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September 13th, 2012
As spot gears up to break through $35 tonight, my bet is that a correction comes right around $36 spot. Accordingly, I'm looking to jump out of my calls in the upper $35's.
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2012-09-14 03:23 pm (UTC)
New bulls love to make it very hard to climb aboard. They sometimes run much further than makes sense. Back in '08, I think silver may (I haven't checked) have jumped about 70% before indulging in a meaningful correction. But then that rise was in the aftermath of a once in a lifetime (I hope) financial panic. No reason to expect a repeat of 70% (or whatever).
My feeling is that prices need to run high enough to make a painful correction possible without really putting anything on the charts that wouldn't look right (in the context of a rip roaring cyclical bull).
$36 or $37 spot silver certainly might be a point from which we could retrace to (say) $32, whether in a week or five weeks. God only knows many miners are already ahead enough that they could easily handle a significant retracement. To me, taking money off the table someplace around $36 makes sense if one isn't going to just hold till the cyclical denouement. That's just my opinion though, just a guess at a possible stopping point. Considering the fiscal insanity in Washington, and the Fed's seeming unconcern about inflation, and total commitment to supporting risk assets, the potential to immediately run higher (than makes sense to us) certainly exists.
2012-09-14 07:01 pm (UTC)
Just as clarification, my "guessing point" is only where I intend to get out of my call options. At this point in time, I'm not planning to sell any of my core PM position until beyond new all-time highs. At that point, I would look to sell in tranches, timing and amounts dependent on apparent strength of the continuing cyclical bull.
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