The ART of sitting ON YOUR HANDS

7 sept

I was not always a bear... but my arms are tired of holding these Silver Bags for over a decade. I am still bullish! In the long long term ( ;

I am still holding a longterm SILJ short position ( see previous post ) but the immediate future is not clear. Will we get an explosive rally leading up to... during... or after the FOMC? I would not bet on it. The truth is however that nobody knows. As Ray Dalio says, "He who lives by the crystal ball will eat shattered glass"

The next few weeks will provide a challenge for market timers and speculators. I expect plenty of whipsaw and broken hearts before a trend is established (bullish or bearish).

I am waiting for a break of 29.83 to become a Bull and enter Long

I am waiting for a break of 26.67 to become a Bear (a big one) and enter Short

I strongly recommend waiting for a daily close over these levels before getting to comfortable unless you are prepared to keep a tight stop and run for the hills if either of these breaks turn out to be a trap.

Until then this range (in between the two levels will provide plenty of juicy scalping opportunities for cowboys like myself. I am using the .382 Fib level 28.10 (derived from the Oct 23 Low to the High in May 24) as my guiding light and BABB (Bullish above Bearish below) in the interim with TPs at my key break levels. They will be formidable resistance/support zones until broken and proven otherwise. Happy trading!

12 sept

Nota

Exiting my long positions from 28.10 here at 29.80. I expect a pull back. I will wait for confirmation before re-entering long. If we reject this FIB and/or downtrend line I will look to enter short.

13 sept

Operación activa

Silver is overbought. Silver might be ready for a breather. It is risky but I am entering short here at $30.10 (spot) with stop on a daily close above $30.50

13 sept

Nota

Fridays are typically trend days... closing at or near the highs of the day. Something smells... Price action after the (unwarranted) euphoric impulse is weak. Beaten and bloody but still standing on two feet looking for a close below 30.50. Only time will tell...

13 sept

Operación cerrada: precio stop alcanzado

Silver and Gold have proven themselves! This break out has legs! Out at rejection of 30.50.

14 sept

Nota

I'll be damned if Metals are not due for a small correction here but Gold looks to be running a tight range/volatility expansion play that could send it to 3k in a matter of a weeks. Given the markets reaction to ECBs cut, I think a rate cut by FOMC will act as rocket fuel. Shorting is off the table despite the metal's ridiculously overbought technicals. If Gold closes (daily) below 2550 and Silver closes below 30 level my bias is continuation to the upside.

17 sept

Nota

Edit * If Gold DOES NOT close (daily) below 2550....

TECHNICALS:

I'd like to see Silver retest 30-30.0 break out zone to enter long.

FUNDAMENTALS

The market appears to be pricing in a 50 basis point cut. If we do indeed get one it "should" be incredibly bullish for the market as a whole. However, if we only get a 25 basis point cut the market may throw a temper tantrum. To be honest, I personally believe a 25 basis point is more appropriate given the recent CPI/PPI numbers. It is my opinion that if we do get a 50 basis point cut it will be due to the fact the FED is deeply concerned about the economy. So although the market may rejoice (explode) at the news of a 50 basis point cut, I think it will be a rather short lived rally. Looking back at prior initial rate cuts, 25 basis point cuts have led to more sustainable rallies while 50 basis point cuts are typically followed by serious recessions and market downturns.