Coffee, cream and METAL MANIA! (updated)

8:24 am (Hawaii) It rained overnight in Honolulu. Weather was cool for a July night. Perfect sleeping weather. I just got up after a productive workout last night, and it's almost the end of the session. Did I miss anything?

Hell yes. I remember Turd Ferguson noting yesterday that, technically, he expects gold to break out to a new high, and if that happened ... fully bullish. Turn on the TV. Turn on the computer. I sorta dread this. If gold breaks out, good. My XG and DGP will do nicely, even at small quantities. But I sold out of AGQ two days ago at a loss of $12/share. Small, small position, but still.

The Metals list I keep is almost all green (79%). It's a wipeout day for Metals bears. Only the bearish ETFs and ETNs are red. The indices are all up. XG is up 5%, DGP up 1.3%. AGQ is up 10% to 195. I sold at 172. Again, my timing ... not so good. I'm glad I held some gold stocks. It's like selling FAZ last Friday instead of holding until Monday. That cost me some. But the AGQ sell just cost me roughly $600. That's on a small position, really small. And if silver continues to rise, AGQ keeps going up at double warp speed, who knows, maybe to its all-time high at 382 (April 28).

I can imagine it's been a wonderful day so far for metal bugs. But Turd's site is down. Has it been overwhelmed by all the excitement? I need my Turd & Turdites fix.

James Turk, in his consistent, almost monotone voice, has been pounding the table for gold for a few months. He keeps repeating that this will be (not could be) a breakout summer for gold. Yesterday, he said it would be like the summer of 1982, when Mexico's default led to a golden rocketship. Holy cow, Mr. Turk is probably correct.

Everything at the top of my Metals list gapped up and is already enjoying bigger volume than yesterday: AGQ, AG, NUGT, EGO, SVM, SIL, DBS, XG, SLV, PSLV, GOLD, GDXJ, SLW, PLTM, EXK, REE, GDX, COPX ... wait, I take that back. PLTM hasn't matched yesterday's volume yet. It's all almost too good to be true. Like a setup. But on this kind of volume? I doubt it. It's usually a thin market that gets toyed with and peon traders like me get puppeteered.

Is it this simple? Obama threatens to yank Social Security, and the market reads it as a desperate threat and confirmation that QE3 is on? Or what's-his-face on Capitol Hill, the Republican who caved in and compromised on the Democrats' offer yesterday ... that's what's driving this? I haven't had time to check yet. Maybe after a bowl of cereal.

Update 8:51 am (Hawaii) On the 15-minute chart, AGQ has never exploded like it did this morning at the open. There was major volume two days ago, when shares sold off. But this morning was to the upside in a gap up. Trying find an entry point is difficult here. After closing yesterday at 177.68, there's a lot of room to pull back.

Has the CME mafia and the govt lost control of the price? Is the manipulation over? Probably not on both counts. But yesterday and today show that even in the middle of what's supposed to be the summer doldrums, the market may be too powerful to shackle 100% of the time — especially when it comes to gold. That is where old money resides. Old BIG money.

Update 9:07 am (Hawaii) Excellent post at SilverGoldSilver.com by guest writer SRSrocco about commercial shorts losing grip on silver. I'll add it to the library reading list later today. I got to eat some cereal. Kept watching AGQ but couldn't find a suitable point of entry. Now it's pulling back below 196, it looks like ... feeling desperate to get in near the highs is never a good feeling, and rarely leads to good results. I like the feeling of buying cheap, it's just that I really don't expect AGQ to go back near 177 any time soon.

Only a rocket ship loaded with 10 trillion ounces of gold and silver from another galaxy could save the US economy here. And that would be bullish for PMs. Production/GDP/jobs aren't about to spike high in the next several months. Not even space aliens can repair that.

Silver and gold stars

11:06 am (Hawaii) Today's silver stars?

GPL 3.82 +0.22 (+6.1%) volume slightly up

SLW 36.75 +1.77 (+5.1%) volume slightly up

EXK 9.81 +0.44 (+4.7%) volume slightly down

PAAS 46.44 +1.59 (+3.6%) volume slightly down

SIL 25.01 +0.67 (+2.8%) volume up big

AG 20.28 +0.42 (+2.1%) volume slightly up

SVM 10.37 +0.13 (+1.3%) volume slightly up

AGQ 177.38 +2.18 (+1.2%) volume even

All are afterhours prices. Not a lot of depth in silver gainers, but notable.

Gold stars:

NUGT 32.65 +1.92 (+6.3%) volume slightly down

GG 52.45 +2.04 (+4.1%) volume up big

NGD 10.75 +0.40 (+3.9%) volume slightly up

EGO 16.37 +0.55 (+3.6%) volume slightly up

XG 14.50 +0.46 (+3.3%) volume slightly up

GDX 57.36 +1.74 (+3.1%) volume up

ABX 47.14 +1.26 (+2.8%) volume up

GDXJ 36.30 +0.80 (+2.3%) volume up big

DGP 50.76 +0.74 (+1.5%) volume up big

UGL 53.80 (+1.4%) volume slightly up

Reign of the metals

8:11 am (Hawaii) Just up from a nice night of sleep. It's cloudy and somewhat cool in Honolulu, a day after the 4th of July. The real fireworks are happening in precious metals.

SVM is up 11.3% to 10.12 on massive volume. EXK up 10.2% to 9.03 on massive volume. AGQ up 8.8%, average volume. AG up 8.2%, massive volume. GPL up 7.1% on solid volume. NUGT up 6.3% on good volume. SLW up 6% on decent volume. EGO up 6% on good volume. PSLV up 4.6% on average volume. DBS up 4.5% on modest volume.

SLV, SIL, NGD, XG, FSG, GDXJ, GG, PAAS, DGP, UGL, WITE, ABX, GDX, GLTR, PSAU, PALL, DBP — all up more than 2%. Just about all are also off their highs of the day. Why such bullishness? Is it rumor that the debt ceiling will be increased (again)? Possibly.

73% of my Metals list is green. What's not working? ZSL, obviously. DUST also down big. REE is sinking, -5.4% after Japan released news of a major rare earths find on a nearby seabed. Getting all that up to surface is challenge, but the info was enough to hit REE and AVL hard. MCP is down "only" 1.1%.

Crude is up, the indices are flat. Metals up big. I remained heavy in cash going into this week. If we have already hit a bottom in silver and gold, if James Turk and other goldbugs are correct in predicting a monster run in PMs this summer, this would be the time to move in. (Actually, it would've been last week when spot silver was below 34.) But I'm still in wait-and-see mode. My favorite miners remain EXK and XG, but I've got no position in them. I won't be walking in at these levels. If anything, I'll start with a small position on a dip and see how the week plays out.

One thing is for sure: volume in silver is heavy today, for whatever reason. Maybe hedge funds are piling in because they already loaded up on stocks last week. That money has to go somewhere and the hedgies tend to move in packs.

Update 8:33 am (Hawaii) Between AAPL, AMZN and BIDU — big boys with growth — BIDU continues to move up with strength in volume. AAPL and AMZN are up today, but volume has petered out. Not touching any of these for now. BIDU could reverse any time and the flaky behavior of the indices seem to indicate that the bull run of the past week is slowing.

NFLX is up 6.8% on major volume, now trading at 286+.

Interest rates status quo

 

6:27 am (Hawaii): Breaking news is no change in interest rates. That's no surprise. I like how the info usually gets released (on paper) to the media this way, an hour or two before Bernanke speaks. The FOMC statement notes the weakening labor numbers.

Generally bullish despite the flat indice numbers so far today. The losers on my Regular watch list are mostly down less than 1%, though NFLX is way near the bottom.

My Metals list is 75% green, 25% red. GPL is up 6%, EGO up 4.5%, NGD up 4.1%, NUGT up 3.8%, XG up 3.7%, MCP up 3%, GDXJ up 3%. My favorite miners are up: EXK (+1.3%) and XG (+3.2%). Both have comparable volume to yesterday at this point.

More losers: DUST (-3.8%), SCO (-2.2%), ZSL (-1.2%).

AAPL is flat. UUP flat, also. While other miners are up nicely, PAAS is flat (+0.2%). GLD is up just 0.4%.

Hitting for power

6:59 am (Hawaii) Just got up to another cool morning in the islands, a nice 73 degrees, partly cloudy, low humidity. The market is where it's hot. Dow up 91.96 (+0.78%), Nas up 47.31 (+1.8%), S&P +14.60 (+1.1%).

Silver is on fire and dominating the top of my Metals list, which is 79% green, 19% red. Unlike other up days, volume is huge so far, which has me intrigued.

AG 17.85, +7.1%
SVM 9.16, +6.9%
EXK 8.37, +6.5%
PAAS 30.36, +6.3%
NUGT 28.73, +5.5%
AVL 6.56, +5%
XG 11.99, +4.9%
SLW 32.57, +4.5%
EGO 13.99, +4%
SIL 23.46, +4%
GOLD 77.69, +3.5%
GDXJ 33.67, +3.16%

All of these upside plays are close to yesterday's volume or, like EXK and XG, have already surpassed it. How is this possible? US Dollar down, Euro up, Greece going through the formalities after the closing bell. Bernanke to speak tomorrow. Even AAPL is up 2.8% to 324.27.

Is it just about Greece and the Euro? I'd say it was a weak dead-cat bounce, but on this kind of volume? The finnies are up big. NBG (+7.4%), BBVA (+2.6%), STD (+2.4%), C (+1.8%), BAC (+1.1%), GS (+1%), GS (+1%), JPM (+0.6%) all up. FAZ down 2.9%.

Whatever the reason, EXK once again bounced off the 7.50-7.60 area. This is no place to chase here.

As for rare earths, AVL is hot on fair volume, MCP is up 1.3% to 53.11 on tiny volume, and REE is up 2% to 10.36, also on very small volume. They had their big run yesterday, but today isn't all bad at all. Looking forward, I'm leaning more toward trading in rare earths and/or holding a small long-term position. Otherwise, I'm still 90% cash, haven't made a trade in nearly two weeks. The game plan was to wait until tomorrow for a signal in either direction and I'm content waiting this out.

My Regular watch list is 87% green, 13% red. The big boys like AAPL, DIS, GOOG, NFLX are up, but on low volume. The smaller players like LULU are up on huge volume (+5%).