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NOTE: This was a Thursday morning post, although still relevant. Apologies for the rasslin’ w. both location and WordPress problems…
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Silver is in a runaway move here. There, I’ve said it. It could end within ten minutes of trading today, or it could end in two to six weeks from now. I really believed we’d get a sharp pullback from our most recent moves, and perhaps we still will, but there’s no denying we’re in major breakout territory here.
I have no advice to give, save that you do not get reckless and leverage yourself into ruin. I have been cutting back here, and adding to my gold names in hopes of a catchup. This late in the day, however, is not the time to start getting careless.
Here’s the thing… this will end and likely soon, but it will not be The End, if you know what I’m saying. In other words, there will be other opportunities to play this bull. Make sure you have the capital to do so.
Right now, I’d be looking at underserved names… Ironically, SLW is one of them, as it had a hard pullback yesterday, if only to it’s 50-day EMA (and 13-week EMA as well). I may grab back some of the exposure I sold there over the last couple of weeks. I will know by 10 am what direction I will take.
I also continue to like AAU and a number of other small names which should be popping today. Check also AUMN on the gold side, as well as IVN and BAA — two other late bloomers.
Best to you all. Oh… and Happy Maundy Thursday and Passover. Think about going to church/shul this year.
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AGQ at $340+?
Seriously?
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Yeah, maybe kiss $400 or so before it’s “over”…but then it won’t really be over because when silver hits over 50 then any correction will be met with a swift “wow here’s my chance to get in under 50” reaction…Folks see value in gold and silver they don’t see in bonds, CD’s, cash or even stocks anymore, while most think that the market is overvalued and some who think a crash is imminent, and why not? And is a market crash a conspiracy theory? Only if it hasn’t happened. But when I go to the bank and pull out that safe deposit box and see the metal sitting there I see real value. People are scared of 50 but this is a different ball game with a whole new set of rules,,,,
That’s sounds awfully similar to “It’s different this time.”
Be careful.
FOMC Rate Policy: FOMC two day meeting 4/26/11 and 4/27/11. Rate decision is 12:30 PM EST (used to always be 2:15 PM), expecting no change, but now Chairman Bernanke’s new Q&A session starts 4/27/11 at 2:15 PM. Expect a question on the strong vs. weak dollar policy that will greatly impact markets. Currently, weak dollar=strong euro=strong commodities=strong equities, but, if Bernanke even hints a little bit at the end of QE2, a stronger dollar will reverse all markets in a heartbeat.
India, Brazil, Taiwan and other Emerging Market Rate Hikes: Same effects as China rate hikes; commodities will sell off. China, India and Brazil hikes are most important to global markets.
5/15/11: Eclipse Sell-off Technique targets this time frame as a potential large market selloff area.
5/16/11 and on: Congress to Raise Debt Ceiling. This may be another down-to-the-wire fight like the budget crisis was. Interesting that this deadline coincides with the eclipse sell-off projection. Geithner says May 16th deadline but drop dead date to raise ceiling is July 8th.
The Keystone Speculator
Under capitalism man exploits man; under socialism the reverse is true. -Polish Proverb
Of all the things I’d never thought I’d say, this is the most surprising:
I wasn’t bullish enough.
Spinning my wheels here. These are the kinds of problems I love to have. When should I unload my silver exposure. Since I’m becoming more afraid of selling too early, I know that its time to start lightening my load. I have trade triggers set for SLV at 48.00 and 48.50 to sell all related positions. As I do, I’ll be replacing with exposure to gold instead. GDX, DGP, and a little GDXJ. No leverage. Maybe 70% exposure. This cycle has been a blast, but its time to get ready for the shift to risk off.
Believe it or not, the dollar will rise, metals will fall, T-bonds will rise, Junk bonds will fall, oil will fall, ag will fall, and equities will fall. But only temporatily. Only enough to get the talking heads really scared. Then we get back to normal and Gold, Silver, and Oil will win the day again, with the dollar crumbling to ash.
Shit.
Oh, if silver spikes hard in the next few days…up a couple bucks at the open, I’ll be getting out, and doing the shift to Gold without waiting for my triggers on SLV to hit. Too much air under us, and I know as sure as I sit here on this couch, that Silver will have a major downdraft with no warning. Like Jake says, it may be Monday or in six weeks, but it will come and I don’t want to be in it. I could easily see silver getting upwards of 54 and then in a couple hours dropping to 44.
Guess I may buy some volatility, too.
Fusby,
Do not buy volatility. It’s tempting but VXX is a one of the worst ETFs out there.
As for switching to gold, I’m right there with you, but in my humble opinion, when the dollar rally hits you want to be in UUP or short. Gold will still get whacked.
Just curious, how high will the dollah rebound?
GBV,
Just lost my response..forgot the spam protection equation. Anyway, I agree. Just going to gold for a ride to what i believe will be its blow off top. Its engines are just getting warm while silver is frickin spooky here.
In a few weeks (4-60 I’m guessing, I’ll be going
UUP, SDS, SKF, TLT short JNK, and 2x short the Euro (forgot the name of the ETF..maybe EUO)
Also a couple puts on SLV and AGQ just for fun. f
I meant 4 tp 6 wks in gold.
Flyaway
The dollar has a major short position to unwind. Its rally will likely last many months. We are in for a nother deflationary cycle. Then another accelrated inflation and on and on till the dollar breaks or someone has the nerve to cleanse the excesses=max pain for American public.
Shit
f
Best guess is a run toward 77 and if its lucky 80 tops.
Time will tell.
I think when the dollar bounces off its low in the next six weeks or so, it will run longer than most expect. There is a lot of short interest to unwind. But, as I said, it really depends on QE. If the FED gives lip service to backing off or cleverly disguises its QE efforts, the dollar will be set for a substantial rally. If not, then the rally will likely be more shortlived. Either way, its all temporary as the Gold and Silver Bulls will be much higher than this at their ultimate top in a few years.