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Silver Wheaton Corp. Message Board

  • seasonedspeculating seasonedspeculating Jan 8, 2008 8:09 AM Flag

    A Perfect Storm

    After declining nine days in a row, the $USD bounced upward yesterday causing gold and silver prices to stumble. As a result, all silver mining stocks that I follow including SLW took a hit yesterday. But gold and silver spot prices are soaring upward so far today, so we should anticipate that SLW will be moving sharply higher today as well. Additionally, we should be hearing from the Fed soon, and due to the recently released weak employment figures, everyone is anticipating that the Fed must again lower interest rates. The only question is by how much. Of course this will drive the prices of gold and silver even higher. Those who rely on TA know what happens to a stock when it sets a new high. It's called a BREAKOUT my friends, and it's certain to happen due to the Perfect Storm of events that I've just described. I expect to see SLW trading at $20.00 in a matter of days. Our boat ride in this perfect storm is likely to be very exciting. SS

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    • Always darkest before dawn. The last few days was just a coup perfrmed by the mm to get the majority of the shares for big hedge funds clients, they want the stock very much, one of the few safe havens to park your money in 2008.

      Goldman Sachs came out today and said the US economy i headed for recession. Not 50% chance, 100% chance. We both know that Goldman i not ever wrong, ever. They are the kings of the street and do not ever lose money.

      Silver reached as high as $16.18, kind of neat because I was predicting $16.20 in the Asian markets. Profit taking here late in the London market, however will be right back above $16 when New York opens. SLW has no where to go but up from here. A true bargain at this price.

    • navajon,

      I'm a big fan of TA but have found that the use of RSI and moving averages are of little value when trading silver stocks. Why? Because the movements in the $USD and spot gold/silver prices appear to be the principle driving force behind movements in silver stocks. But I do attempt to use chart patterns, trading channels, and momentum indicators to help me in making buy, hold, and sell decisions. I'm now in a hold status, having just loaded up on 1/07. My last purchase of SLW was at $16.80. My current total dollar value of silver stocks is higher than it has ever been. I'm expecting both gold and silver to make big moves up at this time. As you know, spot prices have moved up significantly over the past two days. It wouldn't surprize me to see my silver stock prices spike upward at this time. But once they complete their move up, we can expect a blowoff to follow. Therefore, I plan to sell into the strength once stock prices significantly exceed the upper boundaries of their respective trading channels. Hopefully we board members will help each other as we make our sell decisions. SS

    • SS; Do you believe that using a 9 day RSI would help me to judge the Overbought/Oversold area's in this market. I have been also looking at the MACD lines but they sometimes lag a bit. The Stochastic's seem to volitile also. Any help would be benificial. Thanks.

    • mr goldandsilver,

      When we consider that China has a population of 1.3 billion people, currently is experiencing very high inflation, and is now seeking alternative safe havens to the $USD, the Shanghai Exchange has opened a floodgate of opportunity in China for trading gold. Common sense would suggest that this new opportunity to both invest in, and trade, gold will create an enormous new demand for gold. Because silver will move along with gold, I believe that my silver investments should see some very positive action over the next several days. Is my outlook reasonable, or am I getting a little carried away here? SS

    • Shanghai Futures Exchange begain it's first day of trading gold Contracts today. Silver is next./

      Article layout: raw
      SHANGHAI (XFN-ASIA) - The Shanghai Futures Exchange (SFE) started trading gold futures today, officials said.

      The exchange marked the occasion with an opening ceremony before trading several types of gold contracts.

      "Launching gold futures is important to China's futures and financial market development," said Shang Fulin, the chairman of the China Securities Regulatory Commission.

      Analysts said the new futures product is a crucial step in the development of China's markets and offers new channels for investment.

      China is the world's largest consumer of gold, and the third largest gold producer. Chinese manufacturers account for 9.2 pct of world gold consumption, Shang said.

      The exchange has set the contract size at 1,000 grams with the minimum margin at seven pct of the contract value. Individual investors are not allowed to participate in deliveries.

      Trading gold contracts will provide some investors a new investment channel and help soak up some of the liquidity that has helped drive up inflation.

      "The launch of gold futures is very welcome as investors are eagerly looking for new investment tools given the stock market's high valuation and volatility, and the property market is under severe control," Hu Yanyan, a gold futures analyst with Shanghai Jiuheng Futures Brokerage, said.

      Ahead of the official launch, gold futures were traded on a trial basis from Jan 2 to Jan 8.

      The bourse yesterday set the benchmark price for gold futures contract at 209.99 yuan per gram after reviewing the trial results.

      The new contracts will also help companies hedge risks.

      "China has a huge need for commodities. Further opening of the futures market helps manufacturers hedge risks and will improve the overall competitiveness of Chinese companies," Hu said.

      China's gold output rose 7.15 pct year-on-year to 240.08 tons in 2006, with production concentrated in the provinces of Shandong, Henan, Fujian, Liaoning, Hunan and Shaanxi.

      The SFE, which currently trades copper, aluminum, zinc, natural rubber and fuel futures, won regulatory approval to trade gold futures in September.

      The Shanghai Futures Exchange expects to launch silver futures following the gold futures, Huo Ruirong, a deputy executive officer with the exchange, told reporters earlier. The bourse has also applied to regulators to trade in steel futures.

    • Eric,

      Yes, SLW generates huge amounts of cash...it's just not cash FOR GG. And as somone who's owned SLW since it's inception, I'd rather have my money than in dollars, in fact, I'd rather have it here than anywhere else.

    • "until GG sells any SLW or SLW begins to issue dividends ... then SLW isn't really the "cash cow" that some on this board claim it to be."

      I think your post is misleading. SLW IS a cash cow. It generates huge amounts of cash.

      You're right that GG doesn't realize any of that unless they sell shares or get dividends. But it is a rapidly appreciating asset on their books. Is GG cash poor? Not really. They have $675M cash, $975M debt, Debt/Equity ratio of 0.077.

      Which would you rather have, dollars or SLW shares? If you say dollars, then sell your SLW shares, buy a CD, and quit posting on this board because you have no skin in the game.

    • Tom,

      You are exactly right in your understanding of the GG/SLW relationship. The only revenue generated by SLW that GG receives is the $3.90 per ounce GG gets from selling SLW their silver.

      And of course the 100 million+ shares of SLW that GG owns and has sitting on their books...is a nice little benefit in and of itself...but you're correct in that until GG sells any SLW or SLW begins to issue dividends (which I hope they don't for at least a few more years) then SLW isn't really the "cash cow" that some on this board claim it to be.

    • I wasn't looking for any in depth accounting trickery type of answer anyway. Thanks for your quick reply.

      I was looking for verification on this point for my own personal use. I read too many of these posts & begin wondering if I am missing something or working with bad or incomplete information sometimes.

      A post earlier mentioned SLW as GG's cash cow which could be interpreted a couple ways. I wanted to make sure that the implication SLW was a revenue producer for GG was in fact false.

      If anyone else cares to discuss, please weigh in. I think it is important to have a sound understanding on this point in case we get more news on this issue soon.

    • I'm out of my league on tax accounting with respect to the SLW ownership by GG. However, I don't think they get any monetary gain unless SLW pays a dividend. Where they do get a benefit is that their ownership would be listed as an asset and the value of that asset would increase. Of course they would get mucho $ if SLW were to be taken over but I think the price would have to be sky high given that GG could block any unwanted TO attempt.
      crdnlau

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