Predicted Mini-Moon Shoot Recovery in Silver Obliges
A picture is worth a thousand words. This was so embarrassingly obvious, too bad we didn’t get a chance to put together an option play on it due to how fast it went down.
UPDATE: Perhaps this is a good time to mention that there is a wealth of information in the comments section of the Metal Augmentor website (most of it accessible only by subscribers) in addition to the official posts. You should get into the habit of reading those comments and maybe even participate yourself. In any case, here is a little comment from Tuesday:
May 4th, 2010 at 16:39
You are probably right, perhaps some puts in the USD although it had a beautiful chart today for such a supposedly ugly currency! I was looking earlier at July COMEX silver call spreads because when volatility is high the straight spreads (bull or bear) can sometimes be “affordable”. Nothing doing so far, however, and I’m actually tempted to look for outright long calls in COMEX silver JUNE in the 18.50 - 19.00 range. Yes, June is not an active month but we are in an interesting period and whatever is going to happen (follow-through, reversal) is probably going to happen in 3 weeks or less. I doubt we flatline here but of course that is the risk.
And then on Wednesday there was this one:
May 5th, 2010 at 14:39
[David makes a point]: I still think the July contract would be better for Silver because I do not see it bouncing right back especially if we get to 16. The damage is done. And with gold breaking below 1160, it will be that much harder for gold to climb back to 1200 range soon.
Crude is looking attractive at 79ish here. I took a lightly long position at 79.19. I’m looking at adding if we get below 79. The positives for crude are 1) continued signs of economic recovery (or at least the repeated drumbeat that we are in an economic recovery), 2) the upcoming peak summer gasoline demand season, 3)potential for the Gulf oil leak to disrupt imports and refinery output, and 4) Opec’s desire to keep oil in the 75 range meaning not down to 60 any time soon. Negatives are fear that demand and economy will remain weak and supplies high.
Sorry, I know this is not Oil-augmentor, but I don’t mind speculating in oil at these prices, but I am timid about silver and gold.
[silverax responds:] Au contraire, silver did jump back up when gold diverged last time and today we are seeing another major divergence with gold actually up but silver still down over 40 cents. I bought a June 18.50 silver call for $700 just in case we get a repeat of what happened last time. Should we we get just a slight recovery in silver back toward $18.00 I will try to sell a 19.00 call for $700 to set up a risk free trade.
As a postscript, I just went ahead a few minutes ago and sold the call option (a bit early I might add) for a tidy $1,500 profit after commission. Probably one of the easiest 1.5G’s I’ve ever made.
Not a bad trade Tom, netting a nicely sum of $1500 after fees.
To bad i’ve been away from the trading screens having to carry out back breaking work digging up my backyard for becoming the final resting place for all the major currencies of the world.Many have commented on this including my friends,relatives and neighbours who have said i have gone loopy,only my good friend THE PRIEST has commended me on doing GOD’S WORK (AKA.Goldmans Blankfien-d’s past comment)by preparing the burial ground for the demise of all paper currencies and also urged me not to become a MAMMON WORSHIPPER by participating in this global financial casino.
So i pose a question on a personnal level Tom, what are you gonna do with the proceeds may i ask?Would i be asking too much if ya do not mind sharing a small percentage of this profit for charitable causes such as my F.F.C.F.T((The Frederico Fiat Currency Funeral Trust)?.Having exausted all my funds in aquiring the giant granite tombstone for the EURO and signing up BON JOVI and SPANDAU BALLET & DIRE STRAITS this Funeral Trust may be the only answer to continue to fund the largest BACKYARD GRAND CURRENCY FUNERAL ever.
By the way JON BON JOVI has agreed to sing “GOING OUT IN A BLAZE OF GLORY”and DIRE STRAITS will sing the 80’s smash hit “MONEY FOR NOTHING”of course not forgetting SPANDAU BALLET who will sing their 1980 classic “GOLD” at the Funeral Service so i urge you all attend so bring friends & family along.
So,any contributions from you all at silveraxis can make this event happen so all proceeds can be used in purchasing further caskets and granite tombstones ,plaques and flowers and signing up other musical artists. for the POUND STERLING,YEN&DOLLAR and so will be greatly appreciated.
Please note however,if a BLACKSWAN EVENT OCCURS whereby funds fall short of my budget target i may have to take out the large GARDEN GNOMES from my grandma’s flower garden and use those for tombstones and will of course have rip up tour contracts with BON JOVI and the others and sing my self.
Oh,just one more matter,my friend THE PRIEST who you already know from the past commentary has returned from his PIIGS CERMONIAL BLESSING and trip to the VATICAN has pushed the Pope for the resignation of a German Bishop for child abuse and attended an emergency meeting with the ECB and E.U.Commission in which he instructed the Germans to stick up their middle finger and pull out of the EURO.
OH,Speaking of fingers by the way during my conversation with THE PRIEST
i said did you notice the frequent reference in the mainstream media channels of traders fat fingers triggering the meltdown and blaming High Frequency Trading…….FATHER replied ” the news media can shove their PHAT PHINGER$ up their ****!!
Well,well……the foolish Germans did not take any of THE PRIEST’S wise advice and pull out of the EURO as the ECB & E.U. over the weekend decided on a $1 trillion bailout.Lucky for me THE PRIEST warned me before hand not to get to excited by conducting a PREMATURE BURIAL as you know he had refused in performing the LAST RITES for the EURO at my BACKYARD FUNERAL SERVICE by saying a RESURRECTION would most likely occur.Still, its good to know i have friends in HIGH PLACES!
Nevertheless,he advised me to go ahead with the all important BACKYARD FUNERAL SERVICE and said my only salvation laid in GOLD and SILVER BULLION for the coming APOCALYPSE.
Oh, almost forgot….Late last afternoon i called THE PRIEST and asked FATHER about his thoughts on BERNANKE re-opening the DOLLAR-SWAP LINES with foreign CENTRAL BANKS….FATHER’s replied “REMEMBER THE 666 LOW ON THE S&P 500 LAST MARCH….THE SIGN OF THE BEAST…. O’MAY THE ALMIGHTY GOD BLESS US ALL AS BERNANKE IS IN FACT THE DEVIL HIMSELF”!
HA!At least its good to know The P.P.P. PHAT PHINGER PHENOMENON works both ways…..A MONDAY MARKET-MELTUP.
This entire financial & monetary system is totally F.U.B.A.R.
Forgot to add the following….
The double digit gains we are witnessing on European Stocks Exchanges, think….Portugal.Italy,Ireland,Greece and Spain show clearly “PIIGS CAN REALLY FLY”, yet you all thought “You can’t put lipstick on a pig” my compadre THE PRIEST has proven otherwise by giving that almighty heavenly kiss during his CERMONIAL BLESSING weekend trip to the E.U.
This concludes my trash talking session for today folks!
I might have mentioned somewhere that the funeral was a bit premature and the rumors of the euro’s death were being exaggerated and that the markets screaming murder last week pretty much guaranteed a huge bailout package would be done.