It gets more fun by the day. The stakes have definitely gone up. Finally, the poor masses are starting to rise up and realize how badly they have been screwed over the last generation. It only takes one spark to ignite the world into revolution. Almost like the American revolution brought about more revolutions. With the age of instant communication, an unknown place like Tunisia which no one has ever bothered to even consider has become ground zero of what could become the biggest chain reaction since at least the fall of the USSR. How quickly things have escalated.
Yeah, but so what. It doesn't effect us, Bernanke said so, therefore the market keeps going up everyday. This all reminds me of the old college bar nights. It's like an hour before closing time and I am drunk off "liquidity". I know time is short, but I still have plenty of time to keep having fun. There is basically unlimited "liquidity" until last call. Until last call, no one panics.
I kind of summed up my investment strategy today, in conversation. I explained to someone I hold a bulk of my investment in gold and silver. I said I am simply betting that the government/Fed bank keeps printing money. Simple as that. If they keep printing, I win. If they stop printing, its time to re-evaluate. Luckily, I have this trading account to keep me busy until "last call".
I truly consider this my gambling account. I, for the most part, bet recklessly(by most standards). It's almost as if I don't care about retirement anymore. Almost as if my investing mantra is "get rich or die trying"(figuratively, of course).
Now on to something useful(or reckless), my current short-term trading strategy(which will probably change before I even wake up tomorrow). I am watching silver very closely right now. Some of you may have heard of the backwardation in the futures market. I think the reason we see the current trend is because most large traders that normally are rolling out their dates have stood firm on the March contract. Normally, I think many of these would have already rolled out into future months and caused a normal picture where forward months are more expensive that the front month. I think they are most likely playing chicken with the Comex/large shorts. They must be receiving a bonus cash payout to stand for delivery and settle in cash. I think the word is out and more people are jumping on board.
So what happens if more than 100MM ounces stand for March delivery? Well, they would have more standing for delivery than there is even available to deliver. Anyone holding the golden tickets will know they are in a great bargaining position. The second the number hits public, I think there will be a surge in buying interest and short covering.
Lastly, I have noticed a trend where gold and silver will hit short-term peaks on the last trading day of each quarter and have its brief sell-off within the next few weeks of that date.
So how am I playing this? I started with GLD Apr 135's@2.15, SLV Apr 32's@0.45. I balanced this with SPY Apr 125's puts@2.70(ouch!). I added SLV at around 65 cents and SPY twice at average 1.75.
Sold off the SLV at 84 cents and $1.54. I sold the SLV to roll into CDE Mar 29,30@0.80,0.60. CDE wasn't quite tracking the price of silver going up and took a brief correction on Friday, which convinced me to jump tracks. I would have liked to get CDE Aprils instead, but wouldn't be available until next week. CDE earnings are the 28th and I think they will beat and provide great guidance.
My current strategy is to sell off before April. My WAG to silver and gold prices? Silver to $40 and gold to $1450 by the end of March.
Feel free to post your WAG's for whatever random lottery golden ticket you own and well all check back on April 1.
Time to go to the bar.
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