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Silver Wheaton Corp. Message Board

  • c0ntang0 c0ntang0 Apr 13, 2006 10:15 AM Flag

    Bearish Opinion

    I hate saying this because I am not a basher. But, in the SHORT-TERM I have very good reasons to believe SLW will go down. SIGNIFICANTLY. Long-term the future is fantastically bullish. Just not short-term. For the next several weeks, there is going to be much pain on this board.

    Why? What are my reasons?

    IMO, the price of Silver is going to correct at least 20%, maybe as much as 35%. Do your TA. Silver is fantastically oversold. The ETF is a strong force, but I do not think it can eliminate the natural up/down cycle. Like all investments, things go up, then they go down, then they go up again. SLW went up because of the PoS, and it will go down because of the PoS. Then, after the correction, it will go back up again.

    And Barclay's, it seems to me, would want the price of silver to go down in order to load up for the ETF. In fact, a correction is probably required before the ETF will go live.

    I follow the PoS in real-time, about 18 hours a day. It went up in a way similar to an "exhaustion gap" to 13. It is now struggling near $12.50. PoG is struggling near $600. IMO, They will both loose their support and fall through those levels soon and that begins the correction.

    My advice is to tighten your stops. If you are a long-term investor, then get ready to ride out one of those "blips" on the chart, and you will come out ok in the end.

    I am flat. I will be back with a vengeance when PoS corrects. Good luck, all.

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    • If you are correct and silver drops back, if there is a true shortage in supply, wouldn't the shortage offset the decline to a high degree?

      Also, it's my thought the price has recently been bullish due to Asian demand, not the ETF. I'm not sure how much they care about what the newsletters have to say. They are the force IMO, and they don't have a history of listening to "the market."

      The CEO of Exxon has beening calling for oil in the low 30s for at least 15 months.

      I just don't think the market will be as predictable as it has been in the past. There are too many individuals with enormous amounts of money with no place to go.

      As Coup says, time will tell.Thanks for for input.

    • You bet. When I was a broker in the 1980's that was my pitch. Buy the stock, sell the calls. And never, NEVER fall in love with the stock!!! However, I was selling Blue Chips ONLY and selling CC's as a way to maximize the dividends. Either way, not doing it is leaving $$$ on the table.

    • I probably bought the calls you sold ;)
      i'm hoping for a good volatility increase going into earnings...may not happen though
      i buy calls with discretionary $$$
      i sell calls to lower basis and protect gains
      its a good deal

    • I'm curious if you think the same way about Copper, Zinc, etc.? I believe you could make a case for all commodities being overbought.

    • c0n, Although a PM correction is over due and just about everyone that publishes a newsletter is calling for one, 30% seems rather overstated. With the exception of a fast moving and scary correction last April and the previous Dec off of a a very similar spike as silver has now the 50DMA has held well. The 50 is at $10..35 or so. Even those two massive corrections were well under 30%. All that said I suppose anything can happen. Silver is massively overbought it is true. But it could stay that way for weeks or months in a PM bull and could move sideways to eradicate it. You are correct that SLW has been rising with the PoS but I am not 100% convinced that the PoS was the only reason for SLW to rise in that time frame. They also had new silver streams come on board and made management changes that seemed positive. For SLW to break below $9 it would have to violate its 50DMA for the first time ever or move down slowly enough to move MA's down. I do not think there is enough time between now and the Fall PM rally for that to happen. One thing we know for sure. Time will tell. Thanks for posting a well thought out post. BTW my favorite sentence is "It is now struggling near $12.50. PoG is struggling near $600. " Having watched gold from under $300 and silver around $4 those words are music to my ears. gold @ $600 WOW!!!! Silver @ $12 WOW!!!!

      • 3 Replies to couplover
      • The other thing one must consider is that
        silver is now on alot more peoples watch list
        eveyone one knows its getting scarces above
        ground. With Asians and The Mid east buying
        it and gold as a hedge against the Dollar. I do
        not think it would correct very far before
        The buyers would start jumping in. I think
        a 20% correction would be about the worst it
        could go. (thats $10 silver) i can live with

      • You might be right, and I am certainly wrong a lot. SLW has a short history, so its impossible to tell. I simply feel that the risk of the correction is too great at this time. After a correction, I will know there is a good entry point. At that time, I will buy SLW hand-over-fist.

        What newsletters do you read? Also, what other PM resources do you use? This message board is practically useless. IMO, you and crdnlaw are the top two posters in terms of being worthwhile.

      • <<Although a PM correction is over due and just about everyone that publishes a newsletter is calling for one>>

        What was that we just experienced from Feb through March this year? We went from PoG $570ish to $530ish. The GOX, HUI and XAU all inverted the 20 under the 50 DMA and have come back. I believe that was the correction everyone was calling for. IMO, this will move sideways until it can break the resistence and move up from there. Sure, there will be pullbacks, but I don't think we will see another like the one we just had for a while. Summer is coming and gas/oil prices will be going up.

    • Sold calls on both my positions today (SLW and AUY.)

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