Saturday 7 May 2011

Trading Update: Silver: Wow !

That was the week, that was. Having misread the overnight Sunday downtick and added to my stash (and made a day-trader's turn of 4%), it soon became clear this was ugly. On Wednesday I bailed on the main stash (of silver: the gold is a long-term thing), realising a gain for 2011 of a tad under 30%. Of course, last Friday on an MTM basis it had reached 45% ...

All credit to Bullionvault whom I use for PMs: they made a very fair market continuously, throughout all the parabolic carnage. PS that is not a recommendation: but it is certainly a commendation of the highest order.

Debate now rages as to whether Friday marked the bottom. If & when a bottom forms I expect to be back in again, because I have come to like the dynamics of silver a lot.

Next week I will do a proper post on the mayhem in PMs, oil etc. For now, suffice to say, the whole commodities thing reeks of manipulation - details to follow.
The Big Boys are lashing out; there may be worse still to follow in this regard; and it's a very dangerous arena for anyone trading on margin (which I never, ever do). When the elephants fight, the ants get crushed.

Unless they are very nippy !

ND

8 comments:

Elby the Beserk said...

Silver Train, The Stones, croaked by Keef ... quite appropriate for Nick methinks!


Silver train is a comin'
Think I'm gonna get on now, oh, yeah
Silver train is a comin'
Think I wanna get on now, oh, yeah, oh, yeah

Silver rain is a fallin'
Fallin' up around my house, oh, yeah
Silver rain is a fallin', fallin' up around my house, oh, yeah, oh, yeah

And I did not know her name
And I did not know here name
But I sure love the way that she laughed and took my money
And I did not know here name
And I did not know her name
But I sure loved the way that she laughed and called me Honey

Silver rain is a fallin'
Fallin' up around my house, oh, yeah
Silver belles is a ringin'
Ringin' all around my house, ding, dong, oh, yeah

And I did not know her name
And I did not know her name
But I sure loved the way that she laughed and took my money
And I did not know her name
And I did not know her name
But I sure loved the way that she laughed and called me Honey

I'm going home on a south bound train with a song in my mouth
I'm going home on a south bound train with a song in my mouth

Silver train is a runnin'
Think I'm gonna get on now, oh, yeah
Silver train is a comin'
Think I'm gonna get on now, oh, yeah

And I did not know her name
And I did not know here name
But I sure loved the way that she laughed and took my money
And I did not know her name
And I did not know her name
But I sure loved the way that she laughed and called me Honey

Silver train is a comin'
Think I'm gonna get on now, oh, yeah
Silver train is a comin'
Think I'm gonna get on board, oh, yeah

Mark Wadsworth said...

1. The version I have on Goat's Head Soup is definitely more Mick than Keith singing.

2. Is using e.g. Bulionvault really cheaper than buying/selling futures? Even the expensive ones only charge about $30 per round turn.

Steven_L said...

The silver futures contract on my spead betting account has no commission and a tight spread.

On cfd's it's $30 per trade on the spot price.

Nick thinks using complex derivatives to hedge bad news is bad news though.

My personal favourite complex way to trade silver would be to go short the cfd of the proshares ultrashort silver etf.

When someone like me is allowed to do things like this I can't help thinking ND has a point about these derivatives, efts and derivatives of etfs.

Nick Drew said...

perfect anthem, Elby (whoever sung it)

the BV commission gets less (as a %) the more you trade down to 0.02%, Mark, and of course there is no margin involved (+:

& Steven is right: I am only interested in physical for PM, fearing systemic & political risk (recall the Roosevelt gold confiscation of 1933) - these are strange times & nothing is 100% immune, but paper is pretty vulnerable relative to property laws IMHO

of course everything's OK until the day it isn't

Anonymous said...

Nick, check Zerohedge.com, they have an extremely detailed piece on the silver manipulation that occurred last week, and how it will most likely play out.

Nick Drew said...

thanks anon - by an amazing coincidence I am right now drafting a post which includes reference to that very piece - I assume you mean the 'Seeking Alpha' article

there are several others in the same vein: tfmetalsreport is another good source

Anonymous said...

Ha great minds think alike etcetc:)
This is the one I mean:
http://www.zerohedge.com/article/guest-post-anatomy-silver-manipulation-how-low-can-it-go

Think it's one of the best articles I've read, simply because while it explains+reiterates the fundamentals for silver owndership, the author also goes into great detail about how far prices may fall, and why.

Interesting that the author also tells us to be wary of technical chart levels-pretty much the same with all charting I suppose-when such strong forces are at work, levels get blown through without a whimper.
Keep the great blogging Nick!

Nick Drew said...

that's the one (first appeared on Alpha)

thanks for the comments, anon