Can't touch this

10:08 am (Hawaii) Some days, I regret that sleep is a necessity and miss opportunities. Some days, I'm just grateful for warm weather, a cool breeze and a modest profit. In those seconds (or minutes) it takes to log onto the internet from my bed after I get up, my brain can't help pondering what happened since I went to bed two or three hours into the session. Did gold and silver keep rallying? Or did something hit the market hard and send prices crashing?

When I hit the sack this morning, the Dow was up 240 points or so. It just closed the session +146. I mentioned this earlier today, and I'll say it again. This feels like a wanna-be rally. People generally want to get happy and go long and just forget about it. But it ain't happening. The gap-up moves were instantly piggy-backed by the algo space-alien superduper trading machines, which is partly why spot silver was up big and AGQ was up around 14% early in the day. (Puppeteering notwithstanding.) AGQ is now at 121.22, up 7%. That's still a humongous move from 90 yesterday (or was it the day before). Insanely massive move from the bottom when spot silver was at 26.00.

I'm not convinced spot silver is going up. I'm not convinced it's going down. If the HFT computers are searching for patterns and feeding off momentum, as usual, what happens when there's nothing conclusive in the near term? AGQ looks like it should go back to 200, that this run from 90 to 120 is just the beginning. But I'm not touching it. Yet.

DGP and gold should be done bottoming, but again, I'll let the puppeteers and machines do their thing before I step in again. The market, the precious metals ... most everything that moved up today couldn't sustain those beefy gains. I'm holding off and maybe something will be attractive before afterhours trading ends. But I'm not assuming it will happen. The relatively quiet front of Europe always bears watching, no pun intended.

Small teats and feats

FAZ: megaphones and pennant

10:21 am (Hawaii) No reason to get up early, so I enjoyed a night's rest, got up around 6:00 am, went back to sleep, got up 8:00 am. First thing I did was look at the FAZ chart. Sure enough, today's trading range fit precisely within the near-term pennant, which is now narrowing drastically. With lower volume, range is also shrinking. Volume in FAZ is much stronger even today than it was back in May and June. But since I started charting FAZ on Friday, the megaphone and pennant perspectives have helped immensely.

More than that, they're providing some entertainment value. There's no way to predict anything in this stupendously insane market. Maybe it's the algo space tech machines that are forcibly maneuvering FAZ into this pennant. Maybe we really are just a day or two away, according to the pennant development, from a huge event that will move the financials, and thus the market, drastically to the upside or downside. Nothing would surprise me.

All I know is, the mid-range line of the megaphone(s) proved to be a point of resistance yesterday. Today, the lower line of the pennant proved to be support when FAZ fell to 58+. At 60, it's right in the middle of those closing pennant lines. If we get no major event soon, volume could continue to decline and price could level off here. Consolidation. But really, with the PIIGS and debt crises on both sides of the Atlantic, I'm not expecting May-June type action in FAZ. The fan is spinning at full throttle, ready chop and slice any piece of news out of Washington or Euro land. The fan can't stop, let alone slow down, because it's fueled by debt, trillions and trillions of dollars of debt, and the US banksters have poisoned their 'friends' across the pond, spiked their drinks, tainted their pate and caviar.

Most of my urges to scale in have been tempered by these morning visits to Chartsville, inspired by masters like Professor Turd Ferguson. I'm not worried that I'm no guru like him because charts are not predictors and I'm not reading crystal balls. Perspective is key and it's good to have a balanced one.

That being said, if Turd is right and PM's have bottomed, scaling in here wouldn't be the worst thing.

Megaphones and pennants

FAZtabulous?

11:23 am (Hawaii) Not a chartist, technician or astrologer. In fact, headline risk rules just about every significant move in the market. But it's still interesting to see the price action, ie psychology of crowd behavior, as it is in FAZ. On Friday, I observed with my amateur telescope that FAZ was in a pennant move short term and a megaphone explosion longer term. China-saving-Italy rumor withstanding, FAZ moved back into the pennant range by today's close. If not for the rumor, FAZ likely would have boosted from its 66+ open and well past 70. This shit is not for the easily disturbed. Buying at near-term highs is stupid. That's why I keep an eye on this and refuse to chase.

I gave up some gains when I bought at 54+ last week, sold at 60 and saw it run to 66-67. But I do not believe in infinite uptrends and I have no regrets about selling then. This week will likely bring the close of this pennant formation and then on to the next near-term phase. Would not be at all disappointed with 55 or 50. China will do only so much to clean out the toxins of Euro and US banksters.