Nautilus has put out some good thoughts below on the silver space. Kind of puts a damper on the sector for a while, but I think he is onto something. It’s actually how I have been playing it. I follow all the charts and commentary that I can track and I try to absorb what they say. I find the psychology element is very useful. Case in point, m model I am following calls for silver to lead the way here and that it likely has further to decline before resuming it’s uptrend.

I noted mid-week when silver had a bump up that my twitter feed got pretty bullish. When silver pumpers start thumping their chest of how many silver stocks they bought when prices popped up to the upper BB, that was a pretty good signal that prices had run to their limit for now. Good entry points don’t look like this. When you buy right more often than not you are under a lot of pressure and you are sweating it. You’re NOT banging away on twitter bragging to your cyber friends about how many silver stocks you just bought. Well that is just what I was seeing on September 1st. I took it as a sign that it was peaking and IAW my model it was time to get short. See chart below:

So much of what I see here and on twitter etc are simply lines on charts. Trend lines etc. People can’t get beyond the line on a chart is everything. Sure its valuable, but its not everything. After the top we saw on August 7th we entered into a secondary reaction. These things typically take 6-10 weeks or so. It takes time. Let it run its course. The silver market got so crazy on a psychology basis in late July that one should figure that it’s going to take some serious downside action to properly punish the last minute crazies. For me personally, I am watching for the SLV to tag the 50 EMA and RSI to approach 30 before this pullback has run its course. In the greater scheme that’s not really that much, but the stocks would likely get pummeled.

I have been shorting the SILJ and GDXJ by selling naked in the money calls. Since I am no longer gainfully employed and I can’t go live in Rome yet I am stuck in from of my computer trading the tick by tick. Let’s just say I have been following the right model (so far, it could end tomorrow).

Tech Wreck

This move down has been glorious. It’s been a Robinhood gift. The crazed robin hood element chased these stocks all over going into the stock split. We had that huge day in AAPL and TSLA on the day of the split. I took a quick loss trying to short it (too early), but I exited the trade and went back into my bunker to lick my wounds. But the next day AAPL opened with a spike high and immediately reversed. I couldn’t resist and shorted full on from 135. I pressed it all the way down to 115 and covered. It turned out to be my best trade of the year due to the super sized position.

But here is the thing. On my 15 min chart I will post below I think we still have further to go to the downside. If it sets up when trading resumes I may try one last whack at it. I know this is bubble dynamics in action and I could even see another run to new highs, but before that I would like to see one wash out run to the downside. The new green robinhooders could use a proper thrashing before any resumed run up begins.