Hey Dominic. Typical that Silver punched you in the face after you posted this earlier today. ;) What a day for those of us heavily long the USD, but it sucks for the UK and anybody who lives here (including me), and today's price action in Sterling is very concerning. I have close Family who are not hedged up to their eyeballs in Dollars and Gold, and today's market moves have shades of 2008 and March 2020 about them. The VIX seems poised to enter what Keith McCullough of Hedgeye refers to as "The F*** Bucket of Volatility", and that's pretty much what happens to all equities in all sectors once VIX moves above 31. Speaking for myself, I'll be watching both the energy and precious metals sectors for signs of relative strength in the face of any further more disorderly market declines. The part of my portfolio I actively manage hit new 2022 highs today, and this would not have happened if I hadn't been so long the Dollar. Will be looking for opportunities to layout the gameplan for my next play when Jay Powell is effectually forced to pivot. Hope you got through today okay.
I know I keep blethering on about Hedgeye, but here's a little insight into how they think about volatility, with a bare outline of how to trade tactically around it:
Oh well Dominic, that's me hounded out of my Silver short position today. Glad I took half off the table last Monday! Was profitable, but nowhere near as much as it could have been if I'd traded around bigger moves on a shorter term basis
So hard trading with leverage. Who would have expected a 7.5% move in silver in one day. You never catch the highs and lows and if you try to you will lose money is my experience. A case for continually moving stops up ...
The problem with stops is if whatever you've bought gaps on you at market open, they dont really help...
On the whole though, using 3SSI was a good portfolio hedge for me over the last 3 months for the small crop of Gold miners I've continued to hold. Even with today's sledgehammering I was still around 7% in the green on the position. Reckon with my sales last week, I made somewhere between 30 - 45% on the trade (I am pretty sloppy with my trade record keeping when it's done in an ISA or SIPP). Could have been 70% though... :-D
Yeah, I find myself agreeing with Raoul Pal when he says that intervention may be closer than the current Fed tightening narrative implies, and these Dollar trades may only have another 2 - 4 weeks to run:
Raoul has been wrong about a lot this year, but his thinking is bigger picture and I suspect he'll have got more right than wrong by 2030. The Dollar Wrecking Ball is starting to do too much damage, and I think we're getting increasingly towards the point where it doesn't only keep damaging asset prices (a good thing for Gen Z and the Millennials), but spills out into the real economy (bad for all).
Gold/silver ratio at 95 did look extremely cheap over recent weeks. Trading around 85 this morning so still plenty of room left to get back to historic mean levels in the 60s. If it goes to zero as your post today inevitably implies, my plan is to corner the market 😀
Hey Dominic. Typical that Silver punched you in the face after you posted this earlier today. ;) What a day for those of us heavily long the USD, but it sucks for the UK and anybody who lives here (including me), and today's price action in Sterling is very concerning. I have close Family who are not hedged up to their eyeballs in Dollars and Gold, and today's market moves have shades of 2008 and March 2020 about them. The VIX seems poised to enter what Keith McCullough of Hedgeye refers to as "The F*** Bucket of Volatility", and that's pretty much what happens to all equities in all sectors once VIX moves above 31. Speaking for myself, I'll be watching both the energy and precious metals sectors for signs of relative strength in the face of any further more disorderly market declines. The part of my portfolio I actively manage hit new 2022 highs today, and this would not have happened if I hadn't been so long the Dollar. Will be looking for opportunities to layout the gameplan for my next play when Jay Powell is effectually forced to pivot. Hope you got through today okay.
Thanks Jimbo. Yes. Typical! US dollar getting ever closer to 120
I know I keep blethering on about Hedgeye, but here's a little insight into how they think about volatility, with a bare outline of how to trade tactically around it:
https://youtu.be/lgmEBOT5SiY
Will check
Oh well Dominic, that's me hounded out of my Silver short position today. Glad I took half off the table last Monday! Was profitable, but nowhere near as much as it could have been if I'd traded around bigger moves on a shorter term basis
So hard trading with leverage. Who would have expected a 7.5% move in silver in one day. You never catch the highs and lows and if you try to you will lose money is my experience. A case for continually moving stops up ...
Yeah, not me! :-D
The problem with stops is if whatever you've bought gaps on you at market open, they dont really help...
On the whole though, using 3SSI was a good portfolio hedge for me over the last 3 months for the small crop of Gold miners I've continued to hold. Even with today's sledgehammering I was still around 7% in the green on the position. Reckon with my sales last week, I made somewhere between 30 - 45% on the trade (I am pretty sloppy with my trade record keeping when it's done in an ISA or SIPP). Could have been 70% though... :-D
Yeah, I find myself agreeing with Raoul Pal when he says that intervention may be closer than the current Fed tightening narrative implies, and these Dollar trades may only have another 2 - 4 weeks to run:
https://youtu.be/VpRHiPlS4pI
Raoul has been wrong about a lot this year, but his thinking is bigger picture and I suspect he'll have got more right than wrong by 2030. The Dollar Wrecking Ball is starting to do too much damage, and I think we're getting increasingly towards the point where it doesn't only keep damaging asset prices (a good thing for Gen Z and the Millennials), but spills out into the real economy (bad for all).
Yes. Sounds about right
Gold/silver ratio at 95 did look extremely cheap over recent weeks. Trading around 85 this morning so still plenty of room left to get back to historic mean levels in the 60s. If it goes to zero as your post today inevitably implies, my plan is to corner the market 😀