I admit it. I suck at trading.
I can read charts but I lack the discipline to follow through on my analysis of those charts. I bought in at 37 way back when and watched silver rally to 26 and then bounce between 26 and 29 for months. I got out with a loss inside that range and wrote about a potential rally if and when the words quantitative easing became the rumour of the day. In late August and early September of 2012 I watched the rally that would have got me back into a winning trade.
What moved silver paper above 29 ?
In Europe it was news about the buying of bonds. In America it was rumours of a new round of QE which was taken even more seriously when a new jobs report came out way short of expected at the end of the first week of September.
I suck at trading.
However....
On the matter of the ECB ( European Central Bank ) providing low interest loans to EU banks this video called The Great Euro Crash - 2012, starting at 42 minutes, might explain why these loans ( type of quantitative easing ) do more harm than good to any European economic recovery.
At 42 minutes Draghi explains the LTRO ( Long Term Recovery ) concept where nearly a trillion Euros are loosened into the European financial system. Banks can now borrow from the ECB at 1 percent. At 43 minutes another speaker explains ( makes an opinion ) how the money borrowed fails as a recovery tool since the banks mostly turn around and buy newly issued European bonds with the loans.
Narrator : Little of the trillion Euros has found its way into the real economy. It has gone somewhere else.
David McWilliams : LTRO's are cash for trash ???....so that the European banks are not forced to pay for their own reckless decisions. ECB is giving them cash at 1 percent for 3 years. With that cash they are investing in government bonds. So bust banks are propping up bust governments with free money on dodgy collateral and calling it SUCCESS. Is the money trickling out into the economy ? No. On the contrary, the money is being stuck on the balance sheet of the banks.
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The silver breakout of the 26 29 range is happening while the Euro is rallying up from bottoms that saw pairs like the eurusd test 120 after busting through the 135 level. The European big money managers at the ECB did warn that they would not let the Euro fail when eurusd hit 120. That should have been a warning of a wave up for the pair and any good trader would have likely picked up on that tell. The eurusd closed the wk of Sept 7 2012 on a high note just above 128 and it looks to want to keep moving up at least to test the 130 mark or even the 133. But trading is never that easy and it is just as likely that next week the Euro retracement wave stops abruptly and goes back towards 120.
Meanwhile the silver xagusd price ended the Sept 7 2012 wk above 33 which is a test of the April 2012 level seen on the chart above. A breakout above 34 definitely will continue to that 37 test which happened way back in early 2012.
LOL...... I could easily stop this rally...all I would need to do is take a trade long the xagusd.....instantly the markets would reverse and I would stand my ground until..........kidding of course....i suck at trading.
