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Buy Silver with Reckless Abandon

southfork

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#1
Buy Silver with Reckless Abandon

Markets



By MarketSlant Editor 4h ago 570



Source: Michael Ballanger for Streetwise Reports 03/24/2018
Precious metals expert Michael Ballanger believes silver is poised for a "massive move to the upside."


Would it be that a picture is worth a thousand words? In the case of the graphics posted below, in a word, yes!

Look at the positioning of the mighty Commercial Traders, who rarely lose money and who operate under the blinded eye of regulatory oversight and governmental sanctuary. As of last Tuesday, the most powerful group of traders ever to operate under the watchful eye of the Working Group on Capital Market wiggled out of a massive 41,497-contract short position in silver on January 23, and arrived in full regalia this week short a mere 3,709 contracts. To provide some modicum of perspective, the Commercials were short a notional amount of silver that would correspond to 207,485,000 ounces worth $3.3 billion at the $16.20 per ounce benchmark on January 23, and are now short a notional 18,545,000 ounces worth a paltry $300,429,000. In other words, the Commercials covered $3 billion worth of fantasy-land silver shorts in a mere eight weeks, which represented nearly 25% of world silver production in 2017 (885.8 million ounces). But don't let your emotional extremities get twisted into a tangled knot of outrage and indignation. We have seen this movie all too often before, and the only reaction worthy of note is to go out and buy silver with both fists.



Are any of you actually looking at this? Or are you all simply content to count your wealth and tell war stories from the past? The silver market is—right now—exactly where it was in 2001. It is absolutely primed for a massive move to the upside, and while it underperformed gold on Friday and is still worth less than 1/80 its price, the behavior of the Commercial Traders confirms an impending, if not unexpected, thrashing of large speculators in the near future, and sets up an decent trading opportunity for all of us. I now have 60% positions bought in the SLV April $14, calls and am looking for a move through $17 to confirm the validity of the trade (and add the remaining 40%).

As for gold, while the COT structure is less than compelling relative to silver, gold's tape action is simply superb, thrice rejecting downside probes beneath $1,310 and now solidly approaching the magical $1,360-1,370 resistance zone. I will refrain from going off on yet another tirade against trusting "technical breakouts" for gold and silver, but what I will be doing is watching the Commercials like a hawk if, as, and when gold probes that upper resistance zone, which remains most formidable and has for years. Gold almost touched $1,400 back in 2014, but each test since has been rejected at $1,360-1,370. While I am a cynic in trading bullish breakouts, I suspect that, as I wrote back in January, something did indeed change in the December-January rally. I think that statement will be borne out with a successful assault on $1,400, followed by the surpassing of that ominous 2013 breakdown level of $1,525 later in 2018.





My beloved Gold Miners ETFs, both Junior (GDXJ/JNUG) and Senior (GDX/NUGT), are lagging badly, with the HUI caught in the 175-180 level. This is because, despite the underlying commodity they produce, develop, and explore for, they are still "stocks," and when margin calls arrive because your CryptoScam junior just broke the $3 marginable level and has gone "no bid," you thank your lucky stars for that 1,000 shares of a gold producer that can be quickly sold to meet the margin clerk's demands.

I am adding to physical positions in the precious metals, and speculating with calls on GLD and SLV because, quite honestly, the current state of global stock markets reminds me of September 1987. I am terrified that the gold miners will, as in October 1987, get thrown out with the bathwater if a bona fide crash takes hold. That old expression about what happens to the innocent piano player when the police raid the brothel is a keynote thought when reviewing portfolios this weekend. The S&P closed three points from its 200-dma (daily moving average) Friday, and I shudder to think what will happen if it gives next week. I urge everyone to be on their toes.



These are not the times to try to be heroic; capital preservation comes first.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger's adherence to the concept of "Hard Assets" allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure: 1) Statements and opinions expressed are the opinions of Michael Ballanger and not of Streetwise Reports or its officers. Michael Ballanger is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation. Michael Ballanger was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. 2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Charts and images courtesy of Michael Ballanger.

Michael Ballanger Disclaimer:
This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.
 
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JayDubya

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#2
Just curious, for those of you who have been waiting for silver to make a move....

For the sake of argument, let's say he's right and silver does bust out. What will it take for you to sell off a majority of (or all of) your holdings?

At what price point are you ready to say "I'm getting rid of this stuff and I'm cutting ties with silver"?

Does $20.00 do it? $22.50?

Are you willing to take a small loss just to get out from under it? Or do you hold until you're not under water anymore?

For some of you who were late to the party that price point might be some time from now.

Additionally, if you do sell off, what do you do with that cash? Gold? Real estate?

Nobody owes me an answer, but I'd be interested in hearing your thinking. Like I said, just curious.
 

BigJim#1-8

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#4
I'd be happy @ $23-$25 & I'd probably sell some. That said, silver has been good to me & while it's stagnated for a long time I feel it will be worth it in the long run.
Right now I'd consider trading some Au for Ag (Don't grab your chest Brother Irons).
Real estate, gold, cash???? The best thing to do is be debt free, that makes decisions easier.
 

andial

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#5
25, bought at the top in ‘11 so i am sitting on some hefty losses that i will claim against my taxes i think it is 3 thousand a year max deduction. Not sitting on any gains means no capital gains tax when selling i like that. Done
 

Someone_else

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#8
What will it take for you to sell off a majority of (or all of) your holdings?
I figure that I might sell off 20% at $30, another 20% at $40, and so on. That is assuming that other valuable assets are not likewise increasing in price due to simple price inflation. I would move the returns into (1) durable goods I will use in the future, (2) investments in my ability to make more money, and (3) things that other people will always want (trade goods). This is really simple "Alpha Strategy" stuff.
 

the_shootist

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#11
I wouldn't buy for investment. I would buy precious metals to preserve wealth, not increase it.
 

BigJim#1-8

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#16
Southfork & JayDub,
Thanks for starting a great thread. It's nice to be discussing PM BS versus political BS.
 

Buck

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#17
My goal is to pass some down to the kids
can't do that if I have none

I've got some set aside for the GSR swap that will hit, eventually
(the kids will get written instructions on how that works LOL )

and to the Elite Class I shall Goooooooooo

yeah right, I'm so broke, I can't even buy me another boat to sink, guess i'm going to settle for some of those HF Chinese Safes on wheels

psssttt!
you can get 'em for about $99 with a coupon
that and another set of Free Screwdrivers

what a deal!
sell?

LOL


My Progeney will be having the bump of their lives 'cause until it does, it ain't getting any better and I'm broke, my last boat sank and my trucks axles are broken

LOL
 

engineear

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#18
If..wait...SINCE it's manipulated, throw the charts away already.
Also, if/when it goes well beyond $50 what shape is the world in?
Been reading the Chinese are pushing the Yuan/oil thing to get away from the petrodollar and that's what's causing the rise lately.
We shall see.
 

Goldhedge

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#19
I've got some set aside for the GSR swap that will hit, eventually
GSR is 81:1 what # are you considering??
 

Buck

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#20
Reminds me:
Them Chinese fellers,
they the same one's who like opium?

what, too soon?

this opioid crisis is going to
hit the Chinese Farmer first
travel to the cities where they'll build buildings that fall over
affect those who build trains that cost a fortune
send citizens and their new-found wealth overseas to invest in real estate and establish opium runs, back to China

LOL

Communists are Funny!
 

Buck

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#22
GSR is 81:1 what # are you considering??
35 or lower I wasn't positioned properly for the last one and was envious about those I read who said they did it
so
I've been trading au for ag for years
lowest 35 / 1 ( was a small trade just to establish a network, overall cost me nothing)
best 74 / 1 (again a small trade but was long after my network was built)

Overall:
I've gotta beat 40 / 1 to even consider refloating the silver
otherwise it's a wash

on a counter point:
I'll do it anyway, trade somewhere in between, 'cause I'd rather trade my junk silver out for gold, in the end
the kings metal

but, again, that's a selective trade that maybe I could put together where my network doubles my value


nobody talks but we all do some bullcrap just like this
personally I'm broke eating friskees and my new found boat just recently sunk and I'm a troll and etc

however, you know what I mean, yeah??
 

Buck

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#23
I thought the Opium was coming from Afghanistan?
I understand my gibberish better than most, what I meant was:

it don't matter where it comes from, it just matters who ingests it
hit the peasants first, the young ones, of course, they take it to the fad level where the cities are clamoring for it

like the Brits did, earlier on
the Chinese love that shit
 

Professur

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#24
Last time I bought at $15 and sold the lot at $45. I'd be happy to do that again
 

solarion

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#30
I now have 60% positions bought in the SLV April $14, calls and am looking for a move through $17 to confirm the validity of the trade (and add the remaining 40%).
Tough to take people seriously when they talk about silver and then claim they're holding paper figments and bankster frauds.

Gold was pushing 2k at the top and silver was pushing 50. Gold is down < 33% and silver is down 67 freaking percent since banksters began the smash down in 2011. It's pretty obvious what's going to happen when these things take hold again and the GSR starts to move in the opposite direction.
 

Strawboss

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#31
I am loaded to the gills with LEAP options on a variety of miners, GDX, GDXJ and SLV. If metals dip below last Decembers lows - I will buy even more. In terms of when will I sell them? I will keep an eye on the weekly RSI/Stochs/Williams %R...when they give their signal - I will sell and convert some of the proceeds to phyz so I can go have a boating accident.

The thinking behind buying time is to give myself flexibility as I might be wrong on timing (might be a flush first) and it might take some time for prices to rise sufficient to make the trade worthwhile.

I am tentatively expecting at least a 3-5x gain on the trade.
 

Wellsburg

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#32
What plans do some here have for their stacks?
Hope I can see a repeat of 2011 soon. Sold a little at $25, little more at $30, little more at $35, etc. Did sell some at $45, but not enough. Overall, I probably sold about 20% of my silver pile back then between $25 and $45. That brought my cost average down on the remainder and got us cashed up for daughter's college. Timing was perfect by accident.

Now, I buy some only on the dips, last purchase was December when silver dipped under $16 (few hundred ounces generic rounds).

Ultimately, I would love to see the big paper traders lose control of the physical market, paint themselves into a corner trying to cover, and get slaughtered while silver price finally runs to triple digits. Back in 1980, silver hit $50 for a couple of days thanks to the Hunt brothers, so $100 or higher today is possible under the right conditions.

Figure I can wait another 15 years to see this happen. If it takes longer than that, I will probably die waiting and my daughter can sell it.
 

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#33
Mine is for insurance purposes only. That is the neat thing about discreet metals purchases- its like an insurance policy where you get to keep the premium too.

I have no intentions to sell, only swap when the GSR is right. If push does come to shove and I need some cash then I will sell some of whatever metal the GSR dictates that I have. Meanwhile, the stack has outgrown its own storage space- at least for now until the next swap back into AU.
 

BigJim#1-8

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#34
If there's any left when I die, who cares? Not me anymore...
If there's any left when I die, who cares? Not me anymore...

BF
I understand what you're saying. The better question would have been, is everyone educating their heirs about PM's?
The lady I'm going to help was told nothing about the value of the PM's or how to dispose of them if she needs.
She knew about them but never had an interest in them.
My friend told her to contact me if something happened.
 

D-FENZ

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#35
I understand what you're saying. The better question would have been, is everyone educating their heirs about PM's?
The lady I'm going to help was told nothing about the value of the PM's or how to dispose of them if she needs.
She knew about them but never had an interest in them.
My friend told her to contact me if something happened.
Regards and kudos to whoever said it here first. A search turned up nothing. But this quote has always stuck with me since I read it. It's so true. Paraphrased:

"In 100 years, somebody will be burnishing your metals. And it's not you or anyone you know."
 

Bottom Feeder

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#36
"In 100 years, somebody will be burnishing your metals. And it's not you or anyone you know."
Good quote, fenz, did ya see the silver horse my wife had made for us on her last visit to Nam? I'm sure someone will be polishing that for the next few hundred years. I posted a few pictures of in in the Great Sangs thread.

BF
 

BigJim#1-8

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#37
Good quote, fenz, did ya see the silver horse my wife had made for us on her last visit to Nam? I'm sure someone will be polishing that for the next few hundred years. I posted a few pictures of in in the Great Sangs thread.

BF
That horse is fantastic.
 

louky

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#38
Just curious, for those of you who have been waiting for silver to make a move....

For the sake of argument, let's say he's right and silver does bust out. What will it take for you to sell off a majority of (or all of) your holdings?

At what price point are you ready to say "I'm getting rid of this stuff and I'm cutting ties with silver"?

Does $20.00 do it? $22.50?

Are you willing to take a small loss just to get out from under it? Or do you hold until you're not under water anymore?

For some of you who were late to the party that price point might be some time from now.

Additionally, if you do sell off, what do you do with that cash? Gold? Real estate?

Nobody owes me an answer, but I'd be interested in hearing your thinking. Like I said, just curious.

Reckon I'd sell some at $500 to buy some premium TP for my bunghole

 

savvydon

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#39
Hope I can see a repeat of 2011 soon. Sold a little at $25, little more at $30, little more at $35, etc. Did sell some at $45, but not enough. Overall, I probably sold about 20% of my silver pile back then between $25 and $45. That brought my cost average down on the remainder and got us cashed up for daughter's college. Timing was perfect by accident.

Now, I buy some only on the dips, last purchase was December when silver dipped under $16 (few hundred ounces generic rounds).

Ultimately, I would love to see the big paper traders lose control of the physical market, paint themselves into a corner trying to cover, and get slaughtered while silver price finally runs to triple digits. Back in 1980, silver hit $50 for a couple of days thanks to the Hunt brothers, so $100 or higher today is possible under the right conditions.

Figure I can wait another 15 years to see this happen. If it takes longer than that, I will probably die waiting and my daughter can sell it.
This.

For those that are content to just preserve wealth then hold to you fold is a fair bet. You can always pass it on when you are gone.

For those whose economic outlook is a bit more fluid (likely to be younger, but not necessarily so), I favor buying and selling incrementally. On the last run up to $50 in 2011 I started selling in aliquots from about $25 on. I probably sold 1/3 of my stack by the time we were in the mid $40s. I would have sold more if it kept going up.

I buy in mirror fashion. The harder it gets beat down the ore inclined I am to stack. The main caveat here is if you have those funds earmarked for something else (particularly debt repayment), then you better think twice before you jump into the deep end.