***MAY 2011 Gold and Silver Stocks/Options/Futures trading thread***
ProofCollection
Posts: 6,115 ✭✭✭✭✭
This is a continuation of the monthly
thread for discussing relatively short or near term movements in precious metals and related securities.
April was quite a remarkable month for gold, closing at a new all time high, very close to its intra-day high on Apr 29. April saw gold gain $136 for the month!
April was also great for silver, with a gain of $12.12.
thread for discussing relatively short or near term movements in precious metals and related securities.
April was quite a remarkable month for gold, closing at a new all time high, very close to its intra-day high on Apr 29. April saw gold gain $136 for the month!
April was also great for silver, with a gain of $12.12.
0
Comments
Strangely, with such a strong day in gold silver took a little bit of a beating. But silver needs to consolidate its most recent move as well.
Nichols who called the end of the parabolic move in Feb has of course, admitted his error and re-examined the pattern. The difficulty of course is determining when exactly the pattern started. His projection jives with many, many others, and is point toward a mid June date. So if true, not only will May and June be wild months, but also at the end of such moves patterns can become over-stretched to levels never-seen before. So charts that desperately need to consolidate recent moves just keep chugging. The rules are different, and I've decided to move to a very short term trading strategy, where I'll look to book short term gains and buy on dips rather than hold for the bigger move, as the sudden dips can be devastating when highly leveraged. Heck, silver today ranged almost $2. I still think silver needs a few days to consolidate.
So bottom line is, I think May could be crazier than any of us imagine... $70 silver, $1750 gold are probably NOT out of the realm of possibility, although I would feel crazy to bet on it. Although if we do see these levels in May/June, I would definitely look for a sizeable correction, as these moves simply cannot be sustained.
Interesting things in the physical market. Some bullion distributors have stopped taking orders for silver eagles, not to mention increasing premiums. Low end Morgan and Peace dollar values continue to rise, and bidding seems to be increasingle competitive for what I'm looking for on the Bay to fill/finish/upgrade my collection.
Premiums on pre-1933 generic gold seem to be going up a little, but still look like pretty good bargains, as the premiums are lower %-wise then we've probably seen in YEARS. RR- what say you?
Platinum seems to be moving a little bit lately, as I see it's been getting a little bit of press as gold gets closer to the price of platinum. I still don't expect it to be worth messing with, but $2000 platinum in the short term probably isn't unreasonable if gold keeps moving like it is.
"The Commitment of Traders Report was just released by the CFTC and as many have suspected the Bad Guys used the latest silver slams to cover a serious amount of short positions.
Here's the report:
http://www.cftc.gov/dea/futures/other_lf.htm
In the Bad Guy category (Producer/Merchant/Processor/User) the short postions were decreased by 5,209 contracts or over 26M ounces in a single week! As the cutoff was last Tuesday there is likely even more liquidation.
For all those stating that the silver bubble is about to burst it sure doesn't look like the Banksters believe that as they would have increased their shorts but INSTEAD THEY COVERED 26M SHORT OUNCES IN A WEEK!
Next Friday we get the Bank Participation Report for the month of April which should shed further light on the current position of JP Morgan and friends.
If they are the one's covering you can expect fireworks in the immediate future.
The games continue!
Bix Weir
www.RoadtoRoota.com"
The MMs have run SLV down, probably to run the stops and allow the shorts to cover during this parabolic move. In light of the COT report above, next week should see silver and the SLV continue its run to $50 and above. SLV options have been very, very good to me! And my silver coins, bullion, etc!
GLTA
Bob
Vietnam Vet 1968-1969
In God We Trust.... all others pay in Gold and Silver!
If so, what month & strike & why?
Spooly,
Consider selling some calls instead. Highly disproportionate volatility embodied currently.
Not the exact opposite of buying puts but as a tradeoff for the downside protection being limited to the premiums received you have cash in instead of cash out thus increasing your returns instead of reducing it with the put purchase. Actually you could do both and finance x% of the put purchase with a call sale.
>
Successful transactions on the BST boards with rtimmer, coincoins, gerard, tincup, tjm965, MMR, mission16, dirtygoldman, AUandAG, deadmunny, thedutymon, leadoff4, Kid4HOF03, BRI2327, colebear, mcholke, rpcolettrane, rockdjrw, publius, quik, kalinefan, Allen, JackWESQ, CON40, Griffeyfan2430, blue227, Tiggs2012, ndleo, CDsNuts, ve3rules, doh, MurphDawg, tennessebanker, and gene1978.
<< <i>I have a question. I purchased the ETF SIL when silver was $28 spot. Since then, spot has gone up 71%, but the ETF has only gone up 20-25%. What gives? Are silver mining companies a good buy right now since they have not kept up with the pace of silver spot? >>
I think we will learn a lot over the next 10 days as many of the silver miners will be reporting their earnings from last quarter. The average price of silver during the first quarter was in the low to mid $30 range per ounce. During the same quarter in 2010, the price of silver was a good $16 to $17 less per ounce. Expenses may have gone up a little but you would have to believe that most of the miners will be announcing huge earnings and that should draw some attention. Hopefully we will also see some mergers taking place.
As long as silver holds its price or moves up from here during the next 10 days (while the earnings announcements are made), we should see the miners do very well.
Instagram - numismatistkenny
My Numismatics with Kenny Blog Page Best viewed on a laptop or monitor.
ANA Life Member & Volunteer District Representative
2019 ANA Young Numismatist of the Year
Doing my best to introduce Young Numismatists and Young Adults into the hobby.
<< <i>Who's selling COMEX Silver Calls?
If so, what month & strike & why? :HMMMMM >>
You mean options on futures contracts? Why not just buy or sell the futures contracts directly and avoid the time decay?
As far as miner's earnings, I have always wondered and theorized that if prices go significantly up in Q1, those won't be reflected in earnings until after Q2 or Q3's numbers because even if they don't hedge, they probably still sell forward production by a few months. Plus, their customers may take 30 or 60 days to pay so that may affect the books. Not sure how the accounting works but I think it's safe to say that price increases aren't immediately reflected in earnings... Plus - it always seems with miners that their costs go up and tend to eat into the higher profits.
This article today summarizes a number issues of why miners are lagging. Probably the biggest issue is that Asian, African, and European demand is centered around
accumulating physical silver, not mining stocks. Don't know what the average Chinese or Indian J6P is going to do with shares of Hecla or Coeur D'Alene. And the Chinese
markets seem to be littered with fraudulent companies so investing in miners there might have some concerns. The proliferation of bullion ETF's and ETN's since GLD was
founded in 2004 have taken tens of billions away from mining companies. That option was not available during the last PM's boom. This time the banksters are knee deep
in the leading ETF's. I guess they figured if they can't beat them, then join them, while siphoning off the profits....all they while keeping a handle on a large % of the bullion.
Other major reasons include the hedge funds which have been applying a long bullion - short miners trade for many months or even years. Then toss in all the geo-political
risks and rising costs associated with mining companies (labor strikes, raw material and supply costs rising, permits rejected, nationalization concerns (ie CDE and PAAS in
Bolivia), currency risks/fluctuations, derivative's losses, weather, increasing sovereign taxes/royalites, etc.). It seems every other quarterly report I read has a miner losing
$10-$50 MILL in currency fluctuations or derivatives. Ore grades have been dropping for over a decade. The average precious metals miner now has to process 3X the ore
as they did 10 yrs ago to find the same amount of metal. It still takes 5-8 years to bring a major ore find to production. 2 of the biggest finds in recent years are both up in Alaska
but probably still 5-8 yrs from production....assuming everything else including the permitting goes smoothly.
roadrunner
This latest drop in gold has produced another short term $30 cup formation.......now pointing to $1600. Plat just formed a $50 cup.
Figured that with the big gap left from last night's open that gold would bounce back to $1565. But didn't expect the $1575 ATH bounce.
That 100 ounce silver bar trade for 3 AGE's last week now maybe looking like the bet of the month.
Update for 3:45 EST: miners crushed after the bounce, including some very well respected leaders (MFN, GG, GRS, ANV, RIC).
Gold gave almost all of it back up again. The handle on that cup is now awfully L-O-N-G. If the miners are leading, there is more downside to come.
Big gap left in silver and the silver miners on the open. Do we get more downside first, or go back and fill that asap? AGQ<300 (gap up to around 355).
roadrunner
Glen
Uhhhmmmm, isn't that the EXACT REASON one would SELL options?
I assume you genuinely do not understand the difference so let me try to explain a bit.
First of all, the question was who's SELLING CALLS.
"Buying or selling the futures contract" is NOT like SELLING calls - in MANY WAYS.
First off, selling a call is more closely similar to selling the futures (i.e. futures down = profit w/both) - NOT buying one.
Secondly, (and the above is about where the material similarity ends), the DELTA of the futures is 1 & the DELTA of an out of the money option cannot be higher than .5 & for the options MOST out of the money for the remainder of this year the deltas currently roughly range from approximately about .01 to .04
Thirdly, the margin on a futures contract is approximately (VERY ROUGHLY) the same multiple of an option as the multiple of the futures' delta to that of the option (or inversely, the margin on the option is the same ratio - or proportion - as the options' delta to 1) - THUS MUCH GREATER LEVERAGE.
Fourthly, with the futures, you have instant mark to market gains or losses that will be permanantly realized as soon as the position is offset - i.e. if you're wrong as far as the futures' direction you WILL lose money absent a reversal of suffiicenlt magnitude.
While the option has similar characteristics as far as the mark to market gains or losses, as long as you hang in there until expiration you can still make money EVEN IF THE PRICE OF THE FUTURES MOVES AGAINST YOU IN THE INTERIM AS FAR AS THE PREFERRED DIRECTION & any interim mark to market losses will be reversed out completely upon expiration.
So no, trading the futures is NOT the same as trading the options (anymore than flying via hang gliding as the same flying via the Space Shuttle).
I could go on ad infinitum but if you really wanna know more let mew know.
I only trade stock options.
In God We Trust.... all others pay in Gold and Silver!
FCX - 52
GDXJ - 36 & 37
GOLD - 74
EGO - 17
HMY - 13.5
SA - 30
GRS - 9
RBY - 4.6
CDE - 27
AG -17
SLW - 35
roadrunner
5000oz@$48 is $240k, or about 1:20 leverage. Just a week ago @$38 it was $190k, or 1:16. The new ratio, before last night's crash and today's late-day decline restored the ratio to ~1:16. As we learned with the mortgage crisis, it's crucial to keep leverage ratios within reasonable ranges to protect both investors as well as the brokerages.
One of my brokerages, ThinkorSwim, actually implemented DOUBLE margin rates for silver. A full size SI contract requires $30,000 with them, vs. $15k with most others.
As one who has made as well as lost a ton playing futures, I can say that I am glad they have increased margins, as this has probably helped me reduce and manage my losses rather than being completely wiped out if they had left margins the same and I was now leveraged 1:40 or higher.
I just can't see it going parabolic again after this splunge.
For all those stating that the silver bubble is about to burst it sure doesn't look like the Banksters believe that as they would have increased their shorts but INSTEAD THEY COVERED 26M SHORT OUNCES IN A WEEK!
The above is AWESOME as it is 100% believed and 100% inaccurate.
Short covering is what CAUSES the bubble. Short covering is excessive buying pressure above and beyond normal investing or trading demand. When the shorts are finished covering that excessive buying pressure is removed. And since the price has risen "too far, too fast", the normal investing demand is diminished. A situation is created where everyone who wanted to or was force to buy is now gone.
Smart traders DO NOT increase shorts in the face of a rising price. To do so would result in them receiving unemployment checks.
Knowledge is the enemy of fear
I got long ZSL on the initial bounce yesterday, but covered after a 50c gain. Stupid as it is $2.50 higher right now. But I was tired after driving 1044 miles in 15 3/4 hours after trying to watch a scrubbed space shuttle launch. 2600 miles and 40 hours of driving for nothing. This is the 3rd time I have tried to see a shuttle launch, only to return home disappointed.
Knowledge is the enemy of fear
During the past several years (but possibly not the last few weeks/months) that was exactly what JPM and their bankster buddies were doing. As prices rose,
they piled on the shorts until prices eventually turned. That methodology worked from 2005-August 2010. They didn't care about smaller silver or gold losses when
they were probably making many more times that in the stock and currency markets. If one can swing the metals with minimal dollars, and profit in the bigger
markets, then why not? And if the FED/Treasury is sympathetic to your cause (which of course they are), they might even throw bones in your direction along the way.
No one ever said JPMorgue and others were smart traders but I think they are, despite whatever PM losses they have taken along the way. Though it is interesting how GS and
others can profit for 64 trading days in a row. At one time GS held around 50,000 gold contracts (probably shorts) on the TOCOM. That number slowly dropped to
zero over several years. No doubt they were taking losses, but I believe they were doing the Treasury/FED's work. Since JPM and GS PM losses are effectively socialized,
few of them probably have to worry about hitting unemployment lines. A different measuring stick is used for their performance evaluations (ie did you support brother FED
and Treasury to the fullest?). Fwiw I see a number of on-line analysts and traders who scale in their shorts (or bearish ETF's) at increasing amounts during a rising bull market. Eventually the turn will come and if they layered in appropriately, should profit from an extended down move. Why is this any different from buying ever increasing long
positions as a market is falling, figuring a turn is coming fairly soon? Either way you take some lumps until things turn. Or are these people not true traders, but more like
intermediate and longer term holders?
roadrunner
A close under todays low will result in some serious technical damage, perhaps severe enough, dare I say it, to have made a top for quite some time.
Knowledge is the enemy of fear
I traded a good chunck of my silver for gold around 39-42.
I wouldnt mind getting back into silver around 55-60...what are the chances of that happening anytime soon ( 3 months )?
Groucho Marx
As an aside, those curious about how manipulation might be done can read the classic book "Reminisciences of a Stock Operator." There is even a free version online for those willing to search. I won't link it because it might be a copyright violation. In the book, I can remember one chapter where the main character manipulates a stock long, and the press reports that he took a bath with massive short positions. At one time the character was indeed short that stock, but covered at a profit and reversed to the long side without letting the press know. If I had to guess, I would guess JPM has done the same trick on silver, and has made money on both sides, while getting small fish to believe some stories. The book describes old time manipulation, before derivatives, before futures were popular. The game was in some ways harder back then because it was a small group of big fish and most knew each other personally. These days a firm can just buy or sell some unlisted derivatives to offset their public positions in futures or listed options.
Skillful big fish tend to be good at disinformation, half-truths and manipulating the news flow as well as the price, that's part of the game of manipulation. Sometimes it does blow up in their face, but I doubt this was the case in the recent run in silver. Too many factors fed the bull case for smart big fish to be caught in that kind of trap.
<< <i>218 million shares traded today. That probably marks some sort of (very) short term bottom. SLV closed under the 20dma. Usually this projects to the 50dma or lower Bollinger band---both in the 36-37 range. A close under todays low will result in some serious technical damage, perhaps severe enough, dare I say it, to have made a top for quite some time.
The "top" is not in until the Saint Guru sings!
SLV ready to blow up?
An interesting article questioning whether there are way more shares trading than actually exist.
A close in silver to >$39.70 will keep the current intermediate advance in the still possible category. And a drop below $36.76 would probably kill it. That's the line
in the sand. The 20 day BB is already at $37.28. The 100 dma held the January pull back in silver from $31 to $26 (currently at $33.95). The January correction was
a slower moving 4 week affair. This one is very sharp and could be done in half the time. Just completed a parabolic wave 3 advance in silver from $26 to $50ish. This
will be a sharp wave 4 pullback. I think there is a 5th wave up lurking around the corner, though I'm certainly not eliminating this being the end of silver for 4-12 months.
Other than OBL being taken out, don't see any fundamentals that have changed in the economy and financial system. A take down in the silver markets on a weekend when
both London and most Asian markets were on holiday seems pretty desperate....not to mention 3 separate margin hikes in 5 days. Why not just 2 or even just 1? Yeah,
volatility will dampen and that will be good. But this week's takedown was a stinker. Yeah, silver was overdue to for a correction. The only really trading open on Sunday
night and then Monday was the Globex. Pretty good deal for JPMorgue. Now down to only 33 MILL registered Comex ounces. And it's been falling like a rock.
ZH has had some articles recently on how large chunks of registered ounces at the Scotia Mocatta Comex vault were being reclassed from from registered to eligible.
Last week 5.2 MILL ounces were shifted to eligible (ie not available for delivery). Also, how many of those 100,000+ share positions in SLV ended up with sellers taking delivery
of silver? SLV left a nice gap at 46.5 Sunday night. We know that PM stocks don't like open gaps....hmmmm.
There is still unfinished work left on the USDX as it heads down to 71 to test all time lows. That should drive the commodity complex upwards in the final May-June rally.
Gold and silver currently in a 4th leg correction since the January bottom. Gold probably still has a very sharp parabolic move still left in it. And it would not surprise me to see
silver put in yet another parabolic move in the $50's to $60's. Time will tell as this current wave 3 of 3 continues on into the 5th and final wave. Gold <$1450 and silver <$36.70
would obviously kill that possibility. Also interesting that gold once again topped out here at 16-17% above the 200 dma...about the same level as the last 2 intermediate peaks.
The blow off tops in 2006, 2008 and 2009 ended at 25-33% > 200 dma. Still points to this not being a longer term top.
No heavy POMO days until Friday. That will make the SM and risk trades susceptible to more downside. But then it's 4 days in a row with heavy POMO from Friday-Wednesday.
That should put the risk trade right back on for a bit. The jobs report could be the final whack to commods Friday morning. But then POMO will come to the rescue.
With GSR's 200 dma now at 50 and still falling I don't see a target higher than that as reasonable. 45-50 should be as high as it bounces. 40 and then 46 offer solid resistance.
But 40-45 would be my guesstimate.
Mexico bought 78 tons of gold last month for a total of 100+ tons recently. Russia added 18 tons. Seems everyone is getting into the act!
roadrunner
But 40-45 would be my guesstimate
Thats the level it broke down from so a retest is plausible and probable. If gold can hold $1500, then that implies 34-37 for silver. A typical 30% drop in silver takes it to 35 or so. The difference this time is that real money is involved. Example, a holder of 10,000 oz at $15 suffering a 30% drop lost $45,000. That same holder could lose $150,000 this go round. A considerable amount of money that begins to play on ones psyche. He will be more careful next time.
Knowledge is the enemy of fear
<< <i>218 million shares traded today. That probably marks some sort of (very) short term bottom. SLV closed under the 20dma. Usually this projects to the 50dma or lower Bollinger band---both in the 36-37 range.
A close under todays low will result in some serious technical damage, perhaps severe enough, dare I say it, to have made a top for quite some time.
Well, this morn we have silver hitting the lower Bollinger band. Band at 37.28, silver at 37.35. On SLV these numbers are 36.31 and 36.46 respectively. It could retest the 50dma at 38.80 (SLV 37.88) today or tomorrow. Its becoming increasingly likely that a major high in silver has been reached. Massive distribution in SLV. Massive. In essence, every share that was bought in Jan, Feb, and March has been sold in the past 8 days. Incredible.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
You already know your maximum loss.
Perhaps you'd be better off with a call spread.
e.g. buy the ones you already bought. Sell twice as many x strikes further out of the money. Then buy an equal number of the long ones 2x further out (a ratio of 1:2:1). My guess, approx 1/4 of buying outright.
In this way your cost is much less, your loss is still limited to your initial cost, your percentage profit on the move up to the short strike will be superior to that of the outright buy, but on the downside, your profit might go to zero if the underlying moves too far in the "right" direction.
If $1500 level holds for gold, then I think silver is looking good right here for a low. But wow, that is one massive weekly candle...
There is so much energy in silver right now and the move in silver is far from over. I'm with Ackerman, this is just a week-long thing, and the recovery will likely be just as energetic.
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>and the dollar and oil has joined the funny candle party today. Something for everybody to play with in the sandbox. I haven't heard demand destruction mentioned in a long while. I've heard it a lot today. Personally I could use a mini stock market meltdown. The S & P has been a tough nut to crack. MJ >>
Indeed on that S&P nut. I've been waiting and waiting.... patience is a virtue...
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
down to $34.40 to fill it's initial break-away gap from mid-March. GDX and GDXJ ($35+) also now finished filling remaining March gaps as gold dropped
another notch lower to $1466. And with that AGQ has lost>50% of it's value this week, now at $187 (down 20% today alone).
POMO "fat" back in operation tomorrow and then Mon-Wed. Should help the "risk" trade somewhat. The S&P seems to have bent back over
to retest the neckline of the recent breakout. Oil lost an amazing $15 this week and seems drawn by an annoying gap at around $88-$90
from months ago. Corn blew down and also filled a gap from last month. It just completed a 3 yr cup and probably is going to continue to add
a steep handle on the end. A number of the grains have month old gaps that they might now go back and seal up. Sugar putting in a massive
handle on the recent sharp cup. And in doing so is also retesting an older cup neckline formed all the way back in 2006. The plunges in cotton
and sugar this year are deeper than what silver has done so far. They just started a few months earlier. I've always thought of sugar as sort of
the sweet silver. It looks like it should bottom around the $20 range. Right about now Pimco must be looking at TBonds in awe.
roadrunner
<< <i>Interesting that most of those "inviting" PM gaps I mentioned on Monday have pretty much gotten filled, or very close to it. SLV just now sqeeked
down to $34.40 to fill it's initial break-away gap from mid-March. GDX and GDXJ ($35+) also now finished filling remaining March gaps as gold dropped
another notch lower to $1466. And with that AGQ has lost>50% of it's value this week, now at $187 (down 20% today alone).
POMO "fat" back in operation tomorrow and then Mon-Wed. Should help the "risk" trade somewhat. The S&P seems to have bent back over
to retest the neckline of the recent breakout. Oil lost an amazing $15 this week and seems drawn by an annoying gap at around $88-$90
from months ago. Corn blew down and also filled a gap from last month. It just completed a 3 yr cup and probably is going to continue to add
a steep handle on the end. A number of the grains have month old gaps that they might now go back and seal up. Sugar putting in a massive
handle on the recent sharp cup. And in doing so is also retesting an older cup neckline formed all the way back in 2006. The plunges in cotton
and sugar this year are deeper than what silver has done so far. They just started a few months earlier. I've always thought of sugar as sort of
the sweet silver. It looks like it should bottom around the $20 range. Right about now Pimco must be looking at TBonds in awe.
roadrunner >>
Yup, so much for all that inflation some have been expecting.
Knowledge is the enemy of fear
<< <i> Yup, so much for all that inflation some have been expecting. >>
Oh, I don't think we've seen the end of the "inflation" scare by any means. The world's finances didn't get fixed by eliminating OBL or adding another $20-$50 BILL in otc silver
derivatives this past month. That's the only change over the past week....well, other than 5 completed/planned silver margin hikes. They called in the "Bunker" Hunt Buster bombs
for this one. Found the weakest link in the commodities/risk trade and lit 5 fuses. So far 3 have gone off. Will the final crowning glory eventually be the ability to only sell silver on
the Comex? Silver was the leverage to take everything else down along with it. Very interesting times indeed. Was there any hot commodity over the past year that needed 5
margin hikes to calm it? None that I know of and some of those items performed far better than silver. Then again, none of them are considered by some as money either.
This was not so much an inflation fear trade as it was a sovereign and state confidence/debt scare. The USDX going up in price against the Euro doesn't fix any of ours or their root
causes. Though for now, some of the symptoms are abating. Ironic that Jim Sinclair was directly involved in the removal of the Hunt's silver positions back in 1980. He no doubt
recognizes the play book currently being used.
The price of oil just fell 15%. We'll see if gas prices fall by 15% any time soon. In looking at the weekly charts of grains and softs over the past 2-6 yrs there is still a curving
uptrend indicating inflation. They can withstand some serious pull backs and still be in that uptrend. The fact the gold has been the slow and steady for the past 10 yrs is the crux
of the argument. Do what central banks are doing....buying gold. And most are probably doing a lot of it secretly by buying via miners.
GSR's +40% move so far this week rivaled anything seen during the 2008 deleveraging event (July-November) where the largest one week move was 30%. The entire GSR move of
that 14 week period in 2008 was +88%. We're almost half way there! The world was falling apart back in 2008. Did something happen this week that once again tore the
commodity's world asunder on the same order as in 2008 (other than paper manipulation that is)? It took over 2 months to drop the GSR the same amount that it just rose in 4 days.
If there was a financial crash that began on Monday would someone please share the link so I can read about it? Or were huge oil and silver deposits discovered this week? At least
this will save the CEO's of major oil corporations from having to go before Congress and try to explain why they are not responsible for price inflation...in particular high oil prices.
roadrunner
<< <i>...
Silver was the leverage to take everything else down along with it. Very interesting times indeed.
Was there any hot commodity over the past year that needed 5 margin hikes to calm it? None that I know of and some of those items performed far better than silver. ...
The price of oil just fell 15%. We'll see if gas prices fall by 15% any time soon. ...
GSR's +40% move so far this week rivaled anything seen during the 2008 deleveraging event (July-November) where the largest one week move was 30%. The entire GSR move of that 14 week period in 2008 was +88%. We're almost half way there! The world was falling apart back in 2008. Did something happen this week that once again tore the commodity's world asunder on the same order as in 2008 (other than paper manipulation that is)?
roadrunner >>
Preach it, RR. 5 rate hikes!?@! Been asking the same questions .... what about those other 'hot' commodities?? No margin problems there??
And there sits the S&P.... I'm waiting, watching, waiting... ready for you this time
edited to add that how funny perspective changes this week: SDS up 1.68% today would be an awesome day (pats on back) but compared to ZSL, it sort of embarrassing to even mention... But we all have our risk tolerances and goals in mind. Patience and contentment. Keep your eyes on the road and your hands upon wheel.
<< <i>That's the only change over the past week....well, other than 5 completed/planned silver margin hikes. They called in the "Bunker" Hunt Buster bombs for this one. Found the weakest link in the commodities/risk trade and lit 5 fuses. So far 3 have gone off. Will the final crowning glory eventually be the ability to only sell silver on the Comex? >>
I still don't understand this perspective. The margin changes by Comex were needed to maintain leverage ratios and to keep them in a target range (reasonable) as the price of silver climbed. I would shudder to think what would happen if they did NOT do this and continued to let speculators leverage at higher ratios. Silver practically doubled since the end of Jan, and was up 25% since the beginning of April. Volatility had also increased dramatically. If I were running Comex, I would have done the same thing. I don't doubt there isn't some gamesmanship and collusion going on, but margins are not significantly different than they have been in the past, percentage wise.
Looks like we're getting a full-blown retracement of the entire move in silver since the $8.40 low the week of 10-27-08. Depending on how you measure the retracement (using high/lows or opens/closes), we could have achieved the 38.2% retracement already, or we could still be looking to go as low as $33.20. But it is ASTOUNDING that such large retracement is occurring within the space of a week. If this is a retracement, then the recovery will be absolutely spectacular. Or this could be the beginning of a lengthier correction and not a retracement at all. But as RR has pointed out, nothing has changed fundamentally. In fact, gold and silver are MORE on the mind of J6P than ever, but it still has a long way to go. Although moves like this will serve to J6P on the sidelines longer.
Coincidentally, gold has made a 38.2% retracement of a larger move today with its close at $1473. Either way, today was the 5th down day in a row, so I'm looking for a positive day on Friday.
The experts are now all over the place with projections about what the near term future holds. The latest McLellan newsletter has got me really mixed up as to what to expect, as they are generally pretty accurate. Whereas for stocks I was expecting to see a big May and a selloff in June as QE2 winds down, McL is predicting a WILD May, with a possible "liquidity event" mid-month. They are predicting highs and lows close to each other, which sometimes means they cancel out. The dates for stocks are starting to contradict metals. A top in Gold is predicted for May 9/10, and a bottom for May 26 and another top May 31/Jun 1 with a bottom Jun 3, while stocks are looking for a low around May 19-23 and a top a few days later.
Support for gold for Fri is at 1449.6, with resistance at 1485.9 and 1509.2.
Support for Sil for Fri is at 32.77 with resistance at 36.17, 38.08.
Portugal Bailout Agreement
Mexico, Thailand, Russia add to gold reserves.
<< <i>
<< <i> Yup, so much for all that inflation some have been expecting. >>
Oh, I don't think we've seen the end of the "inflation" scare by any means. The world's finances didn't get fixed by eliminating OBL or adding another $20-$50 BILL in otc silver
derivatives this past month. That's the only change over the past week....well, other than 5 completed/planned silver margin hikes. They called in the "Bunker" Hunt Buster bombs
for this one. Found the weakest link in the commodities/risk trade and lit 5 fuses. So far 3 have gone off. Will the final crowning glory eventually be the ability to only sell silver on
the Comex? Silver was the leverage to take everything else down along with it. Very interesting times indeed. Was there any hot commodity over the past year that needed 5
margin hikes to calm it? None that I know of and some of those items performed far better than silver. Then again, none of them are considered by some as money either.
This was not so much an inflation fear trade as it was a sovereign and state confidence/debt scare. The USDX going up in price against the Euro doesn't fix any of ours or their root
causes. Though for now, some of the symptoms are abating. Ironic that Jim Sinclair was directly involved in the removal of the Hunt's silver positions back in 1980. He no doubt
recognizes the play book currently being used.
The price of oil just fell 15%. We'll see if gas prices fall by 15% any time soon. In looking at the weekly charts of grains and softs over the past 2-6 yrs there is still a curving
uptrend indicating inflation. They can withstand some serious pull backs and still be in that uptrend. The fact the gold has been the slow and steady for the past 10 yrs is the crux
of the argument. Do what central banks are doing....buying gold. And most are probably doing a lot of it secretly by buying via miners.
GSR's +40% move so far this week rivaled anything seen during the 2008 deleveraging event (July-November) where the largest one week move was 30%. The entire GSR move of
that 14 week period in 2008 was +88%. We're almost half way there! The world was falling apart back in 2008. Did something happen this week that once again tore the
commodity's world asunder on the same order as in 2008 (other than paper manipulation that is)? It took over 2 months to drop the GSR the same amount that it just rose in 4 days.
If there was a financial crash that began on Monday would someone please share the link so I can read about it? Or were huge oil and silver deposits discovered this week? At least
this will save the CEO's of major oil corporations from having to go before Congress and try to explain why they are not responsible for price inflation...in particular oil prices.
roadrunner >>
Great insights!!!!!
Hong kong/Long Beach JUNE Table #838
MACAU
emgworldwide@gmail.com
Cell: 512.808.3197
EMERGING MARKET GROUP
PCGS, NGC, CCE & NCS, CGC, PSA, Auth. Dealer
Comex silver will be a 100% cash market. But doing 3 hikes in 5 days, and then planning 2 more days after silver is already knocked out cold >30% smacks of
JPMorgue or FED/Treasury collusion. The first 3 hikes were more than enough to whack silver once the OBL news came out. Plus with London and Asian markets
basically off the map from Friday to Monday, it was clear sailing for US markets to dump the market. Silver already had several rate hikes before the past 2 weeks,
so this makes about 8-10 since the rally started in August. Now let's go back and look at the previous massive rises in corn, coffee, cotton, and sugar to name a few. Did
they have similar actions taken during the parabolic runs? I doubt it. Silver is anti-currency while none of those grains or softs are. Why didn't the CME space out
those rate hikes a lot better? They had ample opportunity rather than waiting for a 2 week period near the all time high to do 5 of them. A few more rate hikes
in the $30's and early $40's would have made sense. That's what my beef is with the way things were conducted. Also add that nothing yet has been started on limiting
the number of contracts that any single entity can hold. Wouldn't that have made sense way back in the fall? If the CFTC/CME were so concerned it seems position limits
and other actions could/should have been taken.
The hikes were warranted. But the timing of them was ridiculous. Can anyone guess who got advance notice of those planned increases? I know I can.
The S&P500 is the all-American market. After this retest of the h&s neckline is done I suspect it will head off to >1400 with the Dow>13,000. 4 consecutive days of POMO
following a commodities blitz can do wonders.
Have to love the non-farm payrolls report at +244,000 jobs. In fine print though was the fact that the seasonally adjusted household survey showed -190,000 jobs in April.
roadrunner
Knowledge is the enemy of fear
gap but fell back far enough Friday to fill it.
Ted Butler's view of last week's silver trading
Mentions some of the things we've already discussed plus a few more. A good read as Butler is asking the CFTC just what has it accomplished since Dodd-Frank came out.
Since we're talking about silver, here's something from Zero Hedge that is interesting.
Submitted by Tyler Durden on 05/08/2011 14:40 -0400
30 years ago, Bunker Hunt, while trying to demand delivery for virtually every single silver bar in existence, and getting caught in the middle of a series of margin hikes (sound familiar), accused the Comex (as well as the CFTC and the CBOT) of changing the rules in the middle of the game (and ws not too happy about it). Whether or not this allegation is valid is open to debate. We do know that "testimony would reveal that nine of the 23 Comex board members held short contracts on 38,000,000 ounces of silver. With their 1.88 billion dollar collective interest in having the price go down, it is easy to see why Bunker did not view them as objective." One wonders how many short positions current Comex board members have on now. Yet by dint of being a monopoly, the Comex had and has free reign to do as it pleases: after all, where can futures investors go? Nowhere... at least until now. In precisely 9 days, on May 18, the Hong Kong Mercantile exchange will finally offer an alternative to the Comex and its alleged attempts at perpetual precious metals manipulation.
Maybe the HKME will be a help. But I fear it might become just another cog in the Morgue's Machinery.
roadrunner
Edited---- I hate when I make spelling errors. I especially hate when it's Dave that catches them
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
However, caution is in order, as McLellan is calling for a top yesterday or today, but these can often be off by a day or two.
After a wild week in commodities last week, the sell-off in Gold futures has been seen by many traders as excessive. Some traders note that the primary reason for the selling pressure came from outside markets, namely Silver and Crude Oil. Gold has seen a much more level-headed increase in prices, with prices correcting and consolidating on the way up, rather than the parabolic move seen in Silver and the super spike in Crude Oil. Some traders could look at last week's sharp declines as an opportunity to possibly buy Gold at more attractive prices, rather than at the beginning of a reversal in prices. The debt situation in the EU continues to linger over the market many months after the Greek crisis caught many off-guard, and it is now entirely possible that the nation could cease to be part of the pan-European group of nations, either forcibly or of its own accord. S&P downgraded Greece once again, and Moody's has put its ratings on review for a possible downgrade. The analysts at S&P do not see how Greece could reduce its debt without a complete restructuring. There is also Portugal, Spain, Ireland and, possibly, Italy to worry about in the immediate future. In addition to debt concerns, many traders are worried that the industrialized western nations are set for lower growth rates, which could result in prolonging of the low interest rate environment beyond current forecasts. This makes fixed income instruments less appealing and could result in weakness in the equities markets. These conditions can be seen as favorable for Gold.
<< <i>TBT--------this trade has been out of vague for quite awhile. is it possible that it's putting in a double bottom? MJ >>
Its been quite vague, as well as being out of vogue.
Im watching also. The 5, 10, and 30yr charts are all very similar, with yields sitting at or just below the 150dma and previous price support. Its a compelling trade at this level. Rising yields would support the dollar. Is the recent action in commodities sensing something similar?
Silver got to with 30c of the 50dma this morn. Perhaps one more attempt tomorrow, then it turns lower.
Im out of AGQ calls. ETF is higher than when I bought in, but option premium got crushed so I sold for a loss. The 10% drop in silver from late Thur to early Fri took the steam out of my trade as the 15% bounce I was looking for only got me back to even.
Knowledge is the enemy of fear
<< <i>TBT--------this trade has been out of vague for quite awhile. is it possible that it's putting in a double bottom? MJ >>
TBT should be a big money maker, however, the Fed will use everything in its arsenal to prevent it. I'm gonna wait til they run out of bullets.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Miners still looking like that are in the 4th leg bounce of a 5 wave drop that began around April 22nd. A drop back to $1500 gold or just under that
would help fill smallish gaps in GLD, SLV and GDXJ. On the GDX hourly chart the W%R continues to bottom about every 2-3 days. Right now that's looking like it could
happen again Wednesday-Thursday as it's well past the half-way point. Volume on this bounce-back has been declining as well. Rangold seems to be pointing the way
which is not surprising since it had the most impressive bounce from the March 15th Japanese quake lows.
Rangold
Straightforward and short article by Steve Saville on how underperformance of senior miners today is not much different than what occured from 1976-1980.
Another reason to stick to GDXJ and selected juniors.
Miner's woes
roadrunner