The market was strong for most of the day.  I used this opportunity to sell AGQ and TYH at a profit.  Most of the buying seems to have been short covering and as yet nothing has changed in Europe so we could see another down draft.  I bought FAZ which moved well in my favor.  I will cover that position if the market opens higher and let it run  for a little while if we open on the weak side.

TYH behaved well today.  Silver and Gold were hammered by the bankers in the off hours when few people are trading.  Later in the day they recovered most of their losses.  I am going to take profits in TYH tomorrow morning in what I anticipate will be a higher opening as Europe still has not solved their problems - so.. we may well see another test of the lows.  It would be good if we could see a final capitulation of the longs as this would represent a good buying opportunity.  I still have a nominal position in AGQ which is offside and TYH has done well over the last day or so.  A blogger I respect is looking to short the Japanese Yen but I am still not sure of that trade as there was a significant move of speculators from being short the Dollar to now being long the Dollar.  I am looking to take back long positions in Gold and Silver as well as stocks.

http://www.zerohedge.com/news/goldsilver-plunge-fest   A few days ago I posted how the Fed and bullion banks would try to flush the hedge funds out of their gold and silver holdings.  That appears to be what is taking place today.  The gold silver ratio is now over 53:1 This is a huge move and indicates that China and other central banks are taking this opportunity to buy gold from the hedge funds.  I still think the next big move up will come from stocks but there

Just a few weeks ago the Gold Silver ration was around 44.  Today the ratio is 51.  At these levels silver is starting to be a better buy than gold.  I have bought some AGQ at these levels. TYH is up nicely on the day if it extends the move and silver stays down at these levels I may sell a part of the TYH position and put it into AGQ but

I bought back and added to TYH rather than AGQ as a recovery (if it comes) will be faster in Stocks than Silver.  These markets are not for widows and orphans.  What I said yesterday still stands.. China has a limited number of places it can place its money and stocks, gold and silver are among them.  I also expect the PPT (Plunge Protection Team) to enter the market soon to help President Obama get re-elected.

For good or bad I have reinstated my long TYH position.

Should have staid short silver and long the dollar last week but when the expected moves did not come I reversed position.  That is the way it goes .. all the gains of the previous weeks washed out in one night.

What started as a nearly four percent gain in my postion ended the day with a two percent loss as there was heavy liquidation into the close.  This doesn't change my view that this is a buying opportunity and I will hold it until I get stopped out or I am right.

The initial market reaction is mixed with a sharp drop in stocks.  TYH has been well up all day and just dropped to only a little up.  AGQ seems to have risen more on the news.  I think when the stock market has adjusted to this it will rally sharply.  I tend to be a very short term trader.  If I was a long term trader Ishould load up on Blue Chip stocks because that is what the Chinese may start to buy hand over fist.  They have to have dollars and the Feds move ensures that there is no "interest" income .. so they will look for quality stocks with a dividend.  As a short term trader I will stay with AGQ and TYH for now.

Over the last few days we have seen large corporations move money out of European Banks and deposit the funds directly with the ECB. Seimens as an example moved 6 Billion Euros.  The market has taken this as a bad thing but I look at it the other way - there was enough liquidity for them to move the money.  We are seeing the Euro inprove against the Dollar and I think these are early signs that they have the crisis under control for now.  It wouldn't surprise me if we actually see a weak Dollar for a while.