Jezzo, pete. A couple of downticks and just about everyone gets all worked up.
Look, silver went from 31 to 37 pretty frickin quick. That it is pulling back a little should surprise NO ONE. The USDX bottomed at 76.14 back on Monday. I'd given you 76.17 as a last line of defense for months. That it bounced there while at the same time receiving the MOPE and SPIN of "no more QE did you see that Pimco sold all their treasuries" is utterly and 100% predictable.
Now, please pay very close attention to what I am about to write...
QE WILL NEVER END. IT CAN'T. THE FED IS NOW 70% OF THE TREASURY MARKET. IF THEY LEAVE, WHO WILL BUY? WITH NO BUYERS, HOW CAN THE U.S. GOVERNMENT RAISE THE FUNDS TO COVER IT'S $1,500,000,000,000 DEFICIT FOR THIS YEAR? WHERE WILL IT GET THE FUNDS TO COVER THE $1,500,000,000,000 DEFICIT FOR NEXT YEAR? AND DON'T TELL ME HOW RATES WILL RISE AND ATTRACT BUYERS. THAT'S COMPLETE B.S.!! RATES CAN'T GO UP. HIGHER RATES ONLY ACCELERATE THE DEATH OF THE PONZI! QE IS NOT ENDING. EVER!!
OK, back to business. I love this down move. Just what the doctor ordered. I took off my May silver call spread yesterday. I do not currently have a silver position. I have an order in to buy some May $40 calls that will get filled IF we can sell off a little further, down toward 34.25.
So, keep the faith. If you're going to be trading commodities, you'd better get used to days like this. You have to believe in your analysis, suck it up and buy when the time is right. No matter how hard it may be to pull the trigger. Trust your intuitions. Review the fundamentals. Buy when others are selling.
2:20 EST UPDATE:
The rebound in crude to 103 and the headlines out of the Middle East were too much for me to handle. I just bought some May 37 silver calls and a couple of April (expires next Friday!) $105 crude calls.
We'll see if I acted imprudently by not waiting...TF