The SLW : Silver ratio keeps rising, and it looks like a mini breakout is holding.
Short March 2015 27 put @ 2.95
Long March 2015 27 call @ 2.55
No stop loss.
Update 1, Jan 20 2015
Well, it was not time to go long after all. Will likely be rolling over the options.
Ed Steer: For the week:
– Gold was down 3.4
– The HUI lost 8.6%.
This is normal
– Silver was down 5.5%
– Silver stock index closed lower by only 2.9%.
This is not normal. Typically the index should be down over 10% (if not 5,000%!). The typical explanation is that strong hands are buying silver shares and silver and the silver shares should go up soon. When the top is near, silver should keep going up, and silver shares should under preform.
Graphically, the SLW : silver ratio is rising, suggesting more upside in general. If true, for the next few days, SLW is a buy on a stop of about 25.5, with stop loss a bit under 24.5.
Update 1, May 4 2014
And avoiding that down draft is why I like to buy on a stop. A small divergence seems to have marked a local bottom.
Today even when silver and SPY were dipping, SLW was rising. Pretty good show of relative strength.
The HUI : SPY weekly ratio has tentatively broken out.
The SLW : silver ratio is also looking like SLW price can easily go higher: SLW is leading silver by a lot. The orange arrows show that the ratio has already broken out to the upside. Typically a sign of strength.
Update: And just the fact that price had an outside up day and did not really test the January high and 170 EMA — that also shows strength.
+ Bullish percent is finally rising.
+ SLW is leading the $silver price. Supposedly that means a rally has legs.
I have always preferred SLW. Well, it looks like FSM might be better.
+ SLW declined lower than FSM on multiple time frames.
+ FSM’s rise over the last month or so has been about 5% higher than SLW.
I’m currently long FSM SEP 2.50 calls.
Update July 22: So far incorrect in assuming FSM will outpace SLW. After first hour of trade, FSM +2%, SLW +6%
+ The signs of a desperate bottom are starting to appear in the junior-mining sector… We’re starting to see dollar bills trading for 80 cents. Has a chart and a table (Stansberry).
– 1 issue is there is no prior chart support near 31.5 to 32 to the left. I have read that does not suggest a solid bottom. Bouncing off decent support, say 28 or 26.5-ish, supposedly would suggest a solid bottom
+ SLW – Waiting for a low risk buy due to small short interest, and SLW:silver ratio strength.
+ Medium term RSI now above a long term RSI that seems to be rising.
+ Multiple indications of silver shortages.
+ January us mint silver eagle sales pass 6 million, mint suspends sales, states eagles are sold out!!
+ fed/gov keeps printing money.
+ price broke over the down trend line and had a little rest on near term EMA support.
Buy stop near todays high.
Stop loss around 3.75.
Update 1 Feb 17
Stopped out even with a fairly wide stop loss near the trading range low. Note the updated down trend line.
With seemingly every gov debasing, SLW might just be the premier security.
+ SLW : Silver ratio musings…
+ SLW:silver ratio suggests higher prices
– Silver – attempting to add to longs. -20%
+ 25 prominent hedge funds position’s on gold and silver hold no surprises: No silver, 3% of positions gold related and typically small.
– “Nothing, but nothing, moves like silver.” Maybe no weekly dip for another 4 weeks.
+ Silver and gold – Long if a buy stop triggers near yesterday’s highs. +103% +130%
Update 1, October 24: Well, things don’t seem so bullish now 🙂 With the openly admitted and active debasement actions by multiple gov’s, I continue to be surprised that the metals are not ascending in a big, or at least steady, way. Just another reason for me not to trade what I think. Just trade what I see.
The theory is that stocks lead the commodity. More generally, the premier asset leads the pack (commodity). Possibly this could be due to smart money activity?