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Out of interest, on GEI, is there anyone planning on buying silver today?

 

 

Yep! Me. I bought some a bit of 'junk' yesterday. Discipline. When it crashes, there won't be any, just like last time. B)

 

Ratio at 30.87:1!!!!!!!!! Time to 'nail it'?

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Here We Go

 

Keep an eye on things tonight and get ready for a very volatile week. Watching the PMs over the next few days will not be for the faint of heart. TF

 

Wow, I've written some stuff over the past few months that has worked out pretty well. I'd say this close from last night's note ranks right up there.

 

After spiking almost to $50 overnight, silver has been clawed back to a low of $47.80 this morning. We've seen this countless times before since August. It just seems more dramatic because the price is now so high.

It looks like this:

 

4-25amsilv5.jpg

 

Silver rallies off of a three-day or regular weekend (think back to President's Day as an example) and then plummets as soon as the prop desk monkeys hit their desks at 7:30 EDT. Like clockwork.

In fact, evidence of the coordinated attack is clear when you see that gold and silver were first hit at the exact same freaking moment, 7:35 EDT:

 

4-25amsilv1.jpg

 

4-25amgold1.jpg

 

OK, so here's what you need to watch. Silver is going much higher but maybe not today. Again, pattern suggests that in the 2-4 day time period before first notice day, silver sells off as The Cartel attempts to "convince" weaker-handed longs to roll out of the current month. No reason not to think this won't happen again. In fact, as I type, I have no position in silver calls or futures. I'm waiting for this dip.

 

If I had to guess, the dip will come on the back of a margin increase from the goons at the CME. It won't/can't be a puny little increase, either, as the market will simply shrug it off if it is. No, it will likely be more substantial this time. In fact, you've already got Disinformation Agents like this shill practically begging for one:

http://www.businessi...e+Money+Game%29

All in the name of the greater good. "Please, CME. Save us from an overall market collapse by reining in silver."

 

So, stay nimble. There are a lot of fresh, new longs in the silver market. They are not grizzled veterans like you and I. IF The EE/CME can get the ball started downward, the weak hands will panic and silver will drop very quickly. I will be waiting for them and I will gladly buy their silver from them at the levels below:

 

4-25amsilv.jpg

 

I would first expect support at the point of the gap UP on last nights open, around 46.60. I would give my right arm for a chance to buy some silver at 45.50. (Do you recall that The Wicked Witch gave you that level back on Saturday?
) It will take a lot of courage to step up and hit the bid there as every douchebag topcaller in the world will already be proclaiming that the "silver bubble has popped".

Regardless, IF I can get a dip to buy, silver should then rally back to and maybe even through $50 by later next week.

 

So, stay nimble. This might be an event better watched from the sidelines for the next few days as its certainly going to be wild. Much more later. TF

 

http://tfmetalsreport.blogspot.com/

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CME Hikes silver margins again...

 

 

CME Clearing - Performance Bonds / Margins

DATE: Monday, April 25, 2011

NOTICE # : 11-149

 

SUBJECT: Performance Bond Requirements: Metals Outrights- Effective Tuesday, April 26, 2011

 

FOR THE FULL TEXT OF THIS ADVISORY :

 

http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv11-149.pdf

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This morning I have swapped approx. 25% of my silver holdings to gold.

 

I am now still overweight silver.

 

The gold:silver-ratio has only been that low in 29% of all trading days since 1885, so it seems a good time to swap some.

 

The ratio might go lower or higher from here, I will do according swaps in the future.

 

In general, I believe that silver will further outperform gold over the years, but I need to stick with my long term strategy which means I will reduce my silver exposure step by step to take volatility and risk out.

 

In general, I reduce trading to a minimum. This is hence no trading, but rather a part of my silver exit strategy.

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In general, I believe that silver will further outperform gold over the years, but I need to stick with my long term strategy which means I will reduce my silver exposure step by step to take volatility and risk

 

I'd be interested in your reasoning as to why you expect silver to outperform gold over the next few years.

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I've been rethinking my strategy and I'm starting to wonder how useful/accurate the gold:silver ratio is today. As far as I am aware all gold:silver ratios predate the industrial revolution and because silver is increasingly consumed, how relevant is this now? I'm holding out on silver for at least another year irrespective of the G:S ratio, after all, above ground supplies of gold are far in excess of silver and it takes 2-3 years to bring a mine online...

 

This morning I have swapped approx. 25% of my silver holdings to gold.

 

I am now still overweight silver.

 

The gold:silver-ratio has only been that low in 29% of all tradingg days since 1885, so it seems a good time to swap some.

 

The ratio might go lower or higher from here, I will do according swaps in the future.

 

In general, I believe that silver will further outperform gold over the years, but I need to stick with my long term strategy which means I will reduce my silver exposure step by step to take volatility and risk out.

 

In general, I reduce trading to a minimum. This is hence no trading, but rather a part of my silver exit strategy.

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I've been rethinking my strategy and I'm starting to wonder how useful/accurate the gold:silver ratio is today. As far as I am aware all gold:silver ratios predate the industrial revolution and because silver is increasingly consumed, how relevant is this now? I'm holding out on silver for at least another year irrespective of the G:S ratio, after all, above ground supplies of gold are far in excess of silver and it takes 2-3 years to bring a mine online...

These arguments are the main reasons (industrial overuse, low supplies, silver shorts) why I am in silver. However, one issue is of course that silver has been demonetized, and that the market is much smaller, making it much more volatile than gold.

 

I still hold more silver than gold (in value) - call me Silverfinger. But I took a first step towards reducing my position/exposure. I will possibly do more at 20:1, 15:1, and at 10:1 I will possibly be entirely out of silver. (EDIT: Keep in mind that my first larger goal from a few years ago was 35:1, so, I am just sticking to my original plan of taking some off the table by then.)

 

Silver will easily take out $100, if not $200, in the years to come. But similarly, gold will rise a lot too.

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I'd be interested in your reasoning as to why you expect silver to outperform gold over the next few years.

See above post. But keep in mind that silver is gold's naughty little sister, so strong nerves are needed for any larger exposure. I've held silver through the $21 to $9 plunge in 2008. I will continue to hold a lot of silver. But the lower the ratio goes, the more I will take off the table and put into gold instead.

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Understood. I'm prepared to ride this bull for a while longer yet, I think we'll see $75/t.oz this year and $[100-130]/t.oz in 2012. Silver really could change my life, I'm prepared to take an educated punt! :)

 

These arguments are the main reasons (industrial overuse, low supplies, silver shorts) why I am in silver. However, one issue is of course that silver has been demonetized, and that the market is much smaller, making it much more volatile than gold.

 

I still hold more silver than gold (in value) - call me Silverfinger. But I took a first step towards reducing my position/exposure. I will possibly do more at 20:1, 15:1, and at 10:1 I will possibly be entirely out of silver.

 

Silver will easily take out $100, if not $200, in the years to come. But similarly, gold will rise a lot too.

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There's another side to this coin... There are recent interviews with ES where he discusses this in more depth.

 

Sprott says that in spite of this rising demand, precious metals companies are "being misguided" by reports produced by GFMS Ltd, a leading independent precious metals consultancy which provides data on gold, silver, platinum and palladium market research.

 

"You will notice on the charts that for some bizarre reason the supply and demand are always equal. They're equal because they plugged net implied investment demand to make the numbers balance," said Sprott. "The other day [silver] traded 500,000,000 ounces in a day on the COMEX when [the world] only produces 800,000,000 ounces in a year. It's a paper market; there's no inventory. I think the supply and demand have been massively miscalculated."

 

http://www.remonhann...he-this-decade/

 

EDIT: More detail here from sprott.com: http://tinyurl.com/5vz9gm5

 

ok we all know this would have got pride of place on 321gold at the mo, but interesting reading nevertherless

 

http://www.321gold.c...r_m_042511.html

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I still hold more silver than gold (in value)

Well, you had me fooled! Did the drop from 21 to 9 shape the exit strategy in your mind or was this always on the cards? (If yes, why didn't you just go straight to gold?) Were you factoring in silvers probable outperformance to gold?

Still you floored me with your admission above re your silver to gold value. I am well overweight silver to gold but only weight. Nowhere near value. And I genuinely like silver.

Hope you had a nice holiday btw. I feel certain that you slept well...Time to update those charts please, Mr Silverfinger.

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Because of my personal circumstances, I can bear the risk silver comes with. That's why I bought a shed load of silver.

 

I always had a silver exit strategy. I also have a PM exit strategy. People who have commented to the opposite have made me laugh in the past.

 

The point, however, is that we are nowhere near a point where I would consider starting exiting PMs.

 

With silver it is slightly different due to my over-exposure to it. So, I took some off the table, and as I said, will do again when the ratio dives further. I believe silver will make 20:1 or 15:1, I can even see 10:1 or lower! But no one can know for sure, so I have a strategy which reduces my exposure with the price going up relative to gold. Furthermore, I have an overall PM exit strategy which does a quite similar thing, but there the measure is much more complicated and not as simple as in the gold-silver comparison. Anyway, what I post should give a lot of clues about what I am monitoring for assessing gold's relative expensiveness.

 

Well, you had me fooled! Did the drop from 21 to 9 shape the exit strategy in your mind or was this always on the cards? (If yes, why didn't you just go straight to gold?) Were you factoring in silvers probable outperformance to gold?

Still you floored me with your admission above re your silver to gold value. I am well overweight silver to gold but only weight. Nowhere near value. And I genuinely like silver.

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It's literally off the chart, is the red dot in the area where you've circled where it's supposed to be now, from the scale on the left it doesn't look like $45?

Yes, it is off the chart, so we'll have to wait on an improved update. The red dots (there should be 5 of them, but some are off) represent the last five trading pairs.

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