silver

[nefariousbaffler]

Just wondering if anybody else is seeing a real good bear flag developing on the one day silver charts. If not, could someone advise me as to what are the key ingredients needed to confirm such a formation? Thank you.

 

[gene]

It sure looks like a bear flag, but I see that formation at the end of a large sell-off, as well. Look at your weekly and monthly. Do you see signs of support? I do. It looks like Silver is coming out of a saucer bottom, to me.

I, personally, wouldn't want to trade this market. Signals are, to me, ambiguous. But then, I haven't read up on what's happening in the silver market. If I wanted to trade this, I would wait for a break-out from that "flag" pattern (with fundamentals in agreement), and wait an extra day for confirmation. If that extra day moved too far, I'd wait for a pull-back.

edit: A bull or bear flag is usually a continuation signal. On the silver chart, there is a huge move down, but in the bigger picture, the trend is up. I'd rather be on the buy side, if anything. But let me remind you: I haven't even peeked at the fundamentals.

 

[PeterTT]

You have to remember that Silver is treated by most traders as a high beta Gold (moves more in both directions). The USD spot rate also plays a large factor in price sentiment of precious metals. The spot USD strengthened and so silver sold off. On the long term charts for me its a great buy, but you have to live with the short term volatility .. I am buying at current levels and would do so down to USD 5.50 , but will trim my position as (or rather if !) it gets near $8 again. I tend to maintain a "core" long position in metals but try and make use of the volatilty to increase and lighten my position accordingly.

Peter

 

[DaveT]

On the Monthly charts, silver could also be forming an ascending triangle, with higher lows and equal highs at + $8.00.

A breakout of this pattern, with a monthly close above $8.50 would get me excited. There is little real resistance from there up to $14.00 - $16.00.

I think the above scenario is just a matter of time, perhaps late 2005 or into 2006?

 

[BroadSword]

On the Monthly charts, silver could also be forming an ascending triangle, with higher lows and equal highs at + $8.00.

A breakout of this pattern, with a monthly close above $8.50 would get me excited. There is little real resistance from there up to $14.00 - $16.00.

I think the above scenario is just a matter of time, perhaps late 2005 or into 2006?

I have a long term (for me thats 1 yr plus) bullish view on silver. Can anyone advise on this: I want to hold silver but the volatility makes me wary of being stopped out short term if I bought futures, or had a long spreadbet etc.

Also the roll costs of keep rolling 3 month contracts will eat away at potential profits, albeit this is a small point.

Given as I've said that my interest is long term buy and hold, does anyone know of a UK silver bullion dealer that could supply the metal physically? Or would the premium over the market price prove this unrealistic. I've done something similar with gold, and am quite relaxed about the fact that I can't get stopped out of some gold coins!

Any ideas? Cheers folks.

 

[..]

I read the other day that silver bullion is subject to VAT - so it reduces the attractiveness of holding physical - but I may be wrong - worth checking - why not try a pool account with KITCO.com? - small spread and no time limit

cheers
mark

 

[nefariousbaffler]

Check out
http://libertydollar.org

This is a new, legal currency that has been formed in the U.S. to compete with Fed issued notes...it is backed by silver and gold....really interesting and worth a look.

 

[TheBramble]

Interesting link NB, I was just yesterday looking at the Gold Standard.

This from:- http://tx.essortment.com/goldstandards_rgvh.htm

"Britain abandoned the gold standard 1931; the USA abandoned it 1971. Holdings of gold are still retained because it is an internationally recognized commodity, which cannot be legislated upon or manipulated by interested countries. On August 15, 1971, the world entered the first era in its history in which no circulating paper anywhere was redeemable in gold, by anyone. At one point in time it was illegal for a U.S. citizen to own gold. President Richard Nixon of U.S. closed the “gold window.” This action broke the last tie between gold and circulating currency, resulting in our modern financial system which is called a “floating currency” system.


Since 1976 gold the U.S. government no longer sets the gold value of a dollar. The price of gold rises and falls in relation to the demand for the metal.Gold coins have not been minted as legal currency since 1933."

Are we perhaps witnessing a move toward returning to the GS or are there perhaps more likely reasons for this development?

 

[nefariousbaffler]

So in regards to the bear flags that were developing in silver and gold...is it safe to say that they have faded away and are no longer good indicators or do they still fit the relative criteria?

 

[gene]

Just don't buy/sell, predicting an upward/downward breakout from a bull/bear flag. Wait for the fact to occur, and then, maybe another day for confirmation.

I haven't been watching silver, but by a superficial glance at the chart, I believe I'd rather have my finger poised above the "buy" button.

 

[gene]

That formation looks very much like a bear flag. http://www.asx.com.au/markets/l4/ChartingFlags_AM4.shtm

However, under the following definition of "Flag Formations", it states that a bear flag occurs diring a major down trend.
http://dallas.tamu.edu/econ/Technical Analysis/glossary.html

That down trend looks kinda major on the daily chart, but you also need to look at the bigger picture. The weekly and monthly charts show an up trend. Recent action may have merely been a correction during the uptrend. That's what I suspect.

Shown below is a perfect example of a bear flag.....Oops, sorry!

 

[gene]

It won't take much to convince me to buy silver tonight or tomorrow.
edit: Here's a link I stole from peterpr. It's about gold and silver:
http://www.gold-eagle.com/editorials_04/steer121704.html

 

[rog354]

I have recently bought iKilo bars of silver on E Bay. These are auction prices and there are some good deals to be had.. Have a look and see what is about.

Godd hunting Rog354

 

[bgold]

I have recently bought iKilo bars of silver on E Bay. These are auction prices and there are some good deals to be had.. Have a look and see what is about.

Godd hunting Rog354

Thanks for idea to check Ebay. Wonder what you paid for the kilo bar of silver. Just basing myself on 1 sample (see link), selling silver on EBay looks like a great business. Much better margins than trading!!! :cheesy: . With 7hrs to go people are bidding £156.- (+postage) for a fine silver bar containing 32.15 troy ounce of silver. The equivalent weight in cash silver is: (32.15 x $6.77 ) / 1.7734 = £ 116.2 That is a whopping 34% margin. Brilliant idea for a new business.



http://cgi.ebay.co.uk/ws/eBayISAPI.dll?ViewItem&category=3361&item=3953816979&rd=1

 

[Minder]

Any silver bulls out there ?

Good analysis of the Open Interest position by Clive Maund from June 11th.

OI is about 125k contracts, a level from which the price usually collapses, Maund has support at $6.80 to $7.00.

http://news.silverseek.com/CliveMaund/1118508307.php

Summer is usually a quiet time for the precious metals. If we get a collapse in the PoS in the coming days/weeks, it will present a great buying opportunity which could coincide with a pick up in demand in the autumn.

Any thoughts ?

 

[peterpr]

Any silver bulls out there ?

Trading the stuff is fraught - very illiquid with consequent effective control by the big commercial interests. Ted Butler's COT play has been a good trade over the past couple of years but it's getting a bit long in the tooth now.

I'm certainly a medium/long-term bull. Very wary of taking a leveraged position but a thorough reading of the developing supply/demand fundamentals, together with production costs and practically non-existent inventories makes holding some of the physical stuff one of the most attractive medium term investments around in my view.

Beware of buying too far forward on the COMEX though. If they experience a serious delivery crunch (and there are signs that could easily happen) they'll probably change the rules to require 100% or more margin cover to maintain your position. It's a well worn method of shaking out speculative longs to provide breathing space over a tight delivery situation.

Have a look at this recent Ted Butler interview : http://news.silverseek.com/TedButler/1118798317.php

 

[Minder]

Hi Peterpr,

I am picking up conflicting messages. Am out at the moment, so watching for a direction.

From Bill Murphy at GATA

My smeller tells me something is up in silver. I have nothing to back this up. However, the recent rise in the open interest on price weakness suggest something out of the ordinary is in play. If there are a number of longs looking to take delivery of the July contract, we could finally witness our long awaited silver fireworks.

Butler refers to delays in delivery in the interview in your previous post.

Cook: What do you make of the recent delivery delays on COMEX silver? You have pointed out that in the past they made deliveries on the first day or two.

Butler: It is to the seller’s advantage to deliver right away, to capture the use of the proceeds. Delaying only denies the seller the use of the funds. When delivery is delayed, as it has been in silver and copper, that is proof of tightness in physical supply. This is basic. It should make you want to rush out and buy that commodity.

1,190,000 oz went out of Delaware Depositary yesterday, bring the eligible total at COMEX to 58,423,000 oz.

http://www.nymex.com/jsp/markets/sil_fut_wareho.jsp

This is difficult, delayed delivery and large movements out of COMEX suggest a tightness in supply that could rocket the price. But that has been the promised land for so long now that it is hard to believe it could be happening. OTOH the elevated Open Interest on COMEX is short-term bearish.

The chart shows resistance at $7.60 ish. Keeping one eye open for a break above this level and the other on the COMEX warehouse stocks.

http://tinyurl.com/73xfb

Good luck

 

[peterpr]

Hi Peterpr,
I am picking up conflicting messages. Am out at the moment, so watching for a direction. <snip.>

Hi there M,

I go along with all that. That's why I'm reluctant to swing trade silver any more. I've done very well a few times based on the COT's commercial shorts curve but suspect that may be about to end. Having said that, it could just go on a bit longer in which case we have what looks like another bear flag on the daily chart and a building commercial net short position on the COTs signalling another dip below $7.

I think the Ted Butler et-al analysis of the fundamentals is a sound one though and that sub-$6/oz won't be seen again. That makes it a fairly low risk medium term non-leveraged investment in my view with very substantial upside potential.

My day trading is confined to the index futures right now.

 

[Minder]

Silver is taking a thumping today.

Spot is down 12c at 6.89. Sept futures down 13.75c at 6.95.

CoT report from last tuesday shown a drop in OI.

Oversold IMO, but will wait for a bottom in this washout, it could give up more points for a bottom at 6.70.

 

[peterpr]

Silver is taking a thumping today.
Spot is down 12c at 6.89. Sept futures down 13.75c at 6.95.
CoT report from last tuesday shown a drop in OI.
Oversold IMO, but will wait for a bottom in this washout, it could give up more points for a bottom at 6.70.

Yep - Looks like the old COT play is stil 'in play' so to speak. I wonder how much longer this can go on?

I opened a speculative long in the CBOT mini-futures yesterday at 6.82 (Price briefly touched 6.79 and closed at 6.848). I've no illusions about it though. I take it as a given that the US futures market in silver is not a real market at all. Both exchanges and their regulator the CFTC are blind to (if not complicit in) the OI short side manipulation that has been endemic since the contracts' inception. So, in spite of the absurd supply side fundamentals, the price may be smashed down further just so that 'control' can be excercised for a bit longer. Can't have a runaway silver price now can we, even if mining production is way below even industrial demand? - free markets - what a laugh.

It will be interesting to see what happens about Barclay's proposed new silver ETF. Ted Butler reckons it will never see the light of day for a clear and obvious reason - viz: The prospectus envisages an initial offering of 13 million shares, which equates to 130 million ounces of silver. As he puts it: "I don’t know what the Barclays people are smoking to suggest that they could buy 130 million ounces of silver at anywhere near current prices. 130 million ounces is an interesting amount of silver. It just about equals the total known world silver bullion inventory. In gold, the 6 million ounces in the two big gold ETFs amounts to maybe 1% of known gold bullion equivalent inventory.". The authorities are hardly likely to license a vehicle that will practically guarantee what they have worked so hard to avoid all these years, namely a burgeoning investment demand for silver and a consequent explosion in its price.

http://news.silverseek.com/TedButler/1120048322.php

Interesting times.