Monday, August 30, 2010

Making a Move on Monday

Mondays are rough stuff after a great weekend!

Obligatory Robot Scare Story
I think I should be able to run a robot related story about every day! For consideration this Monday:
MIT Invents Oil Collecting Robots

Making a Move on Monday
I have not been active in the markets this year. Not much has stood out to me and a few positions I had wanted to open started looking a little ill right before I was going to buy. I did make a move today though and I will share my reasoning.

I opened a position in the iShares Silver Trust (SLV). This buy was a larger than normal purchase for me, about 50% of my trading account. What am I looking at?

The SLV chart is attractive and I think it is going to resolve one way or the other very soon, maybe in 1-3 weeks. At today's close of about $18.40 I am looking for an upside move past $22 and maybe even a run to $24. If the resolution goes to the downside a fast drop to $16 could occur. I like the risk/reward profile of this trade.

I have spilled pixels by the ton about why I like silver fundamentally for the long term. I will not rehash all that again right now. I hold a core position in physical metal that I keep for the long haul. I am using the paper silver vehicle here for ease of transaction.

This September should feature whatever plans CONgress, the FED, and the Treasury have to try and give out more free stuff and flood the world with more liquidity no one needs. With elections coming in November they will need to act soon to get any pop out of the actions and this would be silver positive.

Risks? This silver play is hardly novel and thus plenty of folks are seeing what I am. While this makes me moderately sure I am not crazy, this play is not exactly uncrowded. All that about a watched pot never boils can apply here. Add to this I think a huge move down in the stock indices could happen at any moment. Yes, silver will get killed if the S&P drops 10% though there are situations where that may not happen.

Understand, as always, nothing here is trading advice. I am just sharing my own ideas. If you want to lose money, by all means copy my activity!

Rumor Mill
At first I thought this rumor about the Bank of China Governor defecting to the United States was too silly to even be worth a read. Later on I thought it was SO strange, well I guess it could be true! Doing my part to spread false information:
Where In The World Is Zhou Xiaochuan? Stratfor Provides Update As 1 Month Chinese Repo Surges By 50%
If this turns out to be true (I highly doubt it) the tension it will create between the US and China will be worth grabbing a popcorn for.

Have a good night.


insanity shelter said...

How did Keven Costner's oil collector thing work out. I'm guessing not too well since we don't hear anything about it.

Talented actor. Not much of an engineer. Oh well, he wasn't doing anything with that 40 mil.

Kid Dynamite said...

my people are telling me that SLV goes to $28.. maybe not till 2015, but it's just a matter of time.

it's my biggest position.