Monday, December 6, 2010

The Day's End: Gold and Silver Take on All Comers

Today went as expected until just a few minutes ago, when gold broke $1420 with authority.  Silver had the move I thought it would today, beating gold and gunning the moon.  SLW scored another big round today, and is easily one of the hottest stocks on market; I would recomend getting in on a pullback, but I also want to say, "Pullback?  We don't need no stinking pullback!"

If this is your first time at the rodeo, I recommend taking the bull by the horns and digging in a position, we are a long way from the top.  And for all you rockers out there, it is a long way to the top, if you want to rock and roll.  I will rarely discuss level buying, as I am sure everyone knows how to do it, but if not, level buying is basically not spending your whole wad at once.  Let me give you an example.

A couple weeks ago I made a trip to the coinshop.  It was the 22nd of November and I was buying silver to remember JFK by.  I made a purchase.  Then a few days later, the price had dropped.  Was I worried that my 22nd buy had lost value?  No!  That Friday I went and bought 3x the 22nd amount, which lowered my overall investment price for the week.  This is level buying, and it should be used for all purchases.

This is important right now because many many assets are at their highs.  Not just PMs, but many equities and bonds.  Fear not an investment, for if you like it, buy it.  Just do not blow all your "pigfaces" (dollars) at once.  $500 silver will not happen in one day.

The dollar pulled back slightly today.  The dollar as a metric is becoming less viable for measuring assets, as PMs trade higher on a weak dollar and a strong dollar now.  Hendry is waiting for a dollar/gold meltup.  It could happen.  But for now, stop measuring PMs in FIAT, and measure your wealth in ounces stored.

Oil is continuing its steady climb.  Today it and platinum saw high levels of volatility.  The selloff in the last part of trading was brutal, and PMs surged on it.  I almost want to say PMs will have a move higher tomorrow....but I won't.  I will say gold and silver have caught support nicely after hours.

I still think a marginal pullback is likely tomorrow as today's moves leave a wide range open.  I expect a cascade to $1400 overnight once LondonTown trades, and then down to $1395 when NY opens.  I think gold will trade between $1395-$1405 tomorrow.

PS platinum with the flash crash going into the West/East handoff, and looks to do the same with the East open.

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