HI HO Silver and Away?

Interesting strength in silver tonight, and the charts are looking constructuive, as well.  My suggestion is to take a back ratio call spread for September on SLV and buy the breakout on SLW.

SLV fib lines

I currently have a sell on Silver, but this fib line is holding for now.

SLW credit spreads

SLV potential IHS

Gold Resources is setting up nicely.  Also take a look at the charts of AXU and RVMID, nice IHS's tracing out.

Two Juniors Ready for a Growth Spurt

First off, sorry for not positng, my solar business picked up and distracted me from other activities.  Now take a look at these silver juniors, my comments are on the charts.

"nough Said

From a Kitco Blog site.  All you need to know about silver.

Silver Wheaton Bull flag

Silver Wheaton is sporting a nice flag.  I am buying 20 more contracts as it breaks out.

Nice Bull Flag

I Endeavor to buy more

A beautiful chart pattern is emerging in Endeavor (EXK).  I keep hearing that IHS's don't form at the top, but I have seen too many this year that have broken out.  I already own quite a bit of EXK with shares and options, but I will put on a $7.50/$10.00 call spread (April or May, depending on the breakout date above $7.50).

I think it is good for a $2.00 move, just don't jump the gun, let it breakout.

SLW - low risk option trade

SLW is setting up nicely for a run higher, and if silver breaks to new highs SLW will certainly follow.  A trade I am in, March 32's now looks like a add to for more conservative option investors.  It sports a delta of 80%, yet there is still 5.5 to leverage on the option, and since you are deep in the money you can roll this forward if silver keeps moving higher.

SLW is setting up a trade.

SLW is at a discount to SLV

Silver Wheaton is at 80% of its highs, while Silver is 97% of highs.  I have March 32 calls on SLW, and am thinking of adding to based on this.

The chart looks great.

Another Junior Going to the AMEX

Great Panther is moving to the AMEX.  This of course is good news for those of us that own shares in this company.  It is running up a bit on the news but a good company to build a position in.

This is Big News

From Zero Hedge:

JP Morgan announced today that from now on they will accept physical gold bullion as collateral. This is a sign of gold’s further remonetisation in the global financial and monetary system. It may signal that JP Morgan is having difficulty in securing gold bullion in volume. JP Morgan is the custodian for many of the gold and silver exchange traded funds. They will not accept ETF trust gold as collateral.

In October, the clearing house of global exchange CME Group – CME Clearing – announced it will now accept gold as collateral for trades on the exchange. Gold bullion can be used for margins for CME trades, ranging from crude oil, gold, grains, equity indexes and Treasury bonds.

Given the current monetary, macroeconomic and geopolitical risk gold is an attractive alternative to debt, equities or other paper assets as collateral.

JP Morgans’s move shows how gold bullion’s fungiblity and tangibility as an asset makes it attractive and shows gold’s increasing importance in the financial system.

Interestingly, the CME is storing their collateral gold at JP Morgan Chase Bank in London. The exchange said it hoped to add additional depositories in the future but there has been no announcement of developments in this regard.

Silver prices remain in backwardation, showing that buyers are willing to pay a premium for silver delivered sooner rather than later.


I am already positioned, but suggest others start to add to their silver miner positions, and SLW.

So it Begins

I have been re-buying my full position in silver and gold miners for the last 6 trading days in anticipation of a very strong March and April.  Today is confirmation for me that this leg of the bull is back.

First, waking up to a Junior gold miner (FRG) getting taken out tells me the in the know people see other assets are cheap enough to buy.  To me, this will put a floor under this market.

Secondly Silver broke through the 50 EMA, and has been leading gold of late, and now gold has broke above 1345, and is ready to break through the next EMA.

My plan is to keep acquiring until I am fully margin ed, over the next two weeks.

Revett is moving to the AMEX

This silver and copper miner is ready to take the leap to the big board.  This means more liquidity and more institutional ownership.  It is also closing in on the very important $5.00 area.

Also read this Seeking Alpha article on this company, and you may wish to follow this guy, he has good insight.

I own 1,500 shares, and will add more when the move is complete.

Enjoy.

http://seekingalpha.com/article/246368-revett-minerals-seeks-amex-listing-multiple-catalysts-should-revalue-shares-high?source=yahoo

SLW- Breaking out

I bought 20 March SLW calls last Wednesday on that reversal candle, and now SLW has broken through the 20 EMA, late in the day.  My view is it is ready for the move to new highs, but I expect a test of the 20 EM, or even down to the $32.05 area.  For that I sold 20 Feb 35 calls for a little protection, and will close them above the 50 EMA in the $33.42 area on a closing basis.  I'll cancel the trade at a piercing of the $30.37 pivot on a closing basis.

Silver Bells

For the past month Silver has retraced some amazing gains, pretty aggressively, I may add.  But looking at the chart of the miners I selected below, it sure looks like consolidation to me, on the verge of a new upleg.
Up until the unrest in Tunisia became a contagion in Egypt, I was in the camp of silver going to the $24-25 dollar range, and planned on holding any new purchases until the latter part of February to let that scenario play out.

In March, silver the open interest is growing incredibly, and in that OEX the buyers can demand the physical. Also, investors are emptying the Comex of inventory.  My view is speculators sensing a squeeze will start putting upward pressure on the metals after the February OEX closed.

Now back to North Africa, this is a game changer, people are being reacquanted with risk, and the Precious metals benefit from this.  Also, I cannot see a short term scenario that stops the FED from doubling our money supply again in the next twelve months, So I started buying back into my silver positions this week.

Below, I present three companies for you, AG is a core holding, and above $12.40 I will complete my buy program (gap fill and hold), EXK, I think has already broken out, and added to already.  Finally, HL, it looks like AG's chart (I do not own it).

Silver is in Backwardation

Per James Turk.

"Silver is in backwardation not just in the short-term, this time it is extending twelve months forward! 

The last time this happened Eric was in January of 2009.  Over the next few weeks silver rose from about $10.50 to $14.50, a roughly a 40% move higher.  The key to understanding backwardation is that the price must rise to entice holders of physical metal to sell and accept a national currency in return.  I think we can expect a similar event to repeat over the next few weeks. 

A similar type of move would clearly put silver well above its previous high.  What this backwardation shows is that there is a disconnect between the physical and the paper markets in silver.  As I said previously, the silver shorts simply cannot hold the paper price down here any longer without seriously discrediting the paper silver market as a price discovery mechanism.

Gold is not in backwardation, nevertheless the demand for physical gold is extremely intense.  With the sentiment ".

If we get fireworks they will start next week, but will explode in March when the exchanges must deliver physical vs just rolling them over.

I have been buying silver junior miners on every significant down day.  EXK and AG are my choices.  I intend to ride this next wave higher in silver with a very large SLW call position, a position I will begin by buying 31 strike calls and selling 30/25 puts.  I will alternate between Feb and March.  If the 50% retrace lines break, I will roll down strikes to 28 and 27/22 or 20.  Any break back above the 20 EMA, and I will go agressively long again.  Let' see what Monday brings.

 

They are Not Making it Easy

On Friday silver put in a hammer, signalling short term support. Silver and the dollar we are sitting at crucial support areas, and this morning silver is bouncing off that support and the dollar resting right on it.  Where do we go from here?

We are in the zone for at least a correction in the stock market, yet the market is still strong, and the miners took an incredible beating.  I am playing it cautiously, and will continue to buy junior silver miners on all significant dips in their price (> than 1%).