Tag Archives: silver

Covered Short Against Bearish Silver ETF DSLV

I could miss the opportunity of a life time (always a bad way of thinking as a trader) but I am not going to take the chance that this is a little bear flag forming on SLV.  I took my modest 3% from shorting DSLV and booked it.  This little trading account that I reserve mostly for shorting has been on a hot streak lately and now, with no positions open none of it can be given back.

slv

I know I know, I said I’d try to have the strength to hold it for a silver rally but it’s my money and now it’s my profit.  I hope to revisit the trade again because seldom do these impulsive declines just stop in their tracks.  Silver remains suspect for the very short-term below the moving averages.

Added a Short Today

No, not against the SPY, which has not bounced as far as hoped.  But against silver… errr that is against the 3X bearish silver ETF, DSLV.  It’s a hyper long in silver.  Crazy, I know.  But the 19.50 to 19.75 support target was there for a reason, which was to see the punishment of the hype surrounding an over bought silver-gold ratio.  That is all cured now.

silver

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Silver vs Gold

Silver vs Gold became very over bought by daily charts.  Silver also got more suddenly bearish by its CoT configuration.  Okay, now let’s juxtapose that against silver’s weekly situation and what do we have?

sgr

What we have is a still-intact down trend from the 2011 blow off in silver vs gold and in nominal silver.  Further, the ratio is at the top of its long-term down trend channel.  Conclusion?  Why, gold is better than silver.

A problem for the precious metals sector however, is that silver usually leads the rallies that most gold bugs tend to get excited about.

A problem for most global markets is that silver usually* out performs gold during phases of liquidity and risk ‘OFF’.

So is the silver-gold ratio going to break out of the down trend?  Personally, I wouldn’t bet on it.

* In normal markets anyway, which admittedly the last year has not been with regard to some of its traditional functioning vs. the indicators.

Stocks & Precious Metals This Morning

Stock Markets

Well the media always need to have a reason and this morning the reason for the hard down in the stock market is apparently second thoughts by investors on the Fed Minutes and QE tapering (with a side of Portugal/European problems).

What is actually happening is that it was time for a summer disturbance (at best) due to the factors we noted in the NFTRH excerpt on Monday.  At worst the bull market is ending, but the favored plan is for a significant – possibly scary – drop that refuels the bull for one more thrust.

But that preference does not have a lot of conviction behind it.  The only conviction I have right now is that the market is/was due for a July breather and this could be it.

People should have been prepared for this.

Precious Metals

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Who Are Those Guys?

As the silver CoT report data systematically, almost robotically degraded into the September 2012 top (despite the seemingly bullish coming of QE3) NFTRH used to ask week after week “Who are those guys?” doing its best Butch Cassidy while evaluating the gathering short interest.

Below is the CoT graph from NFTRH 203 dated September 9, 2012.  Week after week ‘those guys’ were ganging up on silver and we all know what soon happened; a harsh bear market down leg for the precious metals.

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