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

Rubber band silver? (updated 900 pm HST)

2:49 am (Hawaii) Just playing around with numbers (hey, that's permissible now and then) with spot silver. A couple of weeks ago, I fiddled with the possible range of silver based on 21 to 9 to 49 to 32. Well, now that spot price has broken the resistance level of 32, it seems painfully possible that spot could follow this semi-logical pattern:

high 21, low 9

high 49, low 21

Each new high is met with a pullback of 57%. Each new proceeding new low is met with a gain of 133%. Based on this flimsy, whimsical equation, here's what could happen in a world based purely on repetition rather than puppeteering by the Wizards of Oz.

high 21, low 9

high 49, low 21

high 114, low 49

high 266, low 114

high 620, low 266

high 1,446, low 620

high 3,373, low 1,446

high 7,869, low 3,373

I don't even expect spot silver price to hit 100 this year, let alone 7,869 in the near future. But could this happen over the long haul? Why not? Once a new monetary system is in place, it won't be based on bitcoins, will it?

Nah.

Sunday night spot gold

Sunday night spot silver

Update 8:43 pm Did you wait? Or did you already buy more physical gold and silver this weekend? Of course, the thought passed my mind, but given the uncertainty of global markets, I decided to wait and see how much more puppetry would be on display. Tonight, we have an answer: The CME mafia and the rest of the puppeteers aren't done shaking down spot prices just yet. Silver is down to 26! Gold is at 1550! Am I going to unload my little sack of metals at these ridiculously low prices? Hell no. I'm not planning on selling them for a long, long time, if ever. I didn't buy them just to resell them any time the puppeteers get ornery.

Bloomberg: Banks splinter on Europe debt crisis (Sept 25)
Bloomberg: Euro, Asian stocks fall on debt concern (Sept 25)

I'm with Art Cashin. He thinks this might be a classic Thursday/Monday scenario, with a drastic turnaround coming mid-day Tuesday. Makes sense to me. I'm not going to bank on that, but I'll be ready and waiting in case the market turns then. Of course, with the G20 expecting a Greek default in early November, the market is quite sour. Dow Jones futures are -139, S&P 500 futures are -14 and Nasdaq futures are -32 (-1.45%).

Bottom's definitely not up. Not yet. 

Is the bottom in for gold & silver?

Beyond the laws of nature

10:33 pm (Hawaii) Can there still be, in any way, any doubt that the CME mafia is out in full force overseas tonight? They can try to pull all the puppet strings they can, but the longer they try to shackle price, the more coiled the snapback becomes.

It's official: CME mafia raises gold margin

11:57 am (Hawaii) Not that it matters to a lot of traders and investors, but the CME mafia made it official. Bloomberg reported 24 minutes ago that the margin requirement in gold was raised 27%.

Bloomberg: Gold margins raised 27% on CME's Comex after biggest price drop since 2008

I'm in cash, have my little sack of physical gold and silver, so my stress is almost nonexistent. In fact, if the CME mafia has its way and spot price in gold plunges off a cliff to below 1700, I'm ready to re-enter. Right now DZZ is holding at 4.90-4.94. I noticed it climb to 4.94 a little while ago, but that's the extent of it. If the market were really surprised by the CME mafia move, DZZ would be well over 5.00 by now.

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.

Queasy?

11:00 am (Hawaii) Analyst from I-Cap says we're heading to 650 on the S&P 500. Yeah, back to the 2009 low. He bases this on technicals, nothing else. No talk of economics. No talk of politics.

For now, though, the bulls are happy after a +423 day in the Dow, +111 in the Nasdaq (+4.7%) and +51 in S&P 500 (+4.6%). Not sure how many people actually dipped in before the close of yesterday's horrendous session, but today's bounce was a much-needed reprieve for longs. I got out of DGP for a nice profit, selling at 63.25. Today's low in DGP was 61.31, and it (with gold) has rallied into the close and after hours. DGP Now 63.53.

Not getting back in right now. A second margin hike by CME mafia is coming soon enough. The swings in DGP are big enough that buying dips isn't a bad idea. Just from 61+ to 63+ is nice enough for a quick trade.

FAZ is intriguing here. Though it got hammered with bank stocks way, way up, it rallied from 56.18 to 60.30 after hours. Earlier in the week, FAZ went from 81 to 60. Today alone it was at a high of 74 before falling to 56+. No regrets selling this yesterday at 70+. But I won't touch this without another catalyst.

CNBC just announced more Euro nations have banned short selling. Not sure of the details, but if this is a maneuver to protect bad stocks (banksters) from tanking more, it makes no sense. Corrupt banks have to go down for the system to be cleansed, to start growth all over again. Otherwise, it's just more of the same, no different from the US.

If there's no significant economic news by tomorrow's opening bell and the bank stocks tank, then it's too simple to be true, almost: Buy FAS (3x bank bull) and FAZ (3x bank bear) on deep dips.

Was today the turning point? Are huge inflows back into the market going to be the norm? I'm not betting on it. Yet. Why would anyone go nuts with big bets when the Euro bank/debt situation is still in crisis mode? If anything, I may start a teeny position in FAZ again. But I'm totally cautious about paper gold (DGP) until the CME mafia drops the other shoe with another hike.

Between the JPM/CME/Fed manipulation and the HFT machines, complete sobriety is necessary for peon traders. It used to be enough to be a pilot fish. Now, it's the pilot fish who can get swallowed up.

Out of paper gold

6:49 am (Hawaii) I'm out of DGP. Took my small position and nice profit out of the equation. Much as I see gold going higher in the long run, for now, it's impossible to deal with short-term fluctuation and the trend is down. DGP got over 66 intraday yesterday and was still above 64 in premarket today (while I slept).

It tanked to 62+ this morning and I sold at 63.25. It was on the way back to 64 before CNBC started talking again about the margin hike requirement. I think it won't be long before gold and DGP go higher again, but there will probably be more margin hikes, eventually deflating the speculation and enthusiasm and cornering price into a range. As long as mainstream media keeps beating gold and silver to a pulp, I'll wait for momentum to return.

It's a game the CME mafia love to play. JP Morgan raises its price target above $1,800 on Friday. By Monday, they raise the target again, to $2,500. On Wednesday, they announce the margin hike. Coincidence? Hell no. They're making money on both sides of the trade while burying silver.

The recent action neutralized my latest buy of DGP at 63.46, but I'm content with the trade. I'm not interested in riding DGP down below 60 or 55. My entry point was around 49, and I don't expect to see that again. I'm more apt to quick trade in DGP now, play DZZ (2x bear) on the next margin hike. Trading something like DGP is almost ideal. There will be swings now, maybe from 60 to 65, 62 to 67, maybe on a daily basis. DGP and FAZ, that's a big enough list for short-term trading in my book.

I still like silver, but as long as the CME mafia has a lid on it, I'm not trading it. Silver tanked today with gold, but gold and silver miners are healthy, just trading up with the market (DJ +356/3.3%, Nas +87/+3.7%, S&P +40/+3.6%).

By the time I woke up, it was almost noon Eastern, so I missed the big move higher. Best move I made yesterday was to get rid of FAZ before after hours trading closed. Sold at 70.57 for a small loss. FAZ now at 62.98. It's not that I like banksters now. It's just basic numbers. The market is going to come back after huge losses in three of the last four sessions, including yesterday's monster drop. The machines are all about momentum.

So much to do

9:03 am (Hawaii) So little time. Took a stab at FAZ as it leveled off at 77 or so. Entered at 77.95, it snaked above 78, but dipped and I got out at 77.60. Teeny tiny loss, basically broke even. There is a chance that late-day traders will pile into FAZ, but can they overcome the rush the exits? There will be tons of profiteers with shares above 24% gain for the day.

Couple that with the FOMC meeting tomorrow, and FAZ is due for a pullback snapback style. But you never know in a hate-the-banksters day like this. Dow Jones rising, down 470 points. Don't know if this is the bottom, but the sheer amount of profit-taking by bearish traders could take the Dow back to -400 or even -300.

CNBC says S&P has tweaked its downgrade (today's version), naming six corporations that are immune due to great global business. One of them was Microsoft. Another was Johnson and Johnson.

Update 9:10 am (Hawaii). There goes FAZ, now down to 75+. 73.92 coming, and at this rate, I think a 50% retrace of today's gain is realistic. That makes 71.71 worth watching.

It's almost useless to enter FAZ right here and now. Too many factors work against it in the next 24 hours, though depend on how Helicopter Ben deals with the world tomorrow will be huge. After that, I'd feel safer about entering FAZ at these lofty levels.

The plan I had coming into this week has been altered. I thought I'd enter AGQ, or add some DGP or re-open FAZ. But I lacked the vision to see how huge FAZ would or could move. I never considered a 25% gain in one day. Turns out 68 was a bargain. Someone braver than me shorted FAZ at 80 or went long FAS at that point.

Spot gold now down to 1710 after a high of 1721.70. Silver is taking shots to the solar plexus, now dipping to 38.88. The CME mafia/JP Morgan is making sure they make money long gold and short silver, I'm sure of this. In fact, silver has to be one of their "go to" players since it is so easily manipulated. I'm glad I bought a good share of physical in both over the weekend. Leaning toward DGP over AGQ and FAZ here.

TVIX and VXX should calm down tomorrow, right? Not touching those crazy cars.

Note: CNBC reports that Bank of America refuses to raise capital. Are they expecting another TARP? BAC has gone from double digits (last week) to sub-7. If this is Jim Rogers' short, he remains a genius.

Boy, that was some debt ceiling rally

10:04 am (Hawaii) Again, I will remind all that Scott Blier got it right, forecasting a "sell the news" downturn on the debt ceiling compromise. There were times when the market moved up on bad news, but this past week, it has absorbed a lousy debt ceiling deal and an unending litany of declining numbers in the US economy. Today's 512-point plunge in the Dow (-4.3%) is exceeded only by the Nasdaq (-136, -5.1%) and S&P (-60, -4.8%).

It was Cortez, the contrarian, who declared yesterday that he went long the S&P. He could right. Just off by a day or a week. The Dow has been down eight of the last nine sessions. The weight and breadth today may be, finally, the capitulation it needs to soak in all of the bullshit of Capitol Hill legislation, Eurozone austerity* and real price for real stocks. I suppose that could also mean that gold is a real go-to safe haven, down fractionally today, and that silver is still a trading tool despite far less speculation and volatility in recent months.

Silver traded down as low as 38.10, and is now at 38.62 after hours (-7.4%). Whatever I think of the powers that be, the spot price is stuck in this range, unable to stay above 42, and I'm waiting for a chance to get more physical at 35. If the onslaught continues overnight and tomorrow morning, 32 might be in play very soon. However, a catastrophe scenario in silver is unlikely in my book. There's too much demand in gold globally with the US Dollar stinking up banks near and far. Silver will always tag along sooner or later, so I don't see silver below 32 anytime soon.

If this turns out to be the one-day beatdown to precious metals that was necessary after the recent runup, fine. Silver had run from 34 to 42, so consolidation here above 38 is not a bad thing at all. Gold had run from 1600 two Sundays ago to 1683 today, a 5% gain in just 11 days. In gold! Astounding. I still like 1625 as a bargain price.

Though my small positions in DGP, XG and GSVC were beaten to a pulp today, I didn't sell. It's too late to sell, and I've got enough dry powder to load up if and when the momentum shifts. Whatever happens in Euro land is going to happen. If it's austerity, the pain will be immediate, but recovery will come sooner. If it's more "kicking the can down the road," the pain multiplies at a later date.

On the bright side . . .

• I'm glad I didn't buy more physical yesterday. A pullback was due, whether by natural market price discovery or puppet mastery from the CME mafia.

• I'm content with this small allotment of exposure to miners (XG). I was overconfident when I bought in above 14, knowing full well that miners are underowned by hedge funds, and that they suffer severe knockdowns that parallel the market more than gold and silver.

• I'm okay with not buying anything today. FAZ kept rising, pausing, rising, pausing and I never got a good feel for what was next. It's not easy trying to buy in when something is up 8%, then 10%, then 12%, then 14 freaking percent. Same with ZSL, though I feel far more jittery about holding ZSL for any period longer than an hour than FAZ. The CME mafia could back off overnight, let Asia take control, and silver could be back over 40 within hours or minutes.

At least with FAZ, we know banks from California to Athens are screwed and the worst screwing is yet to come when real estate brings its second wave of disaster.

Down the road, it's the real estate bubble in China that concerns me, but that's quite some time away. The Chinese are adept at manipulating growth, doing things that would be unheard of in the US.

It was interesting to see profit-taking in ZSL, FAZ and other hot movers today. Always in the final hour, more so in the final 20 minutes. But buyers kept scooping up shares at day-high prices. Even VXX was up nearly 5% today after taking a breather yesterday when traders took big profits home.

All in all, it's always best to be ahead of the curve, not chasing the crowd. So I hesitate to add more ZSL or FAZ at this point. (DUST, the 2x gold miner bear ETF, is tempting, but could bounce hard any day.) Anything up more than 14% will need a pit stop, rest time and fuel. This might be a good time to step away from the market and dig around for some physical, just a small amount to average in. After all, ugly as today was, tomorrow could just be the start of a new run. Every central bank loves a big discount on shiny metals.

Hi ho!

12:49 pm (Hawaii) A quiet day for me, mostly working on the road, off the computer. I did see silver pop in premarket. AGQ moved up from 223 to 227, sold off, then bounced back before the opening bell. Last I saw, it was at 230 before the closing bell. Quite a run for silver, not totally unexpected. I just didn't have the guts to step back into AGQ even though every indication told me that it was going higher. The late-March run after consolidation is very similar to this stretch, as I mentioned in an earlier post.

So, is AGQ poised for another run to 382? I can't say no. The fundamentals behind silver and gold are stronger than ever. The awareness of precious metals as a store of value and/or real money has spread to a greater audience. More and more central banks are, well, banking on gold as the US Dollar falls on its face. I am tempted more than ever to chase physical and paper gold and silver at higher levels.

Spot silver is 41.60 at last check and spot gold is off its 1674 all-time high, now at 1661. It needs a breather and time to consolidate, but as Brother Turd Ferguson noted, there's nothing to stop gold from soaring to 1700 and 1800 without a pit stop.

I thought about buying more gold two Sundays ago. Then again this past Sunday. But like a lot of people, I waited for a pullback and it never really came. There was a minor drop on Monday, but once the debt-ceiling deal was nearly official, that was it. The market hit skid row and PMs blasted higher. So, thumbs up to the dollar-cost averaging buyers of physical. When in doubt, average in, no worries about perfect timing. I could've added physical gold at 1600 and 1640 or so. I won't be shocked if it pulls back to 1625 at some point, but I really don't expect it.

Who knew that South Korea (and Thailand) would be the real catalyst? I say that only half in jest. Whatever margin requirement hike(s) may be coming from the CME mafia for gold, they will be utterly temporary, tiny speed bumps for hungry, pent up global forces that are sick and tired of weakass US debt (dollars). The lion has been unleashed.

Sure, there are no coincidences

8:13 pm (Hawaii) I believe that. Maybe there are accidents and what not. But really, is this a coincidence that Spot Silver is virtually duplicating its movement tonight. Look at how tonight's price action compares to that on Monday at the exact same time. For those of you who truly believe spot price in silver and gold are completely off the chains, not handcuffed by the CME mafia at all ... do you think tonight's gold price is coincidentally mirroring Monday's action, too?

Whatever the case, I'm fairly prepared. If price rises, my gold positions gain modestly and I'll wait for another time to acquire more physical. If silver rises, I junk my new, small ZSL position and wait for another time to acquire more physical.

If price drops drastically in gold, I hold my positions and wait for a good time to get more physical. If silver price drops drastically, I wait it out and see if gets below 40, 35, even 32. If I were greedy, I'd buy paper to the hilt and gamble. But I prefer physical in this wacked out environment. You guys can do the casino thing just fine. Oh, and I'll probably hold ZSL until after the post-debt ceiling "agreement" melt-up (in stocks) and selloff (in precious metals) is done.

photo: Kim Yu-Na, Samsung

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

Laser-alarm alert

1:28 pm (Hawaii) Been away from the computer most of the day. The moves in silver (and gold) have been interesting, once again. AGQ opened down at 198, but ran to 216. This recent range of roughly 195 to 220 has been boring to traders who have ignored the market, but for the hyper-sensitive, it has been either lucrative or destructive. My guess is the swings have done more damage to those on margin, a feature that I never recommend.

In hindsight, it was good to get out of AGQ at 205 yesterday, but I was not around to re-enter on the bounce this morning. I didn't expect it, not with the CME mafia's history of driving silver into submission whether it requires a blunt takedown on a thin-volume day overseas ... or five margin hikes in less than 10 days.

Still holding DGP, XG and a sliver of GSVC. All were up, as was 78% of my Metals list. GSVC touched 16 a few days ago on the announcement of the sale of $100 million in stock, but is nearing 18 again. That was quick. When XG and GSVC dipped on these stock sales, smart traders added more at cheaper prices. I didn't. I'm content to stay at roughly 50% cash for now.

Note: VOLUME WAS LOWER for almost all metal stocks today. Not massively lower, but lower nonetheless despite a broad number of issues being higher in price. This is not a bullish signal, not by far.

AAPL dipped, as expected, and is at 387 afterhours. This is close to the 50% retrace level from yesterday's price before shares were allowed to resume trading after the earnings report was released. Maybe 376 is the new support level. Maybe it's 387. Who knows? For now, AAPL is in a rosy garden and a lot of traders are behaving as if the global debt crises will not take the price down. Again.

Back to the PMs, this is an inadequate place to be if you want more physical metal or want to go long. Silver was at 35 just days ago. 32 wasn't that long ago either. I'm not in the camp that believes the Comex will ever be taken out if and when silver inventory goes to zero. That's just not how JP Morgan and the govt operate. They will take what they need and stomp on peon traders like us without hesitation. You think they thought twice about attacking Libya or Iraq after the two nations attempted to trade oil for gold without using the US Dollar? Of course not. Yet there are a lot of us who think the Comex is days or weeks away from "defaulting".

Not gonna happen. If it does, so be it. But historically, there is no way to realistically expect a govt-funded entity to "lose", not like that.

Maybe if I abandon all caution to the winds, I'll make a lot more fiat in this environment. But I'm not doing that. Not yet.

Monday morning jollies

3:15 am (Hawaii) I am half-expecting to write, by mid-day, that Spot Gold and Spot Silver will have been kneecapped by the CME mafia in waterfall fashion. Until then, both are holding early-morning gains. Gold was knocked down from its earlier high, but is at 1599.00. Silver is at 40.29. The technicians no doubt would like to see both consolidate at these levels and build firm support for the next rise, but really, when the puppeteers decide to break out the baseball bats and inflict the bulls with margin hikes, technicals won't matter.

Too pessimistic? Maybe. Just being a realist. Be prepared!

Thar She Blows!

10:38 pm (Hawaii) So, Spot Gold has breached 1600 and Spot Silver has returned to 40. How long will this last? Does the CME mafia have another assassination magic bullet in its ammo? Can gold and silver get shot down before US indices open in a few hours? Will a series of margin hikes commence this week?

Frankly, if gold and silver prices tank to new near-term lows, I won't shed a tear. I'd love to acquire physical at cheap prices. But I really don't see it happening. The volume in the past week has been impressive for both metals. Global circumstances are unprecedented. The typical summer doldrums are not in play. I can't imagine 1600 and 40 being new support levels this soon, but I realize all too well that I don't really know jack. What happens, happens.

Round mound of rebound

11:15 pm (Hawaii) It was not more than three days ago when Spot Silver was tumbling downhill, dipping below 35 and looking weak as heck. Spot Gold, not so bad. But now, with gold at a new high and pushing 1600 in overnight/Asia trading, and silver back at 39, the psychology of round numbers is upon us.

I learned from trading gurus like StockGuy22 that people have barriers in their minds that often will trigger selling no matter how good a stock is. In marketing terms, this is known as anchoring, when a specific number dominates the decision-making of consumers. 40 is a major point of focus for silver. It won't linger there long, I believe. The price will pass 40 and not take long to spark a run back to 45 ... or it will teeter at 40 for a short while before selling pressure is applied. Would people who bought at 40 or higher opt to get out once silver returns to that point?

I tend to think they'll hold and see where spot silver goes. But if it does rip through the low 40s, how long would it be before the CME mafia inflicts the market with another round of margin increases? They could certainly to this to silver again, but gold? I don't see them corralling gold, not when so many gold owners are actually banksters themselves.

Of course anything is possible, which is why I'm not overly excited about this latest PM run. 31 to 39 is a fair range considering the remarkable gain in silver over the past two years. There's no need for greed. There is value to be made if your hand is patient.

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.

Maguire speaketh

3:28 am (Hawaii) Andrew Maguire is incredibly bullish on PMs, to no surprise, but also views the new gold exchange in China as a pivotal force.

See the interview at King World News here.

"We've got now a new fix. A new third gold and fix, each morning at 8 a.m. Beijing time, that will reflect real world pricing. Now it's going to be really interesting to see the effects of this thing, how it affects the London fixes and the HFT traded paper that often follows the London fix. We know when we get a quiet market, we often see a huge selloff. With Asia, we'll see a much more competitive world stage."

I know a lot of gold and silver bugs have already anticipated greatness for the PM bull market via China. But what if China's new metal market is a clone of Comex? After all, JP Morgan has its clammy paws in many things financial. Advisors. Models. Sheer currency. If that pans out to be true, then a third entity could exacerbate the current manipulative powers of the banksters. It could be at least 50% WORSE if the exchange in China is a puppet exchange.

I don't think it will be. If and when the China exchanges want to screw people, they certainly know how to do it without any help from US banksters. They'll just make sure the money stays on the mainland (of China).

Andrew Maguire: 'With Asia, we'll see a much more competitive world stage' (July 11)

While I was 'away'

Trading this market requires resourcefulness and timing

I wasn't able to post yesterday (Monday), but I did scribble this down in the meantime. Just a rant-flavored whine, or whine-flavored rant about the rise and fall of Spot Silver and how I turned a +$200 trade into a -$300 loser.

5:11 am, Monday (Hawaii) I'm unable to post online right now, but I need to vent. Spew, more like it. I went from being up about $300 on my small positions in XG, AGQ and DGP ... to being in the red by $400. All within a matter of minutes, purely from the puppet mastery of the CME mafia. The charts don't lie. Spot silver went from a respectable gain to complete waterfall crash in minutes. Spot gold fared only slightly better.

AGQ went from 185, a fractional gain, to 172 in almost a straight line. The psychology of dealing with such a unexplainable drop is impossible. Either I get out after waiting it out at 182, 179, etc ... and wait for the inevitable bounce, or see AGQ plummet like never before thanks to the puppetmasters. Knowing that they certainly could take it down 20 bucks, 30 bucks without remorse is the trump card they own over all of us peon traders. So I got out at 173, eating a $250 loss. It's not a ton of money, but considering I thought it was a fairly safe, fairly conservative trade with just a handful of shares, it was preposterous.

AGQ bounced, indeed, at 172 and is slowly climbing back up as the MACD indicated it might, now at 175.11. The dangerous speed at which AGQ and other double or triple bulls (and bears) move is not navigable. Yet there I was with that small position. It was pathetic, seeing a decent overall gain in my trading portfolio turn to crap so quickly. It's happened before, so it's not losing money that shocks me. It's the fact that the entire market is down, certain metal plays were up and I seemed to have a grip on the whole situation.

Heck, XG was high as 14.40, and DGP was high as 50.11 in a sea of red. There was no logical reason for PMs to get smoked other than outright manipulation. It's easy to be mad. Nobody likes to lose. For what I have in physical, which isn't a lot, and what small positions I will continue to hold in XG and DGP, the long run is likely on my side and today's loss will be mostly forgotten. I was right to hold AGQ over the weekend. I was wrong not to protect my small profit.

As for FAZ, which I sold at a tiny loss on Friday, it got up over 46 this morning. I sold at 43.03, missing out on today's run as Euro banks tank. I didn't want to chance some insane maneuvering by the banksters on both sides of the pond. That's the game, full of risk, logic and no logic. I probably would've been better off sleeping through this or staying in cash before the weekend.

I was right. I was wrong. But most importantly, my timing was off in FAZ and AGQ. I do not expect to go to bed, wake up in five hours and see Gold below 1500 and Silver below 34. It could happen, of course. XG could give back a chunk of its enormous gains of the past two weeks. It fared better than most miners this spring, but it's pointless to hold any miner that is in stagnation due to rising energy costs. With that fact in mind, it might be best to empty out of XG, sleep well, and wait for a bargain price whenever it surfaces.

Buying low, selling high(er) ... It will work in this ragged, nauseating market. Trying to nickel and dime, that won't work so well. At some level, I believed a gradual rise in the PMs was upon us, but I didn't go "all in" like a fool. The cartel continues to beat down Gold, as it did when price neared 1560 this morning, but buyers remain and I'm not so leery of holding XG here.

More than ever, silver stocks are played in a casino and the House has full advantage. I chalk this up to losing money in Las Vegas, except in this case, the deck was completely rigged before the hand was ever dealt. In those few minutes when my hand seemed to be a winner, it was opportune time to cash in. Better to call it a day early with a small profit than to wait around for the inevitable.

6:01 am, Monday (Hawaii) Stop-loss order is in for my position in XG. It is relatively small, yet my biggest position among the three I began with today. The stop-loss price is a penny below today's earlier low of the day (13.74). That's 11 cents lower than the current price, so I can live with that much of a drop in case the puppetmasters crater gold.

12:14 am, Tuesday (Hawaii) The idiocy of trading silver equities in this climate is obvious, but in small quantities of shares, I suppose I'm willing to gamble. That's saying a lot for someone like me, a rare Hawaii resident who isn't addicted to trips to Las Vegas. Yes, Monday's miscue was about timing. Friday's sell of FAZ, sure it could be categorized as a miscue, but I consider it a calculated minimization of risk. I lean more toward risk control than my logical conclusions largely because -- I'm guessing -- the manipulation of the markets has nothing to do with logic.

The Maguire Effect?

Here's the Maguire video again. See him at 1:25.

11:24 am (Hawaii) How much of gold and silver's run this week has to do with the re-emergence of Andrew Maguire? Seriously. Though the PMs were due for a bounce, Maguire's assertions cannot be ignored. He's even been interviewed on video, talking about China's new Pan Asia Gold Exchange. That has basically shut down all the naysayers who claimed there had never been an Andrew Maguire, that he was a fabrication, etc.

So maybe he isn't a catalyst. I tend to think he is, along with several other co-mingling factors. There is no way to talk about silver, gold and the CME/Comex mafia/JP Morgan/Fed without mentioning Maguire and his tribulations. It's the stuff movies are made of. Steve Buscemi as Andrew Maguire? We'll see how this year plays out as Comex's physical silver numbers continue to shrink. I don't think CME will ever go empty (on paper). They'll fudge and cheat like the bitches they are, and we'll never see ZERO silver on any report. Come on. They have the backing of Uncle Sam, people! But I do think physical gold and silver go higher. And higher. And higher. So will the price of commodities and goods. Mike Maloney says deflation followed by hyperinflation. Gold and silver will protect value. That's key, no matter how many traders prefer to ride NFLX to infinity. At some point, the market succumbs to dying fiat currency and it'll take too long to convert gains in NFLX to fiat, withdraw it and turn the fiat into gold and silver, with delivery. Especially if you're competing with millions of other traders at the same time.

I'm not at 1,000 or even 100 ounces of metal yet. But I'm getting there. Just an average guy trying to avoid the fate of most hard-working Americans because of a hooligan government overrun by banksters.