

GLD was GLD.

I still like Extorre Gold Mines (XG), even with its huge run in the past several months. They are great marketers and have been successful as of late with their finds in Argentina.










DZZ is one way to play a downturn in gold. GLL is another way (+3.7% today). On the whole, however, I don't plan to short gold. If I bet against anything, it would be the financials or silver, maybe the Nas (QID). I've never played QID, and unless there's a complete breakdown, I won't touch it. But the Nas does fall apart in a big way from time to time, so QID is worth keeping an eye on.

 

I'm mostly cash, same as the last several months. Small, but growing pile of physical metals.

Monday bull party

(11:30 am, Hawaii) Talk about complete melt-up. At one point, when I wasn't sleeping through the session, my watch list was 83% green. That's basically bullish to the extreme since the other 17% are mostly bear plays.

DJIA +1.5%, Nasdaq +1.8%, S&P 500 +1.5%.

Volume wasn't great in AAPL (14.7M), but the 2.7% run from 330.67 (Friday) to 339.73 (afterhours today) is incredible. The 100-day moving average was tested three days in a row (Wed/Thur/Fri) before bouncing today. Will the 50-day MA (346+) prove to be a ceiling?

Everything with a pulse move up, from BIDU (+3%) and GOOG (+2.6%) to Japan (EWJ (+2.2%). The yen softened; FXY slightly down (-0.4%).

LVS gained 6.4%, while other recent gainers like OPEN (+2.4%) and HAIN (+2.5%) rose.

Precious metals roared. SLW gained 5.9% to 42.25 (afterhours). EXK +5.1% to 9.62, PAAS +3.6%, PHY +2.4%, SLV +3.2%. NGD +3.4% and GLD +0.7%. Great day for the metal bugs. SLW and EXK ranked second and third on my list of gainers.

WNR, Le Fly's favorite oil refiner play, gained 4.4% to 21.59. UCO gained 1.1% (53.33).

Big losers were TVIX (-15.4%, 44.85), VXX (-7.5%, 32.70), TZA (-7.1%), EDZ (-5.1%) and QID (-3.6%). PSUN also sold off again, down 1.9% to 3.62. C also fell 1.6% to 4.43. Interestingly, X dropped 0.6%.

I'm content to stay in cash here until the puzzle is solved. Which is probably never going to happen. AAPL is my vehicle of preference, and if the runway clears for a flight to new highs, I'll get a ticket. Until then, this is a range-bound titan, from 326 to 360, and there is money to be made in that space. Hat's off to those who bought at 330 on Friday.

Bloomberg: Tokyo Electric says Fukushima fuel rods damaged, leak to sea (Mar 21 2011)
Reuters: Oil lifted by Mideast unrest, Libya conflict (Mar 21 2011)
Bloomberg: Japan futures, nuclear stocks advance as reactor crisis eases (Mar 21 2011)
Business Times: AT&T's big deal lifts Wall St (Mar 21 2011)
AP: Developments in Japan's disasters, nuclear crisis (Mar 21 2011)
Business Insider: What about the Plutonium MOX? (Mar 21 2011)
The Guardian: Google accuses China of interfering with Gmail system (Mar 21 2011)

Fantastical Friday

Gold up. Silver up. Oil up. Stocks up. Everything (almost) is up, and mostly up big with less than 20 minutes left in the session.

I haven't made a trade since Tuesday early morning (premarket). I don't feel satisfied, but I don't feel greedy, either. Good place. Still feeling the ailment, still achy and headachy and it sucks. When I woke up, the market was already 90 minutes in (almost 6 am Hawaii time) and everything was green. I've had some long naps since and there is simply an abundance of buyers and a shortage of sellers. Who would've figured that for a Friday. It's almost like a parallel universe, or an opposite world. Instead of the sell-into-strength tendencies of Fridays, it's almost a fantasy.

The first price that had my eyeballs boinging out of my cranium was UCO, which was listed at more than 300% up. I was drowsy when I saw that and immediately thought, 1) must be a typo, and 2) it's not a typo, so maybe Libya just got turned into dust. Holy crude! But no, it's a reverse split in UCO, the one I'd heard about earlier in the week. QID also did a reverse split.

But generally, the top of my watch list is ruled by silver entities. EXK (+5.1%), SLW (+5%), SLV (+4.1%), PAAS (+3.7%). AAPL, BIDU, other momo names like CMG and LULU all up roughly 1% or more. But on the red side, CSTR and NFLX can't get out of the hole. Even AMZN is fractionally down; as the No. 1 contender to usurp NFLX's throne in streaming movies, AMZN should be rolling today, right?

VXX and TVIX are the bottom of my list. Did they actually stop bombing unarmed protestors in Libya today. If so, how can oil stocks still be above water for the day. Weird. Fantastical. Everybody (but the shorts) is happy.

The only negative? Volume is low.

Skittish you are

The market is looking quite uncertain this morning. It began with crude oil futures spiking over 102, then brought back to 99 by the opening bell. I'm looking for a retrace by UCO to 12.87 (50% of today's premarket gain) before I dip in. I got lots of rest overnight, even with the aches and threat of a bad flu. Show must go on.

There are equities in the green — MOS, GLD, X, FCX. Also some big NASDAQ names like AAPL, AMZN, BIDU. An AAPL retrace to 343.98 is interesting (currently 343.53). And UCO is bouncing off 12.80 now.

SLW got knocked down this morning as silver futures took a big hit just before the opening bell. Funny how that happens.

Update: 5:20 am (Hawaii). UCO nosediving a bit here, now 12.74. Immediate support at 12.67, also support at 11.60, but if this fills the gap from the past week, it could sink as low as 11.

Update, 1:26 pm (Hawaii). Just woke up a few minutes ago, catching up on today's moves. Holy crude. UCO hovered in the 12.80s until 2:01 pm Eastern, then fell off a cliff and didn't stop until 11.91 90 minutes later. (Now trading at 12.22 AH.) Brutal. I'm thankful that I stayed out of the market. Again. Fast Money saying that margins were increased, that this made a huge difference, more than the terror in Libya, the assurances of the Saudis, etc.

Also amazing to see SLW drop even lower than it was when I fell asleep. LOD was 38.38, now at 38.60 AH. SLV, which I no longer trust, began its decline at 2:13 Eastern — 12 minutes after UCO nosedived — and went from 32.44 to 30.95 by 3:18 pm Eastern. Now at 32.55 AH.

Market finished generally flat. DJ -0.3%, S&P -0.1%, NASDAQ +0.55%. AAPL, AMZN, BIDU fractionally up. AAPL was lingering at its LOD 338 when it began its rally — roughly 2 pm Eastern. So, as oil and metals went down, AAPL soared to 343 in almost a straight line. AAPL is at 342.98 in AH.

Freaky Friday: Options Expiration

Watch list preview for the day. It's options expiration and the market is teetering at a level that could lead to a healthy pullback. In other words, any trader not exercising caution could get shredded.

If you like candlestick charts, here's the status of my watch list, courtesy of American Bulls.

AAPL — hold
AMZN — buy if
APC — buy if
ARMH — sell if
BIDU — hold
C — sell if
CLR — buy confirmed (Thursday)
CMG — hold
CSTR — wait
DIS — hold
EGPT — buy if
EXK — sell if
F — sell confirmed (Thursday)
FAS — hold
FCX — sell confirmed (Thursday)
GLD — hold
GMCR — wait
GNK — sell if
GOOG — hold
HAIN — sell if
IPI — buy confirmed (Thursday)
LULU — buy if
LVS — hold
MOS — hold
NFLX — hold
NGD — sell confirmed (Thursday)
OIH — hold
OPEN — buy if
PSUN — wait
QID — buy if
RLOC — hold
SBUX — buy if
SLV — buy if
TBT — buy if
TLT — sell if
TVIX — n/a
UCO — hold
VCLK — wait
VXX — wait
VZ — buy confirmed (Thursday)
X — wait
XVIX — n/a

Update, 5:44 am (Hawaii). So dependent on Red Bull. I kept an eye on the "buy if" watch list (six stocks only) and SLV really intrigued me. Always has for many reasons. But it was trading above its opening price of 31.08 on up to about 31.17, in that range, while the rest of the market was flat. Then I nodded off. It was a few minutes at most. Woke up and SLV was at 31.25 or so. Kept right on going, big run and settled into the 31.30s. I opened a position, with the stochastics swinging low, saving a lot of powder for other opportunities.

SLV has made a massive run from 26 in the past three weeks, and with equities peaking short term and so much uncertainty in the Middle East (oil), metals are so shiny and attractive. For now. I still don't trust the possibilities on options expiry. I think SLV holders are ready to cash in profits after holding from 26, 27, 28, 29. It's human nature to collect that beautiful bounty before the weekend begins. So I hope to be out of this trade before lunch hour hits the East Coast.

My position is small, so even another big run today won't make a huge profit for me, but I am aiming to get familiar with the price movement and rhythm of SLV. It could be a nice, steady trading vehicle for some time, especially with AAPL in the doldrums (355).

Update, 6:18 am (Hawaii). Added more SLV at 31.56. Hesitated on stochastics (low) and MACD at 31.51, but no regrets. Huge buys came in moments after my addition, now at 31.68. This is too hot and I don't assume anything about where SLV will close today, but the news surrounding the physical metal is bullish, bullish, bullish. For today.


Bob Kirtley: Silver prices just starting to warm up (see Chinese demand)

Update, 11:27 am (Hawaii). It's been so long since I actually stayed up through the night and morning to follow the market. Normally, I sleep in or get a decent nap. This time, Red Bull and a position in SLV had me buzzed and stoked. That's where I have to deal with this plain fact: once emotion enters the realm of any trade I'm in, good goes bad. 

It was roughly 7:30 am when SLV was hovering at 32 and I had a decent paper profit, far more than I expected that quickly. I'll take a 1.2% profit for just three hours of "work" any time. But I took a phone call that was lengthy and the topics were both sad and happy. Emotion. By the time I hung up, SLV was still slightly above 32. Knowing that I entered midway through today's momentum, exiting at lunchtime (Eastern time) was the game plan. 

But I realize now that emotion clouded my thinking. I was shaking off the effects of the conversation, but also feeling a bit high about the fun of a daytrade. I haven't bought and sold anything on the same day with a solid profit in a long time. Most trades cover a few days. So I sat there and watched. And watched. And eventually, right on cue, the selling began after lunch. I held and held all the way down to 31.55, a shade above my cost basis.

I knew it was too late to get out. The old adage, Get out fast or don't get out at all, so true, true, true. My mental stop was right above my cost basis. If SLV froze at 31.55, I wouldn't mind holding it over the weekend, either. But the game plan was in and out, and I failed. I couldn't stay locked in that failure, though.

The market remained somewhat robust, closing in the green. SLV picked up, dropped off, repeat ... eventually, buyers returned, i.e. traders going long rather than the shorts who got squeezed royally in the morning. SLV is at 31.85 afterhours. 

The retrace today from its high of 32.13 down to 31.55 is EXACTLY 61.8% (going back to yesterday's closing price of 31.03). For you Fibonacci devotees out there, this is proof that you are geniuses. 

Watching SLV trade for hours was quite an experience. The MACD is undeniably indicative of direction of price. That never failed. I didn't want to believe, but I don't matter to MACD. Also, by the final hour, I gave up watching the 1-minute chart. It was exhausting. The 5-minute did just fine for a position like mine, which is not huge, not tiny. 

Another observation: Once the lots on the Ask side become smaller than the Bid size, SLV goes poof! Early on, during the run to 32+, lot sizes of 20,000 and more poured through on the Ask side. After it hit is high of the day, the Asks shrank until the final 45 minutes. Numbers just don't lie. 

So, I screwed up. Maybe I should turn off the phone during market hours (3 am to 3 pm Hawaii time). Maybe I should tune out human existence in my life 12 hours a day. But if I'd sold at half of 1 percent or 1 percent flat off the top, I'd have my pocket-change profit. I'd have satisfaction. I would probably not have reestablished a position, though. 

I'm prepared, though, to roll with this trade and see it through to Tuesday. Unless SLV does something unexpected in AH. Note to self: write up every possible scenario and have a solution.


Update, 12:47 pm (Hawaii). A look at how today's "buy if" stocks turned out. The market opened flat, so the buy-if mandate is to see how each stock fared after the opening bell. If it stays above opening price, potential buy. If it opens lower, no deal. 

All "buys" listed here are in theory only.

SLV — previous close 31.03; open 31.08; 31.95 afterhours (+2.8% since opening bell)

SBUX — previous close 33.50; open 33.37; not a buy (but turned out +1.9% since opening bell)

TBT — previous close 39.97; open 40.28; 40.14 afterhours (-0.03% since opening bell)

LULU — previous close 82.44, open 83.24; 82.13 afterhours (-1.3% since opening bell)

APC — previous close 81.30; open 81.15; not a buy (dropped to 80.96 in afterhours)

AMZN — previous close 187.76; open 187.55; not a buy (dropped to 186.31 afterhours)

EGPT — previous close 18.99; open 19.00; not a buy (18.73 afterhours)

OPEN — previous close 92.89; open 92.52; not a buy (89.96 afterhours)

So, the only two buys based on the candlestick approach would've been SLV and TBT. The best performers were SLV and SBUX. Aside from theory, I actually did open a position in SLV, still holding here.


Update, 2:49 pm (Hawaii). Some charts of SLV. First, a one-year chart with comparison to GLD, AAPL and the S&P 500. Then a two-day chart. Note: there are some concerns that short attacks may arrive next week. I may still unload my position in the next 10 minutes before the AH session closes.