Silver

[Strawboss]

The lazy days of summer...............

http://i1000.photobucket.com/albums/af126/Strawboss_2009/silver8910.jpg

[Strawboss]

My thoughts on silver currently...

http://i1000.photobucket.com/albums/af126/Strawboss_2009/silver81110.jpg

[Anakin]

Interesting chart from romans holiday at GEI.

Is the kiwi a "tell" on silver?

http://i703.photobucket.com/albums/ww33/ppentecost/silver-2.gif

[Strawboss]

An updated silver chart (daily).

http://i1000.photobucket.com/albums/af126/Strawboss_2009/silver81610.jpg

[jupitergold]

Boss,

Let me earn you an additional dollar on silver trading. I completely disagree with your iH&S pattern setup, but if you really believe in it, go long on my triangle breakout. This would give you an entry near the bottom of your "right shoulder" with a stop loss setting at $17.24 spot ($1.30 spot loss?). Going long at the dreaded $19.50 spot area can really hang a trader out to dry if the momentum fails ($2.50 spot loss).

http://i591.photobucket.com/albums/ss357/jupitergold1/silverdaily81810.jpg

Did I mention there's a gap down at $18.90 spot.

[Weatherman]

Today was a good day for the silver miners. All the issues I follow were up 2% or more on the day. I would like to think that is a bullish omen for the near term direction in silver.

[Strawboss]

Jup - you might be right. I dont think so - but, this is silver we are talking about, right?

Here is the link to this weeks report.

Pay particular attention to my comments on Silver Wheaton.

http://bullion-master.com/the-silver-mining_report-8-11-10.pdf

[Strawboss]

There is so much effort being exerted to keep the price of silver under the downtrend but that suppression effort is being thwarted by the forces (same ones suppressing silver) that must cover their previous shorts. They now have quite the dilemma. They need to cover millions and millions and millions of ounces of shorts, but, they also need to keep the price contained.

What a conundrum...

3305

[jupitergold]

Looking to buy more sub $18 silver again and silver bulls should watch their back if silver falls below $18.20spot within the next 24 hours. Swingin' may double top on the hourly with the 18.14 as the pivot.

[StateofJefferson]

Check out this report on silver from Hinde Capital

The Url was too long for me to copy but you can find this on 321gold. Strong read

Edit: Here is a shorter link

http://tinyurl.com/22roz7m

[Strawboss]

Silver has been consolidating in a tightening coil pattern since mid March 2010 (5 months). These types of consolidative patterns are not unusual and generally portend a very strong move once the consolidation resolves itself.

This type of pattern is neither bullish nor bearish inherently – so analyzing the chart doesnt give us insight into what to expect. For that, we need to turn to the fundamentals and look at what other markets are doing.

Most people seem to expect as a given that the general markets are set to collapse any moment now. There is more than a consensus on this and if you argue something different – you are viewed as an idiot – or worse. After all – if most everyone agrees it must be true, right?

The general public this year has been moving from stocks to bonds (flight to safety) in record amounts no doubt in response to the cacophony of voices saying that the market is teetering on the edge.

The various stimulus measures havent done the job, the housing market has resumed its decline, unemployment is still rising (even though the govt is doing everything it can to hide this reality), etc…

If the markets do fall – it is likely that silver will fall in sympathy…or will it?

The CFTC is serious about reforming the markets and establishing position limit in all commodities – including silver. JP Morgan has so many shorts to cover it makes your head swim. That fact (and it is a fact) will provide a solid steel floor under silver (in my opinion).

I dont think the markets are going to tank – I dont think Obama will allow it. Its too easy for them to buy SPY and DIA in the odd hours of the night, and during the last 15 minutes of trading to keep the markets propped up. In the big scheme of things – it doesnt even cost that much money. The fact that the consensus is we are going down is a big signal to me to be conscious of the contrary – that we are going up. Not because fundamentally we are through the worst and there are blue skies ahead – but, because of a collapse in confidence in US Treasury debt.

If everyone is piled in to Treasuries – what happens when they decide to venture out? They must sell Treasuries – right? What happens when people start looking around and seeing others selling Treasuries? Thats right – they follow the lead and sell too. Of course Bernanke will buy those Treasuries – but, what happens when that fact gets around (and news travels fast) that Bernanke is monetizing the debt by buying all Treasuries – no matter the quantity – to keep yields down? That prompts more selling – which can very quickly turn into panic selling. People sell their Treasuries and then hold dollars. And what do they do with those dollars? They buy anything tangible they can get their hands on. Commodities (including silver) first - but, also stocks.

There is a ridiculous amount of money currently in Treasuries (and its still growing). Are you prepared for what happens when that flow reverses and heads out of Treasuries?

Those are the fundamentals and they argue against a collapsing stock market (and a collapse in the price of silver). Hence, the consolidation pattern that has been forming in silver since mid March will resolve itself to the upside with a target of $23 in my opinion.

http://i1000.photobucket.com/albums/af126/Strawboss_2009/silver82410.jpg

[Weatherman]

Great post, Strawboss. I agree with everything you said, although my short term target for silver is closer to $25 than $23. The next question, of course, is timing. Since there was not (yet!) much of a summer sell off, my hope is that the end of year rally will be pushed stronger and quicker than in previous years. That could be another reason to give thanks at Thanksgiving!!! :wink:

[StateofJefferson]

Silver at $19.01 USD. Isn't Silver aware that Thursday is options expiration day? Silver is misbehaving.

[anywoundedduck]

Silver at $19.01 USD. Isn't Silver aware that Thursday is options expiration day? Silver is misbehaving.

LOL Got to wonder if we get an even bigger spike to the upside on Friday:banana:

[StateofJefferson]

David Morgan video today on silver

http://www.youtube.com/watch?v=jDkokNj7-Mk

[Strawboss]

Silver rising into the options expiration - that is a very rare thing. 2 factors I think at play here. Firstly - Bernanke and Company are at Jackson Hole, Wyoming (at a retreat for the rich and powerful) discussing the right level of QE2 that needs to be injected into the comatose patient. It is expected that Bernanke will deliver a speech on Friday announcing their decision. My guess is that it will need to be approx. $2 trillion or so. Secondly, as I have discussed ad naseum, JP Morgan is up to their eyeballs in shorts and need to get the hell out of dodge in a hurry. The CFTC is on their ass and Chilton isnt playing. With the looming speech on Friday - JPM is capitulating and rushing to apply the tourniquet to slow the bleeding of their shorts on fire.

I have serious misgivings about the sell recommendation on SLW last week - I may end up regretting that one - especially if silver does what I think its going to do. I was just following the old adage - sell into strength...

Here is the link to this weeks report.

http://bullion-master.com/the-silver-mining_report-8-25-10.pdf

[prophet]

I have serious misgivings about the sell recommendation on SLW last week - I may end up regretting that one - especially if silver does what I think its going to do. I was just following the old adage - sell into strength...

http://bullion-master.com/the-silver-mining_report-8-25-10.pdf

Yep

i sold SLW as well! :s10:

Held HL and SVM.......

[StateofJefferson]

Hey Strawboss, You are a must read on all your posts and I bet most of us thank you every day for your insight and technical expertise, so I say this with a friendly smile. You don't really think we sold our SLW do you? I personally think this is a must own stock and royalty company to hold for the duration and at some point in time it will be kicking off big dividends quarterly to those who hold it. Who knows, the dividends might even be in the form of SLW silver rounds or bars.

[Weatherman]

I have serious misgivings about the sell recommendation on SLW last week - I may end up regretting that one - especially if silver does what I think its going to do. I was just following the old adage - sell into strength...
I didn't want to be Debbie Downer so I chose to not say anything, but I have to tell you that my eyebrows went up a notch when I saw that. I am not always happy that I am not a follower, but this time my stubborn independence worked well for me. :wink:

[Strawboss]

You are too kind... My thinking, which I alluded to last week was that because it had hit upside resistance, it was going to correct and provide an opportunity to re-enter at a lower level. It did correct (approx. 10%), but, because I only do the report 1x weekly, it had already recovered its losses by the time the next report came out. I know it seems counter intuitive to think that silver could rise while SLW corrects, but, it happens all the time with silver related shares of various stripes, a phenomenon that subscribers know well. Having said that - dont think that it isnt possible that we still see another trip down which would make my sell recommendation a very prescient call (I hope I am wrong as it would be bad for the other positions).


Hey Strawboss, You are a must read on all your posts and I bet most of us thank you every day for your insight and technical expertise, so I say this with a friendly smile. You don't really think we sold our SLW do you? I personally think this is a must own stock and royalty company to hold for the duration and at some point in time it will be kicking off big dividends quarterly to those who hold it. Who knows, the dividends might even be in the form of SLW silver rounds or bars.

[jupitergold]

Anyone catch the silver breakout? If not, I'm looking for a pull back/look back in the next three trading periods to the lower $18's. Swingin' is over bought now and needs to cool off.

[StateofJefferson]

Is any one else concerned about our Silver mining stocks with primary production in Mexico? It seems the news of mass Narco executions is almost daily now. 14 this morning in Acalpulco, 72 yesterday somewhere else. 26,000 deaths over the past 2-3 years. I am starting to get concerned about the security of some of my investments and invite comments from this knowledgeable forum. Do we or are we going to have a failed country on our southern border soon?

[Strawboss]

I have thought of what you are referring to a few times, and here is my opinion:

The problem in Mexico is Cantarell - more specifically, its decline rate and the govt's dependence upon those revenues. The vacuum that is being created is being filled by the drug cartels as they peel away people that used to be loyal to the govt. There is no fix for this. It will continue.

The reality is that the amount of money in the mining companies is chump change compared to the money in the drug business, so the attention wont be on the mines per se - although there will be "collateral damage" from time time. The response on the part of the mining companies will be to increase the amount of security for both the physical assets as well as the personnel.

At some point in the not too distant future - the US military will have to get involved in Mexico. From a practical aspect - it will be far easier to secure the southern border of Mexico than the border between the US/Mexico.

I think the "big picture" plan is to assimilate Mexico into the US. They have a much younger workforce (which we need to shore up the Social Security system) and lots of natural resources.

Unfortunately, I think that before we can assimilate Mexico, there will need to be a bloody war to defang the undesirable elements.

In support of my position - I point to the ineffectual response of the US govt so far on the border issue. They arent serious about securing the border because that isnt a part of the larger geostrategic plan - assimilation is.

As this occurs over the next several years - there will be periods of instability/volatility - no question. That is why it is so important to be well diversified within the mining complex.


Is any one else concerned about our Silver mining stocks with primary production in Mexico? It seems the news of mass Narco executions is almost daily now. 14 this morning in Acalpulco, 72 yesterday somewhere else. 26,000 deaths over the past 2-3 years. I am starting to get concerned about the security of some of my investments and invite comments from this knowledgeable forum. Do we or are we going to have a failed country on our southern border soon?

[GoldWampum]

You certainly make a good point Boss.

[Weatherman]

I think the "big picture" plan is to assimilate Mexico into the US. They have a much younger workforce (which we need to shore up the Social Security system) and lots of natural resources.
That is my view too. I think that big picture plan is the explanation for why the USA government is so forceful about protecting the "rights" of our "southern citizens." For a while longer, Canada seems to offer better prospects for investing, but I suspect that Canada will be incorporated into the same expanded "America". I have no doubt that there will be an abundance of turbulence in our economic future.

[Strawboss]

3496

This chart illustrates as well as you can the size of the short position in silver. It would literally take upwards of 5-6 months of global silver production to clear out the short position.

There will be a short squeeze in silver at some point. Its going to be one hell of an event when it happens. If you dont understand the argument for buying and holding physical silver and select mining shares after viewing and understanding what this chart is telling you - I dont know what else to say.

[Strawboss]

http://i1000.photobucket.com/albums/af126/Strawboss_2009/silver83110.jpg

........................

[Weatherman]

The link below has an upbeat comment on HL, and on all the other miners in the silver sector.

A Big Upgrade for Hecla Mining (http://www.fool.com/investing/general/2010/08/30/a-big-upgrade-for-hecla-mining.aspx)

[millwright]

HL is to be bought and held. Period end of story.

Never see much spoken about it here .

Hundreds of millions in the bank.No debt. Both producing properties right here in the US.

Cost per ounce around one dollar. Eleven million ounces produced yearly.

Massive short position due primarily to warrants.

This is a complete no brainer.

Ten dollar stock by December?

[Weatherman]

This is an interesting comparison of silver producers. The link has comments on each below the screenshot posted here.

3518
http://www.safehaven.com/article/18013/silver-producers-enter-profitable-phase