"Well you were certainly right about the commodities being overextended!

"I managed to short silver on the very day it turned, at 48.2, having been forewarned by you to watch the charts even on Easter Monday. But unfortunately I didn't have the nerve to sit out the subsequent gyrations, otherwise I would have been quite rich by now. In general it seems that when playing a bursting bubble on the downside, one should always wait for the high to be retested, or nearly so, before going in, which in my haste I forgot.

"Another question.

"Having been stopped out of nearly everything, like many others I have fallen for the temptation to put some of my idle cash into a high yield fund, just to get SOME yield. But I've noticed a few commentators warn that this market is also being flooded and may correct soon.

"Do you have any views on this subject?"

David Fuller's view That was a gutsy trade and justified by the price action. However, it is so difficult to hold one's nerve in those situations, when the market is churning wildly. A young colleague who sits nearby in the office had an identical experience with his silver short. And I did not hold on to my cotton short about six weeks ago, for similar reasons.

You make a good point about waiting for the high to be nearly tested but we are talking about high-stress trading, in which one can be technically right but so easily tactically wrong. And of course there is no guarantee that one will be technically right in the short term because one might have only identified the penultimate peak.

For the record, here are daily charts of silver's earlier accelerated peaks shown on semi-log scales: March 2004, April/May 2006 and March 2008.

If one wants to trade these because of the high-probability shakeout to follow, perhaps one should do so incrementally. In other words, a small initial short which is increased on subsequent churning rallies, which I agree will occur far more often than not. However, one needs to trade well within one's capital and be emotionally prepared for a rollercoaster ride before the anticipated downward break occurs.

Regarding your move into high yield, my policy for many decades has been to skim off profits from the trading account on a regular basis, for investment in less risky assets such as collectibles, equities or bonds. Therefore I agree with what you have done in principal, although I would have preferred a high-yielding equity fund. You did not specify but your subsequent qualification suggests to me that you have opted for bonds.