Sunday, April 3, 2011
As I currently write this silver has opened and move higher past 38 an ounce. Currently we are trading at 38.10 and in light of silvers price action on Thursday and Friday I believe its consolidation above 36 an ounce is very bullish and a run to 40 an ounce is highly probable. Keep in mind with 40 being a nice clean number I wouldn’t doubt serious profit taking and resistance at 40. Not to say that 40 is unbreakable but on the first test I would be surprised to see it tick past that. Honestly a move to 40 will likely get me out of my May call on the SLV on a hint of a pull back/failure of that level. I will look to reenter into July at the money calls for a swing to 50(damn wouldn’t that be swell) on a pull back. The only thing that we need to watch for now is a break of 38.18 as long as we break that level a leg higher should end up on the chart.
I haven’t talked about crude yet on here so here we go. Last week we broke out of a wedge and the chart looks pretty damn explosive. Scary really seeing unleaded at 3.79 a gallon today. So I believe higher for crude as well unless the middle east starts holding hands (which is not going to happen) and the Bernank turns off the printing press which will likely not happen, the fed has financed 84.3% of debt since QE2 started-compliments of zero hedge(http://www.zerohedge.com/article/how-fed-sourced-834-treasury-cash-needs-start-qe2), if the Bernank does stop printing the hand holding everything up is gonna come crashing down on everything from equities, to commodities and PMs.
Now on Friday I closed out of a bunch of positions. First I had my timing off on MHP and NRG since I got in a day late due to settlement (that’s what happens when you don’t focus on having cash as a position), WFMI was showing me a good return and with the S&P making a head and shoulders on the 5 min I exited my WFMI, NRG, MHP and SPY calls to lock in some profits and build some cash for tomorrow. So for tomorrow if we get a pull back in the S&P I’ll be looking at SPY calls for a ride to 1340. May add to silver if we break 38.18 and looking at an entry in crude as long as we show some strength.