Corporations Panic into Hedging their Dollars while Analysts Call Silver a Buy at $40

Silver is collapsing yet again today, down 6-7%, in the meantime, the dollar is stable or losing a bit of ground against the Euro. This post could have been titled "Silver extreme overbullishness meets USD extreme pessimism - part2" as a follow up to the post I wrote yesterday.

Indeed, silver has already dropped by more 20% in just 3 days, and yet analysts remain bullish, while the dollar has been despised and been scratching bottom, and sentiment is panicky with corporations now jumping on the bandwagon of USD sellers in order to hedge themselves, at the worst possible moment... This is almost certainly marking the bottom for the dollar.

Full disclosure:

  • As an update to my silver trade, my options were down 50% from when I bought them a few weeks ago, and during the past 3 days, have jumped 130%, so that I am actually now positive on those long dated, deep out of the money puts.
  • I have acquired at the money put options on EUR/USD and expect a sharp reversal, along with a risk-off trade across all asset classes.

Yahoo Breakout today:
Wolfgang Koester is on the front lines of corporate America's efforts to lessen our collapsing currency's impact on the bottom line. The CEO of FiREapps helps hedge currency risk for U.S.-domiciled heavyweights such as Nike (NKE) and Accenture (ACN), and he says demand for his services is rocketing as more companies become concerned about a weak greenback.
Let's just say plenty of organizations are looking to get rid of the currency headache by outsourcing it to guys like Koester.
A dollar rally seems wildly implausible in an environment of unprecedented stimulus programs. Of course, the reversal of well-established trends always seems unlikely. If past is prelude, and it generally is, ramping demand for dollar hedging suggests a bottom in the dollar may be at hand. The end of sharp moves always comes when no one expects it. [...] 

Yahoo Breakout, today:
Chris Verrone, technical analyst from research and analysis firm Strategas Research Partners, calls silver "recklessly high" at recent levels near $50 an ounce, but he says the recent drop is evidence of a base being built in the $40 to $45 area.
Verrone is firmly in the latter camp, and he suggests patiently adding money into a silver pullback, such as the one happening now, is an investor's best bet. 
In only a slightly less controversial investment position, Verrone is unwaveringly positive on gold, seeing a more conservative uptrend that could continue to $2,000 an ounce in a relatively uninterrupted manner. [...]

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