Technical difficulty (updated 315 pm)

 FAZ returns to the lower megaphone range, but for how long? 

FAS in a near-term pennant/flag with room to go higher? 

10:28 am (Hawaii) Price still matters.

There's really no reason why technicals need to be discounted in a market as schizo as this. Almost everything is subject to headline risk, more on the bear side than bull, and today's move up in the indices - Dow +272, +2.5%, 11,043; Nas +33, +1.35%, 2,516; S&P 500 +25, +2.3%, 1,162) - was no shock. Yet I tried to trade against it early in the day even while it should've been clear that selling FAZ and buying FAS was best in the financials.

I finally quit on FAZ as a daytrade at 65+, taking a second small loss on the day. Totally avoidable, and even my own chart with megaphone patters and the fairly recent pennant/flag pattern, FAZ looked ready for some profit-taking. FAZ is at 61.71 after hours, off the intraday low of 60.86.

FAS climbed 11.3% to 11.72. Once it gapped up at the open (while FAZ gapped down), it should've been clear as day. The machines that own this market often trade on patterns and technicals, particularly when there is no headline risk in the near term. Gap up, finishes strong. Gap down, closes weakly. That's just what happened in FAS and FAZ.

One true oddity is that AGQ and ZSL finished in the red. AGQ hit a near-term low this morning at 96.75, but rallied and is at 114.74 after hours (-3.3%). ZSL is down 7% to 17.99. How can a bull ETN and a bear ETN on the same metal (silver) each be down that much? Yes, there is something fucking rotten in Denmark. That's paper silver. No regrets about steering clear of paper silver for weeks and months now. I'm still convinced that the puppeteers are generally long gold and short silver. The price action says it all. Bear Stearns' massive short position was left on JPMorgan's lap, and with the backing of govt power, they keep shorting silver and/or covering shorts.

AGQ 1-year

ZSL 1-year

That's not going to cause me to unload a single ounce of physical metal. I just like to know what the realities and probabilities are.

Gold spot price

Silver spot price

Gold at 1520 or so earlier today must've been painful for some people. DGP is well off its day low of 49.66, now at 52.79 after hours. That's still -2.2% for the day, putting DGP at early July levels. After four down days in a row with massive gap downs, can this support level hold? The practical reasons for owning gold are still in play. Whether people believe price is manipulated by puppeteers or we've simply had a massive profit-taking run, gold may not get any cheaper here at the 1600 level. 

DGP 1-year

DZZ 1-year

This just might be a good time to average in with the physical rather than try and time a grand slam homer. If spot silver keeps selling and later bounces off 21, it'll make some sense to me based on the snapback/rubber band theory I posted recently. It's more fantasy fun than concrete and factual. But it's enough to make anyone think about what could happen if all the stars lined up and gold sold at an untethered, unleashed price. Silver would become the tail of that comet. 

My Regular watch list is 62% green, 37% red, 1 neutral. Many of the leaders traded on solid volume today. FAS was atop the list with strong volume and FAZ closed at the bottom on fairly soft volume. In other words, there are still a lot of traders holding FAZ, probably since the recent dips to 55, 53, even going back a month or two to 50. Whatever dips happen (maybe as low as 40-44), I still see FAZ at 100 eventually due to Euro and US debt crises.

Noticed that GSVC is off the board or something right now. Basic info on my trading platform is "n/a" though Yahoo Finance has it at 14.15 for its last trade. It's going through a secondary offering real soon, not my cup of tea though I tried trading this a couple of months ago. It was a classic case of buying high and selling low. Sure the market was going through effed up gyrations, but price does still matter. Any buy of GSVC below 12 and any sell above 18 would've been Basic Trading 101 regardless of whether you believe in this company (the next CMGI?) or not.

Winners on my Regular watch list were WNR (+10.4%), YOKU (+9.1%), CRR (+8.1%), EXK (+7.5%), TSO (+7.4%), C (+7%), STR (+5.3%), SWY (+5.2%). A load of big winners (above 2%), even NFLX (+2.4%).

My Metals watch list was 43% green, 56% red, 1% neutral. AVL (+17.2%), SVM (+7.5%), EXK, GSS (+4.9%), DZZ (+4.8%) were the leaders.

My focus is still narrowed down to FAZ (and now FAS), paper gold (DGP, DZZ) with an eye on paper silver (AGQ, ZSL) and the leader of retail, AAPL, which rallied from its intraday low of 391 to 402 (-0.4%).

Maybe today was the only big-gain day of the week. Maybe we're in for choppy waters, but range bound. Maybe selling is mostly done for now. Maybe buying also done. I like FAZ below 60. Like it better at 55 or 50. I have more confidence that spot gold has hit a bottom than silver. All cash works fine right now. If the indices are up and precious metals still finish red overall today, I'm not going to fight facts, even with momentum in PMs late in the day.

Update 2:01 pm Could be a trap. Could be the bottom. Gold is going back up at some point. I'm willing to wager that the process has begun, so I got a handful of DGP before after-hours trading closed. 

The Apple effect is golden

Does someone here want an iPad?

7:35 am (Hawaii) You can probably remember the sight of AAPL going up dramatically - from 80 to 200 in one year, for example - only to sell off drastically. You made a great realized or paper profit, wondering what was the justification for a selloff. Sometimes, it was about profit-taking. Sometimes, it was about hedge funds on the verge of collapse, having to raise case (from profitable trade) immediately.

I think gold (down 2.1% to 1,776/oz) and silver (down 4.1% to 39.15) are selling off in this down session for that reason. The hedgies are desperate to raise cash, and they realize they can always go back into gold, particularly, at another time. I woke up a few minutes ago to find the Dow Jones down 255 points. Not a shock since futures were down more than 100 points when I hit the sack last night.

What is a surprise is that AAPL is at 408 after hitting an all-time high of 411. The only news I found in a brief search is that 1 in 6 Americans are now using an electronic reading device. I suppose that's bullish for AAPL and AMZN. But trading in this cut-throat environment means there will eventually - later today? - be immense profit-taking in those two. Last one out, rotten egg.

My Regular watch list is 20% green. TVIX, EDZ, FAZ (+8.7%), ZSL, TZA, VXX ... it looks like 2008 or '09. CMG, GMCR, TLT, AAPL and LULU are also up more than 2%. SBUX is 1.9% up.

My Metals watch list is basically the same, 21% green. FAZ, ZSL, SCO, are the few leaders. ZSL is up 6.6% and DZZ is up 1.8%. Silver continues to be shorted by the banksters, probably the same banksters who claim to be long gold. They are stuck with these immense short positions (JPM), so what else would they do?

I might actually turn on the TV this morning, but they were chattering about Greek default and yadayada yesterday. It's probably more of the same Euro debt crisis/contagion fear. US Dollar up 1.5% to 77.78 and Euro is down 1.1% to 1.36. The FOMC meets on the 21st (Wednesday). I do not want to be extended in any way until after that meeting. Staying all cash for now.

There goes AAPL, back up to 409.90.

Photo: MKT 300 Rodgers

Game Plan Redux

9:43 am (Hawaii) Now that I'm back to cash, what to do? My gut says stay put and see how things unfold leading into and right through Jackson Hole on Friday. Doing less will be doing more. So I remain bullish on physical gold and silver. I have all my coins superglued to my arms, legs, basically my extremities. Not really. But you get the idea.

I. Long/bullish physical PMs.
II. Cash, no equities.
III. Possibly will go short PM paper via ZSL, DZZ.
IV. Pending more Eurocrash news, short banks via FAZ.
V. By Friday (Jackson Hole), prepared to go long via QQQ, AAPL, BIDU, FAS.
VI. After QE3 momentum slows to a halt, riding DGP again. Maybe AGQ.

It'll be interesting to see, if Bernanke speaketh quantitative easing on Friday, how the miners do. They usually trade in tandem with the market, but this could be different. Maybe. I won't touch miners anymore, but I'm watching for entertainment value.

If BB does speaketh of QE3 Friday, I give it a week max of a rocket ride for the market. But it could fizzle out much sooner, maybe even in hours. Maybe on news that SocGen falters, triggering a domino effect across the continent. It's coming. Just a matter of time.

Like nothing ever changed

7:57 am (Hawaii) Just closed your eyes, breathe deeply and this could be a month ago, a season ago. LULU up 10%. GMCR up 9.4%. BIDU up 6%. NFLX, oh, Netflix, up 5.5%. AAPL up 2.5%. Just beautiful, mindless moves higher. YOKU up 5.1%. GOOG 3.5% higher. The effect of free monopoly money, printed to no end by Helicopter Ben.

Problem is, the market is up today without provocation. It was due for a bounce in the midst of this 2 or 3 week slow-motion crash. Gold is down into the 1860 area after flirting with 1915 or so overnight. Silver has backed up to 42.50 after visiting 44.00 again. All natural, as they say. I don't suspect CME mafia involvement this time. It feels like normal profit-taking. Come on. AAPL shouldn't be below 350 anyway. It's up more than $10 to 366+.

When Helicopter Ben alludes to any form of QE3 on Friday, the indices will race higher than today's gains (DJ +1.8%, Nas +2.5%, S&P +1.8%). It could be good for 1,000 points on the S&P 500 (currently 1,142). But there probably won't be another run like QE2. The general public is past the point of fantastical whims and lies. More people know the fractional reserve banking system is the real bubble. Video of riots in major cities across the globe do not lie. So I expect plenty of turbulence and roller coaster action.

I'm trying to leave my modest position in DGP alone, whether it hovers near its high (72.25) or today's low (69.15). I got up around 7 am Hawaii time, so it was much too late to ride today's momentum on the bullish route. Keeping my eyes on AAPL, FAS, DZZ, ZSL. Also QQQ, BIDU. More than likely I do nothing. With DJ up 180 points, maybe it catches fire into the close, or maybe it fizzles a little.

Update 8:08 am CNBC reporting that an earthquake hit Virginia and was felt as far as headquarters up near New York City and far west as Detroit. Market remains near its highs for today. It was a 6.0 quake.

All in all

The Golden Rule:

Eventually, he who has the gold makes the rules

11:09 am (Hawaii) All in all, my teeny amount of sedentary physical gold did far better today than my active thumbs and fingers in trading. Something to be said there. I tried to outguess the market, the algo machines, and lost on the GSVC trade. Is S&P 500 heading back to 1,333? If it is, GSVC is going back up to 19 and beyond. Even with the ridiculously wide spreads. (Btw, GSVC is now at the original pullback area 15.55) I was hoping for on the move last month to near 20. Lesson is clear: let price come back to your level of conviction instead of chasing!)

But that's the big question, is it not? Are we just going to whipsaw in this range until Jackson Hole on the 26th? Or is this just a dead cat boingboing?

I'm gray area about this, so a small position in AAPL is on deck. BIDU.

Update 11:18 am (Hawaii) Doug Kass on Fast Money says the lows for the year are in. Maybe he and a lot of people really believe this is a repeat of last year. Maybe he knows QE3 is coming. For sure.

"We're now as oversold as we were when Germany invaded France (in WWII)."

If the market rallies from here to New Year's in rip-em-a-new-one fashion, it begins here. Or rather, it began two hours ago — one hour after the FOMC's statement. If the market tanks, I don't want to be 100% long and stubborn.

Which of these possibilities happens first?

• AAPL from 370 to 400
• GSVC from 15 to 20
• Spot gold from 1750 to 1650
• Spot silver from 38 to 35
• FAS from 15.50 to 20
• FAZ from 60 to 40
• FAZ from 60 to 100
• S&P 500 from 1172 to 1333
• Dow Jones from 11239 to 14000
• Nasdaq 2482 to 2700
• AGQ from 188 to 382 vs ZSL from 14.66 to 24
• DGP from 61 to 80 vs. DZZ from 4.90 to 7.25

And finally ... spot gold from 1725 to 2000.

To boot, how about this:

• US credit downgraded by another major rating agency
• US Dollar from 74 to 70
• US Dollar from 74 to 78
• Euro (vs USD) from 1.43 to 1.50
• Euro (vs USD) from 1.43 to 1.35
• Geitner resigns before Labor Day vs. Geitner survives to the end of Obama's term
• Bernanke installs official QE3 by Jackson Hole vs unofficial stimulus after Jackson Hole

Boy, that was some debt ceiling rally

10:04 am (Hawaii) Again, I will remind all that Scott Blier got it right, forecasting a "sell the news" downturn on the debt ceiling compromise. There were times when the market moved up on bad news, but this past week, it has absorbed a lousy debt ceiling deal and an unending litany of declining numbers in the US economy. Today's 512-point plunge in the Dow (-4.3%) is exceeded only by the Nasdaq (-136, -5.1%) and S&P (-60, -4.8%).

It was Cortez, the contrarian, who declared yesterday that he went long the S&P. He could right. Just off by a day or a week. The Dow has been down eight of the last nine sessions. The weight and breadth today may be, finally, the capitulation it needs to soak in all of the bullshit of Capitol Hill legislation, Eurozone austerity* and real price for real stocks. I suppose that could also mean that gold is a real go-to safe haven, down fractionally today, and that silver is still a trading tool despite far less speculation and volatility in recent months.

Silver traded down as low as 38.10, and is now at 38.62 after hours (-7.4%). Whatever I think of the powers that be, the spot price is stuck in this range, unable to stay above 42, and I'm waiting for a chance to get more physical at 35. If the onslaught continues overnight and tomorrow morning, 32 might be in play very soon. However, a catastrophe scenario in silver is unlikely in my book. There's too much demand in gold globally with the US Dollar stinking up banks near and far. Silver will always tag along sooner or later, so I don't see silver below 32 anytime soon.

If this turns out to be the one-day beatdown to precious metals that was necessary after the recent runup, fine. Silver had run from 34 to 42, so consolidation here above 38 is not a bad thing at all. Gold had run from 1600 two Sundays ago to 1683 today, a 5% gain in just 11 days. In gold! Astounding. I still like 1625 as a bargain price.

Though my small positions in DGP, XG and GSVC were beaten to a pulp today, I didn't sell. It's too late to sell, and I've got enough dry powder to load up if and when the momentum shifts. Whatever happens in Euro land is going to happen. If it's austerity, the pain will be immediate, but recovery will come sooner. If it's more "kicking the can down the road," the pain multiplies at a later date.

On the bright side . . .

• I'm glad I didn't buy more physical yesterday. A pullback was due, whether by natural market price discovery or puppet mastery from the CME mafia.

• I'm content with this small allotment of exposure to miners (XG). I was overconfident when I bought in above 14, knowing full well that miners are underowned by hedge funds, and that they suffer severe knockdowns that parallel the market more than gold and silver.

• I'm okay with not buying anything today. FAZ kept rising, pausing, rising, pausing and I never got a good feel for what was next. It's not easy trying to buy in when something is up 8%, then 10%, then 12%, then 14 freaking percent. Same with ZSL, though I feel far more jittery about holding ZSL for any period longer than an hour than FAZ. The CME mafia could back off overnight, let Asia take control, and silver could be back over 40 within hours or minutes.

At least with FAZ, we know banks from California to Athens are screwed and the worst screwing is yet to come when real estate brings its second wave of disaster.

Down the road, it's the real estate bubble in China that concerns me, but that's quite some time away. The Chinese are adept at manipulating growth, doing things that would be unheard of in the US.

It was interesting to see profit-taking in ZSL, FAZ and other hot movers today. Always in the final hour, more so in the final 20 minutes. But buyers kept scooping up shares at day-high prices. Even VXX was up nearly 5% today after taking a breather yesterday when traders took big profits home.

All in all, it's always best to be ahead of the curve, not chasing the crowd. So I hesitate to add more ZSL or FAZ at this point. (DUST, the 2x gold miner bear ETF, is tempting, but could bounce hard any day.) Anything up more than 14% will need a pit stop, rest time and fuel. This might be a good time to step away from the market and dig around for some physical, just a small amount to average in. After all, ugly as today was, tomorrow could just be the start of a new run. Every central bank loves a big discount on shiny metals.

High voltage

7:53 am (Hawaii) I was just about to pick up a few shares of ZSL at 13.75 when I hesitated for a minute, not a second more, and it shot to 14.04 in an instant. Sure enough, spot silver crapped out, dropping from 39.50ish to just above 38.50. This is why I don't mind holding DGP long term, but always view AGQ (and ZSL) as day trades.

It took just a few minutes for ZSL to come back below 14.00 now that the big sellers are out for the time being. They're coming back here in the high 13.80s. I might get that 13.75 after all.

FAZ has also rallied again, now at 56.30. Yesterday, I'd hoped to see gold at 1650, even 1625, before buying some physical. It's clear now, though, that until Bernanke announces QE3 or the market shows certain signs that stimulus has returned, the action will be electrifying, painful, ecstatic and unnerving.

Update 8:11 am (Hawaii) Indices are all more than -3% down now. EU decisions leave the USD as the only green spot on the board. Might be time to pick up some UUP (21.39, +1.5%).

Defense

6:33 am (Hawaii) So, it's too late to get defensive, or is it?

What's working today? Off my Metals list 19% green, 81% red), it's ZSL (+9.6%), SCO (+8.7%), DUST (+8.4%), FAZ (+7.3%). The only non-bearish plays in green are GOLD (+3.8%) and GLL (+1.5%). DUST has appeal for me since it's the 2x bear ETF on gold miners. It would have really helped hedge my position in XG. Hindsight.

But if the global selloff today continues into tomorrow, there's no catalyst to buck the downtrend. All that remains is the probability of QE3, and most traders aren't expecting that until Bernanke goes to Jackson Hole. That's not for a few more weeks.

My Regular watch list is at a pathetic 9% green, 91% red. Only the bear plays are green. WNR is down 15.8%, AMRN is -13.3% and RBY is down 9.5%. WNR, as noted by Le Fly, hedged itself out of a great quarter. Again. The time to sell is often before earnings reports with few exceptions. Like AAPL.

The indices are bouncing a bit off lows now. DUST's appeal can't hide the fact that it's so thinly traded, but it's a possibility I have to consider. Or just go back to sleep.

Yeeeeeah ... man!

9:03 pm (Hawaii) One of the cooler things about learning the market in precious metals is that it's not just the territory of the puppetmasters behind the big banks and the Fed. Regular people understand it — not all, but some — extremely well. In fact, I venture to say that there are a few who have mastered the nuances of reading the market, the economic climate and the yo-yo manipulation of the puppetmasters so well that they bank major coin every time there's a shift in momentum.

One of those people is streetmoney21, a guru (my opinion) of the metals market. He's so good, part of me — the crazy, conspiracy-leaning side — wonders if he's actually an "agent" of the Fed or Treasury, dressing up like a regular dude to inform the masses. Now, if he was a shill, I don't think it necessarily means he is out to hurt anyone. In fact, maybe he's a paid "agent" working to help the masses — those of us who would hear him out — get on board and get off board at the appropriate times. After all, streetmoney21 got out of silver close to the top in early May. Just recently, he got back in. He's not the only trader who's done this, of course, but I'm guessing a lot of us regular peons can relate to him far easier than we would a guy in a suit and tie working out of a New York office.

In his vlog today, SM21 noted that he hesitated to get back in at 32 or 35, and that he went against his own rule: if and when a hunch is supported by strong evidence, scale in. I've done that with physical purchases, though not to the extent I should have. I did an okay job of scaling in when silver dipped to 34 and 35. Buying more with silver at 40 10 days ago was the most I've ever paid at. But I hesitated to scale in some more this past Sunday with price still at 40, and I hope I haven't missed the boat.

Gold is due for some consolidation. I'm hoping for 1625, but 1650 is probably where I'll look to scale in a bit more. Silver should rip through 42 en route to 45 with some sideways action, but I won't be shocked to see both metals get derailed by the CME mafia in the near term. That, to me, will just be a buying opportunity. Whatever we may think about the new exchanges in China, this much is certain: both gold and silver have risen significantly since they both began operation.

Coincidence? Maybe. But the price don't lie. I'm still interested in playing AGQ if it pulls back at some point. As I posted yesterday, a move from 220 to the all-time high of 382 would be a 72% rise, exceeding the percentage of a move in silver from 40 to 50 (all-time high) ... a 25% move. This time, I have to think AGQ from 220 to 382 — if it happens — would send spot silver well beyond 50. Why? The speculators are limited. Margin hikes took their impact down in a big way, and the new buyers are mostly (my guess) in this for the long haul. But if I'm weighing a 72% gain versus a 25% gain, I'm taking the 72%, then buying physical at 50 or even 55.

I'm all for great deals and super discount prices, but the math doesn't lie. With AGQ at 230 at today's afterhours close, it may be too late to get a 220 entry point. Again, I'm leaning toward scaling in ... probably after some consolidation the rest of this week. Volume will tell the story. There were some viciously massive moves today, practically in 2-dollar increments as AGQ moved up to 226, 228, 230 and higher. Those weren't peons like me. Those were hedge funds and maybe big money from overseas.

I'll be looking to hop on board with some declines, if we get some tomorrow and Friday. I won't lie; a drop to 35 would suit me just fine. But with gold powering higher (central banks, no question, plus increased retail buying), silver can't lag too far behind. It's a Catch-22 for us cheapskate buyers. Central banks push gold higher, silver goes with it, and those bankers are not about to sell their metal, not with the dollar headed down the toilet thanks to our mercenary leaders on Capitol Hill.

The key is to set some solid levels for entry and stick to them regardless of macro issues. So I'm looking for gold at 1650 and 1625. I'm looking for silver at 40 and 35. If they don't drop, I'm okay with scaling in here.

After all, 1800 gold and 45 silver are not that far off. As long as QE3 is on the horizon, I'll play AGQ, ZSL and DGP at select junctures. It's ready-set-wait time, finger on the trigger.

I believe now

5:49 am (Hawaii) The writing was on the wall yesterday, but I wanted more evidence. After all, gold was near its all-time high. Silver was being treated like a second-rate contender. The market sold off after a brief rally on the debt ceiling "deal." But I didn't get my evidence until the night passed. That's when ZSL went from 13.90 to 13.28 at today's opening bell.

I was up for the start of premarket trading, but fell back asleep (2 am). ZSL hit 13.56 for a few seconds, but meandered below 13.40 the rest of the morning. I got out at 13.23. Yesterday, it was a very modest paper profit. Today, it was a miniscule loss. More importantly, it gave me a little peace of mind as an insurance policy in case silver sold off big. With DGP and XG up nicely, I'm not thinking twice about letting ZSL go here.

With gold just off a new high at 1642 and silver back above 40 at 40.19, it doesn't look like I'll be getting more physical metal at bargain prices. In fact, with the indices all stinky (down roughly 1% in the DJ, Nas and S&P), it appears that money is flowing rapidly into PMs — even as the dollar shows a fractional gain to 74.63.

AGQ is up about $10 and I'm not inclined to chase here. It's always hindsight that lingers. I had thoughts of departing ZSL yesterday before afterhours trading ended, but opted to hold in case the market spurred higher on some kind of catalyst. But I knew there wasn't one on the horizon. Maybe it's true. Maybe it just drifts and takes on a little more water day by day. Maybe the "deal" means nothing and the market has nowhere to go but sideways, at best. That's what the PMs are telling me. It's sad, but reality is sinking in for the masses. Finally.

Pecking order, indeed

9:45 pm (Hawaii) Sure, silver's gain this year is matched by few commodities or stocks. But gold's behavior in the past week has been almost unaffected by Capitol Hill hooligans, while silver has struggled. Certainly, the recent run from 34 to 41 in silver warrants a breather ... but in the big picture, silver is consolidating here after the bigger run from 19 to 49. In that sense, it's simply struggling to put in a serious run into the 40s again. For whatever reasons.

Tonight's activity in gold and silver overseas shows, once again, some divergence. I continue to be long DGP and XG, long no paper silver, and long physical in both metals. And I'm still holding ZSL, just a little. I considered going deeper with ZSL, but really, it's pointless. The small position is an insurance policy while my core outlook is that silver advances higher as we get closer to 2012.

Respect the action

6:26 am (Hawaii) It doesn't matter what I think of the CME mafia or the obvious lack of conviction on the part of paper silver traders today. All I know is spot silver just ripped higher after AGQ hovered at 208-210 for more than an hour. That left my small position in ZSL rising to 13.85, then to 13.49. I got out at 13.51 for a slim profit (24¢). Break out the harmonica, I'm feeling rich!

With the kabuki actors on Capitol Hill going through procedural stuff now, and the public stuff to start in 2 1/2 hours, none of that is exactly bearish for precious metals. I don't expect a meteor shot for gold or silver, either. But the downside for PMs should be over for today, as Brother Turd Ferguson alluded to in his chat room. The only thing that would hurt PMs is a surprise agreement or delay announcement.

The last time I paid this much attention to a pseudo hedge pairing was May of 2009, when the flash crash hit and my AAPL shares got kneecapped. At the same time, my miniscule position in VXX almost kept me at break-even through the chaos. It was something to behold. By the time I got out of VXX, it had lost most of its gains, but AAPL had made up most of its losses, so I was both exhausted and relieved. I was on the road at the time, so that was one crazy early morning in a hotel room.

Right now, XG is showing signs of life, down "only" 2.7% (35¢) after dipping 75¢ earlier. The last big dip, just a week or two ago, took shares to 12.00 intraday. Today's low was 12.35, and it's now at 12.75.

ZSL is back to 12.58, but I'll be an observer from here to the bell. I'll be away from the computer doing some work, and that's probably for the best ... unless a deal is reached in DC and the market takes off without me. Is Scott Blier right? Will the market actually do the opposite of what most of us expect? Will it sell into any news of a debt ceiling deal?

As for rare earths, the big boys were sky high and not playable when SHZ showed some signs of catching up. Ultimately, it lacked staying power and couldn't stay above 3.25 for long. I stayed out and now it's at 3.12, still up nicely (+1%) for the day so far. Chasing is almost always a sure route to pain.

Game on: Rare earths playing tough

3:51 am (Hawaii) ZSL gaining in the past several minutes as gold and silver paper sell off. Note that the indices are now in green territory. XG tanking as it often does, but I'm not selling and I'm not adding more. This small position is more than enough exposure to the wacky miners. DGP's modest gain has dissipated. GSVC was green, but is now red. Not selling, but I'll look to add when it nears 15.55 (50% retrace from pre-second surge that went to almost 20).

SHZ has lifted to 3.34 on the rare-earths run today and yesterday. Strictly a day trade and will fall on its face once AVL, REE and MCP get hit with profit-taking. I saw SHZ at 3.26, saw it come back to 3.23 and wanted it at 3.19 (50% retrace of today's early gain). But it didn't get there and ran higher. Still watching, but this would be a tiny position anyway. Not chasing. I think.

Sure, there are no coincidences

8:13 pm (Hawaii) I believe that. Maybe there are accidents and what not. But really, is this a coincidence that Spot Silver is virtually duplicating its movement tonight. Look at how tonight's price action compares to that on Monday at the exact same time. For those of you who truly believe spot price in silver and gold are completely off the chains, not handcuffed by the CME mafia at all ... do you think tonight's gold price is coincidentally mirroring Monday's action, too?

Whatever the case, I'm fairly prepared. If price rises, my gold positions gain modestly and I'll wait for another time to acquire more physical. If silver rises, I junk my new, small ZSL position and wait for another time to acquire more physical.

If price drops drastically in gold, I hold my positions and wait for a good time to get more physical. If silver price drops drastically, I wait it out and see if gets below 40, 35, even 32. If I were greedy, I'd buy paper to the hilt and gamble. But I prefer physical in this wacked out environment. You guys can do the casino thing just fine. Oh, and I'll probably hold ZSL until after the post-debt ceiling "agreement" melt-up (in stocks) and selloff (in precious metals) is done.

photo: Kim Yu-Na, Samsung

Back on the Z train

10:00 am (Hawaii) It's been some time since I had a position in ZSL. Opened a tiny position before the closing bell. If the CME mafia raids silver and takes it below 40, to 38, 35, 32 or below, fine. I'll turn my ZSL profit into physical silver. If silver rallies, I cut ZSL off my line quickly. It won't make or break my roll, but it'll add up should the slide turn into a waterfall descent.

FAZ is the other bear play I like, but I passed up opportunities at 44/45. Just too many tricksters in the game. Long term, the banks are fucked, but I hesitate because those banksters have more pull than any puppeteers in the scheme of things. 44 would've been a calculated risk with upside. At 48, FAZ could go back to 50 or 52, but not much higher before the bank stocks rally on a debt ceiling agreement. Then it might be time to ride a little bit of FAS, though my preference would be to get a first-class seat on Air AAPL or the BIDU express.

photo: Kim Yu-Na, LocoInYokohama.com

Pullout

9:04 am (Hawaii) Of all the scenarios I envisioned for this week, this was not one of them. Fear has cast its shadow over the market. The result is a pullout of cash in stocks, commodities ... but the dollar is up 0.9% (74.27). Treasuries as a safe haven? My guess is it's a contrary play by traders and this fractional up move is temporary.

Gold is teetering at 1614 after punching up to 1628.80 early in the session. (I slept right through it all like a baby. Weather in Honolulu has been wintery lately.) Silver rose to 41.46 before getting clubbed in the back of the head with gold. Spot is now 40.28. It's the first time in awhile since we've seen stocks and PMs decline together.

Volume has been a mixed bag. Breadth? My Regular watch list is 15% green, 85% red. Bearish tells lead: TVIX (+10.4%), TZA (+8.3%), FAZ (+6%), VXX (+5.4%), EDZ (+5.2%), QID (+4.7%). AMZN is up 3.6%, but down from yesterday's afterhours high above 228. LVS, PSN, NFLX also up in an ocean of red. AAPL finally topped yesterday and is down more than 10 bucks today, -2.6% to 392.80. No shock. Patience and conviction have worked for AAPL traders for a long time now. It was at 376 when the stock was halted for the earnings report last week. A healthy pullback to 388-390 was reasonable to expect, and that's what it had this week before the run above 400. Trading range until the next catalyst, probably iPhone 5.

BIDU is down 2.2% to 160.66 after a recent high around 167. Another post-earnings pullback.

The Metals list is almost as red. 18% green, 80% red, 2% neutral. DUST, SCO, FSG, ZSL, UUP, DZZ, DGZ are up, all bear plays. Between FAZ and DSL, I could've anticipated FAZ after hearing about bad news for Euro banks before the opening bell. My Debt Spiral list — all banks — is 8% green and 85% red. That 8% is FAZ. Everything else (banks) are at least 1.6% down.

My small positions are red. XG is at the bottom of the Metals list, down 8% to 13.01 with the usual huge momentum swing on days like this. I'll wait until after the debt ceiling agreement to consider adding more. Probably won't. I don't want increased exposure to miners.

DGP is down 0.3% to 53.61. GSVC is down 2.1% to 16.63. A month or so ago, on the stock's second major surge, I'd hoped for a pullback to 15.55. It never came on the way to the high 19s. Now, 15.55 seems very possible. A move below 16 and I'm watching carefully for more shares on a tiny position.

However long the artificial high lasts after the debt ceiling is raised (or a decision is postponed), that will be fun times for traders. But eventually, it'll come to a halt, a crash into an unyielding wall. The wall always wins. Only the best will survive. That's why I'm continuing add physical metal. The lower they bury gold and silver, the better to stack.

Tale of two tittilators

2:54 am (Hawaii) There's GSVC, which has a penny-stock vibe, and then there's AGQ. GSVC, which I delved into a few days ago after it rocketed for a second time in two weeks (from 10 to 16), closed yesterday at 18.02. That's freaking remarkable considering the indices were all down big and breadth was bloody red. With just 3.34 million outstanding shares and a recent deal with ex-Facebook employees to buy a total of 225,000 shares (at $29.28 per), GSVC has some serious sex appeal to traders. Never mind that its sliver of the Facebook valuation pie ($70 billion? $210 billion) is relatively small.

I just wouldn't want to be offline when the stock sells off hard for the second time. The first time, in June, it went from 14 to 10 over the course of three weeks. That was when volume was miniscule.

Now, with all-time volume numbers, and especially with shorts out of the mess, GSVC will find its place in the sun. On Friday, I had hoped for a moderate pullback to 15.55. That never came, not that I was looking yesterday amidst the bloodbath.

Then there's AGQ, which sold off hard not because silver has suddenly become a crap piece of metal. No, no, no. Demand is still strong, supply is still rather weak and the dollar is still near lows. But the puppet masters will have their way, as they did in taking AGQ to the woodshed yesterday. I got out near the low, not willing to risk potential clubbing to the cranium. It closed at 175 yesterday and is now at 167 today in premarket. This is why I got out of this small position with a moderate ($300) loss: Better to cut losses small and go back in if and when the coast is clear. Not when the coast has deadly, rampaging waves and the tide will swallow any ship and spit it back out in splinters.

Gold is hanging in there, now 1549 after a serious dip earlier today. Silver is at the mercy of the CME mafia, down to 35.31. Now that I'm out of AGQ, and now that the latest silver run is done — I missed plenty of chances to ride AGQ and EXK last week — I can put more focus on keeping powder dry and acquiring more physical when the price is right.

For now, with 25 minutes left before the opening bell, 26% of my Metals list is green, 25% neutral and 49% red. The bottom dwellers are GPL (-4.1%), AGQ (-3%), AG (-2.4%), SVM (-1.9%), EXK (-1.4%), SLV (-1.3%).

At the top are ZSL (+2.6%), GLL (+1.1%), DZZ (+0.9%). That's pretty weak stuff for the leaders. With LNKD, AAPL and other stocks showing flat to slightly up gains so far, it looks like the market might stave off another significant selloff today. There's no catalyst in the near future bar the typical Euro crisis stuff. CNBC keeps trumpeting the possibility of strong earnings reports beginning next week, but that's all based off lowered expectations anyway.

My Regular watch list is 28% green, 20% neutral, 52% red. CLNE is ripping higher (+11.7%) with RBY (+5.6%), TVIX (+4.9%), VXX (+2.8%), EDZ (+2.5%), MWW (+2%), TZA (+1.7%), DG (+1.6%). NFLX (+1.7%) is at 292.47.

FAZ, at 46.90 (+1.1%) is still strong. Guess I should've trusted my gut before selling on Friday. I lived to fight another day, at least.

'Flash sales' and fiat currency cash cows

11:59 am (Hawaii) I slept through nearly the entire session. Yeah, after being jolted by an energy drink on top of my normal nocturnal hours, I slept precisely between 4 am and 9:45 am, which is when the market is in action during Hawaii time zone hours. I didn't miss much, from what little I've seen, other than seeing that a small position in ZSL (silver ultra bear) would've been nice. I am 80% cash, have a small position (still) in DGP and a growing pile of physical metal.

With that said, Apmex has another "flash sale" going. Catching up on e-mail (I'm in summer slumber mode and I deserve that), Apmex sent a long, long e-mail recently. I just read it and was surprised by the tone of it. Didn't expect something like that from a big metals dealer. It was refreshing. Yet, the sense of urgency has me thinking that like all dealers, Apmex does not want to be washed out to sea for days or weeks or months at a time. They're no different from you and me. When they buy their metal, they don't want to see the spot price manipulated by some "invisible" entity without TRUE price discovery. Anyone who says otherwise, fuck 'em. It is what it is. Not a complaint. Just the truth. And yet, no matter what the puppet masters do, in the long run (one week, one month, one year, one decade), silver and gold will float to the surface no matter who severe the wreckage inflicted by the banksters/Fed/Wizard of Oz/(you fill in the blank).

The fact that Apmex, which charges quite the premium on its American Silver Eagles, has presented several flash sales in the past few months is cool. I haven't taken full advantage yet, not because I don't like the flash sales, but because of timing and better offers (not always in price) elsewhere. Today, they have their own Apmex 1-ounce silver bars at 99¢ above spot. Can't really go wrong with that. Of course, the dilemma for any silver bug right now is whether to buy with spot price at $33.62, or wait for a drop to 29. Or Jeff Christian's 26 level.

Common sense says to average in. Buy a bit here. Buy a bit more at a lower level, if price gets there. Nobody can really know what's going to happen. Maybe 33 is a bottom. Maybe not. Part of me wishes I'd held all my dry powder and waited for sub-30 to get any physical silver. But the truth is I have no regrets whatsoever about my silver buys, and it really is a small amount to this point, being a latecomer to the "revolution."

So no, I don't recommend buying physical silver at 33.62 if you're looking for the ultimate bargain. I do suggest getting silver here to start the process of protecting your hard-earned dollars against the perils of inflation and hyperinflation. The Euro scored a small victory today with Greece's vote in favor of pseudo-austerity measures. That works against the US Dollar and in favor of precious metals. But whatever the case, a 5-10% slice of the pie should be in PMs, if not more, and that's where I'm going.

They cannot milk gold and silver like a fiat currency cash cow. Eventually, cows die. Gold and silver last forever.

Apmex: Flash sale (June 27 2011)

They can't milk gold and silver dry this time

12:54 pm (Hawaii) Charts and ETFs don't mesh often times, but with Spot Silver and Gold prices locked in a range, it's possible, just possible that we see certain patterns remain for the coming weeks.

• ZSL has run from 17 to 19+, back to 17, and up to 19.58, all in the past two weeks.

• DUST ran to 52, down to 44, then up to 48.92 since June 16.

• QID went from 54 to 57, back to 54, up to 56 since June 14.

• MCP pure kookoo in two weeks. 46 to 52 in two days, then down to 47 and up to 54 in another two-day span. then 52 to 56 between yesterday and today. It's one of those you can trade like a madman, or just pocket it and forget about it for a year. Rare earths are here to stay and the Chinese are going to make sure supply (they control 97% of the stuff) is limited.

• Other rare earth princes like REE have been roller-coaster nauseating. REE went from 9.00 to 11.40 in two days. Sank to 9.40, rode up to 11.10 and is at 10.67 after hours today. All in two weeks.










• Puppet masters knocked gold down as it was about to break to new highs, which means DZZ went from 6.35 to 6.89 since Wednesday. Same move for GLL, from 22.40 to 24.12 in the same time frame.

• FAZ is hovering between 46+ and 52. As more and more banksters (and insurance companies) announce huge writedowns and losses in the coming weeks due to Euro debts, fear of bank collapses and closings should drive FAZ much higher. Nothing would surprise me, though, including some devious plan that would keep the banksters solvent and maintain their current levels of stock price and Monopoly currency.

• JJC, the copper subindex ETN, has been stuck between 53 and 55. Currently 53.83. If stagnant, almost predictable action is your thing, let 'er rip. China's not coming to a complete standstill anytime soon.

• AGQ is a sight. From 165 to 186 in steady action for almost two weeks, then blindsided by the CME mafia the past two days. By CME mafia, I do mean all the powers that manipulate the "Free Market" of commodities, such as crude oil. I am NOT for blatant naked shorting, but I don't see the point of kneecapping any price discovery, especially when the LONG-TERM effect will be negligible at best.







Same goes for all the silver plays that were hammered the past two days, even though MINERS SHOULD BE GAINING DUE TO DECREASED ENERGY COSTS! It's mind boggling to see it all play out. I'm not advocating a full swan dive into miners (gold and silver) here, but AGQ is among many  metal plays now near YTD lows. At 160, AGQ is only a couple of bucks higher than its low a month ago.

It all comes back to what Mike Maloney has said for years and years: The Fed, that private entity that runs our finances, may not have any gold and silver in its vaults. Meanwhile, central banks across the globe have wizened up in recent years and started to accumulate mass quantities of metals to hedge against their valueless US fiat currency/IOUs. So how does the Fed respond? By holding gold and silver hostage.

It ain't pretty. They've got one, maybe two bullets left and they're up against Justice. You can't fuck over the world this long, borrow to the hilt, and not pay back WHILE STILL ASKING FOR MORE FUNDS TO BORROW. It would be best to restructure and concede rather than drag out the hostage crisis. By doing this to us, the Fed and banksters are simply prolonging the inevitable. I have no doubt that they are personally stocking up on all the gold and silver they can at these levels, and I would not be surprised if this is also a way to benefit all our debt masters, particularly China. This gives them ample opportunity to stock up at low prices.

Meanwhile, the value of the dollars we make by working every day (if we have jobs) is eroding by the day. A fucking candy bar at Safeway costs $1.29 now. This is like shopping for snacks at the movie theater. It's just getting worse. And it's been far worse in other countries for a much longer time.

I am not sweating the decline of spot price. I am just anxious to buy at the best discount I can get. That might come on Monday in two weeks or two months, but it's coming. I'm loading. I'm stacking. I'm not waiting for my bank to re-open after some strange "inventory" closing when one of our debt masters calls our bluff at the poker table. I think some of the experts are right. Jeff Christian is probably right when he says silver will drop to 26, then go up, up, up from there late in the year. Jim Sinclair is probably right when he says silver will rocket this year. Maybe not this summer, but eventually, yes.

By then, it won't be a question of how much we paid to protect our assets. It'll be a matter of how much protection we accumulated. I feel for the hard-working folks who were stretched to the limits, but there are also a lot of lazyass bitches who borrowed off their credit cards to the hilt. They bought stuff they couldn't afford for decades, and I'm not about to let them get me again. If they aren't ready this time, that's their effing problem.

Denise Milani

Not quite minus squared

9:37 am (Hawaii) Market is down (Dow -99.83/-0.8%, Nas -31.77/-1.2%, S&P -13.09/-1.0%), but it's not convincing of an onrushing disaster, either. Dollar is up 6/10th of a percentage point, crude oil down again (SCO up 1%). The Metals list is 27% green, 73% red with a majority on the plus side being bear plays. But the key is low volume up and down. Maybe it's a respite of sorts and Monday begins a bloodbath. Or maybe this market will remain choppy, indignant and petulant.

ZSL is up 5.3% to 19.46. DUST, QID, gold bears GLL and DZZ are among the leaders on the list. REE, MCP and AVL have kept rare earths near the top.

Meanwhile, the finnies faded. Three were in the green in the opening minutes today, but now all are in the red. NBG, which got up to 1.43 yesterday on the positive news of austerity psuedo-measures, is down 7% to 1.32. Pulling back is no surprise, but I thought there might be continued momentum after profit-taking. It's tough to make it when you're a bankster.

Silver plays are getting minced again, not a shock. AGQ down 5.4% to 161.54, EXK (-5.2%), SLW (-4.3%), PAAS (-3%), GPL (-4.5%), SVM (-5.1%) are among the bruised silver miners. XG (-2%), NUGT (-5.3%), GG (-3.7%), GDXJ (-3.1%), DGP (-3%) are among the gold plays getting stomped. DGP's descent is unusual; it's normally not a big mover up or down. It's my lone play, a small position, and Spot Gold has room to fall, maybe to 1450. Not fun, but the puppet masters will do what they deem necessary to justify implementation of the next bailout/quantitative easing/big lie.

My Regular watch list is 26% green, 74% red. AAPL is down 1.6% to 325.95. TVIX (+7.5%) and VXX (+3.7%) are up big, as is QID (+3.5%). No buyers, and it seems some hedge funds have emptied out. It's nice to rest easy on summer vacation.

It gets interesting on the Regular list. CMG (+1.1%), RLOC (+0.8%), CSTR (+0.3%) are up. Then it's red, red, red, red ...