In NFTRH 241 we noted that silver was at an important support level. The equivalent of this support is being broken today on the SLV ETF:
Despite the bullish precious metals CoT data, and despite heretofore over bearish sentiment data (which had gotten a bit frisky recently as we also noted in #241) the cold hard fact is that silver is losing a support level. This was the spanner in the works when it was noted in #241. It will now need to double bottom at or around the May low to avoid a date with our silver target in the 17-20 range.
So I am going to stay at high cash levels until things clear (80% as I write). I hold several gold stocks that I consider ‘quality’. I guess at this point it is a matter of just taking some more hits with a ‘is that all you got?’ attitude until/unless the HUI and individual charts break down. That works for me personally. We should all know our individual risk tolerances as events unfold.
Separately, the Model portfolio added back the SGF Singapore fund along with GOOG, AAPL and INTC and global bond fund GIM (all former model portfolio members). This is probably for a trade only, but could go for longer considering my willingness to establish bear positions against the market as needed. I just wanted to note these so they are just not there on Sunday, with no explanation. The equities were bought due to the recent knock down (SGF, GOOG), chart pattern (AAPL) and fundamentals (INTC). The GIM global bond fund was bought back because it was hammered down to where its premium to net asset value was all but eliminated.
I want to be open to being a builder and not just a doom and gloomer considering the ‘carry trade’ scenario, but this needs more work and fleshing out. If it is a valid macro play, things do not stand to get very bearish, pending a potential summer correction.
More to come in #242.