With the silver pop and the drop in SLW the last few minutes , the spread should bottom in here. You can buy SLW here and short silver and own SLW future delivery contracts at a discount. The last time this occurred was the previous bottom when SLW was 17.76. I just loaded the boat
Hammer turned Doji and then collapsed. That's why you wait until the end, so as not to buy right before the next collapse.
Yes, SLW is just playing catchup to silver. Breaking the triangle yesterday, I thought we would drop $1.50 today down to 19, we may still do that. SLW is back to fair value here, so the rate of collapse going forward should slow and just match silver's decline. Gold should drop another $100 here, so we will see if it is just catching up to silver or if the drops creates another leg down in Silver towards the 15-16 area. If that occurs, SLW will break the 17.75 low and head back towards 15. All you have to watch is Silver here. Silver hasn't moved in a while, but SLW was so overpriced at 27 and even 23 that without silver getting back over 20 it finally collapsed back to fair value to wait on the next move.
Let it fall, it broke the triangle yesterday, so we should keep attracting short sellers down to 17.75. I think we get silver and SLW both trading for 18 here soon. A little support at 19.50 for a pause in the next day or so.
About 20.80 is now the underside of the triangle we broke through. This should be a good spot to see a lot of shorts come in if it can make it back to 20.80 this week as it should now act as resistance. A close below 20.80 today should get us down close to 20 even tomorrow and maybe a $20 pin on Friday. Hopefully silver will get into the 18's overnight and provide full cover. If silver can get back into the mid 18's, SLW should slice right through 20 to play catch up.
Keep some dry powder, silver is still paying off handsomely to the short side and SLW merely follows. We should get a good opportunity to cover some silver shorts when SLW hits 19.40 and remove most of them when SLW hits 18. I don't see any evidence of a bottom yet as the short interest is still too low and we haven't had any capitulation, just steady selling
yes, 21.91 is right on the trend line of the weekly triangle. We should ride this line for a bit here until silver makes a move. Back into 18 handle on silver and we should break this line which would usher in a few more weeks of selling down under 18. Not seeing much buying interest here, so the market still believes gold and silver is heading lower. Not covering my short metals yet
Who knows, I had to buy some SLW stock here to stay hedged against my short silver position as my call delta has fallen in the last few days. With SLW trading at a nice discount to silver, I like to add SLW stock in place of covering Silver shorts. SLW is pricing silver at about 18.70 here. Either 18.70 on silver or 22 on SLW will occur shortly.
Where is everyone today? If I don't get filled on my 21.20 covers today, I will keep the shorts pressed over the weekend. It looks like we should see selling all next week until we get to the bottom of the triangle at 20.50. If silver can collapse Sunday night we may be able to gap down hard on Monday. If not, then shorting the open will be then call of the day again.
Outside of the open each day I am finding it hard to get another short off. Someone keeps walking it straight down without allowing a rally to short into even with it tripling the losses in the metal. Very aggressive, we should see a nice bump in the short interest numbers for May 15 and especially into month end when they are released. I would love to see a number back over 3 million and heading towards 4.
Have some bids to cover at 21.20 on the day. Not sure we get down there but it would be a good spot to cover some or go long for a bounce.Silver is watching gold here and SLW is watching silver. The range is tight still, so 21.80 on the upside and 21.20 to the downside would be either extreme I think, with silver around 19.30. No interest yet for any buyers of SLW at this price level so hopefully we try the next level down at 21 or below next week to see if there is any institutional interest there.
Thanks for the plug. To be fair, my view is one of a larger move higher and have been merely fighting off my long call position. Trying to protect it by shorting silver and shorting SLW stock. When silver is down overnight and SLW opens flat to marginally lower, I like to short it until it surpasses the move down on silver since SLW is a leveraged play. It cuts both ways. I have June 22 and 23 calls in SLW and I try to cover those to some extent until we can turn the chart around at which point I will uncover them. I look at the spread of the stream to silver to try and get on the larger trend of SLW. The spread says that this is a high probable spot for a turn higher in SLW, as today reached the high in the spread chart. if it goes any higher we will be breaking back out to test the highs back in December, which would require a move back under 20 in SLW. It's possible, but the spread gets so cheap there that it is a gift and has only occurred a few times in the last 5 years or so. The spread says we get a sharp move soon in one direction or the other. At this price I have to lean on SLW going higher because the spread is cheap. It can get cheaper, but fundamentally speaking it shouldn't get cheaper at this time because of the deliveries to market should be expanding at a much greater rate now than the last two years. This means their earnings will soon be bottoming and will turn up even with silver remaining low in coming quarters. The deals they signed 5 years ago are starting to deliver and will be kicking into full gear in the next few quarters. So technically and fundamentally we are much closer to a major bottom than the last few times we were here. The Pascua-Lama deal being shelved brought the spread up here in the first place and we have hung out. i don't see that catalyst pulling a double negative and should only act as a trigger to rally when things clear up there. On the conference call, Smallwood said things were looking good there.
Their is a real nice clean channel down on the daily line close chart, 90 day time frame. I will watch this for a close above. 3/25/14 as the beginning of the top line and 3/26/14 as the bottom channel line.
Trend line on the bottom of the triangle on a weekly chart runs from the 17.75 low to the 19.50 low and points to the 20.40 area. Either we bounce there and head back to the top of the triangle at around 26 or head right back to 17.75 for a big double bottom. Keep your powder dry as we could get a quick $4 move lower if silver breaks 19 again.
Yes, it is. I keep trying to play for that. It's hard to get short as I keep trying to add shorts today and it is being so aggressively shorted that everyone keeps running in front of me. I just tried at 21.66 and didn't get any. I got some off on the open when silver was down and SLW was staying over 22, which made no sense, but I want to be aggressive on the short side here to play the big move down out of last weeks candle.
Should be able to take out the lows in this area and head down. Shorting the open on down days in silver has been paying off nicely. We should get some nice follow through here to the downside with volume as we break these lows and head for 20.30-20.50 in the next few days. Hopefully we keep getting these flat opens with silver and gold already down. it gives you a great trade to short aggressively on the open and wait for SLW to double the losses in the metals, which it should do on down days.