Crash and success

4:05 am (Hawaii) I awoke five minutes ago to find Spot Silver and Gold prices cratered. I still don't know exactly why with the cobwebs in my head and a sugar-free Red Bull still unopened on my desk. But Spot Gold is down from 1527 just 2 1/2 hours ago to 1508. Spot Silver has been crushed from almost 39.25 to 37.07 in that same time period. It began at 1:30 am Hawaii time, just before premarket trading is allowed for us retail peasants. By the time premarket opened, Spot Silver was down to 38. I would not have had a snowball's chance.

So . . . WTF? I'll have to find out. But charts are brutally honest that way. It matters to find out how and why, but it doesn't matter to the bottom line. All I would've done would be to buy ZSL and SCO (crude is down big, too).

Update 4:14 am (Hawaii) I am catching up with Sensei Turd, who called the double bottom a week ago. A lot of metal heads saw it coming, but Turd nailed it at Spot Silver 39.50 as a test of resistance.

I cashed out after yesterday's trading, a bit remorseful about not having any position in AGQ. But now it's at 205 and I am taking aim at a good, partial entry position. Not rushing, but watching closely. This also means I can start looking for more physical silver and gold with prices going back down. The magic floor could be 36. I still think the puppet masters can and will take it to 30 if at all possible. I hope I'm wrong; 30 could spark an absolute give-up and lead to 19. Not that I'd complain.

I was a bit mad at myself for not letting UCO and AGQ play out untouched yesterday, costing myself a lot of profit. Well, had I held them overnight, right now I'd be underwater by -$300 on AGQ (blowing a $1,900 paper profit) and UCO (-$400).

Update 4:24 am (Hawaii) US Dollar at 75.04, Spot Gold 1510, Spot Silver 37.26, Crude Oil 101.68. Metals and Oil off their lows. ZSL opened premarket at 19.20 and by opening bell was at 19.80, trading between 19.65 and 20.05 since. It just touched 20.05 for a third time and is heading back down. This is almost too deliberate of a pattern.

Update 4:30 am (Hawaii) I knew the China number was 5.3 versus the expected 5.2, but was that really bullish for the Dollar? UUP is up 0.47%. Whoopdeedoo. When will someone create an ultra-bull fund for the dollar? That would be funny. Seriously funny.

Update 4:40 am (Hawaii) Metals and Crude have taken a turn for the worse in the past 10 minutes. UUP popped to the upside as I was wondering why it is so slow to run up in this scenario. ZSL was just above  its HOD for today and I had a small buy order at 20.23, but didn't like the risk. It ran to 20.30 in seconds, and later to 20.45. I just opened a small position there, and naturally, it is double-topping (1-min chart).

Update, 5:17 am (Hawaii) Looks like Spot Silver has bottomed after touching 36.50. ZSL ran to 20.66, but can't attract enough buyers so I got out of my little position at 20.20 for a miniscule loss. I may return if Spot Silver peters out. Just too many shares of ZSL on the ask side vs. the bid side, even as it pushes back toward 20.30. That would be something if the near-term bottom in Spot Silver is 36.50 on the nose.

Update 5:44 am (Hawaii) Le Fly acknowledging that the iBankCoin PPT indicated overbought level (3.25) yesterday. He went long in a big way anyway, but at least he's honest about what IBC technology told him and the premium subscribers. 

Another interesting bit here. BrotherJohnF, one of the best vloggers on Spot Silver, expects QE3 and another run in the white metal. Check out his summary in the final 2 minutes of his latest video. 

Update 6:01 am (Hawaii) Huge move in silver, nosediving below 36.50 to 36.10. ZSL exploded again, going from 20.40 to 21 in 15 minutes. Even as Spot went straight down, ZSL found a tough ceiling at 21.00 and sold off a bit. Now trying to punch through 21. Even here, if I'd held my little position, it would be small. But my thesis is bearing out, no pun intended. If Spot Silver goes to 30, ZSL will make some serious bank for some traders. 

Spot has stopped at some 50¢ levels before plunging again. Did so at 37.50, then 37, and at 36.50. Does NOT look like it wants to stop at 36.00. 

ZSL now at 21.20. I saw it coming. Just didn't believe. Does that make sense? 

The Spot Silver Chart from Hell

(unless you're going shopping for phyzz)

Update 6:21 am (Hawaii) Spot Silver straight cliff dive to 35.50. Does it bounce here? Or is it 30 bound?  ZSL getting tempting again, consolidating short term at 21.30. Big buyers came back in above 21. Can the Fed do anything to protect the Dollar? Will JP Morgan do anything else? They're riding Spot Silver bareback on the short side, no doubt. 

Update 7:16 am (Hawaii) In ZSL at 21.50. Out at 21.60. Lunch hour is over? Hard to read direction in the silver battle of longs and shorts, so I got out, and it went down to 21.50. Seems to hold that level well now, but Spot is still showing no signs of rally. Speculators (hedgies) really smacked the hell out of it. 

Dollar 75.43, Crude Oil 99.43, Spot Gold 1500.00, Spot Silver 35.42 (off low 35.10). 

This isn't the time to put my thesis to the test, not with ZSL up almost 15% today. There was a run in ZSL around this time yesterday, but this is also prime time for the start of an afternoon momo trader selloff. Doesn't matter what the vehicle is. When they want to get out, it's a stampede to the exits and not everyone makes it out unscathed. 

On that note, Scottsdale Silver 10-oz Stackers, which were around $425 earlier today, are now back below $400 ($399.99 to be exact). That was quick. I'm glad I didn't buy above $400. Their Academy hand-poured 10-oz is now $406. If Spot goes to 30, I'm scooping with most of my dry powder in some bars and a lot of Eagles. 

AGQ dipped all the way to 181.03, close to its previous low of 178. Now up to 187.81. Is this finally the end of silver's double dip? 

I still say no. I hope I'm wrong. 

Update 8:29 am (Hawaii) Another make or break threshold for Spot Silver, skidding at 35.00. ZSL pushing closer to 22, idling at 21.80 to 21.90. If Spot dumps through 35, more stop-loss selling kicks in and ZSL pushes toward 23. Ahhh, I remember those times back at 20.45, so exciting, so scary. Way back in ... three hours ago? 

Update 9:31 am (Hawaii) Closing bell in 29 minutes. Spot Silver finally flattening out, holding its ground at 35. Currently at 35.41. But in reality, it's more because I see so many shorts (via ZSL) selling huge-ass lots above 21.70 to take home their profits. Most of them got in below 20.50, so they're banking big. Once that selling flushes through, I think Spot holds 35 for a day or two. No, who am I kidding? If the CME mafia don't announce another margin hike after the bell, then they will when Spot Silver stays above 35 for a couple of days. 

The Dollar is at 75.48. That will not last without more hikes. Crude Oil at 98.46. They'll take these down more and at some point, the Fed will lighten up and let price discovery return without manipulation. After all, Obama needs to get re-elected and that is not going to happen if the market tanks like 2009. 

Update 12: 45 pm (Hawaii) Ready to hit the road in a few minutes before Honolulu's snarl of traffic overcomes me. Spot Silver was at 35.07 during that little dead period when every exchange is closed, but is now at 35.32. Which means ... nothing. There's a long way to go before this takedown is over. A double bottom in the short term can always mean the second dip kills off whoever wasn't tranquilized and offed by the first. 

I look at physical silver prices and I like. I'm not drooling, but the glands are definitely salivating. But what? And where, from who? Eagles make the most sense, the most liquid should I decide to sell suddenly one morning. But bars catch my fancy as something I won't unload in fickle haste. Now that I have a 10-ouncer, I lust for the 100. But it wouldn't stop with one 100-ouncer. I'd want a thousand, floor to ceiling, filling half a room. Yeah, not realistic, not secure and not affordable ... unless Spot crashes through the floor, through the basement and on down to the core of earth. 

So I'll hold off ... maybe. Maybe satisfy half my craving for physical now ... get the other half when the the Wrath of CME Mafia is done, maybe by tomorrow. Maybe not. But this is fairly cheap with Spot at 35+. And since my thesis holds that Spot may get back to 33, maybe to 30, why blow my "play money" all at once? Right? 

I'll tell ya, what I really want is a Scottsdale Stacker or Academy hand-poured at $365. That's what I'd tackle face first without a helmet. I don't expect such a hilarious scenario, though, because that would really mean Spot is at 31 or 30, and most 10-oz bars (hand picked by shops) would be going for $340 or so. It's just true; I'm not interested in physical silver for trading purposes. It's almost strictly for the aesthetic beauty and the wonderful touch. Too bad I didn't see how good this silvery world could be, say two years ago. 

Of course, the better mode of operation would be to stack FIAT as high as possible, wait for a possible breakdown in Spot ... then load up double in the metals. Not sure that will ever happen, but we do live under a Big Brother World, do we not? Who wants to go long Crude? How's about a silver miner? Anyone? 

Do you NOT know that the Fed/CME Mafia/JP Morgan/Darth Vader are ready to pummel mere mortals with another two or four or 10 margin hikes in the next 72 hours? How can you not? 

100% cash and window shopping for some precious. 

Must ... get ... more ... must ... get ... mmmmorrrre ...

Update 1:11 pm (Hawaii) Unless the actual Central Bank of the Middle Kingdom actually steps in and buys 100 billion ounces of gold and silver tonight, I have serious doubts about Hong Kong and Sydney lifting the PM market anytime soon. The last time they lifted Spot Silver to 49+, the rest of the world said F-you and fixed it good, all the way down to 32+. That's the US Fed tell the Chinese, screw you and your yuan — not a very smart thing to do when you owe those folks kazokabillions in debt. That's like going to Don Corleone, stealing his wallet, his household valuables and shitting on his kitchen floor. Really, it is. And Corleone didn't have the backing of all that credit behind him, no sir. 

So yeah, I can see the People's Republic saying, "Fuck it, let's move in here while the gettin's good and cheap." But I can also see them allowing Spot Silver to sink to 30, maybe 19. Then a stampede the likes the world has never seen. But as Sydney opens and HK follows, I expect no real action. In fact, nothing might come from Asia until May 18, when Hang Seng Hong Kong starts trading gold (and later silver) independent of CME. That could and would really mess with the CME Mafia's fixing. 

For futures traders, it could be like this: long Spot Gold, Spot Silver during Hang Seng hours (18-hour shift), then short New York. Lather, rinse and repeat. 

It's exciting times, brothers and sisters. The ride isn't even at full speed yet.