Feels so wrong

Hi Ho Silver!

3:34 am (Hawaii) Just got back home in time for the opening bell. I'd been able to check Kitco for a spot silver price earlier and was stoked to see it at 44.75, even higher than it was overnight when an earlier check revealed spot at 44.30 or so. See, I really didn't expect spot to rise after I bought it before the closing bell yesterday. No, I expected my mistake to turn into a loss one way or another. Not a good attitude, but after making a decent profit on yesterday's earlier trade in SLV, I felt like I'd given up ground too easily: bought at 42.57, sold at 43.07; bought in again at 43.04.

Afterhours saw the price sink to 42.75 or so twice, followed by rallies back to 43.00. So this morning's sell right after the bell at 43.67 is a pleasant surprise. Why sell? I'm frank with myself and know that spot silver has risen so much in a short time; it wouldn't take too much for a major selloff. That said, few other plays in the market have as many forces behind it in good or even some bad market scenarios.

So SLV has dipped as low as 43.55, no surprise given the nice gap up. No rush here to re-enter. SLV could use some consolidation sooner or later. In the meantime, it feels odd to have a winner when I surely had made a poor decision to re-enter at such a high price. That feeling is probably warranted; SLV is just so hot, it's almost impossible not to make money on the long side.

For today, I expect a pullback today in SLV back to 43.36, or at least as low as 43.44. A dip to 43.36 represents a 50% retrace of today's gain (HOD). 43.44 would be a 38.2% retrace (Fibonacci). Very, very short-term view.

Update 4:20 am (Hawaii) Seeing should be believing. It should've been this time. I saw bids, constant huge bids, come in for SLV, while selling pressure was occasionally large, but mostly nonexistent. Yet SLV price remained stuck in the 43.60s. Once SLV rose up into the 43.70s, it rocked hard. In the 43.80s, zipped right on up almost to 43.90.

Powerful.

Turd Ferguson notes that another fall in the dollar has triggered PM mania. It would've been quite enough that the market is up. 82% of my watch list is green. But with investors turning to silver as a safe haven (44.90) and gold above the threshold (1,504), it is very much a "melt-up," as the Turdmaster says.

SLV's new HOD (43.89) means new retrace levels for me to keep an eye on: 50% = 43.45, 38.2% = 43.55. With the market so bullish and silver's unique situation with the falling dollar, I'm not expecting these retrace levels.

Update 4:40 am (Hawaii) Just 20 minutes until London trading ends. The past two sessions saw spot silver explode after London closed. Same today?

Update 5:10 am (Hawaii) The run-up in spot silver prior to the close in London was possibly what normally would happen after London's close. Anticipation maybe of a further surge, or traders in Europe were all over the spot silver buy because of the dollar decline. Hedging activity. Whatever the case, SLV has slipped from its HOD of 44.08 down to 43.94, not unexpected considering the move from 43.00 at yesterday's close. 

Interest is increasing. Kitco's spot silver quote page crashed for a minute or two as the price dipped from 45.15 to 45.04. (I saw the latter price a couple of minutes later.) Now the question is, does spot silver hold here? Or has it "jumped the shark" for today? 

Update 5:21 am (Hawaii) New retrace levels from today's high (to yesterday's close) for SLV: 38.2% = 43.67, 50% = 43.54. Not expecting either level, though. 

Please note, I like SLV strictly as a short-term trade. Lord knows what kind of devilishness will ensue in this ETF (run by the banksters) in the days and weeks to come, re: invisible physical silver in their vaults.

Update 5:34 am (Hawaii) In SLV at 43.95, out at 44.01. It ran to about 44.08 or 44.09, but couldn't pop above that HOD. Now back at 43.98. Still no clear indication that it has any fuel left with all the upside news (dollar decline) in and only precious metals expiry coming (Tuesday). The shortage of trading days due to the weekend holidays makes spot silver and silver plays especially dangerous to hold. At some point today or tomorrow, the profiteering and fear of losing gains begins.

Or not.

Update 5:47 am (Hawaii) Talk about parabolic. SLV now at 44.16. Guy Adami of Fast Money has said many times in recent weeks that the shorts on spot silver/silver stocks have gotten burned over and over, and a $5 move in one day is coming. Is today that day? 

I got out earlier on a second SLV trade at 44.01 and was about to re-enter again at 43.99, then 44.01 ... but nature called and I had to answer. Coming back to a monitor that read 44.16 on SLV was astounding. Silver continues to astound. Looking at 44.08, the previous HOD, as short-term support. Whatever that means. 

Waiting for a dip, if one comes. The post-London surge has arrived.

Update 5:53 am (Hawaii) SLV just went from 44.10 to 44.28 in less than one minute. An "oh crap!" moment indeed. I haven't seen anything like this since AAPL a year ago, afterhours, going from 240 to 270 on its earnings report. This is different; spot silver has many hours left yet to trade today. 

Update 5:59 am (Hawaii) As long as I can calculate quickly enough, I'm learning toward the spot silver/SLV conversion (1.00/.975) to help gauge entry points since stochastics simply don't measure something as thermonuclear hot as silver. Spot at 45.33 converts to SLV at 44.19. Currently, SLV is at 44.27, so I'll wait. 

Best thing would've been to sleep in and let my original position from yesterday roll higher. That's history. 

Update 6:11 am (Hawaii) First serious selling volume (1-minute chart) so far in SLV. Beware all!

SLV down to 44.15 from 44.23ish in seconds. Could be the tipping point where the dominoes fall (stop-loss orders). Selloff is quite due. Turd is looking at 42 as a possible bottom of any looming pullback. Think I'll wait this one out and take a serious look come next week. 

And there goes SLV to 44.06. Slippery slopes get slipperiest at the top. 

Update 7:04 am (Hawaii) A little bit of a trading range in SLV allowed big sellers to empty out. The past five minutes have been nasty for bulls as SLV slides from 44.20 to 43.75. Spot silver is at 44.97, which means SLV should be at 43.84. The selling is simply overdone, but what do I know. Only one exit door and the entire theater might be trying to squeeze out to safety here. 

Update 7:08 am (Hawaii) SLV now at 43.58. 

Update 7:15 am (Hawaii) The 50% retrace of today's gain in SLV has been met with full force in the past several minutes. SLV now down to 43.48 as stop-loss orders kick in, a near-total avalanche from 44.20. Is this a buying opportunity then? 

I'm holding off. I'd like SLV as a re-entry if the 50% point (43.54) had held, and it seemed to for a couple of minutes, but now ... 43.31, 43.28 and sinking. Now we revert back to other levels from the start of the most recent run. SLV closed yesterday at 43.00. That's the next near-term support level. A breach below that — which had been a recent high — and I'm looking at 42.75 as the next line of support. 

After that, 40.25 should hold. Or not. Options expiry on Tuesday, with the holiday weekend ahead, will make it tough for spot silver to hold ground, especially with reports that the most popular options pin is at 40. 

Update 8:33 am (Hawaii) Boo ... tried to get cute and ride a interday breakout from the 43.50-43.75 trading range. Despite bad stochastics (higher side) on the 1-min chart, I re-entered SLV at 43.93, and it rode down immediately. I got out at 43.85, giving back a a small chunk of the today's profit. Maddening for a few seconds, but I liked the spike in volume. I still don't like the way SLV and spot silver will play out in the next several days. Too cute. 

Update 8:55 am (Hawaii) What I think I'll do after a productive trade is get out of the house. Go for a walk. Exercise at the gym. Run at the park. Whatever competitive fuel still in me, well, that needs to be burned off before I dive back in after a winner. The market is up, the trade is done, and there's nothing more to do unless I short something, and I've never done that. 

Just noticed spot silver at 45.07, yet SLV was rallying up again. SLV was at 43.99, well over the "conversion" price of 43.93. A half-minute later, SLV was back to 43.93 like clockwork. I'm glad the conversion formula makes total sense. Now if I can get my trading habits in order ... get exercise. Clean the house. Something.

Update 10:34 am (Hawaii) So, is spot silver truly recovering from the mid-day selloff? Spot is 45.21 now. 

Or is this just a setup for a big selloff tomorrow going into metals expiry on Tuesday?