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Sunday, January 08, 2012
Got Gold Report – Silver, You Ain’t Seen Nothin’ Yet
HOUSTON -- On the day after Christmas last year we shared with Vultures (Got Gold Report Subscribers) our commentary on the Commodity Futures Trading Commission (CFTC) weekly report of the commitments of traders (COT) in COMEX silver futures for the period ending Tuesday, December 20. A few days later, on December 28, we shared that review with our entire readership in these pages as a holiday courtesy. In that review we said, as simply and clearly as our command of the vocabulary can convey, that “this COT setup is about as bullish as they come.”
Since that report there have been two subsequent COT reports and the changes which have occurred and have been reported are in keeping with our view then that the positioning of the large traders of silver futures in New York: “gives us cover to begin adding in our green target box for silver with reasonable confidence, for the first time in over a year, if only the Trading Gods will allow it.” The green box on our tracking chart is visible in this reduced version of one of our silver tracking graphs we share with Vultures.
One of our silver tracking graphs at Got Gold Report. This is the 1-year, daily version which contains part of our weekly commentary in the dialog boxes. The chart is actually quite a bit larger than shown and must be reduced quite a bit to fit this format. Vultures have access to the full sized version any time.
Continued…
As Vultures already know, because they have constant access to all of our tracking and trading charts in the subscriber pages, we often use target boxes placed in advance on our charts to denote areas we intend to consider attempting a trade or to add to a position. In addition to those target boxes, we also often add commentary directly in the various charts to explain our thinking as the events and conditions change. It is a very effective way to convey how we are approaching the markets we track and game. Our “green box” for silver in our tracking chart has been in the same locale for quite some time – ever since we adopted the “Giant Flag” consolidation theory of the silver market.
Silver Enters and Bounces in “The Green”
On Thursday, December 29, having broken implied $28 technical support silver headed south in a hurry in nervous, thin trading early (in the U.S.), entering our green target box for the first time. As the trading neared the September panic spike low near $26.15 (actually the third test of $26 in 2011, having tested it in January and September prior) our instinct was then to set up a trade to fire the instant a bounce seemed to be in the making – so we did. As if on cue, bidding flowed in to support silver at almost the precise area the September panic spike was exhausted (about $26.15) (in the pre-market hours for the Big Markets).
For the first time in over a year we initiated a new silver trade that day, securing a long position in our predetermined zone of potential support (filled at $26.41), as Vultures already know. What some new Vultures may not know, and longer-time Vultures may have forgotten, our last silver trade was stopped out about a year earlier in January of 2011, as we disclosed then on the blog. (We urge readers to review that linked post, if for no other reason than to review the January 20 2011 chart before continuing this offering.)
Silver’s 2011 Bounce at $26 Higher Than We Expected
At the time, in late January of 2011, amid harsh profit taking for precious metals, including some of the heaviest negative money flow for silver ETFs we had seen up to that time, we had decided to target the area of a previous October 2010 flag consolidation for possible reentry (about $0.75 either side of $23 or so, as shown in the chart in the link above). In other words, in January of 2011 we expected more of a retrace by silver than actually occurred, as silver then fetched up just above the $26 level and just didn’t provide us with a reentry we were comfortable with then.
Consequently, except for our holdings of physical metal, we missed out on the run-up of silver from $26 to around $49 from January to April last year as far as our short-term trading was concerned. It was about that time that we adopted our current attitude with regard to silver – that since we already hold a meaningful position in physical silver, we had the luxury to wait for an extraordinary correction before taking another shot with our short term trading.
It should be crystal clear by now, but in case it isn’t, we believe that silver is in the midst of just the kind of extraordinary correction which allows us to put on a new short-term trading position – the first new trade in silver for us since August of 2010 (silver then below $19). We think that the fact that silver has come all the way back down from its near brush with an all time high in April to as low as $26.15 is a bona fide opportunity. Right or wrong, that is indeed how we have chosen to play it too.
http://www.gotgoldreport.com/2012/0...=3bb49e9d3a-Sprott_Money_247&utm_medium=email
Home
GotGoldBlog
VultureInReview
VultureStocks
Team
Calendar
Sunday, January 08, 2012
Got Gold Report – Silver, You Ain’t Seen Nothin’ Yet
HOUSTON -- On the day after Christmas last year we shared with Vultures (Got Gold Report Subscribers) our commentary on the Commodity Futures Trading Commission (CFTC) weekly report of the commitments of traders (COT) in COMEX silver futures for the period ending Tuesday, December 20. A few days later, on December 28, we shared that review with our entire readership in these pages as a holiday courtesy. In that review we said, as simply and clearly as our command of the vocabulary can convey, that “this COT setup is about as bullish as they come.”
Since that report there have been two subsequent COT reports and the changes which have occurred and have been reported are in keeping with our view then that the positioning of the large traders of silver futures in New York: “gives us cover to begin adding in our green target box for silver with reasonable confidence, for the first time in over a year, if only the Trading Gods will allow it.” The green box on our tracking chart is visible in this reduced version of one of our silver tracking graphs we share with Vultures.
One of our silver tracking graphs at Got Gold Report. This is the 1-year, daily version which contains part of our weekly commentary in the dialog boxes. The chart is actually quite a bit larger than shown and must be reduced quite a bit to fit this format. Vultures have access to the full sized version any time.
Continued…
As Vultures already know, because they have constant access to all of our tracking and trading charts in the subscriber pages, we often use target boxes placed in advance on our charts to denote areas we intend to consider attempting a trade or to add to a position. In addition to those target boxes, we also often add commentary directly in the various charts to explain our thinking as the events and conditions change. It is a very effective way to convey how we are approaching the markets we track and game. Our “green box” for silver in our tracking chart has been in the same locale for quite some time – ever since we adopted the “Giant Flag” consolidation theory of the silver market.
Silver Enters and Bounces in “The Green”
On Thursday, December 29, having broken implied $28 technical support silver headed south in a hurry in nervous, thin trading early (in the U.S.), entering our green target box for the first time. As the trading neared the September panic spike low near $26.15 (actually the third test of $26 in 2011, having tested it in January and September prior) our instinct was then to set up a trade to fire the instant a bounce seemed to be in the making – so we did. As if on cue, bidding flowed in to support silver at almost the precise area the September panic spike was exhausted (about $26.15) (in the pre-market hours for the Big Markets).
For the first time in over a year we initiated a new silver trade that day, securing a long position in our predetermined zone of potential support (filled at $26.41), as Vultures already know. What some new Vultures may not know, and longer-time Vultures may have forgotten, our last silver trade was stopped out about a year earlier in January of 2011, as we disclosed then on the blog. (We urge readers to review that linked post, if for no other reason than to review the January 20 2011 chart before continuing this offering.)
Silver’s 2011 Bounce at $26 Higher Than We Expected
At the time, in late January of 2011, amid harsh profit taking for precious metals, including some of the heaviest negative money flow for silver ETFs we had seen up to that time, we had decided to target the area of a previous October 2010 flag consolidation for possible reentry (about $0.75 either side of $23 or so, as shown in the chart in the link above). In other words, in January of 2011 we expected more of a retrace by silver than actually occurred, as silver then fetched up just above the $26 level and just didn’t provide us with a reentry we were comfortable with then.
Consequently, except for our holdings of physical metal, we missed out on the run-up of silver from $26 to around $49 from January to April last year as far as our short-term trading was concerned. It was about that time that we adopted our current attitude with regard to silver – that since we already hold a meaningful position in physical silver, we had the luxury to wait for an extraordinary correction before taking another shot with our short term trading.
It should be crystal clear by now, but in case it isn’t, we believe that silver is in the midst of just the kind of extraordinary correction which allows us to put on a new short-term trading position – the first new trade in silver for us since August of 2010 (silver then below $19). We think that the fact that silver has come all the way back down from its near brush with an all time high in April to as low as $26.15 is a bona fide opportunity. Right or wrong, that is indeed how we have chosen to play it too.
http://www.gotgoldreport.com/2012/0...=3bb49e9d3a-Sprott_Money_247&utm_medium=email
