Thursday, October 2, 2008

Not a Quiet Day! IFCN Wk 43 – Thu- Equity: $1,312.67

Wow! Not a day for the faint-hearted in the metals!

Today, it seemed to be hard to keep a good metal up. Yesterday, silver showed its typical strength and ran up to 12.96 before backing off somewhat by the end of the day.

Out of nowhere – it seemed – came massive selling, dropping the price more than $2.00 from yesterday's high, more than 15% of the metal's value within 27 hours. Gold fell in unison, but to a smaller extent.

For a long while the market hovered just above my stop at $11.00 for the extra 50 units (50 ounces) I picked up Tuesday at $12.00.

Eventually, the price slid to hit my stop, I lost the $50 risked and then had the opportunity to watch the silver market go down even further to test the area where I bought the first 100 ounces 2 weeks ago. I had raised my stop to breakeven – at 10.75. As of this moment, the low has been 10.79 on Oanda and I have not been stopped out yet.

If I was paranoid, I might believe that Silver traders are reading my mind, or at least this site to hit my stops. That's ridiculous of course, but the markets do go where bunches of orders are. Orders are the fuel for the market.

This sudden silver collapse is ironic, since the current financial boondoggle we find ourselves unwittingly paying for is – to date – the single largest contribution to inflation ever created. If the public was truly aware of the ramifications of the current conflagration, they would be buying “real” material instead of holding most of their paper assets which have had dismal showings over the last 5 years. But no, they and the asset managers of the world are in wrong investment vehicles because they prefer to be in the good graces of all the other managers and investors.

Even if they are in perpetual bad company.

Those who have not sold troubled stocks by now are (1) among those who bought way too high and the stocks in question are worth nothing, (2) they are afraid to sell now because either they would have a loss and don't have the foggiest where to put their capital into now, or (3) they would be taking substantially smaller profits than they could have had just 2 months ago and say they don't want to pay taxes on the insignificant sums. So they hold, waiting for an Easter bunny to make them well.

This sad group are in “hope” mode, the poorest substitute for action. Any action is better than hope. Actions which are not found to be optimum can be reversed.

In the recent words of Rudy Giuliani, (this is not a political plug) “Change is not a destination, just as Hope is not a strategy.” This statement applies to trading even more than politics.


I lowered the trailing stop on the remaining short Gbp/Usd trade to a point just above a significant high on the hourly bar chart. If the market continues to fall, great, more profit potential. If it decides to reverse, we will get out with a great profit.

Week's remaining FirstStrike trade:
  • Gbp/Usd: Short @ 1.8230, stop 1.7728. (Significant high stop- At least 502 pips)
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current trade equity is: $1,260.67
(50 units XAG bought @ $12.00 sold at $11.00 for $50.00 loss.)
Silver position equity: $52.00. (Current silver price: $11.27/ 100 oz.@ $10.75)
TOTAL Equity: $ 1,312.67

I've said before that the account would see some volatility. Doesn't mean I enjoy it.

I don't think we will get any OneNightStand trades, but the orders are all going in.

See you tomorrow.

Until then, I found a trivial, but interesting site that you might find interesting.

Belgium Doesn't Exist!

Joel Rensink

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Anonymous said...

As of this moment, the low has been 10.79 on Oanda and I have not been stopped out yet.

The lowest bid price on Oanda was 10.7425 and you should have been stopped out. (See the hourly Min/Max chart to verify this.)


The Archiphage said...

I got stopped out of my silver position at breakeven... and then got the chance to relearn the lesson about catching falling knives. I re-entered at $11.80 with a stop at $10.80, and we all know what happened then. I've been nibbling at it on the way back up... I don't think it's going to stay down here for long.
With regard to Belgium... funny that they picked that country in particular, because it may soon cease to exist. There is talk of Flanders seceding from Wallonia because Wallonia is just a tax drain on prosperous Flanders. I support this... I always support secession. I'd love to see the Earth covered in thousands of Monacos, Andorras, and San Marinos.

Joel said...

I normally don't respond to Anonymous posts, but--

Some were stopped out in that area and others were not. I wasn't.

That is one of the reasons why trading is not an exact science, there is a lot of fluidity involved.