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New Long Silver Position (USLV)
posted Jul 30 '12 by clete
Today was the first day since March the 13th that silver closed above its 50 day moving average. That was enough to convince me to step back into silver.
Now, I know this is a bit agressive. I mean silver is still well below it long term moving averages and it has yet to make even a new higher high. Not only that but it stopped today at a resistance line that I have drawn and the move today was on lighter than everage volume and the RSI (2) is at 97+, which alone almost guarantees that the price will retrace over the next day or two.
In short, I almost certainly haven't picked the perfect day to get back in but seeing as how silver has basically just been going sideways for months on end, I figure it doesn't hurt to start building a position now and if my optimism for the metals proves unfounded then I can get out without much harm being done at all.
Since the 20 and 50 day moving averages have been acting as resistance for months, they should now begin acting as support, that is unless all of last week's gain is taken back almost immediately in which case the resistance would only become that much stronger but assuming that the it does become support, my expectation is that silver will go slightly down to sideways for a day or two or three to eat away some of this overbought condisition that its in at the moment before making a serious move back up to the long term moving averages.
From there, there's no telling where it goes but my intention is for this to be a much longer term hold than I'm used to. I'd love to still own this postion a year from now.
Incidentally, I decided to give a new leveraged silver etf a try. I bought USLV. Like I said, this is an agressive trade. All seat belts should be securely fastened and all seat backs and tray tables in their full upright and locked position.

Silver Interview
posted Jul 31 '12 by clete
Good interview....
The bottom is probably in for silver - Morgan

Would Silver Please Just Break Out Already!!!!
posted Aug 13 '12 by clete
The metals are just taking FOREVER to make any significant move in any direction.
The silver lining to that is the fact that once a direction is decided, the move will likely be extremely sharp and fast and lots of money can be made in short order.
In the mean time, I've taken a bet that the break will be to the up side and just as a quick up date, I'm just basically flat on the trade. The 20 & 50 day MAs have converged and should act as support. If silver drops below the 20ma I might let that shake me out but my real intention is to stay in unless the trend line that connects the bottoms since June gets taken out.

Mike Swanson is Reading My Mind!
posted Aug 16 '12 by clete
I just got home and checked my email to find a message from Mike Swanson saying that he bought GCC, GLD and GDXJ.
I happen to have bought some similar stuff today as well. I haven't watched Mike's video but I'd bet we both bought for similar reasons except that he seems stuck on dividends which I frankly couldn't care less about.
I bought gold via UGLD and gold miners via NUGT. Mike bought the junior minors which is riskier but maybe he's thinking that the dividend midigates some of that risk. I bought on the higher than average volume bounce off the 50 day moving average on both the gold futures and the GDX. If either of them drop below their latest short term low (i.e yesterday's low) I'll get out and wait for a clearer break of resistance.
Like the silver buy, which I'll almost totally flat on right now, I expect that these will both be longer term trades. Several months long at least (I hope!)

Finally! - I Think
posted Aug 20 '12 by clete
Well, it LOOKS like silver finally broke out today! Yippee!
The problem is that nothing else did. Gold didn't break resistance, the dollar didn't break support, oil touched its long term moving average and bounced off (be ready to sell oil if you're still in it from the trade a couple of weeks ago) gasoline didn't do anything today, copper was down, platinum is way up but its move doesn't seem related to silver in any way.
In short, silver was sort of a loan wolf today and on sort of iffy volume. SLV volume was above average today which looks good but the volume on the futures was, while higher than Friday's volume, well below average as was the volume across practically every sector of the whole market, which has been the case for two weeks now.
Bottom line is this. I enjoyed the heck out of this big spike in silver today because a full third of my account is currently invested in silver but if I weren't already in it, I'm not sure that today's action would be enough to convince me to buy it. It's just weird that silver made such a huge move all by itself. If gold follows suit tomorrow or if there is follow through with more buying of silver tomorrow, then I'll trust this move much more.
P.S. IF silver has broken out for real then what I expect will happen in the short term is that silver will move to the high $29s rather quickly and then retrace back to the mid to low $28s before breaking above the long term moving averages. Then when it breaks above the long term moving averages it will go to maybe $33 or so and then retrace back to the long term moving averages before starting a full fledged new stage two up trend. In short, there's no hurry. You're not going to miss out by hanging out another few days (or even several weeks) before pulling the trigger on silver.

posted Aug 20 '12 by jdrizzo
Great analysis. thanks for posting. was thinking about pulling trigger but didnt!

Well now that's more like it!
posted Aug 21 '12 by clete
The follow through I spoke about yesterday clearly happened today confirming that we do in fact have a break out of some importance. Two consecutive closes above $28.50 on silver on increasing volume is just what the doctor ordered. Not to mention a big break of support on the dollar index (/dx on ThinkorSwim) and a breakout of gold to it highest price since early May.
I think silver is still going to have to take more than one run at $30 before breaking above it. A bounce off of that resistance, which is actually just a tad below $30, would likely coincide with gold finding resistance at its long term moving averages which it is sitting at right now. Translation: Gold is going to hang out close to where it is while silver makes a run to $30 and then goes sideways for a while itself to work off what will be an overbought condition at that point and then they'll both break above their long term moving averages together to launch a new phase two bull run.
Of course its the first two words of that last paragraph that are the most important and whether things go just that way or not, it is very likely that the days of being able to buy silver at below $30 an ounce are coming to a rapid end.

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