Silver Top Calling?
In one of my last posts before vacation I told nervy metal holders to drop silver at $50 and gold at $1550. Did I set the price? Reader Anon left a hilarious comment last thread:
After Mr. Get set the price, the parabolic SLV rise led people to conclude that the Duke Bros were trying to corner the market. Get knowing fully well that Clarance Beeks report would show that the Goldman story was a bunch of hooey, he aggressively shorted, making himself rich, and simultaneously ruining the Duke Bros (who coincidentally couldn't cover their MARGIN) in the process. Coincidence? I think not.
AND FURTHER, did they not conclude their little caper with a little R&R on a Caribbean island? HMMMMM - I don't know Get, this all seems very suspicious to me.
Maybe I wrecked the metals market? Sorry!
Did the Music Stop?
Sometimes I think I have to listen more to myself! What did I write last night?:
Unless silver was THE ONLY vehicle for hot money, I think market players would be wise to note what is going on. If hot money flows are that nervous, silver may be the first of many things to get firebombed soon. Could be the canary in the coal mine for the "reflation" trade. It is hard for me to see the S&P going ever higher if momentum spots are being closed out. Unless silver is the only irrational bubble in the markets right now.While the overall indices were not too ugly, looking under the hood we see an engine full of broken parts.
There are too many stocks getting murdered right now to list, but plenty of old hot names are getting axed. Here is a 5-day comparison between SLV and some hot names: LULU, TZOO, and UA:
We see bubbles are all a matter of taste, some high flyers are getting pasted as bad as silver or worse but that is just a normal correction, not a bubble popping(?). I know, it's hard to follow along sometimes.
Low volume ramp ups were the norm for a couple of years. To think all that money went into silver and cotton is pure fancy. If it had, a silver bracelet would cost you $300 and a cotton T-shirt would set you back $100. It went all over the place and equities got plenty of it.
Now this could be a few day event; a few random earnings misses; some other conspiracy. Maybe this phase is over and everything rebounds big time. I hold that if silver and commodities in general get poleaxed, equities are not going to rise above it all in a soaring eagle fly away pattern. They will follow in the elevator down, especially the previous hot names.
I think it a bit too obvious that the end of QE 2.0 trade could be put in force so fast. In any case, I will be keeping an eye on market internals as many stocks are really dropping but the indices hold up somehow. I know everyone is always out before any drop, hedged so that they are up, or went short 10 minutes before any drop but this is happening pretty fast so be careful out there. Could be a long summer until the fall foliage of QE 3.0 rolls out and adds fuel back to a hot money fire, I mean confirms the strong underlying fundamentals of the stock market.
Love this Natalie Dee cartoon (link):
Should have been a unicorn, not a horse!
Have a good night.