Started shorting SLW today on the close against Silver. SLW is pricing silver at $25 here on the forward stream. The amateurs selling at 19 are now doing what they do and are buying at a huge premium after selling at a huge discount. This is the 3rd setup of the year and should swing to undervalued for a 4th setup in the fall. The ride up from 19 to 25 was great and this over-valuation is slightly larger than the undervaluation we saw in May. Amateurs are betting heavy on a rally in silver here through Miner's and ETF's and paying a huge premium to physical, only happens a couple of times a year. The reason is because amateurs don't have access to capital to buy physical supply in quantity and do not have access to the futures market either, where they can produce the same exposure at .08% over spot. Instead they pay a 20% premium for exposure and get hammered every time. GLTA
He is right, and I agree with him...however, the price of SLW just goes up and up...pretty impressive....congrats to those who stayed long and did not sell at $25 like I did.
Shorting SLW here is not only stupid but suicide...sell if you must to take profits, but shorting is just being
I wish SLW would buy AXU...I bought it at $1.02.....
Kaz has contributed many original thoughts over time on this board, many of which have proved to be rather noteworthy. I find your name calling to be less than courteous and disrespectful of a dissenting point of view. A quick review of your past messages shows this is a character trait you posses and spread. I do not need mindless diatribe, thus it is ignore for you.
Hey Kaz! Long time no see. Good to see you back. Below is a re-post from Friday afternoon. I corrected a typo Sharpie pointed out and don't see the post on the boards any longer, so I'm re-posting it hear now.
Okay, we know have a large EW pattern. This large C pattern (down) will now break down (according to my chart) into a final 5 wave pattern. Below will be what I see as the price points of the 5 wave series of the final C leg down.
Wave 1 (down) - 25.87 - 25.91 (Already has happened)
Wave 2 (up) - 25.91 - 26.66 (We just hit this target a few minutes ago (we hit 26.65))
Wave 3 (down) - 24.95 or 24.35 (most likely or lower)
Wave 4 (up) - 24.95 or 25.13 (Most likely) (These two price points are based on hitting 24.35 listed above)
Wave 5 (down) - 22.79 (Based on Wave 3 hitting 24.35) (Will adjust price target if Wave 3 hits an extended wave price (meaning we go lower)
Corrected version 2.0...lol.
Thanks for pointing out Sharpie
Hasn't been a trade since going long into and through May when SLW was selling below spot on their forward stream. The premiums are usually larger than the discounts since most retail traders only play the long side. The larger quantity of retail players on the long side drives the mis-valuation higher when SLW trades a premium. That being said, they may not be wrong in the direction but they usually lose regardless because they pay such a high premium to do so that they lose either way. With spot metal not drawing the arb from the futures contract,t and tight credit not the concern, the odds are that the retail crowd is wrong on their prediction of a massive imminent move north in gold and silver. I'm playing it long the metal against short the miners via SLW, as it is most liquid. SLW should catch down to fair value and then discount in the fall at around 22.60 and lower with spot trading here. I am currently structuring it in the options market since the premium is so high and volatility is so low currently.