Silver

[Strawboss]

Kiwi,

No there isnt. Couple reasons. Silver WILL correct - the question is how high will it go first. Secondly, my short position is only a percentage of my overall long positions - so even if I lose money on the short, I am still up overall if silver continues to rise. Also - I have my physical position that benefits from continued rise. Keep in mind that my thought process is to use this short position as an alternative to selling stocks.

Stawboss, is there are point where you will throw in the towel on your short silver position?

TIA,

K

[Strawboss]

The Detroit Lions just took another HUGE step in restoring the roar with the reincarnation of the Silver Rush with the addition of Nick Fairley to their defensive line. Detroit now has the most ferocious defensive front in the NFL and you could make an argument in NFL history.

Suh - Fairley - Vanden Bosch - Avril - Corey Williams - Lawrence Jackson - Sammie Lee Hill - Turk McBride

Who are you going to block?

[Silver Buck]

The Detroit Lions just took another HUGE step in restoring the roar with the reincarnation of the Silver Rush with the addition of Nick Fairley to their defensive line. Detroit now has the most ferocious defensive front in the NFL and you could make an argument in NFL history.

Suh - Fairley - Vanden Bosch - Avril - Corey Williams - Lawrence Jackson - Sammie Lee Hill - Turk McBride

Who are you going to block?

I've been a Lions fan since the 60's, and I must admit I am excited about their chances of success this season. They did win the last four games of the season including the Packers. I can get behind this Silver Rush.

[anywoundedduck]

So you guys really didn't think that lowering margins and the defrosting and quick burial at sea of OBL (freezer burn) would keep silver down, did you? TPTB are grabbing at straws. Dollar is going down. Silver has regained most of the supposed losses. If I didn't have insomnia, I would have missed the entire charade. Glad I didn't. Very amusing. Makes me wonder what other amusments TPTB have in mind.

[Eat Beef]

Don't look now, dipstick, but it's making new lows.


Hurrah! Silver! It never goes down!!!!

[lhslancers3270]

No volume last nite on the smackdown so the Boyz could not cover any size. Best to get this over with quickly but the first "bottom" won't be the low.

[Strawboss]

I really feel bad for those that bought near the top listening to the foolishness about how this time its different, etc...

If you are one of those and are reading this - take courage. You will be ok as long as you DONT SELL - no matter how low silver goes. It will be a short lived correction and we will see prices going much higher than we have seen so far. Unfortunately - you picked a bad time to enter - but, thats ok. Let the bull market bail you out - it will - just give it time.

For those of you waiting for a nice sized correction to back up the truck - its coming. Dont get too impatient though - lets give people time to puke up their positions.

[jupitergold]

Today's/week's candlestick is awesome for bearish silver traders. If the dollar can find a bottom, bears may get some momentum.

Still holding my July puts, back to being profitable. C'mon funds, dump swingin' off a cliff for the next three weeks!

[Zed]

All the downside has been achieved on the globex in thin volume. It has all been upside while the more liquid markets are trading. London was closed last night. Beware, personally I think there will be a better price on puts before this is done. September puts would be a better call IMO, I think that trade needs more time FWIW, this action would make me nervous if I where short here 2c FWIW.

[StateofJefferson]

From Dan Norcini:

CME Group hikes margin requirements for Silver - AGAIN

3rd time in one week.

[lhslancers3270]

From Dan Norcini:

CME Group hikes margin requirements for Silver - AGAIN

3rd time in one week.

That goes for both sides of the trade.

[Gcubed]

That goes for both sides of the trade.

Some details are best avoided if one is promoting an "agenda".

[Zed]

From Dan Norcini:

CME Group hikes margin requirements for Silver - AGAIN

3rd time in one week.

That is what volatility will get you in any market. CME group are charged with making sure that both sides of the contract can preform in a financial sense, a day like yesterday mandates that margins be looked at, it must have given them the heebeegeebees! Don't forget that the bigger the margin the harder it is to knock out the players, that seems to be over looked every time margins are mention around here. This is not all bad and if we move higher, especially with fast moves, margins will go up again. Most players would expect it!

[StateofJefferson]

That is what volatility will get you in any market. CME group are charged with making sure that both sides of the contract can preform in a financial sense, a day like yesterday mandates that margins be looked at, it must have given them the heebeegeebees! Don't forget that the bigger the margin the harder it is to knock out the players, that seems to be over looked every time margins are mention around here. This is not all bad and if we move higher, especially with fast moves, margins will go up again. Most players would expect it!

Understood. In fact MF Global and TD Ameritrade moved their margins on silver up far higher than CME. I wonder why CME does three in a short timeframe rather than two more substantial ones, or do we just see the margin go up steadily for the forseeable future?

[lhslancers3270]

You can take a look at all the margin requirements here.

https://www.ccstrade.com/futures/GC/margin/

[Strawboss]

Understood. In fact MF Global and TD Ameritrade moved their margins on silver up far higher than CME. I wonder why CME does three in a short timeframe rather than two more substantial ones, or do we just see the margin go up steadily for the forseeable future?

I think its safe to say that we can expect to see margin increases on a continuous and ongoing basis. Some will be because of increasing prices - others will be to try and extinguish any "irrational exuberance" as our old friend Greenspan would say.

I am not sure yet how low this correction will go - perhaps $30ish (I am doubtful we will ever see the $20's again) but, it will be the last best opportunity to back up the truck and load up.

[Zed]

Understood. In fact MF Global and TD Ameritrade moved their margins on silver up far higher than CME. I wonder why CME does three in a short timeframe rather than two more substantial ones, or do we just see the margin go up steadily for the forseeable future?

I would like to see a fixed formula that is published and calculated on a daily basis. A price x volatility x Z% = margin type of thing. Put a 10% collar on that number and every time we hit that limit (up or down) margin moves to that number, the collar is reset and we go again. I don't know why they just don't put it on auto pilot so that no one can call foul or claim to be unaware!

Steady margin moves would be better... big chunks blindside people!

[Zed]

I am not sure yet how low this correction will go - perhaps $30ish

I think you are burying this too quickly. Look at how the downside has been gained, that alone makes me short term bullish.

[lhslancers3270]

Any opinions on this chart? Seems like we might have more to go before a larger break.

[DonShimoda]

Why no margin increases in other commodities that are rising fast?

[Zed]

Why no margin increases in other commodities that are rising fast?

There have been...! There must be... it is CME's job to ensure it happens, they are a clearing house exchange, they guarantee contract performance, they must make sure that enough margin is available to ensure that they don't end up wearing the loss. It is simple self preservation.

[Zed]

Any opinions on this chart? Seems like we might have more to go before a larger break.

Yeah... what a freakin crazy move! It has to end in tears sometime soon... but when? Almost anything is possible once a market gets like this... look at the call/put ratios we have been seeing! Still bullish out to June BTW, not so for May.

[Eat Beef]

Why no margin increases in other commodities that are rising fast?

There have been, but people only see what they want to see.

Zed, I think your idea has merit, but as a guy who trades a small account, it really messes me up when margins change. I normally don't get very extended, but I usually keep up with margin available in my head. When stuff starts bouncing around it throws me off.

When the margin on feeders increased a few months ago, I didn't even get an email, I just happened to notice that my available margin dropped, and researched it myself!

[Zed]

When the margin on feeders increased a few months ago, I didn't even get an email, I just happened to notice that my available margin dropped, and researched it myself!

That is not good! The communication should be well managed... it should be really apparent to all players that it is coming.

[anywoundedduck]

Don't look now, dipstick, but it's making new lows.


Hurrah! Silver! It never goes down!!!!

And I repeat, you guys really didn't think that lowering margins and the defrosting and quick burial at sea of OBL (freezer burn) would keep silver down, did you? TPTB are grabbing at straws. Dollar is going down. Silver has regained most of the supposed losses.

Wasn't much of a pull back. No volume, and that is for sure. When there is consolidation, I expect volume and follow through, which is lacking, at the moment.

Not sure about your dipstick comment. Aren't you able to voice you opinion without that crap. If you're not careful, you could end up in detention.

[Strawboss]

Zed - that would make too much sense. Besides, if they did as you suggest - it would make it more difficult for them to manipulate. What are you trying to propose - free and fair markets or something?

I would like to see a fixed formula that is published and calculated on a daily basis. A price x volatility x Z% = margin type of thing. Put a 10% collar on that number and every time we hit that limit (up or down) margin moves to that number, the collar is reset and we go again. I don't know why they just don't put it on auto pilot so that no one can call foul or claim to be unaware!

Steady margin moves would be better... big chunks blindside people!

[Eat Beef]

Duck, maybe you should have detention. Take your pick, criminal stupidity or groundless threats. If you can put me in detention, then make my day. If not, then you might want to notice that silver is (again) sitting on new lows.

The fact that you can't comprehend something as simple as margin makes dipstick look like quite the compliment to me.

[StateofJefferson]

Just a thought, whenever we go thru corrections, people get stressed. Check that, most of us get stressed. Lets keep it civil. There is a ton of good information on this thread and many good participants. Silver may blow thru $60 USD and it may also see $30 USD. In any event sometime late this fall I think we will see silver north of $50 USD. Stay away from the leverage and the margin unless you are a pro and even a pro might get caught with these sharp corrections up and down. Good fortune to all.

[Gcubed]

How one handles stress separates the men from the boys. Freaking out is not an acceptable excuse for loud quacking. JMHO.

[anywoundedduck]

Duck, maybe you should have detention. Take your pick, criminal stupidity or groundless threats. If you can put me in detention, then make my day. If not, then you might want to notice that silver is (again) sitting on new lows.

The fact that you can't comprehend something as simple as margin makes dipstick look like quite the compliment to me.

I understand margins all too well, as well as those margin requirements being used strategically by the banksters to attempt to manipulate the price of silver down. I also comprehend that the speculators need to answer this margin call, or else close their long positions. I also see that most of these speculators are able to handle their margin calls, because they were totally expecting the shorts to use this tactic, as was I. In that the Banks, the FED, the CME, the SEC and the CFTC are collaborating over depressing the price of silver is no suprise to anyone on this forum. Racketeering at its finest. But their tactics are not working very well. The volume is anemic. They are throwing everything at Silver, and so far have gotten nothing but egg on their face, IMO. I am not saying that you don't understand this, but if the shoe fits.

What I don't understand is why you feel the need and persist making these personal attacks. You know that the moderators will put you in the cooler if you keep it up. That is not a threat from me, but it is part of the the TOS agreement on the GIM forum. Personal attacks are strictly forbidden. Obviously, you didn't know that either.

Have a nice day.

[Strawboss]

While history isnt a perfect predictor of future performance - it sometimes provides some clues.

I think $30 - $33 is going to be a nice buy zone.

[jupitergold]

Sold to close all my July $24 puts since they were just a volitility play. The trade monster holding the $25 puts has more than doubled his money now.

Looking to buy, but waiting to see what shapes up in the low $30's.

[jelly]

I will be looking for us to be oversold on the indicators before i buy. this could be a quick correction before the final spike, or the summer correction everyone was expecting. we won't know until we see.

[Weatherman]

For people following the Bolivia situation, here is an update from PAAS:

Pan American Silver Corp. (TSX: PAA)(NASDAQ: PAAS) ("Pan American" or the "Company") today provided an update on the situation in Bolivia and the San Vicente mine.

On May 1, Bolivian President Evo Morales announced the formation of a multi-disciplinary committee to re-evaluate several pieces of legislation, including the mining law. However, Mr. Morales made no reference to reviewing or terminating agreements with private mining companies. Pan American operates the San Vicente mine in Bolivia under the terms of a joint-venture contract with the state-owned mining company COMIBOL.

Operations at San Vicente have continued to run normally under Pan American's administration and were largely unaffected by the media reports referenced in the Company's April 19 press release, and the Company expects normal operations to continue status quo.

The Company would like to acknowledge and thank its employees and contractors in Bolivia, the San Vicente union, the surrounding community leaders and the local authorities who unilaterally expressed their support for Pan American's continued activities in Bolivia.

http://www.smartmoney.com/news/PR/?s...003024&cid=951

[DHAWK]

Hey Boss.
Are we ever gonna get a bounce in the silver mining stocks?
Whadaya think?

[Strawboss]

Hey Boss.
Are we ever gonna get a bounce in the silver mining stocks?
Whadaya think?

Yes we will. Believe it or not, the mining stocks WILL leverage the gains in gold/silver again. The farther removed we get from what happened in 2008 - the more the public will forget and come back in. Just not yet.

[Weatherman]

Yes we will. Believe it or not, the mining stocks WILL leverage the gains in gold/silver again.

Although it is too soon to shout the all clear signal, the transition to better stock performance may have already begun. Even though silver took a beating over the previous two days, and PAAS and SLW were also lower in price, the ratios of PAAS and SLW to silver showed significant improvement (charts of the ratios are copied below). When silver stops its waterfall decline, even if it simply holds steady, there is a lot of space for the stocks to move higher to make up for previous weakness. I bought some PAAS at the open this morning because I am hopeful that the good news from Bolivia may not yet be fully factored into the stock price. A quick 30% gain in PAAS would be nice if silver rebounds to my target of $52 soon.

[Strawboss]

Sold my ZSL.
Bought AGQ.

Expecting a bounce.

[bemac]

Expecting a bounce.

None so far.

[Gcubed]

None so far.

$35.60 or so, perhaps.

[krugger3]

AGQ is a tough buy right now for me. I've made good on the short end of it. If Silver keeps falling into the low 20's high teens it will keep falling. Straw I was skeptical of your Silver call to these levels, but you were right. Thanks for the posts.

[eric2075]

Yeah I sold my really small position in zsl. May have been a little early but I feel better not shorting silver right now. I can't do AGQ now either but did buy a few shares of exk.

[Strawboss]

Dont get me wrong, I am expecting further downside weakness in silver to the low $30's at least. I just think we are going to have a short term rally in silver. It has dropped 20% from its peak in a very short period of time. My plan is to play the bounce and then to re-establish my ZSL shorts. Gotta be nimble in these kinds of markets. There is good opportunities for quick profits if you can play the volatility - but, you have to be prepared for the unexpected as well.

[TiKi]

Closed my SLV puts yesterday. Trying to close my ZSL puts but the spread is crazy wide.

A quick 30% gain in PAAS would be nice if silver rebounds to my target of $52 soon.

Why be in a PAAS if silver bounces to $52 might as well go in SLV with a bounce to $52 silver you'll get close to a 30% gain.

[Weatherman]

Why be in a PAAS if silver bounces to $52 might as well go in SLV with a bounce to $52 silver you'll get close to a 30% gain.

SLV looks like little more than a paper bag that the banksters are holding open to snare the easy money. One day, that trap will slam shut, and people in SLV will be left holding the empty bag. Stock in a miner is paper too, but at least there is real metal behind it, either in the pipeline or still in the ground. The silver miners have fallen far behind the silver rally, and they rate to play catch up at some future time. PAAS specifically was hurt badly by the prospect of Bolivia taking over mining properties, and it has only partially recovered from that drop. The fact that PAAS was up 2% today while silver dropped another 5% seems like a step in the right direction for that overdue recovery. I hope that PAAS and silver will do much better soon.

[Strawboss]

I posted the following in last weeks Silver Mining Report but thought it would be of benefit to post here for all to see. It describes my trading philosophy, which I would be the first to admit isn't for everyone.

I received an email from one of my subscribers earlier today stating that they got stopped out on their SLW just before it powered higher today. It is precisely for this reason that I don’t use stops (trailing or otherwise) in PM mining stocks. What many traders don’t know is that the market makers and various players with access to sophisticated data feeds and business intelligence capabilities can literally see your stops. They know where you are, and they can calculate how much money they will have to invest in order to run those stops. Once they have taken out all the stops that their algorithms say to run – they reverse the price with their newly acquired shares (bought at the bottom) and go long – driving the price upwards – leaving you behind minus your shares. This used to be the most frustrating thing to me.
The downside to not having stops is that when you are wrong in your entry points and price moves against you – you MUST have the determination to stay in your position and even increase it as price moves lower (or higher if it is a hedging position). I know – some people would scoff at that type of advice and say that it recklessly risks capital. My response is that the mining sector is the riskiest, most volatile market segment out there and if you are talking about juniors and explorers – riskier still. If you aren’t the type that can handle risk – and the feeling that comes with your capital being at risk – trading in mining shares isn’t for you – and my methodology is most definitely not for you.

I am not interested in minimizing risk – it would be foolish to do so in this market sector. Instead, I am trying to master the art of maximizing potential returns while adopting some risk preservation principles that don’t necessarily impede the overriding objective of maximizing returns. For example, concepts such as investing with the trend, riding out corrections, periodically booking profits, not getting too greedy (where do you draw the line?), diversification, not using margin, etc… these are all beneficial concepts that don’t conflict with the overarching one of maximizing returns.
Using stops, on the other hand is not consistent with my methodology which is why I no longer use them.

[Shortstack]

That goes for both sides of the trade.

Yes, the short side margin requirements would increase but, at around 49 dollars an Oz, they allready had massive amounts of margin in thier accounts.

As silver drops, the margin in the short seller accounts, which was adequate at 49 dollars, starts to be reclassed as "excess" margin. So at 38 per Oz, the shorts have huge amounts of "excess" margin in their accounts, which they could leave in if they were planning on increasing the amount of contracts they want to sell, or use to purchase contracts (thus closing their short positions).

Granted, their excess margin would be less due to the increases on initial and variation margin requirements by the CME, but the rate of increase in their "excess" margin (for every dollar silver drops) greatly outweighs the margin increase due to CME requirements.

In a rising price market, margin increase effects players as follows:

1. New longs need to put up more money
2. Existing longs (who have excess margin) find that their excess margin is lowered, to the extent of the margin increase.
3. New and existing shorts need to put up more money.

In a falling price maret, the margin increase effects players as follows:

1. New longs need to put up more money
2. Existing longs (who are finding that their "excess margin" is rapidly decreasing as the contract price falls) may need to pay more money into their margin account, depending on when they got in
3. New and existing shorts will find that their "excess" margin is increasing every day (hour/minute) and thus can take some of that excess out. Yes, their excess will be reduced by the margin increases, but the margin increases are overshadowed by the market action we are seeing now

[TiKi]

Covered about all my shorts just holding a bit of SLV shorts.
The cheerleaders who where making fun of most of us shorting have finally stfu. "If you hold physical is doesn't matter what the price is" yeh yeh yeh BS. Price is everything.

[Strawboss]

Bought some more AGQ.

What a wild ride! I love it!

[jelly]

strawboss, you have more guts than I do. I can't do the little bumps, just the 'big' ones. I took profits in some of my shorts today, but I'm still holding the majority for the low $30's. I'll buy AGQ when I hear "weeping and knashing of teeth".