4:01 am (Hawaii) Yesterday's Bernankepalooza was a yawner in general, a status-quo non-move that kept the Fed on that proverbial tightrope between survival and doom. Today, economic numbers aren't positive, and it doesn't matter to Spot Silver. Though spot price was basically unchanged overnight — Hong Kong did nothing to really lift it after seeing last week's run above 49 falter — it's above 49 now. Spot is 49.17, making an enormous run on massive volume shortly after the bell (9:35 am Eastern) that felt like an algo move. SLV reached a high of 48.18 after yesterday's close at 47.00.
I'm glad I stayed with that precarious SLV position, and with AGQ up $17 to 379, I'm wondering why I didn't start at least a small position. Then I realize that my taste for risk is what it is. I'm comfortable, more or less, at this level (32% cash). The market was lukewarm earlier, but now 64% of my watch list is green.
US Dollar: 73.21 (LOD 73.06).
Early winners include EWJ, EXK, RLOC, PSLV, EDZ, NGD, EXK and CRR (+10.3%). Also XG, AZK, MCP, CLNE.
5:22 am (Hawaii) Trying to stay awake has never been so pleasant. SLV is up to 48.20, shooting parabolically a few minutes ago after ranging at 47.80-47.90 for some time. Spot Silver shot to 49.41 before pulling back only slightly, and Spot Gold is at 1534. Turd Ferguson is watching 1540 as a threshold. Anything above that would launch it (and Spot Silver) and bring more volatility to new shorts.
I've got a drive to make back home before the early-morning commute kicks in on our main freeway here in Honolulu. Wish there was a live audio feed. This beats play-by-play of the Super Bowl.
Spot Silver approaching 50
Spot Gold approaching 1540
Update 6:09 am (Hawaii) In the amount of time it took me to get on the freeway and get home, SLV went from 47.73 to 46.93. Actually, it took only 2 minutes. That's what the span of price was during a big dumpage by some big seller. Since then, SLV has ranged between 47.55 and 46.95. A lot of buyers came in at 47 or so and it's now at 47.25. Opportunity to buy here? AGQ looked tempting at 362. A stop-loss before I hit the road would've been prudent. After all, this is a trade, not a marriage. I could've re-entered here at 47.25 or lower.
I just didn't anticipate a 3% drop (from 48.35 HOD to 46.93). And all because London closed and the royal wedding is closing down the market there tomorrow? I don't think so. This selloff didn't strike until after London closed. In fact, Spot Silver shot up during the close in Great Britain, so this is simply profit-taking by the algos and traders and fund managers. After all, at 48, this was $4 profit for a lot of people and machines.
In fact, this might not be a bad time to take half off the table. That was something else, to see all of today's gains disappear. Moving on...
Update 7:14 am (Hawaii) Well, one day's paper gains (and then some) slipped out of my hands. It's the reason why the subtitle of this blog is "Hammering out the impurities of dumb trading habits." After all, not matter how logical and solid the argument for fundamentals in any stock, what goes up eventually comes down. Today was and is, apparently, a short-term top for Spot Silver and SLV.
SLV gave me a chance to cash out when it rallied back to 47.80 just 45 minutes ago. That would've given me more than a $3 profit per share, something I could be gratified with. Instead, it sank as the NYMEX entered its final minutes of trading for the day. SLV putzed around 47.50 and I had thoughts of getting out. But within a few minutes, it was on its way to 47. In a blink, it was at 46.80 and I hit the sell button at 46.75 or so. After the earlier selloff while I was on the road, I can't say I'm shocked. But the magnitude of the selling is always impressive.
To go from a nice paper profit to a loss for the day (-25¢ is no good), but as SLV plunged down to 46.40, I felt just a teeny bit better. Stop-loss orders are a huge part of the momentum in SLV, just my guess. A cascade with almost no end. Overall, though, I did all right with SLV (+2.00 per) so I will not complain. I'll just remember to lock in profits earlier by selling half or more of the position on a gain that strong in just two days. (Up 8% at today's high; I finished with a 4.4% gain.)
SLV now at 46.22. No rush to re-enter, not for awhile. Have the machines jumped on ZSL? Probably.
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