Silver

[GoldWampum]

This is a 2000th post. Let's make this one an "I probably was wrong" post. I have been saying for months that silver would not see a new high (2008 basis) until it dipped below 17. last time it came close to that it only got to maybe 17.02 or so. And it looks like it may make a new high without going that low again.

It may backup a "little" first, but I don't see it crashing that low again, at least in the near future. Oh well.

[silverwood]

ZED... Yeah but, can't they borrow SLV's metal? They certainly CAN'T borrow joe public's bars and coins! Sure the ETFs have metal but how is it allocated?

[newmisty]

Way to kick off the 2000's GW.

I agree with your assessment too. I think we will be climbing rather steadily for a while with minimal beat-downs.

[Strawboss]

Not to rain on anyones parade, but....

Silver makes its biggest gains at the end of a move.
Silver gets the attention at the end of a move.
Silver attracts the interest of mainstream investors at the end of a move.

We are approaching the end of this move in silver. My target is $23. If you are new to PMs, I would strongly urge you to wait for the next good correction to enter a position. I would NOT suggest buying stock in any miners at this juncture (with very few exceptions).

If you are intent on buying now - I would urge you to buy physical silver and to do it in a time phased manner - i.e. at regular intervals of time so you can dollar cost average your purchases (some purchases will be higher, some will be lower).

The ideal time to buy silver is when there is general agreement that silver is a dog that is going back to $8 an ounce (or less).

[Zed]

ZED... Yeah but, can't they borrow SLV's metal? They certainly CAN'T borrow joe public's bars and coins! Sure the ETFs have metal but how is it allocated?

Not as far as I am aware BUT because it is a stock it can be short sold, anyone using a margin account to buy SLV can have their SLV lent out to a seller. That is legit, naked short selling is also a possibility, that is just plain bent but its a flaw in the US system and does go on. Anyway as far as metal verses stock issued it should all be there unless someone is defrauding the system. SLV makes a good trading vehicle, you can do stuff that you just cannot do with physical including hedge your real metal if you hold quantity... and quite cheaply too via options. Hell $25 Jan Calls are at 36c .... might be a good little flutter, if we break 21 we could get there in a real hurry. If you had a boat load of physical and we get a blow off top you could capture the top by buying SLV puts, you'd not have to sell your metal but have a similar outcome to having sold the top and bought back in lower. Don't hate the SLV, it can be useful... you can play mini hedge funds for play money!

2c

[Zed]

The ideal time to buy silver is when there is general agreement that silver is a dog that is going back to $8 an ounce (or less).

The ideal time to buy Silver is when she has jumped off a tall building in a single bound.... and the thought of it scares you absolutely witless :biggrin: LOL she likes big cahunas & being caught in a suicide dive :biggrin: not a gal for the faint of heart eh?

[Strawboss]

Here is a look at silver on the monthly chart. We are approaching overbought levels, but, nothing like the extremes we have seen in the past. I am still on the bandwagon of us reaching $23ish on this move, and then a wave 2 of MAJOR THREE correction down to @$19.50ish. Once that happens, we will be in wave 3 of MAJOR THREE which is the granddaddy of all. That wave could see us take out the previous highs above $50 set back in 1981.

3858

[Strawboss]

Here is the link to this weeks report on the silver miners. The silver miners as a group are on fire.

http://www.bullion-master.com/the-silver-mining_report-9.22.10.pdf

[Strawboss]

.95 to go for silver to reach my target of $23ish...

[jbilprophet123]

.95 to go for silver to reach my target of $23ish...

There still is no rhino, every $ move in gold is being digested well. Till the point this continues i am going to adopt no Rhino no trade policy.
23ish or not.. Ofcourse depends on everyone's trading style and goal.
No matter what i aint going to loose parabolic move continuing on upside for the sake of safetly after suffering of all this time.
Rhino will happen if a significant top is to happen imvho..

And even if 23 to 20 happens on the way to 50 as you are saying what diff does it make.. wont it be too costly to sell to capture say 10% better price and risk missing 100%+ move?

[FatesWarning]

Most likely some danger short term. Pull up a 3 year silver chart at stockcharts. There were 5 times RSI hit over 80 and always a pullback of various degrees. The daily RSI is beyond critically overobought at 84+ today, and seasonal weakness looms in October. That said, im holding a boatload of SVM and physical through any correction, looking to add other silver miners.

http://www.tradersnarrative.com/silver-hits-30-year-high-with-extreme-bullish-sentiment-4782.html

[Strawboss]

For the sake of clarity - I am NOT suggesting to anyone to sell a single ounce of physical. I am a proponent of adopting a defensive posture with the related mining shares. I would suggest either moderately tight stops (depending on your risk tolerance), or to sell a % of your mining shares into strength with the intention of reacquiring them on the next correction. If silver dips to $19ish - the shares could easily lose 20-30%.

[jupitergold]

If silver holders are nervous about it being way over bought and want to cash in without leaving the metals...... now is a good opportunity to convert silver into gold. If the metals still run, you still move up with gold but probably less on a percentage basis. If a correction happens, the gold/silver ratio should favor a lesser percentage hit and reconversion back over should yield you more silver (physical, ETF, etc.... same difference)

The ratio broke 60 today, time to start planning for the shorter term.

[FatesWarning]

this guy is objective....bullish At least half the time.


http://www.321gold.com/editorials/hoye/hoye092410.html. Last week.

http://www.321gold.com/editorials/hoye/hoye092910.html. Today.

[Strawboss]

Here is the link to this weeks report. I am sounding like a broken record talking about the overbought nature, but, its a fact. I am urging caution - i.e. lighten up on some selective positions, or at least put a trailing stop in place with a % you are comfortable losing.

http://www.bullion-master.com/the-silver-mining_report-9.29.10.pdf

[Zed]

IMO a trailing stop for silver because when she goes she can do over bought for quite a while. What you lose running a trailing stop will be more than made up for when she runs... JMO. 2c

[andial]

The ratio broke 60 today, time to start planning for the shorter term.

Does sixty look like the bottom to you in this chart?

[FatesWarning]

I've never used stops. What happens if you have a 3% stop and your miner opens down 7% in the am. Would they sell you out at the open for a 7% loss or would the stop order be cancelled?

[C&L 1911]

I've never used stops. What happens if you have a 3% stop and your miner opens down 7% in the am. Would they sell you out at the open for a 7% loss or would the stop order be cancelled?

It will get sold right at the opening.

[Spike]

In my old trading days..

I've had the market run right thru a stop...or it sold off a partial amount.

In a fast moving market, stops are not a guarantee.

[Zed]

I don't use auto stop losses, the order is always placed manually. I prefer to assess the action I am seeing before pulling the trigger. I am talking about a stop losses as a trading discipline NOT a type of order.

I only mentioned it to say at this particular point I would prefer to be reactive rather than proactive, if we had really spiked in price, and the scene was different, I would be proactive over reactive.

Also stops need to be set using a chart and natural exit points as opposed to a % number. The chart dictates the stop which in turn dictates the risk which in turn dictates the position size. Yes a fast market can run any stop loss point but if you have it right it is far less likely, if you just pick 5% or 10% from your random entry then its prolly not going to work that well.

[Zed]

Does sixty look like the bottom to you in this chart?

Looks about due for gold to catch up...

$64 Q HOW?

Gold up? OR Silver down?

[prophet]

Looks about due for gold to catch up...

$64 Q HOW?

Gold up? OR Silver down?

With ratios, thats the BIG question???

[Gcubed]

With ratios, thats the BIG question???

Gold catching up means higher.

[prophet]

Gold catching up means higher.

silver reversing also means higher ratio......

[andial]

Gold up? OR Silver down?

(If) the GSR does bump up here back into the low sixties the way it would happen? Gold slightly lower and Silver heavily lower. I can't see a situation where Gold would go up here while Silver stays flat, or falls.

[jbilprophet123]

[1] Orders: Stop : Once stop price is hit the order to buy or sell becomes a market order. This many "evil" brokers always make you feel that you got the worst price.
Stop limit: Stop price hits the order becomes a limit order at the limit price set.
At one point in life i used to have atleast 20 orders per day reaching sometimes a peak of 50+ orders and i remember even in those days i probably had 2 or 3 stop orders out of a million orders or so. It was always a mental stop order that i had, was strict with it and disciplined which is a must for active traders.

[2] Silver imvho look at the prices and ratios of silver and gold in 1980.. I am not big follow the history camp member. However at some stage in life cycle of this gold silver bull, silver will outperform gold by a big margin and i think the time we are in there is some catching up which is in order. On other side silver can be treated as 2 times gold up or down, I am extremly bullish on gold silver at this time so being in silver makes more sense to me.
1650$ gold corresponding to 30$ silver is what is likely imvho.

[Strawboss]

I am as bullish on silver as most people (except perhaps for Weatherman whom I will be selling to when the time comes), but, it does have corrections from time to time. The idea is to trade a portion (not all - just a portion) of the paper based assets (not the physical metals) as you ride the normal cyclical waves up and down.

I do believe ultimately the gold:silver ratio will hit 20:1 probably a bit lower (I want to make sure I leave a scrap of meat on the bone for Weatherman when I sell to him) but, it isnt going to do it straightaway from here. I would think the USDX will fall a bit more (perhaps to 75ish) which will propel gold and silver up and through my targets and then the USDX will stage a dead cat bounce back up to 80ish and the metals will correct - gold to $1050ish and silver to $19ish.

After all that happens - then it will get crazy as we will enter wave 3 of MAJOR THREE...........

http://i1000.photobucket.com/albums/af126/Strawboss_2009/silver93010.jpg

[jupitergold]

When I apply my trading indicators to the ratio, my STO is imbedded and RSI is over sold (meaning the ratio to go lower). I see heavy resistance at the 57.5 GSR level.
2 ratio points down is not enough to me when I can sit and wait for at least 10 up (69 GSR) to reload.

[jupitergold]

Boss,

I should wait till the end of the day, but silver is now showing negative divergence on the daily charts. STO imbedded and can still go higher as the RSI continues to decline, but now on STO watch to start favoring short positions.

edit: daily chart action
http://i591.photobucket.com/albums/ss357/jupitergold1/93010daily.jpg