Consider THIS Sign of a CRAZY Overheated Silver Market (Indicative Of A Bubble or a Fundamental Shif

BigRick

Option Volatility Has Gone THROUGH THE ROOF & you can't buy a call option AT ANY STRIKE FOR ANY EXPIRATION for less than about $1,000 (for a Dec '11 120!).

With the excetion of the above (i.e. Dec 120 Call) you have to shell out AT LEAST appox $2,000 for any other strike/expiration for just ONE call option.

There is currently NO OTHER commodity with the option vol so high &/or where you can't buy SOME call at SOME exp for a tiny fraction of $1,000-$2,000,

This is much like the frenzy in Cotton a few months ago before the vol crashed (along w/the option prices).

This is a GREAT TIME to sell calls if you have the stones!

Current TOP STRIKE Call Quotes (Bid/Ask) - multiply numbers by 5000 for dollar amount:

Jun 60 - .405/.461 (Exp 5/25)
Jul70 - .380/.400 (Exp 6/27)
Sep 80 - .377/.550 (Exp 8/25)
Dec 100 - .300/.320 (Exp 11/22)
Dec 120 - .079/.190 (Exp 11/22)

jmski52

Fundamental shift due to monetary policy. At these levels, how could you not get volatility?

gecko109

Unlike in traditional asset bubbles, people who buy silver are scrambling to get off a sinking ship better known as the dollar. When people bought into dot com stocks, it was for pure greed.....when people went all-in on houses, again, they had false hopes of double digit annual gains on the property. Silver is different though. With those other 2 bubbles, people werent trying to get away from dollars for fear of a pending economic collapse......silver and gold are replacing dollars as the world's trusted "currency" right before our eyes. This is no metals bubble. The true bubble here is the one you hear going "pop".....and its the once mighty world reserve currency.....the USD....THAT is the bubble.

TooSnappy

now thats one of the most acurate statements I've heard in a while.

RedHerring

<< <i>Consider THIS Sign of a CRAZY Overheated Silver Market (Indicative Of A Bubble or a Fundamental Shift???) >>




I believe we've seen a fundamental shift this month. Silver might trade below $40/oz again but it is highly unlikely to ever trade below $30 again. At least in USD!

For PMs bulls this has been an incredible ride. Gold 2007 to present and silver in 2011? It's been a crazy one!

Overdate

Similar options on the ETF, where they exist, seem to be a bit cheaper. Am I missing something?

Konahead

<< <i>Unlike in traditional asset bubbles, people who buy silver are scrambling to get off a sinking ship better known as the dollar. When people bought into dot com stocks, it was for pure greed.....when people went all-in on houses, again, they had false hopes of double digit annual gains on the property. Silver is different though. With those other 2 bubbles, people werent trying to get away from dollars for fear of a pending economic collapse......silver and gold are replacing dollars as the world's trusted "currency" right before our eyes. This is no metals bubble. The true bubble here is the one you hear going "pop".....and its the once mighty world reserve currency.....the USD....THAT is the bubble. >>



Well said, what a crime

ttown

The bubble is the dollar, PM's are just recording the event with their gains.

Wingsrule

Unlike in traditional asset bubbles, people who buy silver are scrambling to get off a sinking ship better known as the dollar. When people bought into dot com stocks, it was for pure greed.....when people went all-in on houses, again, they had false hopes of double digit annual gains on the property.

Disagree. IMO the majority of 'new' people buying silver now are from the same mentality as the dot com and RE folks. Now that the 'word is out' a lot of fresh blood is pouring in.

That being said, I am not discounting those that actually ARE trying to get out of the dollar, but my guess is those people have been in silver much longer.

jdimmick

I agree with wingsrule, several new people everyday coming in,(whom you never seen before) wanting to buy silver becuase they here its going up

goingbroke

Technically, gold bulls remain in strong overall technical command. There are still no early technical warning signals that a market top is close at hand. For gold, unlike silver, the recent lack of high intra-day price volatility is bullish. Gold prices are in a three-month-old uptrend on the daily bar chart and in a 10-year-old uptrend on the longer-term monthly chart. Bulls' next near-term upside technical objective is to produce a close above resistance at $1,550.00. Bears' next near-term downside price objective is closing prices below solid technical support at this week's low of $1,492.00. First resistance is seen at Thursday's record high of $1,538.80 and then at $1,545.00. First support is seen at the overnight low of $1,532.10 and then at Thursday's low of $1,523.90.

cladking

It looks like a blow off top and ven quacks like a blow off top but I can't shake
the feeling that this is the result of two diametrically opposed perspectives of
the nature and value of silver. The markets traders and trend riders as well as
many bears are treatying this as another bubble on which they can capitalize
so it's acting like a blow off top. If enough of these people are actively buying
or selling silver than watch for a steep drop.

But what if the bulls are simply adapting to a new paradigm more slowly than
could have been depicted. There have been competing forces at work for years
here and we've merely reached a level at which they are temporarily in balance.
If this is the case then any sell off will be severely attenuated because the bulls
will use it as a buying opportunity. The short sellers are surely reaching a level
of risk that they have to be concerned with criminal sanctions so which is going
to break first? The duck or the shorts?

I think the shorts break first and the buying panic ensues but this is hardly a giv-
en. They have a lot of tools at their disposal but this ain't Kansas anymore and
you can't create silver out of paper no matter how well placed your friends are.

storm888

Silver is VERY likely a bubble.

BUT, it could easily go much higher before it bursts.

It is prolly silly for folks who are in cheap to pull all of
their chips out now.

The dollar slips a few basis points, and silver adds 2%+;
not reasonable.

The SHORTs are playing with free/stolen money. They
have not yet begun to fight.


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

Gold looks "safer" and more leggy.

57loaded

as long as the USD slides no bubble and i don't see it getting better on the horizon. there is no (or very little concern) about the USD's drop coming from the "Bernank"

if, well, when stocks slide and T-Bills are not being bought as robustly, then the PM markets WILL get real CRAZY (IMHO)

there is both fear AND greed playing in PM's sandbox now.

Bear

Well, when the USD breaks 60, what then?

BigRick

Bubble?

cladking

<< <i>Bubble? >>



I think silver has nearly bottomed. The GSR has to get up to about the 38.5 region
but that can be accomplished without much lower silver levels.

There are growing signs of a double dip recession and ths would severely cripple the
silver bull. It's not a time to be buying with both hands but long term bulls and newbies
might be well advised to make some purchases.

It mostly depends on what happens in China at this point.

storm888

The printing of money continues.

OPA

<< <i>

<< <i>Consider THIS Sign of a CRAZY Overheated Silver Market (Indicative Of A Bubble or a Fundamental Shift???) >>




I believe we've seen a fundamental shift this month. Silver might trade below $40/oz again but it is highly unlikely to ever trade below $30 again. At least in USD!

For PMs bulls this has been an incredible ride. Gold 2007 to present and silver in 2011? It's been a crazy one! >>



Your crystal ball seems to running on all 8 cylinders...good call of yours before the recent correction.

BigRick

Yup. It was a bubble.

ttown

<< <i>Yup. It was a bubble. >>



Good one.....

jmski52

In the heat of the moment, I can understand why you wanted to call it a bubble, but this chart really doesn't look like a bubble to me:



Especially, when taken in the light of this chart, courtesy of cohodk:

BigRick

Does the bottom chart mean that the silver drop was a result of the dollar index breaking below the lower end of the channel (or something like that)?

Edited to add: Duh (wasn't thinking before), I guess you meant that the silver runup was the result of that.

But no price action of the dollar was the result of the huge drop.

OzzyAndy

Surely gold would have also gone up the same % if it wasn't a bubble. From what I saw, silver was increasing in price much faster than gold for no reason whatsoever, except speculators trying to make a quick buck (which is basically the defn of a bubble).

Chart also show that silver got past $49 and then down to $32 ? I think. Certainly fell off a cliff at the time.

roadrunner

Potentially a short to intermediate term bubble with silver. But the fact that other PM's responded to silver's >30% drop with only 5-8% drops suggest this was not a
blow off top for metals. The jury is still out on this one. Gold is looking like it's attempting to assault the $1600 level by June.

The real bubble is in fiat currencies and sovereign/state/municipal debt as the charts above of M0, M1, M2, and USDX clearly show.

roadrunner

jmski52

I guess you meant that the silver runup was the result of that. But no price action of the dollar was the result of the huge drop.

No, I wasn't trying to suggest a causal relationship or even a high statistical correlation. I think that the direction of the trend in each chart is significant and that they both suggest that silver isn't cooked as far as being a profitable position to have.

BigRick

An update for the current gold situation:

IMHO, gold is NOT in the same position as silver was when I posted this thread as you can still get NUMEROUS gold call option for the minimum tick - i.e. $0.10 (or $10) per contract.

fyi: I since bought the Silver DEC 120 Call for a mere single tick (i.e. .001 or $5).

NumbersUsacom

<< <i>An update for the current gold situation:

IMHO, gold is NOT in the same position as silver was when I posted this thread as you can still get NUMEROUS gold call option for the minimum tick - i.e. $0.10 (or $10) per contract.

fyi: I since bought the Silver DEC 120 Call for a mere single tick (i.e. .001 or $5). >>



Big Rick,

Hows it looking on that dec call? Got an update regarding your silver and gold bubble Option guage system?

derryb

The debt bubble must first pop. Student loans are next in a long line.

I'm buying silver.

Baley

Pretty good call in realtime, BigRick

derryb

Still buying silver.

cohodk

Interesting the lack of understanding of markets demonstrated in this thread by the majority. Fortunately this makes my job easier.