Tag Archives: SLV

Follow-up on silver, commodities and stops.

5 May

I will take being lucky over being good any day of the week but I have to say I have been batting a good average on silver this year, based on my chart analyses.  As you know, I issued about as strong a warning as I know how to set stops on silver on Thursday April 28th.  The rot set in the next day and we have seen silver free-fall ever since.  SIVR is now down nearly 29% in a week.  Talk about a falling knife!  Some newsletter writers make a living for a year out of a call like that.

What finally tipped the scales against silver?  I think it was the increased margin requirements set by the exchanges that did the trick although it’s all in the chart too.  I saw a similar thing happen to palladium (but not as severe) after margin requirements were raised on that metal a few months ago. Click in the body of the chart below to see it full size.

A good question right about now is where does the buying opportunity begin?  Before the fall I figured $35 would look like an attractive number but it doesn’t any more.  Given the pace of the decline, the volume, the implied volatility in the options market on silver ETFs………….  and the fact that lately the Fibonaccis have been working for me, I am thinking $26 or $27 is an entirely possible price — we’ll see what tomorrow brings.  We may get a dead cat bounce along the way.

If we needed a lesson that stops are your friend and greed is dangerous to your wealth this week is it.  I spent a few hours Sunday and Monday nights calculating and setting stops to preserve profit with regard to the volatility in the individual security on every one of my investments.  Emotion is out of the game.  My oil is gone, BNO a few weeks ago, DBC went today, I still have gold and DBA.  As I have realized a profit well above where these instruments lie now, I am happy.  You know that I think commodities should play a significant role in a well-balanced portfolio so I will be plotting my entry points this weekend.

I truly hope you all set appropriate stops in your portfolios and are now observing the market action with interest, not fear.

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Silver. Just one reason I like Marketclub.

8 Apr

I think it’s fair to say that silver is still the darling of the hour.  I am sure there are people out there who have made a fortune if they have been long silver for a while.  If you had gone long silver in SIVR (ETFS Physical Silver Shares) on September 1st 2010 you would have better than a two-bagger today.  If you had gone long AGQ (Proshares Ultra Silver) on the same day you would have just short of a four-bagger.  These are nice numbers.

But, as Dr. Alexander Elder says, it is easy to be wise in the center of the chart.  How might we know how to be wiser at the right of the chart?  One method I use, and which is the primary helper in the management of my personal portfolios, is Marketclub.   I typically use a rules-based methodology where timing is primarily dictated by Marketclub’s weekly trade triangle timers.  I personally have to have a rules-based system as I can lose money in the absence  of such a structure.  But how does this work out in practice?  Well, I can honestly say I have Marketclub to thank for the better than decent profit I have earned in silver in 2011 alone.

Below you will see Marketclub’s chart for SIVR.  Remember I told you that when I break my rules-based model I lose money?  I bought into SLV on January 13th based on the daily trade triangle the day before.  Now, my rules say I only trade the weekly trade triangles, and that is exactly what I had to do the next day when a red weekly trade triangle was issued and I exited the position with a near 5% loss.  Sticking to my rules, I re-entered the market on February 7th following the issuance of a green weekly trade triangle.  I am still long that position with a 38.76% gain.  I added to my position in SIVR on February 16th.  That part of my SIVR position has earned me 32.58%.  I am happy with the trade triangle technology on this trade.

You might notice that SIVR is still looking strong.  Climbing away from its 20-day moving average with good momentum showing.  You might want to revisit my post Whither Silver Part II also.  My initial target in that post is looking to be in sight.  At these margins I chose to have a relatively tight trailing stop in place.  It has been at 7%, I recently shortened it to 6%.  I don’t see silver taking a hard reversal or correction just yet, but I am intent on protecting these profits.

Already sitting on some nice silver profits I was emboldened by the Vectorvest Strategy of the Week “Hi Ho Silver” to take a position in Proshares double leveraged silver ETF AGQ on March 7th.  I had to ride through some losses but I am currently sitting on a 23% profit there.  Am I the only person in the World with profits in silver? Heck no!  But I will give my stock services the credit for these two.  Incidentally, this is the first profit I can directly point to from Vectorvest, and I can be quite hard on them sometimes (they deserve it).  But, this AGQ trade has paid for their subscription at a many-year multiple.  I’m protecting AGQ profits with a 5% trailing stop.

I’ve put Marketclub’s chart for AGQ below.  I only activated the monthly trade triangles on this chart.  Point being that more conservative investors would have captured all the upside in silver as Marketclub indicated a long-term silver trend in May 2010.  The SIVR chart is essentially the same, by the way.

If you want to keep an eye on silver yourself, this might be a good time to start a two-week trial to Marketclub.

 

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Whither silver? Part II

24 Mar


[Most Recent Quotes from www.kitco.com] On February 17th, I wrote the first episode of Whither Silver?  At the time, with silver changing hands in the order of $29 an ounce, I suggested that $35 an ounce was, in my opinion, a fair bet.  Turns out I was right.  In a recent article looking at charts, we discussed what direction the silver price might take.

Once again, silver is making some significant moves to the upside, in a manner that looks as if it has some legs again.

“But wait”, you say, “Hasn’t silver just hit a 31-year high? Aren’t we ready to pull back?”.  My thoughts are that while we may see short-term pullbacks due to profit taking, we are not really near to REAL highs in silver.  I try to remember Jim Rogers’s advice to know the history of the commodity one is considering, even if it is a long history.  In 1980, silver sold for $49.45 an ounce.  Adjusting for inflation that would be over $132 an ounce today.  OK, so maybe there were some shenanigans in the silver market back then, but even looking at average annual silver prices and adjusting for inflation, we would be looking at silver priced around $64 an ounce.  So, do I think we’re close to real highs?  Absolutely not.

Last night I put this chart together based on the silver ETF, ticker SLV:

Assuming silver confirms its breakout I think $45 silver is quite a reasonable target, and one that could be achieved in roughly a two-month time frame.  My intuition tells me that $50 silver is entirely doable too.  As I have said before in other contexts, I do not think we will get there in a straight line, AND, we are living in a turbulent and correcting market as I write, so expect volatility,  All that said, there is, in my opinion, more opportunity to the upside than the downside.

Of the two physical silver ETFs iShares silver trust “SLV” and ETFS silver trust “SIVR” I break to SIVR because its management fee is cheaper (0.3% versus 0.5%).  Silver Wheaton “SLW” tends to behave like a leveraged ETF for the silver market.  If you want a leveraged product there is AGQ, ProShares ultra silver (DO NOT invest in a leveraged ETF until know exactly how they work, especially as an intermediate or long-term investment.

Resources?  The excellent KITCO has a special site devoted to silver, which includes real-time charts.  The Silver Institute offers a wealth of history and data.  You shouldn’t consider these sources altogether unbiased but they are great resources if you plan to trade or invest in silver.

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Whither silver?

17 Feb


[Most Recent Quotes from www.kitco.com]Has silver been on a tear the last few weeks or what?  Certainly it’s giving validation to those who said it is going to continue dusting off gold.  While I always fear tempting the fates when I say something like this, I have nothing to complain about in respect of my timing lately.  Some of this is courtesy of Marketclub, some of it just plain old good timing or luck, call it what you will.

I am currently using ETF Physical Silver Shares (SIVR) as my ETF of choice in physical silver as it has only a 0.3% expense ratio.  If you take a look you will see that SIVR and the iShares Silver Trust ETF (SLV) track each other almost in lockstep — which is just as well as they hold physical product.  It’s worth pointing out that silver has returned nearly 80% in the last year, but I think there’s a bit more to go.

OK, back to the timing issue.  Below this post I’ve put the Marketclub YTD chart for SIVR.  I responded to the green weekly trade triangle on February 7th and purchased a decent position in SIVR.  In the ten days since, it has returned me 8.06%.  Now here’s the perfect market call — or luck, I’ll let you call it.  I was doing some portfolio rebalancing last night and extended my position in SIVR.  Just today, that additional position returned 3.25%!

Now if you look at the chart — I put candles in to emphasize the point — we went straight up from the open today and closed at the high for the day on significantly higher volume.  This is a good time to remind you that what I write here are personal opinions for discussion and education — I don’t give stock purchase advice — but looking at this chart, we have a strong trend in place (+100) good volume to the upside and the MACD isn’t looking wobbly either.  It may not be a straight line to get there but I will be very disappointed if SIVR doesn’t get to $35 in the near future.


DISCLOSURE: Long SIVR

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