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Sunday, July 17, 2011

$SPX - Volatile Week

This upcoming week could be quite volatile with high profile budget news anticipated.  I don't think that the bottom is in quite yet, but it does appear to be close to bottoming.  1303 is an important Red trendline.  I also see multiple supports in the 1295 area.  It is difficult to be precise with smaller movements, and it is possible that the market does not make it below 1300 SPX.

I see Tuesday July 19th being important, and the market may decline on the budget/debt ceiling news initially with a rise in the dollar.  However, I see a strong push higher likely into the end of the week with an important time cycle due on July 22nd.        

15min Chart

125 comments:

  1. Ouch , I'm in short silver since Friday 38's and it really hurting today :-)...

    Well its near 40$ seems like a good "mark" for a sharp reversal if so... if it breaks above this level with confidence I'm going to take my loss on silver shorts. But lets see what happends next 24 hours.

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  2. Silver would have been an excellent trade on the long side. It can keep doing thus. Looks line a moce to $44 is in order at this point

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  3. Excuse the typos, i am not good with the iphone keypad!

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  4. Anybody here covered their silver shorts?

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  5. Gold and silver rise despite a rising dollar. If the dollar is trashed by any hint of no enough spending cut, they will jump even higher.

    Gold and silver will pullback big, but it seems it will pullback only after a finale pop.

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  6. SC , you are waiting for point 9 tomorrow to cover silver short? PLZ keep update. Thanks

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  7. Yes TC, holding short and waiting for point 9.

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  8. Hi SC hope you had a good weekend. Are you still keen on loading up with longs around the 1303 area? It does look like a bottom is close at hand here. Seems to be good support around the 1307-1310 area as well. Let's see how the morning unfolds.

    I agree with your analysis on the PM, I think a correction is imminent.

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  9. Hi Muzz, yes had a great weekend, thanks. It does look like we could see a test of 1303 area, and a pop to around 1325 next.

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  10. Silver at 40.22, this bull doesnt seem to have anything stopping it, even with Mr.Geithner comment this morning on "Default 'Off the Table,' Debt Deal Will Be Struck"

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  11. Just bought a bunch Muzz.

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  12. Same here SC, I think this is a great spot to get long.

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  13. We hit the red trendline above. So let's see now.

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  14. I bought a good size position on long side this morning SPX 1302 area - think we will rally from here over next weeks..... all imo

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  15. silver already way above your target for point 10. When do you draw a line and accept that your analysis is not matching up with reality?

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  16. silver and gold breakin' my balls

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  17. me too, worst trade of my life. Largest loser i have ever had. What I am upset about is that I have just blindly followed while all of my signals have pointed towards higher prices. SC has just been so confident that his posts are hard to ignore, even while losing tons of money for 2 weeks. I have to close this out today, it has gotten absolutely ridiculous for me.

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  18. Silver now 40.60.. this is painful.

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  19. they will likely go parabolic intraday for 1 or 2 days before they even start to move down. Like I said, probably $44, then a correction.

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  20. SC

    Great analysis work.

    The PM's require patience during topping process.

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  21. Blake, what do you call the last 4 days?

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  22. a move from $34 to 40.6 is quite a topping process....some might call it a rally

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  23. I like a move to point 9 next for SLV per the symmetry. What I am thinking Blake is that because Silver is so high already, that means point 10 only pennies above current levels.

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  24. 40.36 silver price. Me think this price will continue to rise until a news post of debt ceiling has been raise. This is such a patient test breaker. My prediction if this rise any further, the decline will be hard to ignore. Cause this entire rise is base on this debt ceiling and nothing else, it even basically over shadow europe debt crisis.

    A little Hint, always hedge your position in situation like this, knowing the boys at white house has started to play poker.

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  25. Made a chart on my blog www.sqwiitrader.blogspot.com on SPX

    http://3.bp.blogspot.com/-3YgMXHHjIBA/TiRKwg9Gf5I/AAAAAAAABm0/GV9lyVEu9A4/s1600/7-1.JPG

    My target met 1295-1300 area , was my target for this - loaded up with TNA today - a bit underwater now but have a size swing position

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  26. I'm most worried about my silver short position I must say... I have a big resistance area around here.... so hope it wont run much higher , went short silver on Friday - got in too early I see... but if it starts to drop it could go fast too...

    SC do you add to your short position or still holding ?

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  27. Jolly, silver has been going up fast, but the rate of price climb has not yet accelerated. It usually does before it corrects. It first squeezes shorts like us out. I have been short since 35...kind of funny at this point except for the money that I have lost. There is nothing funny about that.

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  28. i want to close this trade so bad, but just want some kind of a pullback. Even 30 cents at this point!

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  29. Added to my SPY September calls this morning. Stocks are set to rally big now through the end of July. Looks very bullish, and I can see 1370 being tested before the market turns down again. Good luck all.

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  30. Clive Maund says SUPER BULL MARKET for Silver.
    http://www.clivemaund.com/article.php?art_id=67
    James Turk also said we'd have a good summer. Blake you have my sympathies. I was shorting too and lost a LOT of money. Devastating. Got severely depressed on Friday, got Valiums from my doctor - but only took two and quickly decided I needed to change my attitude. Cried out all the pain in sobbing buckets and now, trying not to look back. There's still lots to be made in the bull market for this summer and fall. Hang in there and Think positive!

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  31. haha, thanks Dakini. Certainly not the first time I have been through something similar to this, but just made mistakes I have not made in years and swore I would never make then again. Funny thing is I have an automated system for trading silver and it has been long this whole time, however I have not listened at all to my system that I spent so much time developing. I know what I need to do, I need to get out of this screwed trade and clear my mind, but the loss is hard to take. There has not been a single decent pullback to conduct any business. What worries me is that this type of price action in silver, where there are no pullbacks, typically results in a final parabolic spike intraday, and usually during the night so that you can wake up in ruins if you are short.

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  32. Blake I was short at 35... kept building every $1, but got too much this morning and cut back half. Still holding out for the big drop..

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  33. Yes Sqwii heavily short Silver, and looking forward to this week, and summer.

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  34. Once again I strongly recommend you don't use preconcived notions to trade metals, rather focus on sentiment and classical mean reversion techniques.

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  35. I know what you mean Blake - Have been reading your posts and I REALLY sympathized with you and sorry for your loss, as I am for mine. In my case, I REALLY wish I'd listened to James Turk who said the summer would rock (just his timing was off). I believed (as many did) that the market was going to go down to low 30's.
    Well onward -- Most men I know have difficulty crying, but I have found that sobbing like crazy - shaking and blubbering and all helps to release all the bad chemicals. Seemed to help me release a lot of the the pain and grief.
    I thank SC for his efforts and believe he's correct about how cyclical markets work. Traditionally July is the down month for silver. But my feeling (and I don't know much yet) is that the market fundamentals are trumping the technicals. There may well be a pullback once debt ceiling deal is made, but how how far up the silver will go until then - who knows? Market is overbought right now, but I still bought in a little today. I'm just glad I got something still to play with. I am new to all this (only in the market since last March, so I also suffered the May smackdown.)
    Learning from reading many posts on Turd's site - tfmetalsreport.com. Thanks for everyone's good faith efforts. And good luck to all.

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  36. I also recommend you stay far, far away from the "gold is money" crowd.

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  37. SC it's taken it's good old time down at these levels the SPX. I expected it to start moving up by now. I think it just touched 1296, what are your thoughts on the action?

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  38. Yesterday, I was debating whether it would stop at 1303 or 1295 area on this decline today.

    Did see 1296 so that means this should be the low for SPX, with a run to 1325 next, and with the higher low on the following dip.

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  39. Financials have been firmer for the last hour as well. Very bullish for SPX now.

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  40. Agree SC on your short term target 1325 next or so - but I see we could rally into this month end got the next fib cycle end of month....

    So possible we see 1360-1370 and if not ... 1345 again

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  41. I agree SC I think the 1296 area held as support of this low point. As you said in the SP analysis there is multiple support around 1295. I think sometimes I watch the screen for too long and become impatient with the markets, also it is after 2am here so I need to make a nice strong expresso to wake up a little :) Must let things play out in good time and I am confident that a rally up to 1225 - 1230 area is on the cards.

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  42. 1325 or so, dip, and then 1347 is the end SPX target for this run.

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  43. hoping silver drops from here. Last weeks action made me gun shy. I think I will wait on SPX until the debt ceiling is raised.

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  44. Looking for a low around 7/25 at 1280ish.

    Don't know how that might fit into your work.

    Thanks.

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  45. ckorey,

    I am anticipating a sharp rally into the end of the week so I see July 22 or so as a high near 1347. Your 1280 level (or a little lower) is what I am looking for on the next decline into around August 10-11.

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  46. It doesnt look like Silver is moving pass the 40.60ish so far today. Two more hour of trading.

    Lix, I am waiting on the debt ceiling is raise before looking into SPX as well just to be on the low risk side.

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  47. Thanks SC.

    Will be looking for a VIX sell / Stock buy signal with a vix poke and close inside BB.

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  48. Any one read the article from CNBC:
    Obama: 'We're Making Progress' on Debt Compromise

    interesting read for what is ahead this week.

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  49. Just read this from zerohedge.

    On Google trends the #1 search is silver prices. lol.

    I dont know if I should be more scared or is the shoeshine boy now interested and buying silver.

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  50. FYI - Hong Kong exchange to start trading silver this Friday:
    http://af.reuters.com/article/metalsNews/idAFL3E7II0W920110718

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  51. Mr Warren Buffett thinks the debt limit is a waste of Congress time, same as Moody's. Interesting...

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  52. another strong finish for gold

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  53. Blake, you sell all your short yet?

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  54. no, I am still short, but i don't know why at this point. I guess i can wait till the morning, but that is really it. It is extremely overbought here, just feels plain stupid closing out with it this overbought. I also fear i am just getting strung along though and will end up selling at worse levels.

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  55. a lot of short is under water right now I am sure. what you think it will happen if silver drop to the level when the shorter are able break even? hehe.

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  56. i closed out...maybe i covered at the top, but this is an absolutely pathetic trade

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  57. absolute nose bleed with silver right now. hope tomoorow is the day :)

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  58. if it is going to come down, my system will go short on it, I am not going to trade against it again.

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  59. silver is such hot topic these days, for those who are interested, please welcome to visit my blog for all the gossip about this hot commodities, just started the blog, I love to hear your thought and ideas going forward.

    http://investmentgossip.blogspot.com/2011/07/silver-market.html

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  60. Silver will fall hard soon. Just need patience. This is the market's way of getting everyone back into the parabolic trade of the year. If you can't handle the volatility, you shouldn't be in it in the first place.

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  61. Other than penny stocks, silver is the most volatile trading vehicle out there... at least in the current era. You have to balance that with your own risk tolerance.

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  62. Chris,
    Care to throw your hat in and tell us when the price of silver will start to drop? :)

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  63. I predict the price of silver if it doesnt hit $41 ish, it will drop back down to $37 ish. If it rise above $41, it will continue it rise to $43 ish.

    visit http://investmentgossip.blogspot.com/2011/07/silver-market.html
    for some after hour chit-chat

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  64. Based on rising sentiment #'s and Fibonacci retracement levels from the initial plunge, my best estimate would be silver at $43.50 ish area, give or take as an intermediate top. Once it does start to turn, it will be an incredibly steep sell-off, similar to the sell-off from the 52-week high.

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  65. This comment has been removed by the author.

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  66. Chris

    I cant wait till it hit that 43 ish target of yours, I can sell some of my hedge for profit and use that profit to short the "silver snake" (SC famous name for silver)



    visit http://investmentgossip.blogspot.com/2011/07/silver-market.html
    for some after hour chit-chat

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  67. Well it's very possible we could top out at 50% Fib which would be closer to $41.76 ish give or take on Silver, which isn't too far away. I was estimating higher just based on momentum and timing but ya never know.

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  68. That is alright, I can sell some of my hedge at $41 as well. All is good.


    visit http://investmentgossip.blogspot.com/2011/07/silver-market.html
    for some after hour chit-chat

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  69. This is my first post here as i have followed the blog for a short while. I must say I am perplexed by the way the Silver short has been approached. It is perfectly okay to be wrong so to stick to a position that is clearly losing is pure and simple wrong. Granted, I dont quite understand the style of trading that this blog advocates but especially when it involves silver, allowing a market to move so far away is not my idea of sound trading.

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  70. PK, the problem is that everyone has their own risk tolerance. Everyone has to own their own strategy for exiting losing positions. Some people may look at a current loss in short silver position and just decide to add to their shorts over time. Others may just bail entirely. It's all up to the individual as to how to manage their risk.

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  71. PK: There is no doubt that markets move in cycles and patterns over a variety of time frames ranging from a day, a week and several years and decades.

    SC, Sqwii, Daneric, Pebblewriter and many other fine analysts have made great calls recently in what continues to be a tricky market full of surprises.

    The thing they all have in common is that they are sometimes early with their calls. That's very useful in a way because you can take time to get into your positions. Act immediately and you may be in the red for a while before the market comes back to you.

    I am short gold and long SPY right now. Both positions are in the red right now, but I can handle it. As Chris rightly says, it depends on your risk tolerance as to how comfortable you are at any given time.

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  72. SC....What are your thoughts now on Silver?

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  73. Tomorrow is the day I have been eyeing as important, and could see SLV plummet to point 9 $35.70 area within a day or so.

    Ultimately my target for SLV is $27 Aug 10-11.

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  74. SC...how high do u see silver going, before it crashes?

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  75. Silver already crashed in May, and is still finishing it's bottoming process from that crash imo. Now, I see Silver putting in a capitulation bottom similar to the Feb/March 2009 SPX low.

    Silver may already be on the way down to point 9. I see the upside being practically nothing, and a big summer play on the short side.

    Gold actually is the one that technically crashes next imo.

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  76. With bank index not participating. I don't see how the Dow and SP500 can rally.

    BKX took out the last low around 8 jun and 24 Jun.

    http://www.google.com/finance?client=ob&q=INDEXDJX:BKX

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  77. Hi SC, still wait for point 9 today? Plz keep update
    what you see. Thanks

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  78. I did not like the double bounce at 40.. silver is still holding high..

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  79. Hi SC, futures look strong this morning on S&P, was a great call yesterday and in the previous days analysis on S&P. It held that 1295/1300 well as you indicated, now we are hopefully going to 1325 area. I am happy to be long at 1303 for this pop up. Will you be covering some longs at that point(1325) or do you see only a minor dip before resuming and heading up to 1345/1350 area?

    Thanks again for your fantastic work :)

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  80. Thanks Muzz. I like 1325 area, and then a dip to 1303-05, up to 1347 from there fast(almost straight up).

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  81. What is interesting about Silver is that it has been trading inversely correlated with the S&P lately. It hasn't been trading as a commodity but rather a fear asset.

    If that continues then that means when SPX hits near my 1347 target, Silver hits point 9 SLV $35.70. The time target is the 22nd +/- 1 day.

    I'll do updates later today showing this.

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  82. SC, that would be one of the best calls I've seen if that materializes. Let's see what the market gives us.

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  83. doesn't look like silver will plunge today

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  84. I dont see how silver can plunge today either, maybe tomorrow. It starting to crack though. Currently in the negative price zone. All news is focus on Rupert Murdoch, lol.

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  85. I think I have the dynamics of the Silver timing figured out now along with the inverse correlation. Silver weakens today somewhat, and the plunge bottoms around the 21st or 22nd.

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  86. I think crude is holding it up....

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  87. Financials still leading up intraday, SPX more upside to 1325 area next imo.

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  88. crude gain cause of strong housing data and strong economic US data (sometime I wonder who write these CNBC article, US is in a debt crisis right now and they dare to say strong US economic data) Interesting. How can oil be up $2 base on such crappy market.

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  89. InvestBB, its dropped $1 off its high already....

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  90. however SLV is still holding...

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  91. silver is still on a hold kind of position, my guess is it wont move much till there are any news on debt ceiling shows up. Still poker face right now.

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  92. finally some good movement for the people who shorted silver including myself... let us see how far it will go

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  93. fivir

    amen to that.

    but it may just be a small crack. hopefully bigger crack later on or early tomorrow.

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  94. Looks like a deal is here boys from cnbc:
    Senate Group Unveils Deal On Major Deficit Plan

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  95. Spot on SC, I took some profit on my longs at 1325. Great work SC.

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  96. man, i need a flood; still red.

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  97. Can't even believe it. I bought some GLD puts and not 15 minutes later, it comes crashing down. Loving this.

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  98. Bob, A men.

    Would love a earthquake or planet explode anytime now. lol

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  99. oh InvestBB.. the chart looks a lot nicer now... looking forward to a bigger drop to start realizing some profits...

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  100. i need a hurricane, SC plz keep up date when you see point 9 reach.

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  101. oh man this is too much, off topic, anyone saw Rupert Murdoch’s wife? LOL the "Tiger wife". I need someone like that to slap the tea party some sense to get the deal done faster LOL

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  102. SC,
    cover shorts or wait for better bottom on 21st or 22nd.

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  103. predict this $1 dollar drop in silver price right now will reflect more significant drop in SLV tomorrow. Just cause there is like 1 more hour of trading. Thinking the after hour silver will plunge.

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  104. guys, be patient, I'm still red. even added to shorts when it broke through 40.
    This has been climbing for over a week, its only been dropping for an hour!

    Hopefully the Asians will take it down further and the Brits tomorrow.

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  105. Nice day, flat now on S&P. My cycle shows a decline to 1305-1307 or so next. Could apple be a disaster or something else? A glitch with this deal overnight.

    Financials are giving some warning signals today now. I'm playing it safe for SPX.

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  106. the sad thing is, we've only just pulled back from yesterdays rise!

    we're at 39.30 which is where it closed on Friday!

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  107. it takes time for ppl to digest the news. especially those that dont have internet access during work hour...

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  108. I am liking the action on Silver, letting it run for now.

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  109. SC nice call on s&p. I just went flat.

    Wow silver really taking it. Hope to see a few more days of this kind of action.

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  110. what worry me is SC's point 10. when that would happen? cause between 9 and 10, looks like short amount of time.

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  111. SC. As you mentioned, SLV runs inversely with S&P. Since S&P top at your chart at today's high around 1328. If it decline to 1295 tomorrow, will that SLV go higher before it decline again?

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  112. bounced off 38.60...back into 39's again.

    Maybe just shorts covering?

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  113. SC, do you think there still point 9 to 10? or we already have 10 when silver almost at 41?

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  114. It's tricky to say Roger. In any case 1295 was already hit, and so a retracement could make it to 1303-1307, but I don't see lower. The problem is that I can't say for certain if that retracement happens tomorrow.

    I do see near 1347 in a few days regardless. I'm playing it safe for SPX (though could regret that if it keeps running).

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  115. I think so Choppy, but let's see how things shape up next.

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  116. SC.. so are we still looking for 35.70 for point 9??

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  117. Thanks, SC. Is the reason for playing safe for SPX is because of debt ceiling news? Since it might come out any time. Anyway, are you still expecting a small retracement to around 1303-1307 somewhere highlighted on the chart before it rocks to 1347 or it's possible will just go direct to 1347? Though, it might hard to tell with the debt news playing around, I guess. Thanks the good call on SPX.

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  118. My best take from the cycles is that SPX could see weakness and decline to 1307 next. However, I am not short SPX, and prefer to lean on the long side since I see a powerful rally likely brewing.

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