1:13 am (Hawaii) Hong Kong is done for the day, but now it's London that's buying up spot silver, which is now 46.19. After watching the 24-hour quote often as possible before, during, after work, and even as I napped, it's nothing short of a phenomenon. I mean, I've seen stocks rocket like crazy for years. But 24 hours a day? That's new to me. This is going to end in an unhappy way for the most persistent longs. Silver has its place and the case for a high price on it is legitimate. But this smells much like irrational exuberance, and maybe that's going to kick in fully soon. When it sells off, it'll be like the sudden dip we had on Wednesday, except bigger, faster and far more painful. Until then, what a freaking freak of a monster.
No mojo can contain the unleashed momentum of this beast. Enter at your own risk. My favorite silver play is SLV, fake physical and all, because of the liquidity. Sheer volume. SLV is at 45.05 in pre-premarket.
Then, there's something less alien and clearly not on steroids. That would be AAPL, which is trading at 358.32 in pre-premarket. I missed it at 350 afterhours yesterday. Then it spiked to 354, then on to 357. When it came back to 355, I decided to wait until this morning. It's run from a low of 320 (Monday). I can't help but realize it's due for some profit-taking after a run of nearly 10%.
Crude oil is trading above 112, so UCO is already up 1.6% to 62 even. With the US dollar barely able to stay above 74 and Brazil raising interest rates to 12%, this could be a blowoff day for gold and silver.
Update 2:29 am (Hawaii) AAPL dipping below 358 ... Not sure if it'll retrace 50% of the gain since yesterday's close. (That would bring AAPL to 351.) SLV is at 44.84. Strangely becoming used to spot silver at 45-46. All in all, gray area opportunities, not prime at all. Best to be a shrewd, cheap trader looking for that one golden opportunity rather than chase and pay the highest prices.
Traders on the ancient Silk Road
Update 8:53 am (Hawaii) Back up after some much-needed sleep. Even Red Bull couldn't keep me up after the opening bell. That's life in the islands. I can't stay up through every night and morning, missing sleep ... but I try. Spot silver drifted below 46 today and it would've been perfectly sane for it to stay there. However, London closed shop and the post-London spike ensued. AGAIN. How I forgot about this ... well, I was asleep. But spot went from about 45.75 just before London's close to 46.33 now, another all-time high. Incredible and totally daffy.
Volume in SLV, which is at 45.22, is down from yesterday's memorable run, but still robust at 67 million shares. How many shorts are trying to set up for a gravy train over the weekend, with global markets closed (Good Friday, Easter Sunday) into metals option expiry (Tuesday)? Much as I like to see the contrary side of things, I can't fathom going long over the weekend in any silver play.
AAPL. I cancelled my buy order after hours yesterday at 355.83. AAPL went up to 357 at the time and was in that area early today in premarket, but hasn't been there since. It pulled back, as expected, to 351. Then lower to 348+, and is now at 351.85 with an hour left in the session.
GLD is up fractionally (+0.2%) while spot gold is up nicely to 1,506.60. The reaction to Chinese inflation/
rise of the yuan (vs. dollar), Brazilian rate hike, a faltering dollar (74.31) and robust crude oil (112) work in silver's favor for another day. The bubble will pop some other time.
Update 9:26 am (Hawaii) Almost stepped into a quick trade in SLV at 45.30, but opted not to. Oh well. Either mania or short covering is pushing SLV higher, now at 45.39 as spot silver zooms to another new high. For awhile spot was a 46.49, which converts to 45.32 for SLV (-2.5%), but SLV kept trading up to 45.39. Mania. Short covering.
Stochastics are out of buying territory. A buy here, now at 45.41, is pure risk. SLV held that 44.40 area early today and inched higher with higher highs and higher lows. What happens after hours? Global market is basically closed until late Sunday night. I'd like some SLV shares at 42.50 or so, as Turd the Genius projects. For now it's all lecherous hand-to-hand combat with scissors, razor blades and sharpened spoons in this alley.
Update 9:44 am (Hawaii) The DIABOLICAL fiends who have traders thinking China will devalue the yuan by 10% ... geniuses? It has shorts in a frenzy. SLV dipped from its high down to 45.41, and now it's roaring higher again. I passed on a quick trade again. Okay, now it's at 45.50. 15 minutes left in the session and shorts are screaming as they sprint to the exits. Thing is, is the Fed going to allow the dollar to fall on its face? Is JP Morgan going to call for the mother of all naked short sales this weekend?
Questions, questions.
Update 10:03 am (Hawaii) Market is in afterhours trading. Spot silver is healthy at 46.69 ... or is it running on fumes? Global markets are now closed with one exception: Tokyo opens soon. Can Tokyo carry spot silver here or even take it higher? I have no idea if Tokyo has any impact on commodities any more. This weekend has all the makings of the Big Bad Wolf making carnage out of the Three Little Pigs at that lonely house in the woods, BBW being the puppetmasters and the pigs being peon retail traders (us).
10:06 am now and SLV has cratered a bit. Tried to stay at 45.55, but plunged to 45.48. Am I still wishing I walked into that buy at 45.30 roughly one hour ago? That would've been pure risktaking. A billionaire can afford to toss 100K into a risky trade. A little guy like me has to manage risk to the nth degree.
Update 11:20 am (Hawaii) This is why I stay home late mornings instead of running errands, getting exercise, etc.: Chatter on Fast Money about silver took SLV from 45.45 (after hours) to 45.65 within minutes. They went on an extended discussion — it wasn't a real debate because everyone agreed long is strong right now — that fueled more and more price action. Discussion ended and SLV came back to 45.55.
It's entertaining and ludicrous. Spot silver was and still is 46.61, which converts to 45.44 in SLV. Shares are now at 45.58, very overpriced. That's mania momentum. Please consult with your doctor if your erection lasts more than 4 hours. You've been warned.
Update 11:39 am (Hawaii) Sure enough, SLV just fell through a cloud or two. After trading up on CNBC hype and a few thousand shares after hours to 45.70, SLV fell to 45.58 in an instant. At 45.70, it was trading 26¢ off its actual conversion (mine) price (45.44) relative to spot silver (46.61). This is high-end goods and oily swap meet bartering at its finest, only after hours.
Update 11:52 am (Hawaii) This was the first time I can recall Fast Money talking this much about SLV during the current run. It's been almost always about spot silver, but not specifically SLV. The response in price action was wild. Once we're at the top of this hour, though, I expect spot and SLV to drag down. Cramer loves hyping gold, but never silver.
Update 1:10 pm (Hawaii) At 11 am Hawaii time, when Fast Money began, SLV was at 45.48. By noon, when the show ended, SLV was at 45.68.
Then Cramer began, and when he was done an hour later, SLV was at 45.73. It remains at that level right now, up from 45.55 at the closing bell. SLV is now at 45.74, or 30¢ above where it should be. Short covering and mainstream adulation, indeed.
Update 1:35 pm (Hawaii) One of the most perplexing patterns this week was the disconnect between spot silver (and SLV) and miners. Silver Wheaton (SLW), Pan American (PAAS), Endeavour (EXK) and other miners waddled far behind spot and SLV. Maybe the miners are providing an omen of where spot silver is heading. Or maybe the increased energy costs of mining (crude oil is at 112+) are scaring traders. But SLW was a home run for the past year, and maybe it was just time for a pause.
I don't like SLV, but it trades with great liquidity and volatility, and I don't need to like something to make a profit. In a perfect world, the best miners move up with spot.
Update 2:02 pm (Hawaii) Chances are a spot silver (and SLV) pullback is coming. Until then, I've decided to keep a small position in SLV rather than be 100% out. Most who follow spot silver knew that it was on its way up at 20, 30 and 40. But I sold at 32 and other levels since. Spot will hit 50 sometime soon; I put an 85% chance of that. But the chance of a near-term pullback by Monday afternoon or Tuesday morning (PM options expiry) is very high, too. So my position is only 1/5th of what I usually trade. (I was aiming for 1/4th, but time ran out on me.) And a small part of that wasn't filled with my order before afterhours trading closed.
It's partly philosophical, partly strategic and mostly common sense. Keeping a half of quarter position in since 31 would've racked up substantial profit despite the ins and outs of my trades. So I'm approaching with more recognition of gray-scale positions than sheer black and white. The current partial position represents just 13% of my roll. The remaining 87% is cash.
Unless China announces this weekend that it no longer wants its citizens (or its federal bank) to invest in silver, there is no point fighting Big Brother.
