Seeing silver rebound this morning makes it a little frustrating to have been stopped out yesterday – but I know it’s all part of the game we play. Never should the thought of more upside make you violate your trading plan- thats gambling not trading – especially given that the price action in silver was murderous yesterday afternoon. All in all I am still unsure if we are going up or if this is a rebound to yesterday afternoon’s sharp selloff.
I still believe the trend in the PM’s is up – dollar weakness, flight to safety and middle eastern dictators/oligarchs looking to stash their loot all support this thesis. I will take this opportunity to look for points to load up on longer out calls on some of my favorite names: SLW, EXK, ABX and SLV. I want to nibble today – I am uncomfortable starting a large new position on friday, but on a balance of probabilities, any news that occurs (another middle east revolution perhaps or QE3 announcement) should be beneficial or at least ambivalent for the PMs.
Going with this theme, I just added some SLW June 35 calls at 7.15 – its a half position but I feel much more comfortable because I have rolled my calls forward.
Finally, here is the graph of HUI from yesterday I have been working daily to help me gauge the direction of the miners, which seems to be confirming my theory this morning.