Nov

10

The Waverly Advisors morning note commented on yesterday's precious metals markets. Their observation is relevant to all markets at all times:

"In practical "trader's terms", it boils down to this: These markets are certainly overextended by any measure, and, as such, are vulnerable to corrections. Because of the potential for new feedback loops, these corrections may be larger, sharper, and more irrational than most market participants expect. In short, expect the unexpected and do not be caught off guard. Though yesterday's action could set off a larger pullback, we see nothing to challenge the integrity of the higher timeframe trend, and weakness in these markets is to be bought until further notice."

Mental note to self: Make sure that I am on the distribution list for the "further notice."

Anton Johnson writes: 

Consider further notice given: See CME silver margin increase.

Victor Niederhoffer comments: 

Further notice with bonds going through 30 year auction. Will they be able to pull rabbit out of the hat, especially considering recent failures. My goodness, the clients might have a loss.Let us hope that any announcements of a negative nature will be released before the auction so as not to upset the sensibilities as usual.

Anatoly Veltman asks: 

1. I never looked up Waverly– are they good?

2. Silver hit $29.34 Tuesday. It is back over $28 this minute. Please don't lose sight of history. November two years ago: $9. Watch out this week (comes from a fool with $1m in margin money leveraged 30:1 on the day Silver dropped from $11.25 to $7.50; and traded even lower next day!) 


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