London bridges and beyond

8:40 am (Hawaii) So are we to believe that the closing of London's exchange tomorrow and Monday for some royal wedding is enough to stifle Spot Silver (and Gold) for a few days? I'm not even close to a guess on that. I do know that there will be speculation now that Spot Silver has entranced traders. Whether Spot Silver tops out at 50 or not, there will be renewed interest beyond silver and gold. Platinum has its share of bulls. And now, so it seems, so does copper. This story by The Canadian Press claims that copper will become the new gold and be more profitable.

Pure hogwash? Doesn't matter. All that matters is whether enough people believe it and whether enough traders buy it. Making a market has less to do with complete truth and more to do with momentum, emotion and belief. Right now, I believe Spot Silver and SLV are a tough place to be. In fact, any return to SLV for me will be strictly for scalping. (Why do I doubt that will hold true?)

Looking ahead and exploring will help. If copper is going to be the next king, I want to be in a favorable position, to be ahead of the crowd, as Jim Rogers often says (words to that effect).

Update 9:07 am (Hawaii) SLV gives me the willies with its empty vaults and all. So I'm leaning toward daytrading AGQ from now on instead, but that's no piece of cake either. Though AGQ rallied huge yesterday from 320 to 380 this morning (Bernankepalooza effect), it fell to 345 mid-day today. Even with a small position, that's a huge range that requires micromanaging. That's the nature of an ultra-bullish ETF. AGQ vs. SLV. I know the biggest advantage for AGQ, but the speed is blinding in either direction. Currently at 364.47.  

Silver vs. Gold vs. Platinum vs. Copper. Gold seems poised for a big move, and both gold and silver remain in high demand by China and, to a lesser extent, the public at large (for investment). Platinum and copper may be interesting, but are they worth trading on dips? Or are prices stuck in the mud because of energy costs? 

Precious metals vs. Cash. No contest. Inflation is eating us alive, whether it's gas prices or food prices. That's why the right PM was the place to turn fiat into a growth vehicle at the start of this year (and last year). Right now, the environment is tricky. I think Spot Silver will consolidate here in the 40s after that huge surge recently. I'd rather buy on the south side of 45 than north. Simple as that, though it might not happen again for a long time. AGQ would be a nice start at 350, and it dipped below there during today's selloff. I wasn't ready for a trade at that time, not after getting out of SLV just before that. I need an algorhythmic tradebot to overcome my emotional state. 

UCO vs. Cash. Again, no contest. A buy in UCO (ultra crude oil ETF) just two months ago would've netted any trader a 50% gain. Even a modest gain in UCO is better than cash. I still want a small position just to hedge against rising gas costs. We pay $4.50 a gallon here. I'd like a piece of UCO below 60.50. 

Silk Road

Update 11:35 am (Hawaii) Right on cue: SLV was trading at 47.25 after hours with a tiny ask lot size and a large (35k) bid when Fast Money starts talking Spot Silver and SLV. A guest talks about the 160M that came into double-bear silver ETF ZSL yesterday compared to the 230M that's been in SLV year to date. Then Pete Najarian talks about the options activity on the bear side, spells out the name of the ETF and instantly, SLV plunges to 47.16. The big bid disappears. SLV is down to 47.10. 

Small fries like me can't beat the big boys. The space-alien machines rule. I'm still not ecstatic about selling my position too low, but I don't miss having to wonder about SLV blowing up sooner or later.