Market Curiosity: Exploring Markets And Systems

March 8, 2011

Selling, and not selling, gaps in SLW

Filed under: Just Watching — Tags: — Jeff Fitzmyers @ 7:40 pm

SLW has a fair number of gaps. Usually when a move is rather extended to the upside and there is a gap on the open, it’s a good time to sell. But not always, especially if price is not extended. I did not sell at point 10 because:
+ I want to keep the position despite daily price movements, unless they are very bearish. (Yesterdays bar did not even take out the low of the bar before it. Compare that to point 1 and 2. Point 4 is a little different because it might have received support from the 10 ema.)
+ Price is not extended compared to the the old high at point 2. (definitely extended compared to the recent bottom mid February.)
+ The 2011 backwardation has been following 2008 closely. That implies price can go up for at least 5 more days with minor corrections.

The other reason I want to hold onto the position is silver really could explode up at any time. Among other things, the stream of rumors about JPM offering cash premiums to not take delivery from the COMEX is continuous. Mr Chapman, about 1.8 minutes in, is saying premiums were at 80%. IF true that puts the real price of silver at around 65 frn’s/oz. Then add backwardation, the lack of Silver Maples, funky warehouse stats, etc, etc… One could sell the gap and be chasing price big time to get back in. Maybe that is a good plan? If every major gap was sold and bought back 1-2 days later, that would probably cover the loss of having to chase price. But I’m not at the computer all the time. So I don’t want the stress.

Note that usually when price gaps up, it just heads down. None of this bouncing back stuff after 10 minutes. If silver really is bullish, SLW could open up, and just start accelerating up 15% in a short amount of time.

Xiphos Trading: Silver is in such a runaway bull market that its blowing right thru POs in all currencies. WW phenom

References
+ SLW – Part 2 of the silver and SLW campaign

2 Comments »

  1. Do you have a link to the Bob Chapman interview you seem to be referring to?

    Comment by silverflaunt — March 8, 2011 @ 9:13 pm

  2. Thanks for pointing the missing link out. Now updated.

    Comment by Jeff — March 8, 2011 @ 9:48 pm


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