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I figured I’d throw out a rare intra-day post this morning to let you know exactly what I’m looking at to determine my next moves here. As you may have guessed, my position will largely be dictated by the action of the dollar here as it struggles to emerge from a months long death spiral — whether temporarily or not.
What will determine that decision in the near term will be the dollar’s actions as it approaches it’s long term cap — the 50-day EMA. Notice how that line has served to knock the dollar back, even on strong rebounds like the one we’ve witnessed this last week or so?
Now, even if the dollar does break that 50-day EMA at $75.22, I think it’s rather unlikely that it will get much farther than the descending 200-day EMA above it at around $78.00.
What I don’t want to do, however, is wait around with overweighted positions in silver miners and AGQ while it decided to redescend. I have enough budding gray hairs from my kids, thanks very much.
So the plan will be to cut back to about a 40% position across the board in the event of a dollar breach of the 50-day. I will likely get rid of most if not all of my AGQ, though I may keep a stub position just to keep an eye on it. Again, I may have a lot more slack in that position than you do, so mind your own risk at your acceptable levels.
Keep in mind also that I told the Monsieur at the end of last week, via private correspondance, that I wholly expected a retest of the lows in the silver miners in order to prove this a more substantial rebound than the “V” we’ve seen thus far.
That doesn’t mean it’s not hard to watch, of course. Best to you all.
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