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North American Energy Partners Inc. Message Board

  • chemaes44 chemaes44 May 1, 2011 10:51 AM Flag

    Sunday night Silver

    Sunday night will be important for silver.

    There is no denying that on Friday as gold surged $30 silver fell. I watched the intraday chart as gold went to 1440, 1444, 1448, 1458, and 1466. I didn't look at the chart to see these prices, I remember them vividly from watching what was happening Friday.

    Each time gold rose, I expected silver to follow but instead silver seemed to roll over a bit more to the down side.

    Those who have followed silver know sometimes the miners lead the metals, sometimes the metals lead the miners, sometimes gold leads silver, sometimes silver leads gold - as the prices move up.

    It is undeniable that the absolute best situation is when silver leads its miners and silver leads gold. For a while now the miners haven't followed silver. Now we have a situation where gold is leading silver and silver isn't following based on Friday (one day does not make a trend).

    Silver is still marginally safe where it's sitting right now. However if you see silver fall below $42.60, you'd better think about running for the hills. I'm in cash with everything as all my commodity plays looked like they were rolling over except gold and oil.

    Silver would have to get back above above that 48.40 to 48.73 range sunday night/monday morning for bulls to feel comfortable. If it doesn't I'll be thinking about truly shorting silver on a substantial level -for me- through the 2 x etf. This thought only enters my head because the volumes in the short etf's have become ridiculous over the last four days.

    I couldn't help but notice the dollar resisted falling for 4 days last week and seemed to build a base. I believe this in turn made all my commodity plays weak. I didn't touch anything except silver and oil last week.

    Good trading
    chemaes

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    • H8--We had a change of plans, we're spending the weekend at the lake. Will post a new thread the first of the week.



      Have a good weekend all!




      tiger

    • Thanks, Chemaes. Everything you said is what I expected you to say, and I don't disagree with any of it. But I always try to see both sides of the argument to try to keep from missing something.

    • Will do H8, I'll post some tonight. I will be gone all day today.

      I made nice profits yesterday on CADX & its still a good long term buy for the end of the year. I'll explain more later. Still holding EXEL & HGSI.

      Have a good day all!



      tiger

    • Looks like just enough jobs were created for the Fed to stand down for a while longer. I like it that way. Just let the economy play out natually.

    • Isn't that what GS says when they want to "get out" of their long position? They're probably the bag holder right now and want the price to go up so they can get out. A simple press release from those crooks usually does the trick.

      Tiger, give us some new biotech picks and put them in a new thread. Thanks!

    • Goldman is switching directions this morning, saying oil will surpass recent highs by 2012 as oil supplies continue to tighten.

      Looks like GS is going long again soon.

      They are not ruling out futher "limited downside".

      There went $80 oil!





      tiger

    • Hi Lance,

      >if impatience has hurt me again...< It wasn't that we were early, it's that the game is rigged. I never go all in on one day, but rather, I ease in after a fall like the one being experienced in silver because a bottom usually take 2-5 days to build. The problem here is we started buying before news broke there would be two additional margin raises. This is dirty poker. I believe the raises triggered more selling but if you think about it, the speculators would be likely all gone after the first four raises. The people controlling the margin raises have created a situation where only institutions and very large specs can own silver (rich helping the rich). This is what I'd call artificial pressure to further cause disequilibrium. When artificial pressure is removed or when the process of going back to normal begins it will have a proportional move.

      >Can silver bounce while the dollar is also moving up?<

      Yes. When silver first started its up move all those many years ago it's inverse correlation to the dollar was something like 88%. I did some really deep analysis on it several years ago and posted it on the SLW board. The thing is, there were periods then when silver and gold moved with the dollar verses inversely to it. PM's do it all the time. Gold and silver have behaving even more like a currency now then all those many years ago and so again, yes, PM's can and will likely move up with the dollar at some point if the dollar move up is sustained.

      >Did you buy now because you expect a short-term bounce... before the July/August time frame?<

      Exactly. However, even if it didn't bounce, sell-offs like the one being experienced now usually have a capitulation blow-off sell day which is the low for the year. Yesterday morning suggested that yesterday would be that capitulation day. I'm reading that there is now more money trading in silver than in the S&P futures, something unheard of. This increased money jacked up volatility which in turn supposedly jacked up margin requirements. I personally believe some rich and powerful people intervened for shorts who were getting blown away because silver was only a few dollars from taking out its all-time non-inflation adjusted high. So, buying yesterday seemed like a low risk proposition since a bounce would likely occur before topping out and continuing a bit down or yesterday was going to be a capitulation day. Had it been a capitulation day silver would just move sideways for the next several months.

      >
      Oh, and are you just playing this through SLW or are you still dabbling in AGQ too?<

      Both. I bought more SLW than AGQ yesterday. SLW is falling less than the price of silver. It (SLW) wasn't falling at all in the morning giving a tell that the miners were ready to lead the metal up. When margin was announced the miners started selling a bit. Also when the day was done, silver was down 11-12% but the miners (SLW, SSRI, PAAS, First majestic, endeavor etc.) were only down 4% or thereabouts. The miners are levered typically two times to the metal but they didn't fall 24% because the selling has been exhausted due to the fact they were being sold why silver was rising.

      Remember, for every seller there is a buyer. Entities are picking up these shares and silver prices from those who want out. These entities are only buying because they believe there's money to be made (prices will go up). All you're hearing on TV or reading now are those people who are sellers. In a few days you'll find out who the buyers have been. For every "Soros" and "Slim" billionaire selling, there is a billionaire taking over that sold position.

      Will the jobs number today suggest QE3 and cause the dollar to head back down later in the afternoon and gold and silver higher? That's a good question.

      Good trading
      chemaes

    • To my knowledge, they haven't increased the margin requirement in oil since February, but one of the reasons in the selloff yesterday was an "expected" increase. However that increase in February didn't seem to work too well.

      http://seekingold.com/index.php/Gold-Market/Gold-Analysis/Margin-Requirement-Increase-is-Crushing-Commodities.html

    • Where did you see a margin hike for oil? I can't find anything about it anywhere. That would change my outlook dramatically.

    • If banks didn't have the ability to lie about their numbers, I would be going long Goldman and shorting JP Morgan and Bank of America. They are going to take huge hits on their commodity positions.

      Remember when Goldman said that oil was going to $90, and BofA and JPM said it was going to $130? Well, they just told you what their long and short positions were.

      The problem is with the current pick a number accounting allowed today the banks don't have to show their losses. But make no mistake, JPM got KILLED on its silver to the tune of billions the last few days! :)

      I would rather be short oil and oil companies than going long at any time. The long term trend is down.

      When to get out? Well, that is easy... when the fed announces QE3. There is no way Bernanke leaves Obama out in the cold.







      tiger

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