Another round of smackdown is ahead for Gold and Silver

The evolution of the silver price based on a futures market net total position - bottom of 10000, which partly disguises the cash market supply/demand changes:

02/02/2016 45474 $14.26 > $11.80
26/01/2016 28799 $14.33 > $12.99
19/01/2016 36034 $14.03 > $12.17
12/01/2016 30562 $13.88 > $12.41
05/01/2016 28799 $14.01 > $12.67
22/12/2015 31162 $14.24 > $12.73
15/12/2015 23542 $13.74 > $12.77
08/12/2015 31027 $14.24 > $12.74
01/12/2015 29821 $14.21 > $12.89
24/11/2015 28725 $14.14 > $12.89
17/11/2015 35524 $14.25 > $12.43
10/11/2015 50129 $14.55 > $11.68
03/11/2015 67141 $15.38 > $11.30
27/10/2015 69373 $15.80 > $11.56
20/10/2015 66800 $15.86 > $11.80
13/10/2015 58626 $15.61 > $12.14
06/10/2015 49502 $15.67 > $12.85
29/09/2015 30106 $14.56 > $13.12
22/09/2015 31314 $14.94 > $13.42
15/09/2015 22255 $14.35 > $13.475
08/09/2015 25560 $14.63 > $13.52
01/09/2015 24566 $14.68 > $13.64
25/08/2015 23970 $14.87 > $13.87
18/08/2015 25437 $15.23 > $13.41
09/06/2015 35941 $16.13 > $14.28
02/06/2015 57569 $16.70 > $13.30
26/05/2015 61502 $16.79 > $13.82
19/05/2015 62485 $17.40 > $13.71
12/05/2015 38103 $16.46 > $14.45
05/05/2015 37250 $16.42 > $14.44
28/04/2015 33999 $16.32 > $14.6
21/04/2015 33836 $16.08 > $14.38
14/04/2015 41980 $16.08 > $13.8
07/04/2015 50438 $16.86 > $13.97
31/03/2015 49861 $16.60 > $13.75
24/03/2015 39242 $16.97 > $14.88
17/03/2015 30210 $15.56 > $14.1
10/03/2015 33263 $15.78 > $14.1
03/03/2015 39712 $16.42 > $14.3
10/02/2015 53457 $16.80 > $13.7
03/02/2015 56199 $17.59 > $14.29
27/01/2015 61593 $17.87 > $14.18
20/01/2015 55641 $17.80 > $14.54
13/01/2015 46804 $17.00 > $14.37
06/01/2015 36951 $16.47 > $14.54
30/12/2014 38636 $16.25 > $14.20
23/12/2014 33732 $15.71 > $14.01
16/12/2014 33997 $15.87 > $14.16
09/12/2014 35357 $17.12 > $15.31
02/12/2014 26576 $16.31 > $15.13
25/11/2014 22043 $16.56 > $15.69
18/11/2014 18367 $16.08 > $15.48
04/11/2014 12408 $15.77

The last lowest bottom was 03/11/2015 67141 $15.38 > $11.30
So cash market situation appears similar as 2 months ago.
The rate of the longer term (years) downtrend certainly dropped.
But that's to expect, that's how it goes: clearly recognized easy profit is grabbed faster, and unclear slower.
The price hangs now around the level that the majority of ETF shareholders "got in" at (2008-2010).
The average price of 2008 and 2009 was $15. Hello break even! And now, will you accept a small loss guys and girls? Remember, the single most important task in speculation is sniffing out small losses while they are still small. :D
 
Remember the hype oh doom around Russia?
March 12, 2014 by admin
http://www.zerohedge.com/contribute...ssia-will-sell-us-bonds-and-“crash”-financial- ?
With pm dealers linking it under titles alike "Are the days of cheap gold and silver numbered?"
With price
ag2014D.gif

then $20.97
Now $14.
The cheapER gold and silver numbered days sit now around 690.
And Russia doom, where?
 
I Believe We Will Be Heading Up Tonight Jim. Things Are Happening So Keep Stacking

[youtube]http://www.youtube.com/watch?v=GD4D9zN0kMU[/youtube]
 
Hello Charlie, so glad to see you made it onto SilverStackers as well. I really enjoy your videos by the way! Stack on!

Marchas45 said:
I Believe We Will Be Heading Up Tonight Jim. Things Are Happening So Keep Stacking
Click to expand...
 
leon1998 said:
My silver short position is under water now.

However, I feel like I am NOT worried at all; let's wait for commercial traders' action in the following weeks. A long term downtrend is not that easy to reverse, to say the least. ;)
Click to expand...
How long can you hold onto short positions? At some point, as prices continue to rise, it must be too risky to hold them.
 
Silverpv said:
dun dun daaa... I wonder how long this run will last. I don't see a smackdown coming if news still sucks.
Click to expand...
How can we know? We've seen this before followed by rapid falls. I think if gold surpases $2000 AUD for an extended period of time then we can be more confident.
 
What happened to the 8.00 silver calls. LMAO. Some on this forum were real doomers and gloomers. Thanks for helping me identify the bottom. lol.
 
SilverPete said:
Silverpv said:
dun dun daaa... I wonder how long this run will last. I don't see a smackdown coming if news still sucks.
Click to expand...
How can we know? We've seen this before followed by rapid falls. I think if gold surpases $2000 AUD for an extended period of time then we can be more confident.
Click to expand...

That's kinda my point.. queue the dramatic music... dun dun daaaa! Jan-Feb were strong months historically, but the world situation was different. This time the world looks like its on shakey ground, but same thing last year.
 
Looks like we broke thru 200 day moving average cleanly. Kind of looks like a possible cup and handle formation developing. If that were to happen, it is a bullish formation. If that happens we should make it to $16-16.20 and then drop to form the "handle". This might not be what is developing but something to watch.

http://stockcharts.com/h-sc/ui?s=$SILVER

cup and handle chart formation illustration:

http://www.investopedia.com/terms/c/cupandhandle.asp


Jim
 
Jim we need to break thru the trend line which is $15.50 and the next resistance line is $16.50 and I believe we are going to crash right thru that. As you say" Just My Opinion" Lol Going to be one hell of a week. Keep Stacking

P.S. The Gold resistance right now is $1195.30 and if it breaks thru there then watch out. I did make it there today but was pushed back.
 
Marchas45 said:
Jim we need to break thru the trend line which is $15.50 and the next resistance line is $16.50 and I believe we are going to crash right thru that. As you say" Just My Opinion" Lol Going to be one hell of a week. Keep Stacking

P.S. The Gold resistance right now is $1195.30 and if it breaks thru there then watch out. I did make it there today but was pushed back.
Click to expand...


Charlie,

I'll get more excited about all this if we break through the down trend line convincingly in silver. I feel like Charlie Brown when he is going to kick the ball that Lucy is holding with respect to any bullish moves in silver due to the past few years' action.

One good thing about the price going up a bit is that it will draw in more and better "inventory" at my local stores. The cool stuff coming in has been very low lately I think because of the lower prices. It is funny what just a couple bucks price move up can do to get someone to sell who has been waiting on the sidelines.

My calls have been more wrong than right on PM's so I can't say where it's headed. I won't be surprised no matter which way it moves. I'm still stacking when I can- really DCA and getting as much cool cheaper stuff as I can when it's available (for my ebay sales which someday I will finally do) does that count as stacking? LOL

Jim
 
Caneorange said:
Curious as to why you short Slv instead of buying a put. I typically buy puts since I am looking for a short term play and they require less margin.
Example: slv currently trading at 13.95. To short 100 shares need 697.50 margin. If slv drops $1 you make 100 or 14% which is awesome but you have unlimited upside risk (I know you'll stop it at a certain level)
Buying a 14.00 put though has you essentially the same shares short of the market and costs currently $50. So if slv drops $1 you make 100 or 200% and have a max risk of $50. Yes there is a time frame (March 18) but isn't this a short term play anyways?

Edit to correct the symbol thanks to autocorrect.
Click to expand...
This exact scenario is why I buy put options instead of technically shorting the stock. I'm still wondering why a short term play would not buy puts.
To continue the above example. Slv closed at 14.59. Paper loss for the short sale would be $64 and in order to keep the position open would have a margin of $729.50. If slv drops to $12.95 now only getting about 13% return on money. The put however is currently trading for $24. So it has only lost $26. Or less than half of what the short sell has lost and requires no extra capital.

So again I ask why short the stock and not buy a put?
 
SilverPete said:
leon1998 said:
My silver short position is under water now.

However, I feel like I am NOT worried at all; let's wait for commercial traders' action in the following weeks. A long term downtrend is not that easy to reverse, to say the least. ;)
Click to expand...
How long can you hold onto short positions? At some point, as prices continue to rise, it must be too risky to hold them.
Click to expand...
Abit weird question, a futures position materializes profit/loss immediately. Leon1998 has put some dollars on the short positions account, and since the price rose, that amount was already transferred to a long position so he has now less on the account.
There is some margin amount dollars, called a maintenance margin, that has to be on the account, and when underceeded, he will need to replenish, or they will close the short position. So it's the opposite, the 'risk' of a short drops with a rising price. Of course, post mortem, due to the immediate materialisation.
 
The problem with an option is that you have to decide a time span on your price change prediction.
And for the same reason, an option adds a risk: if the price doesn't change at all, you can lose the whole of the sum money. The entire premium is then lost, while a futures position account would just have kept what it had.
 
Caneorange said:
Caneorange said:
Curious as to why you short Slv instead of buying a put. I typically buy puts since I am looking for a short term play and they require less margin.
Example: slv currently trading at 13.95. To short 100 shares need 697.50 margin. If slv drops $1 you make 100 or 14% which is awesome but you have unlimited upside risk (I know you'll stop it at a certain level)
Buying a 14.00 put though has you essentially the same shares short of the market and costs currently $50. So if slv drops $1 you make 100 or 200% and have a max risk of $50. Yes there is a time frame (March 18) but isn't this a short term play anyways?

Edit to correct the symbol thanks to autocorrect.
Click to expand...
This exact scenario is why I buy put options instead of technically shorting the stock. I'm still wondering why a short term play would not buy puts.
To continue the above example. Slv closed at 14.59. Paper loss for the short sale would be $64 and in order to keep the position open would have a margin of $729.50. If slv drops to $12.95 now only getting about 13% return on money. The put however is currently trading for $24. So it has only lost $26. Or less than half of what the short sell has lost and requires no extra capital.

So again I ask why short the stock and not buy a put?
Click to expand...

Pirocco said:
The problem with an option is that you have to decide a time span on your price change prediction.
And for the same reason, an option adds a risk: if the price doesn't change at all, you can lose the whole of the sum money. The entire premium is then lost, while a futures position account would just have kept what it had.
Click to expand...

Why would you ever create a short position for more than 3 months? You are putting too much time risk on the huge amount of extra margin required. After all if you look back at the example you have already lost more than your max loss for the put. So, if you liquidated your short now you would have lost more than your entire risk on the put.

Yes there is a time risk for puts, but if you initiate the position beyond 21 days and plan to close beyond 21 days the time premium will be negligible.

Investing is all about managing risk and shorting a stock is not managing risk if held over night. Buying a put has that risk managed very nicely. I know my max loss.

Just my opinion.... well not just my opinion Larry McMillan who literally wrote the book on trading options and stocks this is out of his book.
 
Jim4silver said:
Why does anyone care how Leon chose to short silver? It's his money, not yours.

Jim
Click to expand...
Well, he does have the courage to put his money where his (rather vocal) voice is, so it is interesting to watch. Personally I wouldn't want to see him get burned too badly if things don't go his way.
 
SilverPete said:
Jim4silver said:
Why does anyone care how Leon chose to short silver? It's his money, not yours.

Jim
Click to expand...
Well, he does have the courage to put his money where his (rather vocal) voice is, so it is interesting to watch. Personally I wouldn't want to see him get burned too badly if things don't go his way.
Click to expand...


I agree with you SilverPete. I was referring to the Monday morning quarterbacking with respect to shorting shares vs. puts, etc. Leon sounds like a smart guy from his posts, so I am sure he knows the risks and thought about what he was going to do.

As far as him losing money, I would say his pain would be like that of the many silver bulls who have purchased silver at prices higher than where we are today (but at least we have some nice shiny metal to hold on to despite the lost $$$ :) ).

You never know, silver could easily reverse here and drop below $14 again (remember the heavy COT commercial shorts, etc). Leon could come out of this with a profit if he doesn't get closed out first.

Just my opinion.

Jim
 
Just for the record all I've been doing is explaining why I buy puts and don't short silver and asking what I am missing since, as you have pointed out Leon sounds like a smart guy.
I don't know 1% of the investment strategies out there and am simply showing my strategy and asking him to explain his. I thought that since he was willing to announce his exact investment he would be willing to elaborate on his reasonings for it versus other strategies. After all no one strategy works all the time so best to know multiple ways to play the game.
 
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