Remember the good old days. When markets reverse and trend lower for a day. When Vix actually goes up when market feels somewhat “crap”. Today is one of those days. Market has been going up on all news incl bad news. Today market reversed, sucked in some of the last bears, and drifted lower throughout the day, despite the Bin Laden news. Even Vix is picking up during late afternoon trading. Hopefully we won’t get a too fast move down, so we make sure the last bears have given up, and all joined the just go long trade.
Silver ETF is collapsing today. The huge vol, accompanied with the volume surge lately, is telling us a big short term top could be forming. The parabolic trend is getting exhausted, and will bring Silver to the first support around 42 Usd. Let’s see if that level holds. Many “new” investors are very lost in the Silver trade that was supposed to only go up….
Some potentially really ugly candles being formed today. Both SPX and NDX are making spinning tops on a day chart. If we close here or lower, the short term top is in.
“The killing of al Qaeda leader Osama bin Laden represents possibly the biggest clandestine operations success for the United States since the capture of Khalid Sheikh Mohammed in 2003. The confirmation of his death is an emotional victory for the United States and could have wider effects on the geopolitics of the region, but bin Laden’s death is irrelevant for al Qaeda and the wider jihadist movement from an operational perspective.
Americans continued to celebrate the killing of al Qaeda leader Osama bin Laden well into May 2 outside the White House, near the World Trade Center site in New York and elsewhere. The operation that led to bin Laden’s death at a compound deep in Pakistan is among the most significant operational successes for U.S. intelligence in the past decade. While it is surely an emotional victory for the United States and one that could have consequences both for the U.S. role in Afghanistan and for relations with Pakistan, bin Laden’s elimination will have very little effect on al Qaeda as a whole and the wider jihadist movement.” (Stratfor)
BGC’s Chief Market Strategist and Head of Derivatives Research, Michael Purve, says Take Profits in Silver. Purve has been spot on recommending going long Silver at 18, is now saying take profits. That’s a nice ride….
Price Target Reached: Silver reached our $45/oz price target on April 20th while our gold/silver ratio hit our target of 32 (Chart 1). Silver trading has become frenzied of late, though silver has failed twice to penetrate the $50/oz level – a key level established by the Hunt Brothers in 1980. While we believe the fundamental story is intact, we recommend taking profits here. The fact that silver is not trading well on a sustained basis after the FOMC last Tuesday confirms our view. We expect there will be several good reentry points in the near term and the broader fundamental picture for silver is very encouraging. We also note that this morning’s sell off has found support at its 21 DMA – a key level for the bull trends since we began recommending silver in late August 2010.
Technical thresholds: Silver has failed to decisively push through the famous $50/oz level it reached in 1980 twice (Chart 2) while the decline in the gold/silver ratio is finding support at 32 – a key level established in 1983 (Chart 3). These two thresholds will continue to conspire to be key resistance levels in the near term. Chart 4 shows the evolution of silver price as a function of the gold price and the g/s ratio from our recommendations.
The young IT consultant was Tweeting the Bin Laden event, without knowing what was going on. Too bad he didn’t log on to his trading account and bought some cheap SPX futures…
Overnight news took futures higher, but we are turning very weak. Did people buy into this unintentionally? Below some charts of SPX and NDX. Take a close look of how we topped out in 2007. Click the first and second chart to compare the top in 2007 to todays reversal candle.