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« Silver prices drop ‘down under’ | Main | Max Keiser interviews Brad Cooke of Endeavour Silver Corporation »
Friday
Apr292011

Silver prices continue to tease

silver chart 29 April 2011.JPG

Silver prices are looking rather stretched at the moment, however, when they were standing at $30.00/oz they looked a tad stretched there too and prices have moved a lot higher since then. The yawning gap between the 200dma and the current price is also cause for concern for us as we would prefer it to be a lot closer. Some sideways consolidation by silver would allow the 200dma to play catch up and pacify us a little. The technical indicators are on the ceiling, however, they were there in October 2010 when prices were around the $25.00/oz level. Yes silver is overbought big time at this juncture and a number of analysts are bailing out and advising their readers to do the same. Looking at the above chart it is difficult to disagree with them, but we are not that pessimistic about silver prices. We have been silver and gold bulls for a long time and witnessed silver vaulting one hurdle after another just when the bears where finding their voice.

As an alternative to silver we have the currencies, which are all still trying to win an Oscar for dieing in the most dramatic fashion, the number one nomination is of course the US Dollar, having fallen by more than 10% this year. The battle for '74' has flopped, so now all eyes are on the '72' level, last seen in July 2009, if it does not hold then the financial markets will become calamitous to say the least. On the other hand the technical indicators are on the floor suggesting a bounce or at least a breather is on the cards. Now sit back for moment and look at the rate at which the fall is taking place, it appears to be accelerating towards the '72' level and could well go straight through it in spectacular fashion. An ignition of some sort, or a Black Swan event as some call them, could weigh heavily on the dollar pushing it below this water mark.

USD Chart 29 April 2011.JPG

Its still a play on the currencies, the tightness of supply of silver, a possible dollar bounce, a possible silver surge taking it through the old high of $50.00/oz, etc. Picking a number beyond the $50.00/oz for silver is impossible for us as it will have entered uncharted waters and it can then go anywhere, we don't have a figure for resistance beyond the old all time high, so it could shock to the upside.

Its a tough call alright, however, the next few trading days should give us a pointer as to whether or not the fundamentals or the charts will win out.

…............................

(4 more profitable trades have now been closed, so far, this week.)

Over in the Options pit, our model portfolio has managed an average return of 40.19% per trade, 74 closed trades, 72 closed at a profit, or a 97.29% success rate. Average trade open for 44.89 days.

sk chart 28 April 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

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Stay on your toes and have a good one.

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Reader Comments (6)

4 words...Morgan...short squeeze...enjoy

April 29, 2011 | Unregistered Commenterfallingman

a tad harsh!

April 30, 2011 | Unregistered CommenterSilver Prices

Nonetheless, Morgan did chicken out, as he told the folks at Kitco. A new week, a new month, in which I foresee silver prices to boldly go where they have never been before!

April 30, 2011 | Unregistered CommenterArgyromaniac

I'm afraid that with silver, both the fundamentals and the charts will win: if Silver Wheaton has a cash cost
of 3.90, with all big producers below USD 6 and last
but not least, with production being 20 % over consumption
in 2010 and most likely the same in 2011, many silver bugs
who ignore these facts are in for something that could be
a repeat of March-December 2008... As for the rest, the poor-man's gold could become the poorer-man's silver.

Not David Morgan. The house of JP Morgan, for god's sake...the mortal enemy of all decent people worldwide. The principal silver market manipulator.

I guess I needed more than 4 words.

In prose form...JP Morgan has sold a mountain of silver they don't have and can't get. They are naked short. They are getting squeezed. They are paying longs off in cash at a rate well above spot. This is a wonderful thing. Enjoy it.

The Crimex can raise margin requirements and pull plenty of other stunts...Remember the Hunts...but how much silver will that really force onto the market? NOT NEARLY ENOUGH is my guess.

Can the market get whacked? Of course. But that let's me trade clownbucks for real money at a better rate. Cool. Bring it on. I didn't have all the silver I wanted.

May 2, 2011 | Unregistered Commenterfallingman

JP morgan have been buying physical silver like crazy this week increasing physical silver holdings by 25%, at the same time as massive sell of in paper silver in the market depressing the price. This is illegal market manipulation in its worst form. How have they managed to purchase 250,000 tons of physical silver and yet the market dipped. That much physical silver being purchased in one week on the market should have had the price rocketing through the roof this is a huge purchase, alarm bells should have been going off on the trading rooms all over the world and all the business press and tv stations talking about it, and its all been hidden. Please spread around the net and world to every source. Please post this, tweet this, write to newspapers, mp's, tv stations. I knew something very wrong was going on this week as have had silver min by min ticker open on bookmark all week and watching with alarm as silver price shot up the crashed in matters of only hours like bucking mule.

May 14, 2011 | Unregistered Commenterdave chalmers

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