Well, the week has begun and, so far, it's unfolding about the way we expected.
On a day like today, where London is closed and the entire week last was UP, you'd normally expect some give back. So far, not so much. In fact, the silver market has traded almost exactly as anticipated. Volatility at the Globex open last night. A surge from Asia. A pushback from Europe. A continued rally in NY. We've broken $31 and are holding strongly, even in the face of falling crude and capped gold. This is very impressive and somewhat reassuring. Tomorrow will be the interesting test. With London back in, will silver surge higher or be pressed lower? Once NY opens, will silver rebound on a "Happy Tuesday" or will a mini-raid develop? For now, I expect continued strength as I see several areas of strong support on the chart and silver remains well above all of its moving averages.
Gold is hanging in there, too, but is being subjected to much more aggressive capping than silver. There can be no doubt that The Gold Cartel would prefer that gold stays below its Battle Royale line as well as the area around 1680. Just like 1635 last week, you can be certain that there are a plethora of buy-stops positioned above 1675-80 and The Cartel does not want to see them triggered. Will they succeed? Maybe for a few days this week but, ultimately, they will fail. Gold will then surge toward 1700 and, once it starts printing $17**, it will likely rally toward the next logical battle zone near 1720.
All of this is in the face of falling crude prices this morning. That crude is down should not come as a surprise to anyone here. I had told you that crude would trade to $98 last week and it did. I then suggested that a pullback would follow before a consolidation. The next move in crude will drive it to and through $100 and, from there, it will likely move rapidly toward $105. This is a very tradable move so be ready. Any dip to $94 and below would be a logical entry point and I'll be watching it closely.
Lastly, I'm sorry but I need to do this one more time because of the costs and effort needed for setup. As you know, it has been suggested that Andrew Maguire and I "team up" for an options trading service. The platform would be similar to Andy's current "DayTrades" service where trades are posted in realtime and the subscriber has the discretion to either follow along or not. Here are other random thoughts that I printed last week:
1. I'm quite uneasy at recommending options trading to anyone given the inherent risks involved and my oft-stated concerns for the viability of the current "system". After the MFG and PFG debacles, everyone should be wary of holding cash, or anything else for that matter, within the confines of a customer account. That said, I could be wrong. That Ann Barnhart gal could be wrong, too. Maybe MFG and PFG are simply one-offs and everything is fine. I recognize, though, that there are still literally thousands of people worldwide who are still actively trading. Therefore, I'm content to go forward but under the banner of "proceed at your own considerable risk".
2. I've been trading options for over 25 years now. In my "career", I've always been forced to enter The Den of Thieves armed with nothing but my own experience, wisdom and charts. To think that I could enter again but, this time, have the experience of Andrew Maguire to guide me?...well that is pretty compelling.
3. After 25 years, I do at least have some idea of what I'm doing. All trades established by Andy and I will only be placed if we are in agreement that the trade makes sense. This clearly doesn't guarantee success but I'd like to think it increases our chances a bit.
4. It's not going to be cheap but it shouldn't be. First of all, we don't want totally inexperienced traders taking a stab at it simply because the subscription is just $20/month. Additionally, at $250/month, the service would be a bargain. Subscribers would need to maintain an account balance of $15,000-25,000 so we're only talking about a 1-2% monthly vig.
5. For those that don't trade futures options but do trade equity options, we'll try to offer an alternative ETF option play whenever possible. For example, a Dec12 gold call trade might be matched with a DecGLD call.
Again, IF WE DO THIS, the fee will be $250/month. Why so expensive you ask? One, anything of value is not cheap AND two, we need to limit the amount of subscribers and a high cost helps with this. Much of the time, we'll be taking positions in options that don't have a huge amount of open interest. If, all of a sudden, we had 1000 people putting in orders for an option with only a few hundred in OI, it could immediately skew the entire dynamic of the trade. Therefore, it is preferable to have 100 subscribers rather than 1000.
So here's what I need from anyone who is seriously still interested. Please send me an email at:
turdistheman at gmail dot com
Nothing fancy, just say "yes, I'm interested" or something of that nature. If it looks like we're going to have 100 subscribers, then Paul and Andy will go ahead and set it up. Personally, I hope we can do this because, with more QE in the horizon and the other "fundamental changes" I'm expecting, I think our chances at success are pretty high. So, again, anyone who thinks they'd participate needs to send me an email at the address above. (This is, of course, non-binding. It's not like I'm going to beat you to death if you ultimately change your mind and decide not to join. It's just that taking the time to send an email gives us a much stronger indication of general interest.)
As I close, I see that price continues to hang in there at $1670 and $31. After the moves we had last week and with London closed, I'm relieved that things are going as well today as they are. Let's just get through this day and then see what tomorrow brings. With all the fresh shorting supplied by The Cartels last week, I'm expecting (hoping for) a somewhat happy Tuesday.
Have a great day and pray that Isaac continues as a tropical storm for as long as possible.