Today the metals markets rebounded strongly after a somewhat weak start and some late Comex headfakes.
As I had mentioned I had come out of cash and bought the dip in the precious metals sector yesterday, rather heavily, running cash levels to effectively zero. There was even some picking from the fallen stocks among those wild tigers, the silver miners, and in some size at end of day. Their beta is pretty impressive, and nice when it runs your way.
The buys in the stocks that had fallen to long term support were big fat targets. And they bounced with a vicious flourish today, going up even faster than they had fallen, gaining momentum steadily after the FOMC announcement.
I flipped the hedges early, and just let the metals run into the afternoon, trimming back into the close to raise some cash back again for more opportunistic buys. I like to get my money off the table and let the profits run.
So what next? The formation on the gold chart looks good, and the support on the correction helped to draw the cup of the inverse head and shoulders a little more firmly. Yes there will be draw downs and corrections along the way, but gold looks headed for 1590 and probably beyond, but one leg at a time.
Silver is a juggernaut. I had to force myself to buy beta heavily in that rugby scrum of a market yesterday and it paid off extraordinarily well.
If they want to be really Machiavellian they'll hit the metals tonight and tomorrow again, but its getting so old it might not work, and they'll have to retreat to try and defend another level higher.
And thanks Blythe. You're the best, baby.
Zicke zacke zicke zacke hoi hoi hoi
