Cartoon Blythe has a pretty good handle on things, too, so we should start to consider the second part of her "message" last week. After allowing silver to pass through the old highs of 38.20, The Witch postulated that the monkeys should stand down and wait for silver to approach the round number, psychological barrier or $40 before attacking again. I'd say she probably is offering very sound advice. A great many themes discussed here suggest you can probably begin to take some profits this afternoon or tomorrow morning.
1) Forty dollars will likely offer short-term resistance.
2) The HUI is rapidly approaching old highs near 600. I have a last of 596.
3) Almost all range breakouts get immediately tested. Meaning gold will likely trade back down soon and test what now should be support above 1445.
4) Documented pattern of Tuesday highs and Wednesday/Thursday raids.http://tfmetalsreport.blogspot.com/2010/12/wicked-witch-of-new-york.html
Now don't worry. Ole Turd isn't getting out or getting short. I still hold all of my long-term positions. I'm just saying that if you wish to trade, you might sell a little on the open tomorrow if silver is above 39.50 and pushing 40. Let it reverse and look to buy back in, first near the old highs of 38.20 or even 37 if Blythe rolls out some dirty tricks and is able to get it down that far. Watch the HUI for a dip back near 580.
Predictably, the HUI gapped higher on the open and has since rolled over. After a high of almost 606, its back to 594. The overall stock market has weakened, too. We've seen this countless times before. DO NOT be surprised to see an EE raid on the Globex this afternoon. If history is a guide, an early week push to new highs in both the PMs and the miners is usually met with a late Wednesday/Thursday raid. Now, don't get your panties in a bunch. I don't blame you if you choose to simply look the other way and ride it out because the metals are almost certainly headed even higher as we move through April. However, if you wish to trade, you could sell now (if you haven't already) and look to buy back in tomorrow with a HUI between 570 and 580 and silver between 38.25 and 38.50. Gold will pull back, too. Probably between 1445 and 1450. At that point, I will BTFD.
Full disclosure: I sold my May 38s yesterday and my May 41s today. My only current PM position is June 1500 gold calls, which I am holding and do not intend to sell anytime soon.
More later after we've had a chance to observe the Monkeys in action this afternoon.
p.s. Read this:
And, while you're there, read this, too, just for fun:
5:15 EDT UPDATE: