This Ass knows

9:24 pm (Hawaii) He's known as the Golden Jackass, but don't be deceived. He is smart as heck and his latest piece covers just about every key issue of the US economy's slow, inevitable decline. I'm not a subscriber and don't plan to become one. But this free essay is a great read.

Here, he writes:

The new Shanghai silver futures contracts are most likely not welcome to the COMEX and its Wall Street overseers. The common practice of ambushing the Gold & Silver prices overnight or immediately after hours in the late afternoon might soon come to an end. 

And this:

Expect no change to the 0% policy (ZIRP) with no change to the heavy monetary inflation (QE), as the path to ruin is set, and the policy of Inflate to Infinity cannot be stopped. Gold will not stop until it surpasses at least $5000 to $7000 in price. Silver will not stop until it surpasses at least $150 to $200 in price. Such forecasts invite mockery, but in two years they will seem prescient.

About CME Mafia:

Few are aware, but the events in the first week of May are what a COMEX default looks like, in its preliminary phase!!! JPMorgan could not meet the schedule of May silver deliveries, that simple. In time, the distance between paper Gold & Silver and physical Gold & Silver will be great. Then the COMEX shuts down, unless they act as a Cash & Carry exchange. Doubtful.

Golden Jackass via Goldseek via Silver Gold Silver: Green shoots, exit strategy, no QE3 (May 25 2011)

So what does this make Jeff Christian? Is he a jackass too? He's forecasting $26 silver.

(video) CPM's Christian forecasts silver at $26, gold near $1400 (May 25 2011)

A brother with a big brain

8:22 pm (Hawaii) BrotherJohnF is one of the most stable, steady hands in the community of vlogging analysts/commentators on silver. This is one of his better videos, a simple reflection of price over the past decade. He began accumulating junk silver when it began to break out around 2003 or so and has continued to stack since.

It's interesting to me that while he points out the obvious manipulations and activity, he doesn't go into detail about it. In fact, his point in this video is that there is nothing those entities can do to stop silver's ascent in the long run. The higher highs and higher lows on the 10-year chart affirm what BrotherJohnF says. His target is $68/oz.

It's not often anyone in this world of PMs looks forward that far, and those who do come up with big numbers. Huge targets. BJF has four figures in mind for silver at some point in the distant future. But near term, he sees 68, and I can't disagree.

(video) BrotherJohnF: Silver Update: Keep Stackin' (May 25 2011)

Sentimental reasons?

1:06 pm (Hawaii) Finally, a moment to relax, get off the road and have some fine home-cooked style lunch in a small town, slower pace. I'm at peace here. Catching up with the wisest of the wise online. Brother Turd sees today as proof that the PMs are too strong to be taken down for long. I can't disagree with him, even though fear shook me out of EXK and AGQ earlier. I can't be mad at myself too long. Even if I'm right and silver spot price plummets, that's just an opportunity to buy more physical.

At my age, with my patient, deliberative nature, it makes more sense to ride out the storms and venture out to the destination, to the place where my conviction lies. I may just do that.

Turd Ferguson: Changing sentiment (May 26 2011)

Weapon of choice

12:28 pm (Hawaii) On the road today and for some odd reason, losing money on those trades isn't bothering me. I exercised caution, cut losses. True, stop-losses would've kept me in better exit points, but that was true only in EXK. There was no way to avoid that steep drop in AGQ. But looking back now, Rip Van Winkle would've fared better than I did.

AGQ is at 194.61 after hours, which is just a few cents lower than my entry point yesterday. Well off the recent high above 201, but still ... I would be OK with it here had I not sold. EXK is at 9.84, finishing pretty strong after that drop to the 9.40 level, where I sold (9.48). Yup, I was one of the fools who got shaken out. Guess that makes me nothing more than a speculator no matter how much I believe in the fundamentals of the silver and gold markets. As for XG, what a punching bag. After that nice run, it's been a dud for days, now at 10.42. I'm glad, in a way, that I got out of that. Then again, this is not a bad level for an entry point. It's just that my entry was at 10.73.

It's a matter of perspective and timing. All the risk management in the world is great for a trader, but it still comes down to choices. Do I choose to micro-manage from minute to minute? Or do I put some trust in the direction of one stock, one sector, one global economy that is clearly in trouble? Even the bears have their conviction and find ways to make money. It's simple for a lot of traders, not so simple for many more. I want simple. Traders who knew silver was topping again at 39 (or close to it) went long ZSL or shorted AGQ. Some of them smartly went long AGQ at 188 or 190 not long after the opening bell. Just like those who sold EXK at 9.90 to 9.93 yesterday, then went long again today below 9.50 — where I sold.

It's about choices, more than any other factor. Being informed helps me make better choices, but it's about as plain as this: buy low, sell high. Anybody with a half-brain and can determine what's low and what's high in any stock, etf or sector and makes the best choices based on that platform will win more than lose.

Might be best to flush out all the activity and give myself a break for the rest of the week. Maybe build up my cash flow situation so I can acquire more physical metal in the next few weeks, strictly for long-term purposes, if the puppet masters take spot prices down again. Not if, but when.

In a tank of sharks

10:05 am (Hawaii) Trying to be a pilot fish ... it's not getting easier. It's getting harder. Choppy seas in the world of precious metals. I was fairly good a while back when Spot Silver climbed to 49, spun out of control and fell to 32. But the trades in EXK, AGQ and XG the past few days leave me yearning for balance and peace of mind. I didn't lose a lot in the sells today, but watching a $525 paper profit turn into a $370 loss was disappointing. I'm too jaded to be angry or frustrated. It's more like surrender now, not the kind that will keep me from trading paper silver and gold, and absolutely not the kind that will scare me out of buying physical PM.

It's just another step along the way, understanding the manipulation and fear in this market. My Metals list is now 41% green, a whole lot better than early this morning when it was around 21%. Then, only really good news could keep EXK above water, but that eventually sold off. It's just doubly difficult when spot price gets yo-yoed by the puppet masters and takes everything down with it no matter what. We don't have a fair opponent for the CME Mafia, an entity that can slash and decapitate with as much frequency and force as the Big Money. We are at the mercy of the phantom puppeteers.

That's why I have avoided going long silver for the most part overnight. Last night's exception proved to myself that it was a good policy. There's no sensible or fair reason why Spot Silver should not be at 38 or 39 right now, and yet fairness and sensibility have NOTHING to do with price. This is the game many of us have chose to play, and when the rules are completely altered over and over, bent to one party's advantage, then it becomes pointless.

For us peon investors and traders, there is no edge.

There is no consolation in being 100% cash while EXK runs back to 9.85, especially when I gave out and finally went to sleep. AGQ is struggling to get back to even for the day, and XG is hopelessly dead money for now, as are most small miners who have no news to report. (Just another reminder of why I stopped trading smaller stocks long ago.) ZSL is still atop my Metals list with a 3% gain, far off its high of the day.

Even with the nice gain in gold and silver in the past few days, it just doesn't smell right. If the Chinese gold futures market is released from restrictions, maybe things really get interesting. Maybe when the Chinese silver futures market opens (expected at the end of this year), we get balance. Or maybe the puppetry continues and grows to a second continent.

The mystery is what permits potential. The blatant chicanery is what shuts that potential down. Between PM options expiration today and my uncooperative sleep patterns, I may resort to putting stop-loss orders on any future positions. Or I'll have to learn to buy puts. But whatever the case, watching minute by minute has become fruitless for me. There's a next step ahead and I'm taking it. Just don't know where it will go.

Making sausage

3:37 am (Hawaii) Another morning begins with me lying in bed for an hour or two. No TV here in the bedroom, just the laptop and me. Trying to figure out how EXK has remained green through this morning's pullback in Spot Silver. TheStreet.com likes the technicals on the chart.

Silver still trying to get untracked, but the process is not pretty. Same goes for gold. AGQ, EXK, XG all losing ground bit by bit.

TSC: 5 silver stocks set to rebound (May 25 2011)

Marketwire: Endeavour moving forward (May 25 2011)

Update 4:04 am (Hawaii) My suspicions were right. This is no time to be trading long on PMs, and I cashed out of AGQ at 191.38 (small loss), EXK at 9.47 (tiny gain) and XG at 10.38 (small loss). Back to 100% cash. I wanted to hold these positions through a bounce, but there is simply not enough buying pressure right now, which means Spot Silver could easily return to 36 and below. I think traders and investors look at what happened this morning and realize the friggin bogeyman CME is out loose in the woods again.

So, being up a nice (paper) profit yesterday and selling at a solid loss today, that was a swing of about $850. When I awoke during premarket and my positions had rallied off their early lows, I was at break-even, thinking that odds were low that prices would go back to those lows. The fear factor in the PM market is widespread, though. I didn't take that into account enough.

ZSL now at 17.49, off its high of 17.70, up 4.4%. Turns out that selling AGQ above 200 yesterday was the right move whether you hate CME or not. Selling AGQ and/or buying ZL, which was 16.73 at yesterday's close.

Update 4:21 am (Hawaii) Spot Silver reaching 38.75 overnight turned out to be the turning point, it appears. What's almost impossible to figure out is whether the central bank in China is willing and able to short Spot Silver and Gold. China is still in accumulation mode of physical, so higher prices aren't what they want. Yet. To that end, I won't mind getting more myself once the price goes below 35. 33 would be nicer. 30 would be great.

Terrible Timmy's Time Machine

3:09 am (Hawaii) Maybe it's too early in the morning, I've got too many cobwebs in the head and the crash of an automobile waking me up for good did no favors. But maybe this who flash crash (the latest one anyway) was engineered by an overburdened Treasury head who unknowingly walked into a parallel universe and found himself years younger. Maybe he was 8 years old and had all the power in the world there. Maybe his first act was to run to the nearest (and conveniently empty) algo hedge fund office, type in some secret code mumbo-jumbo that bought up a whole lotta naked shorts on Spot Silver, sending the price over a cliff.

Maybe. But soon enough, the young boy's time travel adventure ended and all he had done gradually dissipated. That would explain how AGQ sold off to 188.25 this morning in peon premarket trading. AGQ is now back to 197 or so, still off yesterday's close of 200.18. But Spot Silver has bounced off the early low (below 36) and is at 37.14. Sleeping through the first hour of premarket was a good thing in this scenario.

I'd have a hard time believing any theory other than one involving the puppet masters and their naked shorts (unbacked paper silver). Was it really Asia that took the price down from 38.75 to 36.75 in a 3-hour span? If Asia generally is going to sell off any topping action, why here? A lot of buyers got their positions when Spot was above 45. I don't believe they'd settle for 38 or 37 en masse like this.