June 2009


Silver Wheaton has had a pretty strong pullback right into support over the last few days. I was fortunate enough to sell some of my position, and write calls against my position above $10.50. I have been an advocate of the stock in the past, riding it from its lows to the recent highs. I still continue to like this company. I like the long term fundamentals of precious metals, and in particular silver more than gold.

Today spot gold traded below $920, which has been decent support over the last week, but when GLD tried to break through 90 on the downside, it quickly reversed and took out the morning highs. I really like SLW in front of this $7.50 level. Gold is still in a bull market, and the longer we can consolidate above $900, the more explosive the move will be to the upside.

I’m playing this two ways:  Buying the stock outright, and selling put spreads.  Most recently I sold $10 September puts and bought $7.50 puts, and expect to make the spread in them in the coming months.

SLW

The SPY was finally a little weaker this week, as the range moved down slightly, starting the week at 94, moving down to 91, and closing at 92. This coming week, the levels I will look at are 93 as resistance, and 90 as support.

Some of this week’s links:

An interesting look at the possible moves the Fed will make in the upcoming months. Really good read, this could give you some insight on possible scenarios that could play out.

A clip from 1994 regarding the Internet. It’s funny to hear how it was regarded just 15 years ago. We’ve come a long way in a pretty short period of time.

An interesting article on Bill Gross in the NY Times. I’ve got to side with Barry Ritholtz on this one. I think Bill Gross has had an agenda for too long, and every time he talks you have to wonder what his real motive is.

Goldman Sachs is on track for record bonuses this year. Probably one of the most ridiculous things I’ve read in a while. Nine months ago the company effectively bailed out Goldman by bailing out AIG, and now the company is paying record bonuses? This is absurd.

A little alphabet soup accounting. The Fed is taking on an awful lot of obligations.