[youtube:http://www.youtube.com/watch?v=w_g2t0ZfIkA 450 300]
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Gobble, Gobble, fellow pilgrims! Are you concerned about your precious metal stores and stocks this close to Turkey Day? Even though The PPT has assured us that these are the stuffing days for such metals coursing into year end?
Well, I can’t say that I don’t blame you, given the vexatious day we had yesterday, where everyone and their brother decided that liquidating hard commodities was the answer to Europe’s considerable paper problem. On the other hand, with a relatively high Blees rating (a relative ratio of commerical trader sentiment over the last 18 months) of above 50% (at 74 as of last reading), I can’t see traders going against historic trends hear and blowing out of these positions in defiance of the Turkey gods.
In other words, I think yesterday was something of a panic day. Do tell, right?
But panic days are what we are here for… especially when they are delivered toward the end of the year and a mere week before Tryptophanatic Day.
So far the Bernank seems to be playing along, as the dollar is currently down below my target of $77.80 as revealed on Fly’s blog yesterday. If it stays down there, I believe we will have a chance for a sustainable bounce in play on all the PM’s and even the much beknighted silver that so many were moaning about here yesterday.
Before I show you my silver chart, I want to remind you that it was junior golds that I thought would provide the biggest bang for the buck here. That should still be here, and outside the old favorites of SLW and EXK, I would probably avoid getting too crazy about silver miners until we see a rebound, and then a re-test of yesterday’s levels.
That being said, I note that AGQ weekly is still well above it’s long term trend line. And while yesterday I thought perhaps we’d get a test of that line, I think we may even open higher this morning (above $60), and if so, I might actually begin adding to my 50% positions here. The stops are pretty obvious on the weeklies, but you may not want to set them below the trend line if you are more of a short time type. In that case, I’d recommend a stop below $60, and a “wait and see” going into next week.
Keep in mind that Friday after Tryptophan Awareness Day is often one of the best PM days of the year (although not always long lived). Here’s my latest on “fast money” AGQ.
Given the oversold levels of AG and even of the more stable $HUI (we missed the 200 day EMA ($552) by a hair yesterday, and may test today, but we did bounce right at the reliable 34 week EMA as well), I will be looking to add to a number of positions today.
Keep in mind a number of caveats…
1) If the dollar index (DX-Y) breaks back above $78, which is the 61.8% Fibonacci retrace on the long term weekly, I will take these adds off
2) If the $HUI breaks below it’s 200-day EMA (approximately $552), I will take these trades off.
3) If the POG breaks below $1700, I will take these trades off.
Again, I am still not convinced that any of the above events means our traditional Santa Claus Gold Mitzvah is off for this year. In fact, it probably just means the rebound will be pushed into next week.
That said, one must take some precautions, and those levels are good ones to pay attention to.
Perhaps we will revisit this weekend, if I don’t have 12 kid parties and 15 lacrosse/field hockey/Quick Recall games to attend.
My best to you.
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