YouAreNotFree
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Not so much anymore, and certainly not for my daytrading. Its way, way, way too illiquid for that.
I'll post more detail tonight how I use BV.
Best Thread Silver!
Not so much anymore, and certainly not for my daytrading. Its way, way, way too illiquid for that.
I'll post more detail tonight how I use BV.
YouAreNotFree
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.....
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rawrschach
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So your positions net out or you buy one/sell other and wait for prices to converge?
YouAreNotFree
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Edit.
Last edited:
Ritika Sharma
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Holdings of the largest silver-backed ETF, New York's
iShares Silver Trust, dropped 0.43 percent on Thursday
from Wednesday, while that of the largest gold-backed
exchange-traded-fund (ETF)
iShares Silver Trust, dropped 0.43 percent on Thursday
from Wednesday, while that of the largest gold-backed
exchange-traded-fund (ETF)
YouAreNotFree
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Today was an inside balancing day. I thought on Tuesday night that the odds favoured weakness after we only managed to take out Mondays high and the Tuesday Euro session high during mid-late US trading.
There could be some good balance trading opportunity tomorrow, fingers crossed. Its the news Full Monty. ADP jobs, claims, manufacturing pmi in the US, and, Mr Draghi will be jaw-boning the markets some more in all liklihood.
I have an upside ref of 33.10 and downside of 31.30.
There could be some good balance trading opportunity tomorrow, fingers crossed. Its the news Full Monty. ADP jobs, claims, manufacturing pmi in the US, and, Mr Draghi will be jaw-boning the markets some more in all liklihood.
I have an upside ref of 33.10 and downside of 31.30.
YouAreNotFree
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Was going to post some charts too but NT is playing up on me.......back on the line to Customer services for the 3rd time this week
YouAreNotFree
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So those pesky Asians decided to ramp it out of balance to the upside while i'm asleep.
C'est la vie.
Stalled at 33.05 currently.
morpheustrading
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Why I Bought A Gold ETF, Even Though Silver ETFs Were Stronger ($GLD, $SLV)
When gold ETFs broke out on August 31, we bought DB Gold Double Long ($DGP), a leveraged version of the popular SPDR Gold Trust ($GLD). In the following day’s commentary, we briefly pointed out that silver ETFs (such as $SLV) had broken out as well. In fact, the spot silver commodity has actually been outperforming spot gold (and the corresponding precious metals ETFs) in recent weeks. So, if silver ETFs have been showing more near-term strength than gold ETFs, why did we enter a gold ETF trade instead? Here’s why…
Below is a “percentage change chart” that compares the price of the main silver ETF ($SLV) versus the popular gold ETF ($GLD). Rather than showing actual prices of each ETF, this type of chart merely compares the performance of one instrument to another, and reports the percentage price differences between the two. The chart shows the relative price action between SLV versus GLD over the past 30 days. Take a look:
As you can see, SLV has clearly been showing relative strength to GLD over the past several weeks. Notice that GLD (the blue line) was tracking relatively in sync with SLV (the red line) until around 17 August. Then, SLV suddenly began to show relative strength by outperforming GLD. Over the past 30 days, the chart also indicates that SLV has gained 15%, while GLD has only rallied 5%. However, one mistake swing traders frequently make is limiting their technical analysis to analyzing only one particular timeframe, such as the daily chart, without comparing the patterns of longer-term chart intervals.
It is important to use multiple time frames when doing your daily research and technical analysis of potential stock and ETF trades because there are times when one chart timeframe indicates a completely different technical situation than another timeframe. As swing traders, we base most of our detailed entry and exit points on the daily chart patterns, but we always assess the longer-term weekly chart patterns to look for confirmation of trend. Ideally, we want both the daily and weekly charts to be aligned with one another. When they are not, the odds of a successful trade are reduced.
If comparing the longer-term weekly charts of SLV and GLD, it quickly becomes apparent that SLV has a lot more technical price resistance and overhead supply to work through before recovering back to its year 2011 highs. To illustrate this, we use a technical indicator known as Fibonacci retracement lines, which seeks to predict significant price levels where a stock or ETF may reverse, or at least take a significant pause. The first chart below is a weekly chart of $SLV:
As shown on the chart above, SLV has only retraced about 25% of its decline from the April 2011 high to June 2012 low. It has not even recovered to the first major Fibonacci resistance level of 38.2%, despite its relative strength over the past few weeks. By comparison, take a look at the weekly chart of GLD with Fibonacci retracement lines:
Unlike SLV, GLD has already moved above its 38.2% Fibonacci retracement level, which means it has already reclaimed more of the loss from its year-long correction than SLV. As such, there is proportionately less overhead supply with GLD compared to SLV, which should make it easier for GLD to attempt to rally back to its 2011 highs over the longer-term.
In this situation, where the shorter-term chart of SLV is showing more strength than GLD, but the longer-term chart is showing the opposite, the longer-term chart interval bears the most weight, and therefore holds the most significance in ultimately determining the direction of the trend. If, for example, the daily chart of a stock or ETF shows a bullish breakout above resistance, but the weekly chart shows the breakout to merely be running into a one-year downtrend line, resistance of the downtrend line on the weekly chart should be viewed as more important than the breakout on the daily chart (except perhaps only for intraday traders).
Overall, SLV has indeed been showing relative strength to GLD over the past several weeks, but the question is how long will it be able to retain that relative strength, given that SLV has substantially more technical resistance and overhead supply to contend with than GLD. This is the reason we decided to trade a gold ETF, rather than a silver ETF, when both precious metals broke out above resistance of their 200-day moving averages on August 31.
Even though we are primarily short-term stock and ETF traders, we still prefer to have intermediate and long-term price momentum in our favor, rather than fighting against it. Water running down a hill will always flow in the path of least resistance. The same is true of technical analysis in when trading ETFs and stocks, which is why multiple timeframe analysis is so important.
When gold ETFs broke out on August 31, we bought DB Gold Double Long ($DGP), a leveraged version of the popular SPDR Gold Trust ($GLD). In the following day’s commentary, we briefly pointed out that silver ETFs (such as $SLV) had broken out as well. In fact, the spot silver commodity has actually been outperforming spot gold (and the corresponding precious metals ETFs) in recent weeks. So, if silver ETFs have been showing more near-term strength than gold ETFs, why did we enter a gold ETF trade instead? Here’s why…
Below is a “percentage change chart” that compares the price of the main silver ETF ($SLV) versus the popular gold ETF ($GLD). Rather than showing actual prices of each ETF, this type of chart merely compares the performance of one instrument to another, and reports the percentage price differences between the two. The chart shows the relative price action between SLV versus GLD over the past 30 days. Take a look:
As you can see, SLV has clearly been showing relative strength to GLD over the past several weeks. Notice that GLD (the blue line) was tracking relatively in sync with SLV (the red line) until around 17 August. Then, SLV suddenly began to show relative strength by outperforming GLD. Over the past 30 days, the chart also indicates that SLV has gained 15%, while GLD has only rallied 5%. However, one mistake swing traders frequently make is limiting their technical analysis to analyzing only one particular timeframe, such as the daily chart, without comparing the patterns of longer-term chart intervals.
It is important to use multiple time frames when doing your daily research and technical analysis of potential stock and ETF trades because there are times when one chart timeframe indicates a completely different technical situation than another timeframe. As swing traders, we base most of our detailed entry and exit points on the daily chart patterns, but we always assess the longer-term weekly chart patterns to look for confirmation of trend. Ideally, we want both the daily and weekly charts to be aligned with one another. When they are not, the odds of a successful trade are reduced.
If comparing the longer-term weekly charts of SLV and GLD, it quickly becomes apparent that SLV has a lot more technical price resistance and overhead supply to work through before recovering back to its year 2011 highs. To illustrate this, we use a technical indicator known as Fibonacci retracement lines, which seeks to predict significant price levels where a stock or ETF may reverse, or at least take a significant pause. The first chart below is a weekly chart of $SLV:
As shown on the chart above, SLV has only retraced about 25% of its decline from the April 2011 high to June 2012 low. It has not even recovered to the first major Fibonacci resistance level of 38.2%, despite its relative strength over the past few weeks. By comparison, take a look at the weekly chart of GLD with Fibonacci retracement lines:
Unlike SLV, GLD has already moved above its 38.2% Fibonacci retracement level, which means it has already reclaimed more of the loss from its year-long correction than SLV. As such, there is proportionately less overhead supply with GLD compared to SLV, which should make it easier for GLD to attempt to rally back to its 2011 highs over the longer-term.
In this situation, where the shorter-term chart of SLV is showing more strength than GLD, but the longer-term chart is showing the opposite, the longer-term chart interval bears the most weight, and therefore holds the most significance in ultimately determining the direction of the trend. If, for example, the daily chart of a stock or ETF shows a bullish breakout above resistance, but the weekly chart shows the breakout to merely be running into a one-year downtrend line, resistance of the downtrend line on the weekly chart should be viewed as more important than the breakout on the daily chart (except perhaps only for intraday traders).
Overall, SLV has indeed been showing relative strength to GLD over the past several weeks, but the question is how long will it be able to retain that relative strength, given that SLV has substantially more technical resistance and overhead supply to contend with than GLD. This is the reason we decided to trade a gold ETF, rather than a silver ETF, when both precious metals broke out above resistance of their 200-day moving averages on August 31.
Even though we are primarily short-term stock and ETF traders, we still prefer to have intermediate and long-term price momentum in our favor, rather than fighting against it. Water running down a hill will always flow in the path of least resistance. The same is true of technical analysis in when trading ETFs and stocks, which is why multiple timeframe analysis is so important.
isatrader
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Although I agree with your logic about resistance levels etc, there are some key areas that you should consider. Firstly, Silver has fallen much further than Gold and so it doesn't need to climb back to it's April 2011 high in order to outperform gold as to get back to it's high it needs to move close to 60% from here, whereas gold only needs to move around roughly 13%. Secondly is correlation. Silver and gold have around a 92% percent correlation on a 200 day average and so both move fairly in tandem especially around this fundamentally strong period of the Indian Wedding Season. Thirdly, Silvers only major resistance is up to $36 on the spot (see on left of the attached silver chart) and after that the volume resistance is moderate up to $41, and very light above that. I think these are much more important that fib levels personally.
Attached is the P&F relative performance chart which shows that although gold has been the place to be of the two since May 2011, Silver has broken below the moving average and is on a short term double bottom buy signal.
Attached is the P&F relative performance chart which shows that although gold has been the place to be of the two since May 2011, Silver has broken below the moving average and is on a short term double bottom buy signal.
Attachments
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morpheustrading
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Good insight here, and it all seems quite sound to me.
When I was a new trader back in the last 1990′s, I was primarily a sector trader who focused on trading individual stocks within the sector that was showing the most relative strength. During this time, I consistently made the mistake of buying the sole stock in the group that had not rallied as much as the other stocks in the group (the weakest one). My thinking was that since it is lagging behind the other stocks in the group, is a good play because it must “catch up” to the rest of the stocks in the sector.
However, what I eventually learned was that laggards are laggards for a reason…Institutional traders such as banks, mutual funds, hedge funds are not buying – plain and simple. The actual reason why a particular stock is not being bought as much is another stock within the same industry sector is irrelevant. The point is simply that the stock or ETF is a laggard. I will close by sharing an actual true story the best relates this example…
I remember one day about 13 years ago, when I was a daytrader, I immediately noticed relative strength in the pharmaceutical sector ($DRG) shortly after the market opened. Most of the individual stocks in the industry sector were already up 2 or 3% on the day within the first 30 min. of trading, so my thought was that I would try to find the one stock that had not yet rallied, the one bucking the trend, and I did. It was Schering-Plough (SGP), which was only up 0.1% (basically flat) at the same time the other stocks in the same sector were already up several percent.
Buying SGP at that time, I felt like a genius who would end up making a lot of money by the end of the day because I had spotted the one stock that nobody was buying it. But as you may be able to guess, the outcome of the story was not at all what I had anticipated. By the closing bell, those other stocks that were originally up 2% or 3% on the open, which I was afraid to buy, were now showing large gains of 5% or more on the day. However, my “genius” SGP play was exactly within a few pennies of where I bought it hours earlier. Why? Because it was a laggard within the sector.
In summary, just remember that cheap stocks are cheap stocks for a reason, and the reason they are cheap is irrelevant. The core of our swing trading strategy is to buy HIGH and sell HIGHER, rather than to buy LOW and hope to sell HIGH if the cheap stocks and ETFs catch up.
With time, I eventually figured out a much more profitable strategy was to buy strength. Still, I guess it really depends on what time frame a trader is, and more importantly, if consistent rules are applied to one's strategy.
For us, making sure intermediate and longer-term trends confirm has always been important; hence the post. But I can also see how one could just easily make the argument that silver will become closer to parity with gold.
Different opinions are what moves markets.
Good trading to you,
Deron
When I was a new trader back in the last 1990′s, I was primarily a sector trader who focused on trading individual stocks within the sector that was showing the most relative strength. During this time, I consistently made the mistake of buying the sole stock in the group that had not rallied as much as the other stocks in the group (the weakest one). My thinking was that since it is lagging behind the other stocks in the group, is a good play because it must “catch up” to the rest of the stocks in the sector.
However, what I eventually learned was that laggards are laggards for a reason…Institutional traders such as banks, mutual funds, hedge funds are not buying – plain and simple. The actual reason why a particular stock is not being bought as much is another stock within the same industry sector is irrelevant. The point is simply that the stock or ETF is a laggard. I will close by sharing an actual true story the best relates this example…
I remember one day about 13 years ago, when I was a daytrader, I immediately noticed relative strength in the pharmaceutical sector ($DRG) shortly after the market opened. Most of the individual stocks in the industry sector were already up 2 or 3% on the day within the first 30 min. of trading, so my thought was that I would try to find the one stock that had not yet rallied, the one bucking the trend, and I did. It was Schering-Plough (SGP), which was only up 0.1% (basically flat) at the same time the other stocks in the same sector were already up several percent.
Buying SGP at that time, I felt like a genius who would end up making a lot of money by the end of the day because I had spotted the one stock that nobody was buying it. But as you may be able to guess, the outcome of the story was not at all what I had anticipated. By the closing bell, those other stocks that were originally up 2% or 3% on the open, which I was afraid to buy, were now showing large gains of 5% or more on the day. However, my “genius” SGP play was exactly within a few pennies of where I bought it hours earlier. Why? Because it was a laggard within the sector.
In summary, just remember that cheap stocks are cheap stocks for a reason, and the reason they are cheap is irrelevant. The core of our swing trading strategy is to buy HIGH and sell HIGHER, rather than to buy LOW and hope to sell HIGH if the cheap stocks and ETFs catch up.
With time, I eventually figured out a much more profitable strategy was to buy strength. Still, I guess it really depends on what time frame a trader is, and more importantly, if consistent rules are applied to one's strategy.
For us, making sure intermediate and longer-term trends confirm has always been important; hence the post. But I can also see how one could just easily make the argument that silver will become closer to parity with gold.
Different opinions are what moves markets.
Good trading to you,
Deron
Although I agree with your logic about resistance levels etc, there are some key areas that you should consider. Firstly, Silver has fallen much further than Gold and so it doesn't need to climb back to it's April 2011 high in order to outperform gold as to get back to it's high it needs to move close to 60% from here, whereas gold only needs to move around roughly 13%. Secondly is correlation. Silver and gold have around a 92% percent correlation on a 200 day average and so both move fairly in tandem especially around this fundamentally strong period of the Indian Wedding Season. Thirdly, Silvers only major resistance is up to $36 on the spot (see on left of the attached silver chart) and after that the volume resistance is moderate up to $41, and very light above that. I think these are much more important that fib levels personally.
Attached is the P&F relative performance chart which shows that although gold has been the place to be of the two since May 2011, Silver has broken below the moving average and is on a short term double bottom buy signal.
isatrader
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Good insight here, and it all seems quite sound to me.
When I was a new trader back in the last 1990′s, I was primarily a sector trader who focused on trading individual stocks within the sector that was showing the most relative strength. During this time, I consistently made the mistake of buying the sole stock in the group that had not rallied as much as the other stocks in the group (the weakest one). My thinking was that since it is lagging behind the other stocks in the group, is a good play because it must “catch up” to the rest of the stocks in the sector.
However, what I eventually learned was that laggards are laggards for a reason…Institutional traders such as banks, mutual funds, hedge funds are not buying – plain and simple. The actual reason why a particular stock is not being bought as much is another stock within the same industry sector is irrelevant. The point is simply that the stock or ETF is a laggard. I will close by sharing an actual true story the best relates this example…
I remember one day about 13 years ago, when I was a daytrader, I immediately noticed relative strength in the pharmaceutical sector ($DRG) shortly after the market opened. Most of the individual stocks in the industry sector were already up 2 or 3% on the day within the first 30 min. of trading, so my thought was that I would try to find the one stock that had not yet rallied, the one bucking the trend, and I did. It was Schering-Plough (SGP), which was only up 0.1% (basically flat) at the same time the other stocks in the same sector were already up several percent.
Buying SGP at that time, I felt like a genius who would end up making a lot of money by the end of the day because I had spotted the one stock that nobody was buying it. But as you may be able to guess, the outcome of the story was not at all what I had anticipated. By the closing bell, those other stocks that were originally up 2% or 3% on the open, which I was afraid to buy, were now showing large gains of 5% or more on the day. However, my “genius” SGP play was exactly within a few pennies of where I bought it hours earlier. Why? Because it was a laggard within the sector.
In summary, just remember that cheap stocks are cheap stocks for a reason, and the reason they are cheap is irrelevant. The core of our swing trading strategy is to buy HIGH and sell HIGHER, rather than to buy LOW and hope to sell HIGH if the cheap stocks and ETFs catch up.
With time, I eventually figured out a much more profitable strategy was to buy strength. Still, I guess it really depends on what time frame a trader is, and more importantly, if consistent rules are applied to one's strategy.
For us, making sure intermediate and longer-term trends confirm has always been important; hence the post. But I can also see how one could just easily make the argument that silver will become closer to parity with gold.
Different opinions are what moves markets.
Good trading to you,
Deron
I agree totally with your argument as I follow Stan Weinstein's method and have a very long thread on here: http://www.trade2win.com/boards/technical-analysis/134944-stan-weinsteins-stage-analysis.html which I believe is very similar to what you do from reading your posts over the last month or so. Except that yours is a shorter term swing trading method. But we seem to have been picking similar things none the less recently.
My other argument with Silver vs leveraged gold is that if gold makes it back to retest the highs, then the leveraged will have moved roughly 26% or so. So to get the same return in silver it needs to reach $40 which is roughly your 61.8% fib level and below the second volume resistance high.
Attached is the weekly and the daily line charts of the ratio which shows that the ratio is back above a flattening 200 day MA in favour of silver:
Attachments
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YouAreNotFree
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Lulz. This liquidation was coming. It should come as no surprise.
Huge swings up and down in no time at all.......ahh yes, the good times are back in Silver.
Huge swings up and down in no time at all.......ahh yes, the good times are back in Silver.
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YouAreNotFree
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SGTBull(s_h_i_t)07 subscriber right here
Did you see that massive paper manipulation just now by JP Morgan? The $1.50 sell-off? Curse them. This up move has been all physical demand!
If you are not actually a subscriber, I apologize. I know his minions visit this thread though.
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isatrader
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I closed out half my position in silver today to take some profits as it has had a 23.44% move since my Aug 14th entry. So I was pleased with that as it's close enough to my initial $35 target where the major volume resistance is - see attached P&F chart. And I'm going to let the other half ride for a longer time to see if it can reach my next target of $40.
Zeal have also updated their Silver Bull Seasonal charts which I've found useful over the last five years or so. You can see their article here: Silver Bull Seasonals 2 and I've attached the charts from it below.
Zeal have also updated their Silver Bull Seasonal charts which I've found useful over the last five years or so. You can see their article here: Silver Bull Seasonals 2 and I've attached the charts from it below.
Attachments
Ritika Sharma
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SILVER
Silver tracked gold higher and held near its strongest since March. Platinum was near multi-month highs even after Anglo American Platinum said it will resume work this week at its strike-hit Rustenburg operations.
Silver tracked gold higher and held near its strongest since March. Platinum was near multi-month highs even after Anglo American Platinum said it will resume work this week at its strike-hit Rustenburg operations.
Just when we thought silver was taking off. It's at the USD33 level. Still great performance the past two months.
Physical silver is the way to go, but I'm not totally against speculative assets related to silver. I used to own SLV, and have a few stocks for silver mines.
Physical silver is the way to go, but I'm not totally against speculative assets related to silver. I used to own SLV, and have a few stocks for silver mines.
